Bolthouse Farms to acquire cold-pressed (mostly) organic brand Evolution Fresh: ‘They're very different consumers. There's only a 4% overlap’
Speaking to FoodNavigator-USA after Bolthouse announced plans to acquire Evolution Fresh from Starbucks for an undisclosed sum in a deal expected to close later this year, Bolthouse Farms chief customer officer Phil Kooy said the brand (manufactured in-house at Rancho Cucamonga, CA) was “performing fantastically.
“The last 52 weeks are up close to 40%. Evolution Fresh is the fastest growing beverage brand in the super premium beverage space, and so we're tremendously excited to be able to partner with them to further accelerate growth.”
Evolution Fresh and Bolthouse Farms: ‘They're very different consumers. There's only a 4% overlap’
Research suggests that Evolution Fresh and Bolthouse (a fresh food business specializing in premium juices, smoothies, dressings, functional shots and packaged carrots) have distinct consumer bases, said Kooy. “Yeah, from our research right now, they're very different consumers. There's only a 4% overlap, which is pretty incredible in terms of how distinct they are.
“We don't have an entry into cold pressed and organic right now, so that's why we're really excited because it's the perfect complement to our current portfolio.”
Goodbye 1915, hello Evolution Fresh, ‘the crown jewel of the category’
While Bolthouse Farms had made moves into the super-premium segment of the category with its 1915 premium organic cold pressed juice brand, launched in 2016, this was dropped in early 2020.
The Evolution Fresh brand (which was launched in the mid-1990s), however, is “the crown jewel of the category right now,” claimed Kooy.
“In the case of 1915, it was organic, it was cold pressed, and it was a similar proposition, but it is really difficult to build a new brand. Starbucks [which acquired Evolution Fresh in 2011 for $30m] has done a great job of stewarding the brand over the past number of years.
“Cold pressed is really in line with what consumers looking for. It’s clean label, with fantastic flavors, and nutrient dense. Evolution Fresh’s immunity Defense Up SKU, the growth on that in particular has been awesome, as have the 59oz offerings – they have been a big growth driver. It’s similar for us at Bolthouse with our 52oz offering.
“At Evolution Fresh, almost 40% of their portfolio is citrus-based, and naturally that has also benefited from general interest [during the pandemic] in orange juice. People were looking for anything with any type of immunity benefit with nutrients, and vitamins and minerals, and it enabled Evolution to introduce themselves to a whole wave of new consumers.”
Evolution Fresh in 10,000 Starbucks locations and 11,000 grocery stores
Right now, Evolution Fresh is in 10,000 Starbucks locations (where it will stay, post-acquisition) and around 11,000 grocery stores, with a stronger presence on the West Coast, said Kooy. Bolthouse Farms, meanwhile, sells products in 30,000+ stores, providing obvious opportunities to extend the brand’s reach.
“We're excited to share resources and streamline supply chain, access to fresh produce, and we both share a passion for innovation. So we’re going to exchange a lot of learnings but still provide Evolution with the autonomy to continue doing what they do best.”
Asked about capacity, he said: “We are learning more and working to understand that in terms of additional capacity that we can bring online. We're certainly going to need it based on customer and consumer demand.” (This would likely mean expanding the Rancho Cucamonga plant, not building a new facility on the east coast, he said.)
'We want to make sure that all the households we have gained and that have come into the category do not exit over the next 12 months'
But will shoppers keep buying premium organic juice if prices continue to rise and budgets are stretched?
“Multiple vendors in the category have had to take price at least once over the past 12 months as we're all facing a similar reality of rampant inflation,” said Kooy, who said all 283 Evolution Fresh employees had transferred over to Bolthouse Farms.
“Our commitment is obviously to drive dollars, but we're very sensitive to unit volumes as well, in terms of our production efficiencies, but also making sure that all the households that we have gained and that have come into the category do not exit over the next 12 months.”