There is a huge untapped opportunity to drive growth in the US chilled prepared food market with innovative new products offering freshness and convenience, says Bolthouse Farms.
Chief marketing and innovation officer Todd Putman was speaking to FoodNavigator-USA yesterday after the official opening of the baby carrot and premium juice firm's $5m innovation center in Bakersfield California.
The state-of-the-art 17,900 square foot center - located next to the firm’s manufacturing facility - will significantly increase the potential number of new products Bolthouse Farms brings to market per year and enable the introduction of “completely new product categories”, said Putman.
“A lot of our innovation in the past was done in a really ugly way - in a trailer across the street. Now we have state of the art facilities where we can develop fresh chilled products for the perimeter of the store, where sales are increasing fast, while many categories in the center of the store are declining.
“We think there is a wide open opportunity here.”
We have identified four to six categories as ripe for opportunity
The firm, which was acquired by Campbell Soup last August, specializes in baby carrots, but has more recently diversified into super-premium juices, smoothies, protein shakes and café beverages, refrigerated yogurt dressings and extra virgin olive oil vinaigrettes.
Putman would not reveal which product areas the firm is now exploring, but said that it has “identified four to six categories as ripe for opportunity. We have a robust innovation pipeline.”
He added: “When we look at our manufacturing capabilities, some [new products] we can do already and some we might have to outsource.”
One new product that has just hit the market is Baby Carrot Shakedowns, snack packs of baby carrots with a serving of seasoning - which are as convenient as a bag of potato chips, but considerably healthier, he said.
“It’s in three test markets at the moment and feedback has been good, although it’s a unique product, so will take time to jump into the mainstream. In general we’ve found that it performs better when it is positioned in store as a grab and go snack [rather than in the main produce aisle].”
Asked how being part of Campbell had changed things for Bolthouse, he said: “The transaction has gone amazingly well. We are being run as a standalone entity, although we are working closely with Campbell’s innovation team and there are a lot of back of house technologies and other things we can use from them to work in a more efficient and effective way.”
However, there are no immediate plans to integrate product development systems, he said.
Test kitchens and sensory center
The new center houses several test kitchens and a sensory center, and employs 40 staff, 15 of which are new recruits, said Putman.
Outlining the rationale behind the acquisition of Bolthouse last year, Campbell Soup boss Denise Morrison said the move would bolster Campbell's presence in the fast-growing premium healthy beverages category and give it a platform to grow in fresh packaged foods.
“Bolthouse Foods’ strong position in the high-growth packaged fresh category complements our chilled soup business in North America, and offers exciting opportunities for expansion into adjacent packaged fresh segments that respond directly to powerful consumer trends”, she said.
Bolthouse, which was founded in 1915 and is still run for former Coca-Cola executive Jeff Dunn, markets its beverages and dressings under the Bolthouse Farms brand, and its carrots under the Bolthouse Farms, Earthbound Farms and Green Giant brands, as well as private label brands.
In the year ended March 31, 2012, it generated sales of $689m.