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Big Interview: Matt McLean, CEO of Uncle Matt's Organic

Uncle Matt's Organic outpaces competition in organic juice 'war of attrition'

1 commentBy Maggie Hennessy , 30-Oct-2013

“We’re still capped on what channels we can go into and have an effect," said Matt McLean, CEO of Uncle Matt's Organic. We have our limits and organic in general has supply limits."
“We’re still capped on what channels we can go into and have an effect," said Matt McLean, CEO of Uncle Matt's Organic. We have our limits and organic in general has supply limits."

From one pulp-free organic orange juice SKU in a regional Florida grocery store chain in 1999, Uncle Matt’s Organic is the oldest US organic juice company with 11 organic juice products and national distribution in such chains as Whole Foods, Publix and Kroger. 

A fourth-generation citrus grower, Uncle Matt’s CEO Matt McLean said the company achieved profitability the past 10 years and outlasted the competition by staying focused on its roots in growing organic Florida fruit.

“We’re firmly rooted as growers and patient with the process of converting farming to organic,” McLean told FoodNavigator-USA. “We started with three acres in my father’s backyard and now have 1,200 acres and a network of 25 growers. We get them each certified as organic, sign market agreements to sell and buy the fruit, do all the caretaking and outsource the packing and processing pieces. Fourteen years after we started, we’ve outlasted Horizon, Pavich, Cascadian and Organic Valley—all of which have had issues in supply. It’s been a war of attrition to get as far as we have.”

Growing organically

McLean was running a juice brokerage business in the mid-90s when customer in Germany inquired about importing organic juice. He discovered there was a void in the US juice market for organic. Seeded with money from the brokerage, McLean, his father and grandfather started growing organic citrus trees on a few acres in the backyard, supplementing production by purchasing from other organic growers in the region.

“It took awhile for me to learn everything from bottling to retail, brokers and distribution,” McLean said. “As a juice exporter, I was good at moving bulk drums from point A to point B. I also learned a lot about different flavor profiles from German to French to English to those in the Middle East. From all those different palates, I learned what made a great-tasting juice.”

Organic was still a fairly young concept in the US in the late 90s—though soaring demand for organic baby food had paved an entryway for a lot of other organic products. McLean spent the first three years presenting the ins and outs of organics to potential buyers, targeting multiple channels at once in the hopes that something would stick.

“In the beginning, I was just educating buyers about the different growing methods. I had no money for advertising, so I had to fight the battle there first. I couldn’t get to customers yet,” he said. “Organic was still new, but it was something that progressive stores knew. This is a category that we wanted to look at.”

Limits to organic supply

Uncle Matt’s secured distribution early on in upscale Florida Gooding's Supermarkets and Chamberlin's Natural Food Market, followed by Whole Foods.

As consumers have increasingly embraced organic over the last 15 years, so has the mass retail penetration of organic products like Uncle Matt’s, though the firm has to be discerning in its channel selection, given the limitations of organic juice production.

“We’re still capped on what channels we can go into and have an effect,” he said. “We don't have the velocity on the shelf as Simply Orange. We're not going to go into Walmart and be successful.

"We have to choose those battles carefully. We don’t want to have too high a swell or shrink, which is something we learned the hard way. We have our own limitations and organic in general has supply limits.”

Stick with what you do well

The company is also choosy about line extension, as its roots are in US-grown orange, grapefruit, apple juice and lemonade. Adding exotic fruits or functional beverages would require sourcing outside the US and building out production.

“There are a lot of new entries into market every year in juice, flavors, brands—you name it,” McLean said. “A lot of it is fads, but some things become trends. We haven’t seen a need to go into sophisticated blends to maintain our shelf space. We have that space; we have our customers. But never say never. If we found a good opportunity that fits our brand, message and abilities, I’d definitely consider it.”

He adds that despite the appealing growth opportunities in areas such as energy drinks, kambucha and cold pressed juice, Uncle Matt’s has to stick with what it does well. “It’s riskier getting into some of those areas. We’re comfortable sourcing all USA fruit, and we like supporting organic American farmers.”

The future of orange juice: ‘good’ sugar and battling citrus greening

McLean considers big, conventional juice brands like Tropicana or Minute Maid to be more indirect competitors, since they don’t offer organic options because of sheer size. (McLean remembers when Tropicana approached Uncle Matt's seven years ago about growing fruit for an organic line. "They wanted a simple trial of a million gallons. And I thought, 'That's all our brands combined!'" Tropicana got out of organic not long after.)

Still, organic juice still faces the same concerns as the conventional market, from flat sales amid the recent vilification of sugar to citrus greening, a bacterial disease that has led to the loss of millions of citrus trees and a reduction in production levels.

“The industry as a whole needs to continue to educate consumers to overcome the stigma that the sugar in juice is bad sugar. It’s not the same as soda; it has antioxidants, plus vitamin C and folate,” he said. “There are a lot of things people should be cutting out instead of juice. We also need to overcome the production declines from citrus greening in the states, so prices can stabilize and we can bring back consumers on fringe who could no longer buy orange juice.”

Indeed, from 2004 to 2012, Florida citrus production dropped from 292 million boxes of fruit 171 million. Average orange yields have slipped from 428 boxes an acre in 2004 to 338 boxes an acre today, despite denser plantings of orange trees. The wholesale price of Florida oranges has almost tripled, from $2.89 a box in 2004 to $7.96 a box in 2012.

One proposed solution to citrus greening has been to introduce genetically engineered citrus trees, which is where Uncle Matt’s diverges from its conventional juice counterparts. “As an organic company, by law simply we can’t use them. And philosophically, it’s not the right option long term.”

Other potential solutions pull from organic farming practices, such as introducing plant-friendly bacteria or a high population of biodiversity within groves.

While it’s unrealistic to say organic farming practices would replace conventional farming methods as a whole, McLean is optimistic that the industry will opt for a sustainable solution.

“We’re at a crossroads with citrus greening, and biotech is standing by to invest in GE crops to alleviate it,” he said. “We’d rather go for a more holistic approach. As a farmer, we tend to be eternal optimists. There are some more sustainable options for farming that conventional can take from organic. I’m not an environmentalist; I’m a grower.”

1 comment (Comments are now closed)

Congrats

Congrats on keeping the business growing and becoming profitable. Kudos to you Uncle Matts! I love to hear about organics companies doing it the right way and providing products that people want. The market is there for organics. We just need to keep it going!

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Posted by A. Mac
31 October 2013 | 01h41

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