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Articles from 2017 In August


Convenient produce options pop

Thinkstock baby carrots snackable produce

Consumer taste for healthy, on-the-go snacks is driving growth in "snackable" produce, like individual servings of fruits packaged with dips, cheeses or nuts, according to new data from Nielsen.

Packaged snack items merchandised in the produce section account for $1.1 billion in annual retail sales, with a growth rate of more than 10 percent each year between 2012 and 2016, Nielsen says. That includes fruit cups, snacking fruit (grapes, cherries, apples, baby carrots), fresh smoothies, snacking vegetables and dried fruit and nut snack mixes. While more brands are innovating in this space—like Bonafide Provisions with its Drinkable Veggies and Horizon Organic with its Snack & Go packs—Nielsen notes that private label and unbranded items are particularly underrepresented here, which opens up an opportunity for retailers to create products in-house.

Indeed, the produce section is critically important to natural retailers, as conventional grocers expand their special diet and better-for-you center-store options and online grocery sales show particular strength in packaged food categories. Shoring up fresh and convenience items in the outer sections of the store could be a key differentiator.

In the natural channel, sales of produce grew 17.7 percent to $276 million in the 52 weeks ending April 21, 2017, according to SPINS—almost double the amount of produce growth in conventional grocery stores during the same period.

Organic produce also posted an 8.4 percent growth rate in 2016, according to the Organic Trade Association, with grab-and-go salads and ready-to-eat veggies (fresh or frozen) as top sellers.

FMI’s annual Power of Produce Report for 2017 also notes robust growth of value-added produce, adding that such items are positioned for further growth through increasing household penetration and purchase frequency.

[email protected]: The battle over 'natural' carries on | Center for Food Safety sues USDA over delayed GMO labeling study

Thinkstock 100 percent natural

The raging legal battle over what makes a food ‘natural’

Lawsuits related to “natural” food labeling were down in 2016 but appear to be back on the upswing this year. The Washington Post counted 19 so far this year—compared to 27 such suits in all of last year. They include a class-action lawsuit against Sargento that alleges its “natural” cheeses aren’t natural because the cows that produce the company’s milk eat genetically modified feed. It’s been more than a year since the U.S. Food and Drug Administration stated that it would look into further defining “natural” and how it can be used on product marketing and packaging, but the agency has yet to provide any guidance. A spokeswoman said FDA is “currently reviewing comments … to determine next steps.” Read more at The Washington Post…

 

USDA sued for missing deadline to publish GMO-labeling study

The Center for Food Safety has sued agriculture secretary Sonny Perdue and the U.S. Department of Agriculture for missing the July 2017 deadline by which the agency was supposed to finalize a study on QR codes on genetically modified foods that would inform draft rules for the National Bioengineered Food Disclosure Standard. A spokesman for USDA said the agency has received the study and is reviewing it. Read more at Natural Products Insider…

 

Organic Doritos give snack giant a way into the new Whole Foods

PepsiCo Inc.’s new line of chips and snacks without artificial ingredients meet the criteria required to be sold in Whole Foods Market, according to a PepsiCo executive, who says the company sees an opportunity to reach new customers and charge higher prices by targeting natural and organic shoppers. So far, though, the retailer hasn’t shown signs of embracing similar staple conventional brands trying to clean up their ingredients. Amazon, however, might be a gateway. Read more at Bloomberg…

 

Wheat nerds and scientists join forces to build a better bread

At an annual event called the Grain Gathering, bakers, millers and scientists put their heads together to brainstorm and showcase new whole-grain creations, like a whole wheat croissant and new varieties of wheat. Read more at Wired…

 

FitGenie is applying AI to automate nutrition planning

A bootstrapping team of former Georgia Tech students has developed an iOS app that applies machine learning algorithms that factor in body composition, hunger, fatigue and other metrics to simplify planning for people who want to lose weight. Read more at Tech Crunch…

Presence and confidence drive Pickled Pink success

Pickled Pink Foods products

If you ask Jim Lawlor, cofounder of Georgia-based Pickled Pink Foods, the gourmet pickle brand had no business being at Natural Products Expo West, AmericasMart Atlanta or the Fancy Food Show when it was mere months old. But that didn’t stop it from playing. Pickled Pink dove into the deep end and has been rewarded with spots on store shelves across America and even across the pond. Here, Lawlor talks about taking a chance, hitting the road and growing the brand.

