R&D / New Food Products / Process and Operations

Newman's Own, Kettle Foods, and Naked Juice In Sync with Customers

Newman's Own Organics, Kettle Foods and Naked Juice are in sync with their customers in ways envied by mega competitors.

By Diane Toops, News and Trends Editor

Vowing to stay forever young, the eldest of the baby boomer generation - people born in 1946 to 1964 - hit a milestone this year: They celebrate their 60th birthday. Perhaps after watching the ageless Rolling Stones during halftime of the Super Bowl, they are also rethinking the lyrics, "Will you still need me, will you still feed me, when I'm 64?" from another iconic 1960s band, the Beatles.

Those 3.4 million Americans born in 1946 are not ready to retire or become more retiring. In fact, they have redefined aging. They've been hippies and yuppies, and now it's the time of the "abbies": aging baby boomers, reports Newsweek. Boomers define "old age" as starting three years after the average American is dead, according to a Yankelovich Partners study. With an actuarial life expectancy of 82.3, boomers don't consider themselves bound by the laws of statistics, and they expect advances in health care and genomics will enable them to live past 100.

And they prefer to feed themselves, not just when they're 64 but way beyond. So the rush is on to buy wellness foods, cosmeceuticals and nutraceuticals. These divine boomers, whose feet are pounding the firmament as they run to stay in shape, are convinced there is a connection between what you eat and how you look and feel. Abbies are also the inspiration for younger consumers to age not gracefully, but instead to live adventurous, youthful, extended lives by nourishing the spirit, mind and body.

Boomers also have a growing sense of social responsibility. If they must turn the world over to their children, they want to give them a world that's in better shape than when the boomers inherited it. At this stage in their lives, with the kids' college bills forgotten and a sub-$100,000 mortgage nearly paid off, they can afford to spend a little more on their own health and a healthier world.

It's wonderful coincidence that our choices for rising stars are companies founded by boomers making products largely for boomers. But they also embody a passionate philosophy that connects with other consumers, as well. Newman's Own Organics is redefining the organic category by mixing environmental consciousness with the parent firm's social responsibility mission. Kettle Foods' natural/organic message puts a healthy spin on potato chips, then adds unusual flavors. And Naked Juice is helping to define the superpremium juice segment with products fitting a spectrum of lifestyle needs.

Newman's Own Organics: Contributing to a healthy ecosystem

Organic-food advocate Nell Newman learned values of social responsibility, political involvement and philanthropy from her famous parents, actors Paul Newman and Joanne Woodward. But it is her passion and commitment to the environment, organic foods and sustainable agriculture that led her and business partner Peter Meehan in 1993 to found Newman's Own Organics: The Second Generation – at the time, the organic food division of her father's successful (and philanthropic) company, Newman's Own.

Nell rallied to get her father to add an organic line to Newman's Own, but whenever she brought up the subject, he dismissed it. "To him, organic foods referred to the hippie-dippy dishes my mom experimented with in the '60s, like nut loaf with yeast gravy," says Nell, with a smile. "My mission was to change his mind."


Rising Stars: Nell Newman (Newman's Own Organics)
"It's fairly obvious one can't be a perfect environmentalist," says Nell. "Perfection isn't the goal; a good life is. And a good life has a lot to do with who you are in the world, with intent as much as with the end result."

She did, and today Newman's Own Organics products resonate with consumers, proving that timing, persistence and great tasting products are the ingredients for success. "We knew there was a market for organic snack foods, but couldn't have anticipated just how quickly the demand for our products would grow," says Nell, partner, product developer and president. With more than 100 products, Newman's Own Organics is one of the strongest organic brands.

In fact, meteoric success led to the division's spinoff as an independent company, based in Aptos, Calif., in 2001. The unit remains closely tied to Newman's Own, and like its parent, all royalty payments after taxes are donated to educational and charitable organizations. Since 1982, thousands of charities worldwide have been the recipients of more than $200 million from the coffers of Newman's Own.

"‘Great tasting products that happen to be organic' is our slogan, and it really says a lot about us," says Nell. "We've seen that people increasingly want to know more about the food they eat, not just how many calories a product contains. It's becoming more important to them how ingredients are grown and processed on the way to their grocer's shelf."

Nell says she was lucky to have grown up in an old colonial farmhouse with a garden and a few apple trees. "My mom taught me to cook at an early age, and the ingredients we used came from our garden," she says. "The fruit ended up in our pies, and the eggs laid by our chickens went into cakes and omelets. My father taught me to fish, and we polished off what I plucked out of the Aspetuck River in Connecticut with corn and tomatoes from a local farm stand. My pa always had a good eye for produce. Early on, he showed me how to thump a melon."

