“What happens when you send everyone home with their families for two or three months or more? It’s a huge sociological experiment. We’ve seen a huge increase in demand but we’ve also seen a spike in traffic to our recipe sites because everyone is trying to figure out what to cook.”
‘We’ve seen a massive surge in demand on carrots and a secondary wave on beverages’
While the surges in sales seen in the latest Nielsen data are a reflection of pantry-loading, the 50% of food that is typically consumed outside the home in schools, colleges, workplaces, restaurants and cafeterias, is rapidly switching to in-home consumption, and will stay there for at least as long as social distancing measures remain in place, Dunn told FoodNavigator-USA.
“We’ve seen a massive surge in demand on carrots and a secondary wave on beverages, especially those that are high in vitamin C, so our C-Boost product has been doing amazingly well, and we expect that to be sustained,” he said.
“On carrots we’re shipping 150% of our budget and we have demand for 250% of our budget, but with an agricultural crop we can only harvest what’s ready, but we had some extra acres in the ground which allowed us to meet this surge in demand and we’ve kept our fill rates very high in the last couple of weeks.”
‘It’s a huge sociological experiment’
He added: “We can build a little bit of beverage inventory [where products have a 60-day shelf life] but with carrots, we literally pull them out of the ground and 24 hours later they are on a truck, so you can’t just build up inventory, which is why we put enhanced safety and sanitation protocols in so early.
“For a business that was in decline [Bolthouse Farms was acquired by Butterfly Private Equity last summer for a fraction of the price that Campbell Soup paid in 2012], we’d just managed to flatten the revenue curve [before coronavirus hit], and then just all of a sudden it’s gone straight through the roof. It’s a testament to all the work my team has been doing since last summer that we've been able to respond so well."
Asked how the pandemic had impacted the wave of new products under development at the company, from CBD beverages to protein shakes, Dunn said that BOLTS - a new line of functional wellness shots - had only made it to a small number of outlets before coronavirus hit and retailers temporarily stopped onboarding new brands].
But he added:“We got our [new] Protein Keto drinks into a lot of stores, about 30% ACV, before this hit, and they are absolutely ripping the cover off. But some of our core beverages, with immune boosting functionality, they’re absolutely in the right place [delivering what consumers are looking for right now]. Our original product carrot juice is also on fire, and C-Boost and Green Goodness are up 200-300%.
"We’re at the value end of the premium beverage category and we are in carrots, which is a staple business, so I am very optimistic and think we’ll come out of this stronger.”
Testing, sanitation, segmentation, backfilling
Asked about keeping employees safe at the firm’s main facility in Bakersfield, California, while addressing surging demand, he said: “The team has responded incredibly, focusing on employee health and safety and basic business continuity, and I don’t think we’re through the worst of it yet, but on the processing side we took a number of actions early that have really worked well.
“The first thing we did is say to people don’t come into work if you’ve got symptoms, and we’ve incentivized them not to do that, and we also segmented the plant into teams of 10 with the same work and break areas and staggered shifts, so that if we do get a hit, it affects fewer people.
“We also started testing everyone that is about to enter the plant with temperature guns and if they have a temperature over 100˚F we send them directly to an offsite clinic to get tested [for COVID-19] and we don’t let them come into the plant.
“If we do get someone with symptoms we’ll send the people [who worked with that person] home, come into that part of the plant and sanitize everything, and then we’ll monitor those people.
“We’ve also started to recruit as many as 500 incremental people so that if people get sick and have to take time off, we can backstop them. It’s like fighting a war and everyone has the job of supporting the frontline troops.”
‘I think our food system is holding up incredibly well’
The vast majority of Bolthouse Farms’ business is in retail, said Dunn, “But we’ve got a number of foodservice distributors and partners that have asked us to help them move product into retail, they were built for restaurants and foodservice and were caught flat-footed with big inventories of fresh produce.
“Food is moving around the supply chain in ways that are unpredictable right now, but I think our food system is holding up incredibly well.”
Bolthouse Farms has just entered into an agreement to acquire Arizona-based Rousseau Farming Company’s carrot operations, which will allow it to offer customers more locally grown carrots as part of its regional strategy and 'four corners' growing approach: Washington, Georgia, Eastern Canada and now Arizona, in addition to California (where Bolthouse Farms is based). It will also bolster Bolthouse Farms’ plans for innovation in the carrot space, said Dunn.
"This acquisition will help us scale to serve our customers better by bringing more fresh and healthy, locally grown carrots to them in the Southwest."
IRI data: Produce sales: According to IRI multi-outlet food retail data (MULO), US dollar sales of fresh produce increased 29.7% year-on-year in the week to March 22, while frozen fruit/veg was up 114.4% and shelf-stable (canned etc.) produce was up 158.1%. In the vegetable aisle, shoppers are stocking up on fresh vegetables with longer shelf life, notably potatoes, onions, carrots, and squash.