How did you get into pickling, and why did you decide to start a business out of it?

Jim Lawlor: It’s kind of a funny story how it all started. Charlie [Stevenson, cofounder and president] absolutely hates pickles. Hates them! But for years, his wife was making the family recipe for pickles during the holidays, for family and friends. Well, one day Charlie got bored and started snacking, and he started eating them. And he said, damn, these are good! So he says, shoot, if I hate pickles and I like these pickles, maybe other people will, too.

So in the spring of 2013, we decided to start selling these pickles. We didn’t know where it would go, but we thought, let’s take this recipe and see what we can do with it. By July of that year, we attended the Atlanta Home and Gift Market at AmericasMart Atlanta. We brought every last jar we had with us thinking we’d sell them there—we didn’t even realize that we were supposed to place orders instead of sell at the market. We were two dudes with a company and one product—a sweet gourmet pickle—packaged in large, 24-ounce jars in heavy 12 packs because we didn’t know any better. We picked up about 93 clients in 12 states at that first show. We thought we were the king!

You’ve grown a lot since then. What do you think contributed?

JL: First, we discontinued the large 24-ounce jar because it was just too big and heavy.

The other thing we did in our first years—and still do—was that we went to as many shows as we physically and financially could. We went to many Junior League shows all over the South—Birmingham, Richmond, Charlotte, Raleigh, Mobile, Nashville, the list goes on. We were on the road 8 out of 12 weeks. We didn’t care if it was a consumer show—we just wanted the pickles in as many hands as possible. Plus, we used these shows to listen and learn. What do people like?

We also hit the big shows hard, so we did the Fancy Food Show in New York when we were 10 months old. We had no business being there, but we wanted to play. We did Expo West when we were a year and a half old. We played bigger than we were but it got the word out there. It wasn’t up for debate whether it was too expensive to attend a show—we went. And it’s what fueled our growth: presence and confidence.

We also learned that as much as we really enjoyed our first 300 to 400 clients we had in the gourmet mom-and-pop world, there’s just not enough of them to sustain a long-term business. So we realized after about a year that we’d have to branch into mainstream, and you’ve got to have enough SKUs for them to choose from. When we had three items and thought that was a nice selection, the truth is that for mainstream, high-end grocery, you need more than one or two items on the shelf to draw people’s attention. Now, with seven SKUs, we have a nice selection where stores can choose to carry the whole line or three or four for nice shelf presence.

Your jars say “Pickled for a Purpose.” What’s the purpose?

JL: Charlie’s only son, Hunter, passed away in 2004. And the family started a foundation called Hunter’s Hotline, which puts hotlines in schools that provide a direct, private and secure confidential line to the police should you feel you’ve gotten yourself into trouble, whether that be drugs, bullying or alcohol. This has been up and running for the better part of 12 years.

So travel forward—here we are with Pickled Pink, and we’re asked all the time if we partner with breast cancer foundations, because of the pink connection. We didn’t. We spent time having meetings and trying to have that partnership and connection when I said to Charlie, we have a purpose, your family has a purpose and our purpose is Hunter’s Hotline. Today, a percentage of the profits go to help maintain and grow this organization.

What's next for Pickled Pink?

JL: Our short term goals—that being 12 to 15 months away—is to roll out no less than two and potentially three new items. One of the items will be a standard garlic dill cucumber pickle. But we’ve found that our unique products like the watermelon and peaches, although more expensive, are top sellers because they’re unique. So we’ll likely be looking at adding products that are unique with nice color, too.

We will also likely begin the process of having our products become Kosher certified. And we’re looking at foodservice, since we are asked about that constantly.

We are also going to be moving into a new warehouse in Atlanta in the beginning of 2018. So we’ll be hiring new employees, too—rather, we’ll be hiring employees, because for now it’s just us!