Spreading the environmental message is dear to Nell's heart. An avid student of biology, she has a B.S. in human ecology from the College of the Atlantic, Bar Harbor, Maine. She worked for the Environmental Defense Fund in New York, moved west to head the Ventana Wilderness Sanctuary (working to reestablish the bald eagle in central California) and later did fund-raising for the Santa Cruz Predatory Bird Research group. Outdoors is where she prefers to be. She's a licensed falconer, and a few years back this baby boomer took up surfing to help her focus and stay in shape.

As her food awareness grew, Nell gradually begun using organic ingredients in her cooking. "I'm what you'd call a ‘flexitarian,'" she says. "I prefer to eat lots of fruits and vegetables, but I'm not averse to eating meat, poultry and fish from time to time. If a friend has graciously prepared a wonderful dinner, I think it's more fun to enjoy the food than to scrutinize ingredients. Food and friends make the meal." Nell also confides she's a lover of fast cars, just like her dad, and inherited his quirky sense of humor.

A little joke on "Pa"

In November 1992, Nell packed a bunch of organic foods - petite pois, sweet potatoes, breadcrumbs - from her local haunts and took them home to Connecticut for Thanksgiving. "The whole bit, down to the turkey packed in ice," she explains. "I flew home with this cornucopia in my luggage and headed straight for the kitchen to prepare, unbeknownst to my dad, an organic Thanksgiving meal.

"After dinner, I asked him how he liked his ‘organic' meal," says Nell. "He was floored." Paul Newman also was convinced enough to cover expenses for Nell and Meehan for one year to determine the feasibility of adding an organic line. In 1993, he loaned $15,000 to the entrepreneurs to get started. The planets were in harmony, and their first product - organic pretzels, a personal favorite snack of Pa - became a best seller in the natural foods market. After only one year in business, they paid back the loan.

The product line of tasty snacks now includes different varieties of cookies, popcorn and chocolate bars. "What's great about the chocolate line is that the cacao is grown in the ancient way so that no rainforests need to be destroyed," explains self-confessed chocoholic Nell. "We want to encourage this method by supporting the farmers economically."

Perking up the line in 2003 was Newman's Own Organic Fair Trade Certified coffees, roasted and distributed by Green Mountain Coffee Inc., followed by organic balsamic vinegar and olive oil. "We know how many people enjoy making their own salad dressing once in awhile - and use Pop's the rest of the time," says Nell.

Thanks to Pa approaching the president of Kraft Foods, the very popular Fig Newman's, the first fig bar with organic figs, sugar and flour but without hydrogenated oils, came into being (the name is used under license from Kraft). Two other pleasers in the cookie line, which uses palm shortening, are Alphabet Cookies and Ginger-O's, a ginger crème-filled cookie.

"People initially confused palm shortening with palm kernel oil," says Nell. "Palm kernel oil is extracted from a nut and is generally solvent-extracted and refined before use. Palm oil is extracted only from the fruit, as are olive and avocado oils, and is not refined, only filtered and deodorized. Plant derived, it has no cholesterol, and although palm shortening has more saturated fat than partially hydrogenated shortening, it contains no trans fatty acids."

Nell and Meehan branched out to Fido and Fifi next with a line of premium pet foods. "Pets have always been a part of our family life," says Nell, who grew up with dogs, cats, birds and an occasional snake. She currently has six pampered chickens, who follow her around. "We recognize that, like the food we choose for ourselves, the food we choose for our pets has a strong impact on their health, so we use the same quality ingredients and careful manufacturing process used in our human food line." The charity money generated by the sale of pet food is donated to organizations that support animal welfare. Sales are skyrocketing.

A staple for consumers and bakers, a line of 100 percent organic dried fruits with no sulfites - raisins, cranberries and pitted prunes - was added in late 2004. Last year, the company entered the largest and fastest growing segment of the market: organic fresh produce. "This is a particularly opportune time to make the move into organic salads," says Nell. "With everyone from educators to parents to doctors concerned about how and what Americans are eating, it's no wonder the packaged organic salad category grew 75 percent between 2001 and 2003."

Committed to spreading its message to younger consumers, Newman's Own Organic is one of the sponsors of "eat smart, grow strong," which includes a supermarket Spy Game that encourages kids to choose better options and eat better (see www.EatSmartGrowStrong.com).

