Can junk food be unjunked?

October 29, 2012: 11:12 AM ET

Unreal Brands, a Boston-based company with millions in backing from renowned tech investor Khosla Ventures and others, wants to find out.

FORTUNE -- Tom Brady and Gisele Bündchen are fans. So are Matt Damon, John Legend, and Jack Dorsey, the tech entrepreneur of Square and Twitter fame. Later this week, you may get a chance to find out what all these celebs are fussing about.

As you sift through your kids' Halloween loot -- or the pile of sugary treats your colleagues will undoubtedly drop off at the office -- keep an eye out for a new type of candy wrapped in shiny packaging. It's called Unreal, and it's on an improbable mission: to "unjunk" junk food.

Unreal Brands, a Boston-based company with millions in backing from renowned tech investor Khosla Ventures and others, sells five types of candy for now. You might not guess from their clinical names -- Un 41, Un 54, Un 5, Un 8 and Un 77 -- but they're clones of M&Ms, peanut M&Ms, Milky Ways, Snickers, and Reese's peanut butter cups. Unreal's versions are made with natural ingredients. They have a less sugar and fat, and more fiber and protein. They use no corn syrup, no hydrogenated oils, no artificial colors or flavors and no GMOs. Oh, and all the ingredients are "responsibly sourced."

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"People are going to eat candy, so we want to give them a better choice," says Michael Bronner, the founder of Unreal. He says Unreal's goal is not to appeal to the Whole Foods (WFM) and farmer's market set. It's going after average consumers, and its treats are sold at Target (TGT), CVS (CVS), Staples (SPLS), and soon at 7 Eleven, at prices similar to those of the items they clone. Ultimately Unreal is trying to prove to giant food companies that they can make tasty -- and profitable -- products that are free of junky ingredients, says Bronner, a successful entrepreneur who founded Digitas, the digital ad firm now owned by Publicis Groupe (PGPEF), and Upromise, the financial rewards company now owned by Sallie Mae.

For all its mission-driven ethos, some public health advocates are skeptical that Unreal can be a net positive in the fight against obesity and chronic disease.

"Natural junk food will clog your arteries and make you just as fat as regular junk food," says Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest. From a health perspectivecane sugar is no better than corn syrup, Wootan said. And adding fiber to a nutritionally worthless food may be good marketing, but can be bad for health, she added. "It helps people think of the food as better and may make them eat stuff they would otherwise not buy."

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Wootan acknowledged that Unreal's products come in smaller portion sizes, have less sugar and fewer calories than rival treats. But those benefits could be more than undone, she said, if the marketing of Unreal's product prompts people to eat more than they would otherwise have. It's happened before. "The whole category fruit snacks has had a negative impact on children's diets, because parents are more likely to include them in their lunches," she says.

Bronner says he's heard the criticism. But he says tiny Unreal is unlikely to have a direct negative impact in an industry that rings in $30 billion in sales annually, and that continues to grow every year. "As much as we'd like to see candy not be part of the American diet, it is and it is growing," he says. "If we can get people to stop and think about why this junk is in their food, maybe we can get the big companies to cut down on their sugar, corn syrup and artificial ingredients. "

A spokesman for Mars, the maker of M&Ms, Milky Ways and Snickers, declined to comment.

Unreal emerged out of a father and son dispute following, appropriately, Halloween. Three years ago, when Bronner's son Nicky was 12, his parents took away most of his trick-or-treating spoils. When Nicky protested, his parents told him candy was bad for him. Unconvinced, Nicky turned to the Web, only to find out that his parents were right after all. So Nicky embarked on a two-year quest to find out whether tasty candy could be made without junk.

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Using his father's business world connections and pocketbook, Nicky contacted food and nutrition experts, a renowned chef, and investors like Khosla. Little by little, the Bronners built a company with veterans from Procter & Gamble (PG), Kellogg (K), Google (GOOG) and Godiva. The products were first introduced this summer. Over time, Unreal hopes to expand into sweetened beverages and other products.

Samir Kaul, a partner at Khosla, says Unreal made sense for his firm, which has been making a growing number of investments in sustainability, with an increased focus in the food and agriculture sectors. "We are going to start with candy and give people a value proposition," he says. "We have to affect change when we can in meaningful ways."

Whether Unreal can fulfill its mission remains to be seen. Kelly Brownell, director of the Rudd Center for Food Policy and Obesity at Yale University, echoes several of Wootan's concerns. He says Unreal's ultimate impact largely depends on how consumers respond to its products. "Lets say the products are better by 10%, but if consumers think they are 40% better, then it's not going to be good," Dr. Brownell says. "If consumers respond by eating the same amount, they will be better off."

As a pile of Unreal's treats sits on my desk, I'm trying to heed the implicit message of moderation. When a colleague stops and grabs a candy bar, I do my best to explain Unreal's mission. Before I finish, however, he walks out the door, and from the hallway, he blurts out: "I'm not eating it to be healthy. I just want some chocolate."

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About This Author
Miguel Helft
Miguel Helft
Senior Writer, Fortune

Miguel Helft is a San Francisco-based Senior Writer at FORTUNE, where he covers Silicon Valley. He joined FORTUNE in August 2011 following a 5-year stint as a reporter at The New York Times covering companies like Apple, Facebook and Google. His knowledge of Silicon Valley and the tech world runs deep. He worked as a software engineer at Sun Microsystems in the late-1980s, and for the past 15 years, he has chronicled major industry events -- from the Microsoft antitrust trial to the dot-com boom and bust - at publications like the Industry Standard, the San Jose Mercury News and the Los Angeles Times. Born and raised in Argentina, Helft emigrated to the U.S. to attend Stanford University, where he earned a BA in Philosophy and a Master's in Computer Science.


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