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[email protected]: New fodder in the carbs vs. fat debate | Natural beauty brands face supply strains

Thinkstock research on carbohydrates and fats

The low-fat vs. low-carb diet debate has a new answer

Recent research on dietary fat has nudged the public to re-think the notion that fat is bad. Cue the rise of coconut oil, “healthy fats” and the ketogenic diet. In a new study published in The Lancet that followed the diets of 135,000 people from 18 different countries, people on a high-fat diet were 23 percent less likely to die during the seven years of the study than people who ate less fat. On the contrary, people who ate a high-carbohydrate diet had a 30 percent greater risk of death than those on a low-carb diet. Read more at Time…

 

What happens when supply can’t meet demand in the natural beauty world?

Like food brands, natural beauty brands that use ingredients that grow on trees or vines and are affected by weather, labor and climate, can experience sourcing crises—especially as they scale to met the needs of large retailers like Target who are doubling down on natural personal care products. For example, after finding success with a serum that contained the Southeast Asian ingredient mangosteen, SkinOwl Founder Annie Tevelin couldn’t source enough of the stuff. Jessica Morelli of Palermo Body had the same challenges with organic rose hip oil, and Rachel Winard of Soapwalla had it with jojoba plants. The lesson learned? “Always have a plan B for every ingredient,” Winard says. Read more at Well and Good…

 

How an Ivy Leaguer’s need for caffeine launched a startup

Tyler Gage, cofounder of Runa, explains how a business plan he wrote in college grew into a full-fledged social enterprise based on the energizing qualities of the Amazonian plant guayusa. Read more at CNN…

 

Organic hazelnut growers band together

Nearly all hazelnuts grown in the U.S. come from Oregon—but less than 1 percent are organic. Linda Perrine, who runs Honor Earth Farm, has just started the Organic Hazelnut Growers Association to bring awareness to the concerns of the handful of organic growers, including processing. Read more at Capital Press…

 

Yale grad students look to expand homegrown frozen food line

Kitchen Table, the plant-based meal kit startup that won the Rising Star award at the Natural Products Expo East pitch-slam in 2016, has rebranded as Zoni Foods and launched in six East Coast stores. The next step? Investing in equipment to make production quicker and more efficient. Read more at New Haven Register…

Is there room in the plant-based future for old-school meat alternatives?

FitLife Productions Dan Staackmann with jackfruit
Dan Staackmann of Upton's Naturals shows off a jackfruit.

Founded in 2006, Upton’s Naturals is perhaps the coolest legacy vegan protein alternative in stores today. Whether it's the mustached, hipster-friendly mascot “Upton” on the package, or the company's stalwart commitment to crafting perfectly seasoned seitan and jackfruit products, Upton’s represents how a company using old-school ingredients can continue to innovate in an increasingly food-tech landscape.

Here, we chat with Dan Staackmann, owner and president, about plant-based protein merchandising, cultured meat and the future of the plant-based movement.

Upton’s Natural’s core products feature seitan, which is made with vital wheat gluten. What inspired you to start a company highlighting this ingredient? 

Dan Staackmann: I’m a vegan of over 25 years, and seitan was always a favorite food of mine. When I started the company in 2006 there was just one national seitan brand and no one doing it locally. It seemed like a good opportunity that there was room for in the market. I chose not to do tempeh and tofu because they are way more complicated to make, and there are so many regional producers of those protein alternatives.

As gluten-free eating rose to popularity, did your business suffer? Were people shying away from vital wheat gluten?

DS: You know, gluten-free popularity didn't seem to affect us as much, possibly because we were a smaller company. Our sales continued to grow quite a bit each year. So maybe we’re not the best to answer a question like that. For us, things continued to grow and the more mainstreaming of veganism seemed to be happening at the same time.

Who are your core consumers?

DS: Less than half are vegan. That’s based off social media posts, consumer events and in-store demos that we have done. It doesn’t seem like we’re 70 percent die-hard vegans and then just 30 part-time vegetarians. It really seems like there are just more and more people trying to reduce the amount of meat in their diets. We think a lot of our customers eat vegan most of the time, and then once in a while they have a steak.