Since an organic product is more expensive to produce, the company's growth process hasn't been without problems. Ingredients, certified organically grown by Oregon Tilth, are grown on farms that have not used artificial fertilizers or pesticides for three years or more. An independent third party also certifies the processors. Kosher certification is by the Union of Orthodox Jewish Congregations of America. "We are constantly dealing with trying to keep our products competitive in the market," says Meehan. "We do, though, want to give consumers a viable alternative, so we search for organic ingredients that are cost-effective."

Packaging, too, is a challenge. Consumers expect organic products to be in completely recyclable packages. "We look for materials that keep our products fresh and allow for shipping perishable product," says Meehan. "It can be a frustrating process, as this can raise the price of products the point people won't buy them."

"It's fairly obvious one can't be a perfect environmentalist," says Nell. "Perfection isn't the goal; a good life is. And a good life has a lot to do with who you are in the world, with intent as much as with the end result."


A healthy ecosystem

The chief difference between organic and conventional food is the method used to grow or make it. Nell defines the differences in her book, "The Newman's Own Organics Guide to the Good Life: Simple Measures that Benefit You and the Place You Live," (Villard 2003) written with science writer Joseph D' Agnese, and filled with practical advice on why living a more environmentally conscious life helps us all.

"No long-lasting, synthetic pesticides or herbicides are sprayed on organic veggies and fruits," she writes. "The livestock grow without hormones meant to fatten them quickly and without the antibiotics necessary to keep them from getting sick in overcrowded feedlots. The land and feed is also certified organic. On organic farms, the soil, water, air and all living creatures (including humans) are spared the stress of assimilating compounds that are proving unnecessarily complex and threatening. Biological reality has proven volume and price are poor substitutes for a healthy ecosystem."


Kettle Foods: Passion for chipping in

It's the stuff entrepreneurial dreams are made of. With a lot more passion than capital, a starry-eyed, idealistic and enterprising 27-year-old Cameron Healy began driving a beat-up van along Interstate 5, selling cheese, roasted nuts and trail mixes to natural food stores from Seattle to Eugene, Ore., in 1978.

"I had no master plan, but I knew the priority for quality lifestyles and values would be growing into more mass markets as baby boomers matured," says Healy. "I wanted to develop products of natural integrity that could be flexible in both the natural food and mainstream markets."

His dream led to the 1982 founding of Kettle Foods Inc., Salem, Ore., making the only natural, hand-cooked potato chips in the Western U.S. at the time. "Although he pioneered a multi-million dollar segment in the potato chip segment, Healy continues to combine a community-oriented and family-style approach to business, and it remains privately owned so he can do things his own way," says Kettle ambassador and historian Jim Green.

Healy's "own way" and unique philosophy is in sync with the increasing demand for natural/organic foods. Kettle Foods supports sustainable farming methods that produce food grown without the use of chemical fertilizers and pesticides in naturally nourished soil. One of the first brands to recognize the health benefits of trans fat-free products, Kettle Food products are, and have always been, cooked with expeller-pressed safflower and sunflower oils (they contain no hydrogenated oil and no more than 10 percent saturated fat).


Rising Stars: Kettle Chips (3 varieties)
"The introduction of Kettle Potato Chips was a tremendous success, and we immediately had trouble meeting demand," says Jim Green, Kettle's ambassador and historian.

Tortilla chips are made from organically grown corn and a patented process of adding sprouted corn to the masa. Only Northwest Russet potatoes, a variety high in natural sugars, are used for the potato chips. They crystallize during cooking and lend amber color to the chips. Even though processing organically grown potatoes presents challenges, Kettle's potato chips have been organic since 1989.

Opening a bag of Kettle Chips, one sees tawny gold chips in a variety of sizes and shapes. The potatoes are cut thickly at all angles with the skins on. "Just as with people, we respect their individuality and, as a result, no two chips are alike," says Chief Flavor Architect Carolyn Richards. Stirred by hand with a tool inspired by a garden rake, the chips react by forming crunchy curves and nooks of flavor - flavors from real lime, sea salt, vinegar, honey, roasted red peppers and other natural ingredients. Always on the lookout for daring flavor combinations, Richards oversaw the development of Spicy Thai and Cheddar Beer last year, and her current favorite is Roasted Red Pepper with Goat Cheese, rich cheese blended with sweet peppers, tomato, onions, parsley and garlic.

Stellar growth and expansion between 1984 and 1988 led to the addition of new cooking and packaging equipment. "The introduction of Kettle Potato Chips was a tremendous success, and we immediately had trouble meeting demand," says Green. "We actually had to ration them at first. Soon a production facility was built and Kettle Chips were made as fast as they were ordered. Production capacities were increased to meet the expanding popularity of our products."

