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Q&A with Jeff Dunn, CEO of Bolthouse Farms, on the Campbell acquisition, trends and what’s on the horizon

8 min read

Food Retail

We spoke with Jeff Dunn, CEO of Bolthouse Farms and former senior executive at Coca-Cola, in a one-on-one interview after his inspiring session “Creating Fruits & Veggies Passion!” at this year’s PMA Fresh Summit in New Orleans. From the acquisition of Bolthouse Farms by Campbell and industry issues and trends to marketing to kids in the future and a brand new partnership with PMA to begin a marketing community, we get the scoop from straight from the source.

SB: The natural foods and premium juice industry is exploding and more and more large companies are acquiring smaller health-oriented companies. What has changed for Bolthouse Farms since Campbell acquired it 15 months ago? Has it changed the direction of the brand at all?

Not at all, and the reason is that because when they bought us, Denise Morrison, the CEO, part of the deal in buying us was that she really wanted to leave us as a sustainable company, she recognized our mission was slightly different than theirs, but mostly, our business system was different. You know, big food companies tend to buy smaller ones, they see synergy operationally, but because we’re a fresh business, there was a little synergy, we could grow carrots for them and things like that, but it wasn’t a major driver of the acquisition. The driver was growth and they recognized for us to continue to grow at the high rates we have, they needed to leave us alone and kind of let us do it our way, and that’s worked extremely well. They’re really pleased and I can say with kind of impunity, that’s not the history of big companies buying small companies, it’s actually more the rarity, but in this case, at least so far, they’ve been fantastic and I think it’s paying dividends for them.

SB: Do you think this represents a sea change with the way larger companies treat smaller companies they acquire?

I don’t know if I have enough data points to say whether it represents a sea change, but now, if you’re smart, it’s what you’re going to do. I mean, big companies have a bit of arrogance that when they buy somebody small, they think they’re going to have them do it their way, but generally, small companies grow the way they grow because they’re entrepreneurial, they’re fast and they’re responsive, so you don’t want to bring them onto the big mothership. I mean Coke, they were famous for taking small brands, they buy them, they’d be growing like crazy and it’s because they try to get them to do it the Coke way. Barg’s is a perfect example in New Orleans, it’s a huge root beer brand regionally and Coke bought it, it was very quirky, they did all this crazy stuff and we bought them, shut down the New Orleans headquarters and it was a New Orleans brand, it’s like we should have just left an office here, it wasn’t that much money, so it kind of lost its authenticity, its roots, and that was it.

It would be my hope, but all I can talk to really is Campbell at this point, and they’ve been — I’m almost surprised, but not totally surprised; they were clear about it — but they’ve been really good about giving us our space, which is good news because if they didn’t, we wouldn’t do what we do. That’s kind of the proof in the pudding right there.

SB: Marketing produce to kids has been in the spotlight throughout the country, and here at the PMA Fresh Summit as well. What’s Bolthouse Farms doing to market to kids, if anything?

We’re actually doing a lot through the parents, through millenials at this point. We’re looking at some direct to kids stuff, but we actually think that like the Shakedown [products], which [aren’t] really necessarily targeted to small kids, that we start to just create the right kind of imagery, kind of contemporary imagery, around us, and then if you can get mom to bring it into the house, our Shakedowns are a good example, our juices are also a really good example. You actually get mom to put it in the house, and the kids will drink it. The kids aren’t necessarily asking for it because they’re not seeing us on tv or those kinds of things, but right now our focus has really been about the gatekeeper and getting mom to put us in the refrigerator.

A good example would be the smoothie business, [which] grew up as a sort of single-serve business, you know, $2.99 for a single serve portion. Well, mom, when I got to the company, mom said, “I’ll drink that for myself, but I’m never putting that in the refrigerator for the kids – it’s expensive.” So we moved up, we had a quart packaging, and we moved up to a 52-ounce bottle, which was really designed as an all-family size. We started putting that in the house and mom said, “OK, that’s close enough to orange juice, I’ll let the kids drink it,” and all of a sudden, our consumption exploded because it was an all-family beverage. So part of this is getting the whole family.

And I think from a produce standpoint, baby carrots are a little different for smaller kids, but you’ve got school children, you can’t go too young, but I think one of the things that we’re talking to Bryan about is, how do we create a more comprehensive approach to younger kids? It’s still kind of a work in progress, but that’s the current thinking.

SB: What are your thoughts on the increasing media attention that’s been given to the amount of sugars in juice? Is it hurting business?

The business is continuing to grow pretty fast. They’re 100% juices, so they have as much sugars as those juices have unless you want to cut them down and use artificial sweeteners, or do some other things. It’s this balance between 100% juice and not.

One of the solutions we’re looking at is to put more vegetable juice in. That lowers the sugar content pretty significantly, and we’ve just launched, actually in Costco in Los Angeles, a V8 Harvest, which is a fresh V8 product, 100% vegetable juices. I think part of the answer there is really a balance between fruit and vegetable, and really, a continuum of 100% fruit, 100% vegetable. I think we can start to shift and get more vegetable juice in, blends for some fruit juices where it keeps tasting good, but we can bring calories down. Our average products are probably around 140-160 calories, probably somewhere between 25-30 grams of sugar. You go to vegetable juice and it’s 60 calories and about 9 grams sugar, so that’s the difference between 100% fruit and 100% vegetable.

SB: Speaking of vegetables, do you see any trends in savory snacking with veggies?

Yes, I think it’s a huge opportunity. We’ve got a lot of other flavors of Shakedowns we’re looking at. Most of them are actually – a couple of sweet ones – but mostly savory and we’ve got some hot varieties, buffalo wing kind of flavors and things like that. We think savory, we think heat is actually really enjoying. We look at cultures, Mexico for example, pickled vegetables, pickled carrots, that’s a nice way to create some taste interest, I think, in vegetables. If you take the raw products, that’s the reason with the Shakedowns, you can eat baby carrots. We went to households, watching people, anthropological type of stuff, and you know, most of the time, they were dipping it in something, whether it was hummus, ranch or whatever.  We looked at that and said, “that’s good, but why are they doing that?” They’re doing it for taste reasons, it makes it more interesting. That’s how Shakedowns came about, because we said we can give them that taste hit without the calories, because regular ranch dressing is adding 100 calories [and] you’re kind of defeating the purpose; have a Hershey bar.

SB: Tell me about this new online marketing community that you are partnering with PMA in creating, which was just announced on Friday at PMA Fresh Summit.

We’ve been leading this effort with PMA to kind of create this marketing community. So I’ve just gone onto the board of PMA this cycle, yesterday, so it’s early days, but we want to be part of building that community of marketers, and so Bryan [Silbermann] has been great about partnering with us and sort of thinking about what we can do.

SB: Will a guide or some other type of resource come from this?

There is some stuff in process, we aren’t ready to reveal it because of timing purposes, but yes, there’s some beef coming…that’s all I can say or I’m going to have to kill you. [Laughter]. Stay tuned.

Read more about the new marketing community.