On the one hand, you have all this investment money flooding into food-tech companies working to create identical meat analogs or cultured meat. And then on the opposite side of the spectrum you have brands like Upton’s who use old-school ingredients—tofu, seitan and jackfruit to craft meat replacements using artisanal techniques. Is there room in the marketplace for both methods?

DS: I definitely think there’s room for both methods, and they definitely appeal to different consumers. Personally, I’m not as interested in the high-tech approach. I don’t think I’ll ever be a consumer of lab-grown meat. There are definitely people out there that get excited about that. As consumers are drawn to a more vegan diet, they’ll start to explore other alternatives such as seitan. All those big investments and food-tech companies are certainly helping the entire vegan category.

Where do you think meat alternatives should be merchandised—next to the beef, chicken and pork, or in the produce or dairy aisle?

DS: It’s tricky, right? There’s been a lot of debate in the industry—is integration better than having the subset somewhere else like in dairy or produce? You would think, yes, if they are in the meat case, maybe you’re going to find that eaters of meat can make decisions to choose vegan protein easier. But consumers of meat alternatives have been pushed into those dairy and produce areas for so long to find vegan products, I wonder if you’re going to lose out on those people. As a longtime vegan, I don’t enjoy going into the meat department to find things. I’m very curious to see what’s going to happen in that regard.

What’s the solution to wean Americans off meat?

DS: What a great question. It seems like [plant-based eating] should be an easy decision for people to make. I just don’t see any reason for anyone in 2017 to say “veganism is ridiculous, why would I do that?” How many studies do there need to be that prove a vegan diet is healthier and better for the environment? Even setting aside the animal rights issues, do you not care about the environment and your own health?

There are so many alternatives right now that make it easy to make the [plant-based] transition. I don’t think meat alternatives are the sole answer. I don’t recommend that anyone eat seitan seven days a week. When I went vegan at 15, it opened my eyes to all the different kinds of traditionally vegan, delicious cuisines like Ethiopian and Indian that are out there. There are so many choices. 

Hain Celestial's Irwin Simon sees opportunities in Amazon-Whole Foods deal

Hain Celestial logo

All retail channels—and Hain Celestial brands—will benefit from Amazon’s Whole Foods Market takeover, Hain Founder, President and CEO Irwin Simon said during the company’s fourth-quarter and year-end earnings call Aug. 29.

“This will be very much favorable for us,” he said. “The combined entity represents a significant proportion of [multi-unit outlet] consumption between our U.S. and Hain Pure Protein business, and we know this will grow.”

Hain Celestial Group (NASDAQ: HAIN) has improved its focus on its top SKUs and driving sales on shelf at retail as part of its strategic plan to improve company performance. It has seen results in Whole Foods Market outlets and expects more as Amazon Prime’s 54 million subscribers join a Whole Foods customer loyalty program that Simon predicts will drive additional in-store traffic.

“It’s great to see Hain Celestial trends improving at Whole Foods, particularly the top 500 SKUs, which are up 5 percent in the latest four weeks,” Simon said. “As Whole Foods reduces prices, we believe it will bring more and more consumers to buy our brands, which will fuel incremental future growth. And it also highlights the tremendous opportunity for Hain Celestial as organic and natural products are increasingly becoming more mainstream and accessible to a much broader consumer base.”

That, he says, creates growth opportunity across all channels.

Online, though, might be the greatest.

“Today, natural and organic foods and beverages represent 9 percent of sales within brick and mortar,” Simon said. “Of online food and beverage sales, 29 percent is natural and organic food, or approximately three times brick-and-mortar sales. This represents an increasing opportunity for us as more and more consumers will shop online today.”

Creating company growth means focusing on Hain Celestial’s “Project Terra.” The strategy focuses on top brands that result in 90 percent of its sales, reducing costs, focusing on innovation, and enhancing retail sales execution with a particular focus on consumer needs and brand building.