Adding a halo to chips

Kettle Foods' organic line, introduced in 1989, was inspired not just by emerging market trends but from its own employees. Kettle Foods' product line today includes: Kettle Potato Chips; Organic Kettle Potato Chips; Kettle Bakes Baked Potato Chips; Krinkle Cut Kettle Potato Chips; Organic Kettle Tortilla Chips; Kettle Roaster Fresh Nut Butters and Kettle Quality Handcrafted Nuts. Kettle is the No. 1 salty snack brand in U.S. natural supermarkets, according to market research firm Spins. With 550 employees, and revenues of $185 million in 2005, Kettle Foods has a healthy bottom line.

Although a healthy bottom line is important, Green says it sometimes seems half of the employees are trying to donate money and resources to support the environment and fight hunger. Green champions the donation of money, product or time to more than 200 organizations around the country. The company also delivers some 175,000 lbs. of potatoes to food banks in Oregon. "We certainly don't want to curb our people's unconventional enthusiasm to make a difference," Green adds.

Healy and his son took a six-week motorcycle sabbatical in Europe in 1987 to research European specialty food markets, and found a unique niche for their hand-cooked chips. A sister operation was founded in Norwich, UK, and production began in 1988. Kettle products have distribution in all 50 states, as well as Canada, Japan, Singapore, Hong Kong, Guam and Western Europe.

After outgrowing its original facility in 1999, a 60,000-sq.-ft. facility was built in Salem at a site along Mill Creek, next to a beautiful stream and wetlands. Employee volunteers led an effort to restore a nearly two-acre wetland system, which improved environmental conditions, prompting the return of nesting herons and other wildlife.

"We feel it's important to help people cultivate values that are about integrity, respect, honesty and love," says Green. "We've found that the workplace is a great environment to demonstrate this."


Eastward ho!

To meet increasing demand, production at Kettle's flagship facility in Salem, Ore., is getting a boost next month from a $2 million investment in new fryers, expanding the plant's capacity by 30 percent. Production capacity has tripled since 1999, resulting in job growth of 112 percent. Kettle Foods currently employs 280 people at its Salem facility, compared to 132 in 1999.

Kettle Foods recently announced it would expand to meet demand on the East Coast by building a facility with 70,000 square feet of manufacturing space in Beloit, Wis. Critical to the company's decision is the fact that Beloit is centrally located in one of the strongest Russet Burbank potato growing regions in the Midwest. Ground breaking is slated in April, and when production begins toward the end of the year, the plant is expected to process 50 million lbs. of Russet potatoes a year, boosting overall company production by 50 percent.

We've experienced double-digit growth consistently over the past 10 years, fueled by the great taste of our Kettle brand Potato Chips," says Tim Fallon, president/GM North America. "Demand is particularly high in the East Coast where consumers still struggle to find our products on store shelves. Building a plant in Beloit allows us to keep pace with demand while reducing the environmental impact of fuel and distribution."

Not only will the plant's location help cut down on fuel use and cost, the new facility will be built to environmentally sensitive standards. Kettle Foods has been working with A. Epstein and Sons International of Chicago to evaluate suitable locations for the facility, as well as plan for its design, construction and sustainable business practices.


Naked Juice: Nothing to hide

Tropicana and Minute Maid may dominate the juice market, but Naked Juice Co., Azusa, Calif., is riding high on the growing superpremium juice segment of the $14 billion healthy and new age beverage category (ready-to-drink iced teas, sports drinks, bottled water, fresh and refrigerated superpremium juices). This category experienced an estimated 18 percent compound annual growth rate since 1991, nearly seven times that of the overall beverage industry. And the $640 million superpremium juice category grew 42 percent last year and is projected to hit $1.4 billion by 2008.

Prompted by both a revised food pyramid and waves of research calling for more fruit and vegetable consumption for disease prevention and overall health, interest in the superpremium juice category is soaring. Nutrition-savvy consumers are coveting pure, unadulterated (and sometimes exotic) juices, especially those believed to promote elasticity of the arteries, better blood flow and healthy cholesterol levels.

Company strategy is simple but effective. Naked Juice encourages consumers to get rid of their inhibitions and "Get Naked," albeit metaphorically, by consuming its all-natural, preservative-free ("naked") fruit and vegetable juices, smoothies and superfoods drinks enhanced with protein, vitamins or herbs. According to Information Resources Inc. data, the company generates the highest amount of sales per store and enjoys the highest brand loyalty in the superpremium juice category.


Rising Stars: Naked Juice's Pomegranate Acai juice Naked Juice makes it easy for juice-lovers and juice newbies alike to pick among inventive flavors to match a spectrum of lifestyle needs. It divides its products into functional categories so consumers can easily choose the right drink for specific nutritional benefits.

