How Undercover Snacks is Good on the “Better-for-You” Category with Chocolate

Some brand stories are bound to inspire, and Undercover Snacks is one of them. Founded in 2016, the New Jersey-based company may self-describe its products as “healthy ingredients in disguise,” but it can’t hide the fact that it’s quickly and steadily become a force to be reckoned with in the better-for-you snacks category. We recently caught up with CEO/co-owner Diana Levy for details on Undercover Snacks’ journey, chocolate industry insights, and market trends.

Company Background

Let’s start with the company’s humble beginnings, which was originally a small chocolate company. “It was probably closer to a hobby than a business where I was making chocolates for events,” reveals Levy. “I sold in a couple of retail shops and online locations, but I was part-time and pretty much doing it in a rented commercial kitchen from time to time.” Simultaneously, two of Levy’s three teenage daughters were diagnosed with Celiac disease, so she wanted to come up with a product that was gluten-free and better-for-you using the same delicious chocolate—just less of it. “I kept mixing different ingredients with different types of chocolate and suddenly came out with the chocolate quinoa crisps that we’re doing now,” explains Levy.

The growth phase

Soon after, Undercover Snacks was placed into additional stores, including a Whole Foods in Newark. As it turns out, while she was there sealing the deal, the Whole Foods team from the Northeast was walking through the store and authorized Levy to sell her products throughout the region. “That same week, I had a conversation with another enormous retailer who said, ‘We’ll do a trial in 120 locations if you can manufacture enough product to be in 8,000 stores in three months,’” adds Levy. “I thought, ‘I’m sure there’s some way I can do that,’ and I tried very hard to find a co-manufacturer.” But at that point, Levy realized just how unique the product was because nobody could make it for her, and she knew how important it was to control the quality and manufacturing process. “There was no equipment that could run this ratio of inclusions to chocolate because it would clog up somebody’s pipes,” continues Levy. It was at this time that her husband joined her in the business as Chairman, bringing with him finance experience from different food businesses he had worked with over the years. The couple then decided to construct their own factory in East Hanover. “We built out a SQF Level 3, Kosher manufacturing facility, which is the highest level of food safety and quality that you can have in the United States,” notes Levy. By 2018, the company installed a state-of-the-art custom manufacturing line, which Levy designed with several engineers, and sales growth quickly followed.

The product line today

Undercover Snacks is now found in approximately 10,000 stores in the United States; it’s offered on United Airlines; it’s going into Costco; and selling internationally. “Because we built out our own factory where we were able to scale up rapidly—and because it’s our own factory—the facility is able to be dedicated and certified gluten-free,” says Levy. “We’re working hard now, and it’s a lot of fun.” The family-run company not only includes the husband and wife team. Their older daughter serves as its marketing manager and the two younger ones, who are still in college, are brand ambassadors.

The product line—which includes Dark Chocolate + Sea Salt, Dark Chocolate + Blueberries, Dark Chocolate + Pomegranate, Milk Chocolate, and Milk Chocolate + Currants—features all-natural, non-GMO-sourced ingredients and premium Rain Forest Alliance Certified chocolate. Although milk chocolate contains milk, both the facility and products are free from all of the other top ten food allergens including wheat, peanuts, tree nuts, eggs, soybeans, fish, shellfish, sesame, and poppy seeds.

What makes Undercover Snacks different?

So what makes Undercover Snacks so different? “We’re cooking the quinoa rather than extruding it. A lot of the products out in the market today that are using crispy quinoa are using an extruded quinoa which breaks the fiber down so much that you’re not getting the nutrients you’re getting in ours,” explains Levy. “We’re actually doing a much more nutritious process. We’ve got more of the fiber and we’re able to keep the product that way, so you’re getting protein, fiber, and nutrients from the quinoa. It’s a complete protein, so it’s kind of like the best of both worlds—and it’s delicious.”

By bringing together the best of both worlds, Undercover Snacks has been able to stake a significant claim in the better-for-you category with chocolate. “Our chocolate is certified and sustainable. The chocolate farmers are being paid sustainable wages, and the product is growing sustainably,” notes Levy. “The product itself is made with vanilla beans, not vanilla, which is an artificial flavor. We’re using sunflower lecithin instead of soy since it’s just a little bit healthier and there are no allergens in that. We’re also using pure cane sugar. There are chocolates out there that throw in a lot more sugar. Our products—even our milk chocolate—feature a pretty high cocoa content.”

A Positive Outlook

In terms of plans in place to meet market demands, Levy says the company will start by doubling the size of its factory in the next couple of months and adding new equipment. “Once we do that, we’re going to be able to offer different types of chocolate,” she says. “We’re still figuring out exactly what we’re going to do, but we’ll definitely be expanding the types of chocolate that we’re using.” While a range of trends are popping up in the snack space—from sugar-free to milk chocolate sans dairy—Levy finds that while gluten-free, sustainability, and plant-based ingredients are on the list, for Undercover Snacks things depend on where they’re selling and what market the company is in. “I think there’s room for all different options and interests, and because we manufacture, we have the ability to try things on a smaller scale online and then roll them into stores depending on how popular they are.”

Meanwhile, balancing the healthy indulgence in the products is something Levy has found has appeals to a wide scope of consumers because it’s guilt-free. “I’m not ever selling the sense of health food—this is actually a better for you indulgence,” she explains. “It’s a satisfaction ratio that you’re getting here. If you have a certain amount of calories a day, and you’re going to spend some on an indulgence, you’re getting your calories worth here. For a serving of our Dark Chocolate and Sea Salt, which is 120 calories, you’re getting something that’s satisfying. The protein in the quinoa fills you up; there’s incredible texture; and you’re getting something that nails the chocolate need, which I sort of have every day!”

As premium chocolate snacks have become part of the small luxury mindset consumers crave—especially brought on during the pandemic—Levy acknowledges that’s part of her company’s success. “I think viewpoint has trickled down from not only being in natural grocery stores, but also to mainstream now and health and wellness,” she concludes. “That’s what people care about. Too many people have been sick this year, and you realize that what you eat has a lot to do with it.”