Hain Celestial financial results

Fourth-quarter 2017 highlights include:

  • Net sales of $725.1 million, a 2 percent decrease, or a 2 percent increase on a constant currency basis, compared with the prior year period. Net sales were impacted by $28.2 million from foreign exchange rate movements versus the prior year period.
  • Operating income of $8.6 million; adjusted operating income of $67.2 million.
  • EBITDA of $82 million compared to $83 million in the prior year period; adjusted EBITDA of $86 million compared with $91 million in the prior year.
  • Earnings per diluted share was breakeven compared with a loss per diluted share of 86 cents in the prior year period; adjusted earnings per diluted share of 43 cents was in line with the prior year period, and foreign currency exchange rates impacted reported results by 3 cents per diluted share.
  • Operating cash flow of $69 million.

For fiscal year 2017, Hain Celestial reported:

  • Net sales of $2.85 billion, a 1 percent decrease, or a 3 percent increase on a constant currency basis, compared with fiscal 2016 net sales of $2.885 billion. Net sales were impacted by $124.3 million in foreign exchange rate movements compared to the prior year.
  • Operating income of $111 million, with adjusted operating income of $202 million.
  • EBITDA of $239 million compared with $362 million in the prior year, with adjusted EBITDA of $275 million compared with $379 million in the prior year.
  • Earnings per diluted share of 65 cents compared with 46 cents in the prior year, with adjusted earnings per diluted share of $1.22 compared with $1.85 in the prior year. Foreign currency exchange rates impacted reported results by 12 cents per diluted share.
  • Operating cash flow of $217 million.

Fiscal year 2018 guidance includes:

  • Total net sales of $2.967 billion to $3.036 billion, an increase of approximately 4 percent to 6 percent compared with fiscal year 2017.
  • Adjusted EBITDA of $350 million to $375 million, an increase of approximately 27 percent to 36 percent as compared with fiscal year 2017.
  • Adjusted earnings per diluted share of $1.63 to $1.80, an increase of approximately 34 percent to 48 percent compared with fiscal year 2017.

[email protected]: Amazon wastes no time cutting prices at Whole Foods | Organic milk prices drop

Gettyimages organic gala apples on sale at Whole Foods Market

Amazon cuts Whole Foods prices as much as 43% on first day

Bananas, responsibly farmed fish and organic avocados are some of the items whose prices were slashed as Amazon closed on its deal with Whole Foods. “Amazon has demonstrated that it is willing to invest to dominate the categories that it decides to compete in,” says Mark Baum of the Food Marketing Institute. “Food retailers of all sizes need to look really hard at their pricing strategies, and maybe find some funding sources to build a war chest.” Read more at Bloomberg…

 

She built a $1.7 million beauty business while home-schooling her 14 children

Tammie Umbel built her skin care business, Shea Terra Organics, “the old-fashioned way”—with hard work and no investors. She started in 2000 in her Arlington, Virginia, home and has built the business herself, traveling the world to find raw ingredients like argan oil, shea butter and marula oil. Sometimes, she even brings her kids to industry shows and to the factory near their home where the products are made. Read more at Washington Post…

 

Farmers see organic milk prices drop

Where, not long ago, there was a lag in supply, there is now an abundance. So much, in fact, that organic dairy farmers are getting less for their products. About two years ago, demand far exceeded supply, so farmers started producing more and transitioning from conventional milk to organic because of the price premium they could get. Read more at Valley News…

 

Senator questions quick approval of Amazon’s Whole Foods purchase

Democratic Sen. Amy Klobuchar of Minnesota says she plans to ask the Federal Trade Commission to explain how it decided so quickly that the Amazon-Whole Foods merger wouldn’t suppress competition and harm consumers. The FTC said last week it ended its antitrust investigation and wouldn’t seek more information on the deal. Read more at CNBC…

 

Blue Majik is Instagram’s hottest healthy food trend, but what the heck is it?

It’s a proprietary extract of spirulina, a type of blue-green algae grown in fresh-water lakes, sold by E3 Live in powder and capsule form. It supposedly contains protein, B vitamins, phytonutrients and a slew of other nutritional benefits. Read more at Organic Authority…