More than two decades after its 1983 founding, Naked Juice is thriving as a national brand that delivers unique flavor combinations and highest quality. "Each 15.2-oz. bottle delivers on the ‘pound' promise, with a pound of bare-naked fruits, no added sugar and no preservatives," says Hicks. "That translates to more than two servings of fruit and vegetables per day."

How do they do it? "It isn't easy," says Hicks. "We take the best bare-naked fruits available and juice them to perfection. Plus, you'd be surprised how much juice you can fit into one 15.2-oz. bottle when we leave out all those fillers, water, sugar, artificial colors and flavors."

"Despite the overwhelming evidence that eating more fruit brings strong health benefits, families are busy and don't have time to clean and peel fruit before they run from one commitment to another," says director of marketing Kimber Ward. "Our products' grab-and-go convenience and innovative flavors allow the time-challenged to incorporate fruit into their daily diets, particularly during stressful times when tempted to grab an unhealthy snack."

A superpremium price

Available in the refrigerated section - think fruit in a bottle - Naked Juice is kept at temperatures below 38°F, and the suggested retail price for a 15.2-oz bottle is a pricey $3.

All of the ingredients are hand-inspected by the quality assurance team, who reject several trucks of fruit daily. Safety is equally important. "All our juices and smoothies are gently pasteurized [via flash pasteurization] to provide a great tasting product that doesn't compromise safety," explains Hicks. "They are heated quickly and brought back to a cold temperature in a flash, so the natural bacteria found in produce are destroyed while keeping nutritional benefits, aromas and original flavors intact."

Naked Juice makes it easy for juice-lovers and juice newbies alike to pick among inventive flavors to match a spectrum of lifestyle needs. It divides its products into functional categories so consumers can easily choose the right drink for specific nutritional benefits.

"The line is divided into what we call functional families - each family gives you a different group of benefits," says new CEO Monty Sharma. All-natural, 100 percent juices, smoothies and protein smoothies include:

  • Superfood

  • Antioxidant

  • Protein

  • Well Being

  • Just Juice
(carrot, apple, O-J and Tangerine Scream). (classic favorites like Tropical-C, boosted with immune enhancers like vitamin C, bioflavonoids, rose hips, and zinc to keep you happy and healthy). (shakes and soy smoothies packed with soy protein to fuel and repair muscles, including the heart, with names like Protein Zone). (including Pomegranate Blueberry, they are loaded with free-radical-zapping-antioxidants).
    (juice blends packed with nourishment and carrying high-impact names like Green Machine, and five fruits with 10 boosts -- including wheatgrass and spirulina).


Products are certified kosher by the Orthodox Union. They are gluten-free and without added sugar, preservatives, artificial colors and flavors. Speaking of the label, Naked Juice has re-branded its full line with contemporary, colorful packaging, under the leadership of Sharma. "It includes realistic fruit graphics on the front panel, the exact amount of fruit per bottle on the side panel, as well as the added ‘boosts,' such as vitamins, echinacea, blue-green algae and soy protein," says Sharma. "The tagline is ‘A Pound of Fruit in Every Bottle.'

"We added Naked Juice Rainforest Açai and Naked Juice Pomegranate Açai to our heart-healthy antioxidant line in January," he adds. "The Açai (pronounced ah-sigh-ee) berry, with its blend of amino acids and essential omegas, also contains high levels of flavanoids and polyphenols, potent antioxidants offering free radical zapping power. Açai berries contain 10-30 times the anthocyanins of red wine."

"One of the advantages of being a smaller company is the ability to quickly change recipes of products based on input from consumers," says Ward. "Over the years, we've enhanced flavors by rebalancing the fruits, added more fruits or added different fruits."

Naked Juice received a big boost in 2000, when private equity firm North Castle Partners, focused exclusively on businesses dedicated to healthy living and aging, brought the company under its Ultimate Juice Co. umbrella of smaller beverage companies. Since then, it has consolidated products and brands, and North Castle assisted the management team to integrate operations, upgrade financial management and infrastructure and grow the Naked Juice brand from a West Coast regional business into a national market leader.

Its national manufacturing and distribution system includes production facilities in California and Chicago, where some 200,000 units are produced daily, ensuring fresh product throughout the U.S.

"Today's consumers are much more conscious about the fuel they put into their bodies," says Ward. "Ranging from professionals and students to athletes and families, they want foods that not only taste great, but are free of added sweeteners and preservatives that compromise product purity. They want a ‘clean' palate in which you can really taste the fruit - that's what Naked Juice is all about and why we fit this food trend so perfectly."

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