MARKETING: Johnny Granola-Seed

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The largest empty space on the shelves of health-food stores these days is probably where the Crunchy Granola is stocked. What is Crunchy Granola? It is a dry cereal about the texture of uncooked oatmeal that consists of rolled oats, wheat germ, sesame seeds, unsweetened coconut, soy oil, sea salt and brown sugar, give or take a few things. Because of all that natural goodness, plus a not unpleasant sweetish taste, it is the rage right now with a generation that is rebelling against the likes of Sugar Smacks and other products that it considers overpackaged and undernourishing. One of the producers of the cereal estimates that its sales double every four months. Which may explain the reported interest of such sizable companies as Norton Simon Inc., Bristol-Myers and International Multifoods Corp. in getting a few flakes of the action. As well as why that chronicler of capitalism, the Wall Street Journal, recently considered Crunchy Granola worthy of front-page treatment.

There is some dispute about who invented Crunchy Granola;* at least three claimants have appeared. But everybody agrees that it was popularized by affable, fiftyish Layton Gentry, who has spent the last seven years being a kind of Johnny Granola-seed. In 1965, after experimenting with various recipes for granola as a "freelance baker," Gentry developed a formula that he liked and sold it for $3,000 to Sovex Inc. of Collegedale, Tenn. It caught on not only as a breakfast cereal served with milk and fruit, but also as a snack food eaten by itself and as a base for cookies. Since then, Sovex has enlarged its granola operation from a single pizza oven to a 20,000-sq.-ft. bakery plant with a capacity of 1,000,000 Ibs. a month. Sales in 1971: more than $1 million.

Bad Word. Gentry, meanwhile, moved to California and bought back from Sovex for $1,500 the granola rights for states west of the Rockies. Then he sold the California territory for $18,000 to Lassen Foods of Chico, Calif. At last count, Lassen's annual sales of granola were $3 million and the company has installed a bank of specially built ovens to bake the stuff. Gentry also took off for Australia, western Canada and Hawaii planting granola seeds, in the form of royalty arrangements with local health-food manufacturers, as he went. His latest deal was with Breads for Life of Springfield, Mo., which is producing a granola fruit square.

Gentry is now back in California operating a small store in Hollister that sells three varieties of Crunchy Granola (regular, honey almond and granola with nuts) plus cookies and candies. He hopes that the granola business stays spread out, the way he planted it. "I really think if the big companies got their hands on it that it may become a bad word," he says. "Even now, there's a lot being made that doesn't do justice to granola. I felt to do things right there should be small plants in several different places manufacturing it."

*The first health food called granola, made with entirely different ingredients from those used in the current product, was developed in the 1870s by Dr. John Harvey Kellogg. His brother William K. Kellogg founded the well-known Battle Creek breakfast food company.