Amy’s Kitchen gears up to open new plant, predicts revenues will approach $600m in 2020
While many frozen food brands have experienced a sustained uplift in sales in recent months as Americans have stayed home, growth at Amy’s is outpacing that of the category, claimed president and CEO Xavier Unkovic.
“There was a pretty significant spike [in March/April] where we saw sales of some products up 50, 60, 70% - pretty significant – and then it slowed down, but we’re still well above [pre-pandemic growth] on frozen food but also soup,” said Unkovic, who joined the business in late 2017 after a lengthy career at Mars.
“We’ve been growing faster than the category growth average if you look at the SPINS and MULO data. More people are looking for frozen foods but within that, they’re looking for better-for-you products and plant-based products.”
And while part of the growth reflects the fact that loyal fans of the Petaluma, CA-based brand have been buying more Amy’s products as food consumption has shifted towards the home, Amy’s has also attracted new customers, claimed Unkovic.
“Many consumers have been trying products that they had never tried before during the pandemic, and they tried our products and they realized that we taste great and our value proposition makes sense.”
Amy's Kitchen was founded in 1987 in Sonoma, California, by Andy and Rachel Berliner, who named the business after their daughter, Amy. The first products - pot pies - were followed by burritos and mac & cheese. Pizzas were added in the 1990s, along with soups, beans, and chili. A wide range of gluten-free products joined the portfolio in the early 2000s followed by candy bars in the 2010s. Today the company also makes a wide range of frozen bowls and entrees inspired by cuisines from all over the world.
Currently, Amy's operates production facilities making vegan, vegetarian, and gluten-free products in Santa Rosa, CA; Pocatello, Idaho; and Medford, Oregon; with new plants to come in San Jose, CA, in 2021, and Goshen, NY in 2022.
Currently, most of Amy's vegetables, grains, and beans are organic.
Capacity updates: New plants in San Jose, CA; Goshen, NY; Portugal plans on hold for time being
The new 65,000-sq-ft pizza production facility in San Jose will free up capacity at the Amy’s facility in Medford, Oregon, said Unkovic, who plans to hire 180 employees at the San Jose plant by the end of the Q1 2021.
A new $120m plant in Goshen, New York that will have the flexibility to produce multiple products, will open in 2022, said Unkovic, although plans to build a plant in Portugal have been put on ice.
While Amy’s – which now sells its wares in 28 countries - has been “delighted” with its performance in the UK, where it sells frozen products and soups in multiple leading retailers, it has not had the same success in mainland Europe, he said.
“We sold the land that we bought in Portugal, as right now we need to be very focused [on the core business], but we plan to buy another piece of land in a similar place in future.”
Reduced SKU count
Like many brands, Amy’s has rationalized its SKU count in recent months, in part to focus on top sellers to keep supermarket shelves stocked, but in part reflecting changes it has had to make in its manufacturing plants in order to ensure social distancing, said Unkovic.
The company has also moved to new shift patterns at its plant in Pocatello, Idaho, to increase capacity, and hired an additional 150 people to meet demand.
‘We need to tell our story better…’
While Amy’s has been generating strong double-digit growth, and clearly has products that resonate with shoppers, especially as the plant-based trend gains traction, marketing is “not our strength,” conceded Unkovic, who said more focus is now going into how to tell the brand story more effectively.
“We have such a great, authentic story. We are a family-owned business and we’ve been making our own products using organic ingredients for more than 30 years, but I think other brands are communicating a beautiful story way better than we do.
“So in 2021, we’re going to do a much better job of explaining who we are, what we do, and why we do it. And digital communication is a key opportunity.”
As for new products, Amy’s still has a lot of runway to increase the penetration of its core frozen entrees, pizzas, bowls, pies, burritos, wraps, burgers and shelf-stable soups, said Unkovic. “There are still a lot of customers that do not carry all Amy’s products.”
However, the team is also looking at where else the brand has permission to play, he said.
“We’ll continue to try things that are not in the core business; we’ll try more categories moving forward if there is a need, as we don’t want to lose our founder mentality of trying new things. When we do new things it’s because we see a consumer need or it’s something our consumers are asking for.”
