Rising Stars of the Food Industry
Fran's Healthy Helpings Feeds the ChildrenInspired by her own children, Fran Lent started a company that would offer healthy eating options for children too old for baby food. As Lent recalls, “When my children were babies, I was giving them a natural and organic baby food called Earth's Best. After that, I did not feel like there was anything I could give my kids that I would feel good about and that they would want to eat.”
With that in mind, Lent would go on to develop Fran's Healthy Helpings, a line that has enjoyed quite a response from consumers and, most importantly, from its target audience—children. Lent, president and CEO of the company, says, “Kids will only eat what they like, so we have taken the philosophy of not trying to recreate the wheel and looked at McDonald's and our competitors. We are never going to taste like McDonald's because we are healthier. Our foods are baked, not fried, and we use white meat. I think we taste better than McDonald's, but we are not going to fight an uphill battle. So, we have given that profile to product development and said try to make this taste as much like what kids already like as possible.”
Each of Fran's offerings adheres to the FDA's definition of a healthy food and is free of artificial colors, flavors, sweeteners and synthetic preservatives. Development at Fran's Healthy Helpings has often been in partnership with ConAgra, who also co-packs the healthy meals for children. Currently, Fran's line includes six kid-oriented meals, all with an element of fun to them, though always with healthiness at the forefront.
“Consumers and retailers alike have embraced us because there is nothing else out there that is healthy [and just] for children,” says Lent. “It's a very mainstream healthy, and most of all, it's fun for the kid.” There is a very important fun aspect to the line, namely in the names and fun shapes. “There is a need out there. No one else has addressed it, and now we have,” she continues.
Fran's six products are now in about 4,000 grocery stores across the country, averaging three items, sometimes four, in each chain. Their strongest distribution is in northern California, but Fran's Healthy Helpings can also be found in pockets around the country. The company intentionally has grown at a slow pace, Lent notes, but now has reached a point where some strategic and economic decisions will have to be made.
“We have purposely tried to keep it small. We have had to manage our growth because of the cost of doing business and growing a consumer packaged goods company. Now, we are actually at a crossroads. We are growing. We don't think a large company can do what we have done—create a proven business model on a small scale. We have proven that our brand stands for something, that we really care about what consumers feed their children.”
About 12 large consumer packaged goods companies have shown interest in establishing a partnership with Fran's, either as a strategic partner or in a strategic alliance. “If we associate ourselves in some major way with a large consumer packaged goods company, we can grow faster,” concludes Lent.
Fran's Healthy Helpings
Sales: $2 million
Employees: 4 (on-site)
Distinction: Innovator of healthy meals for children.
Pacific Foods of Oregon Takes ChancesNever afraid to take a risk, Pacific Foods has extended its scope beyond the dairy alternative arena.
GPacific Foods is not a large, massive food company that comes up with a new product idea that only sees the light of day after two years of extensive research and testing. We go a lot by our gut and go out and do it. We would rather be out there fast and make a few mistakes than take forever to get out there and be a 'me, too.'”
That “quick to market” philosophy, as stated by Ron Martell, vice president of marketing at Pacific Foods, has been the secret to the company's success, which has translated into an annual growth rate of 30-35%. Nevertheless, the road to success has not been a straight one.
Pacific Foods was founded in the fall of 1987. Martell recalls, “Originally, the founder thought tofu was an emerging item and would be big in the United States. Obviously, it did not take off as anticipated.” However, one of the byproducts of making tofu is soymilk, and other companies asked if Pacific would co-pack soymilk. The company agreed because it had no use for it. As soymilk's popularity grew rapidly, Pacific realized this was the growing market and that it could do this under its own brand.
The ability to market behind an approved health claim (and its sheer popularity) has made soymilk among Pacific's most successful products, but the company has goals in other areas. In fact, according to Martell, Pacific has hit “a gold mine” with its chicken broth, whose popularity stems from being natural, organic and sporting the Pacific brand.
Most retail chicken broths are high in sodium, salty and watery tasting. Many consumers are looking for healthier products, which translates into natural items, which contain few or no preservatives and a lower sodium and fat content. “As we read the handwriting on the wall regarding consumer wants, we have been very quick and creative in coming out with products that answer hose interests,” Martell continues.
Pacific Foods began by targeting natural foods consumers, but—also like many of those companies—that range has expanded into mainstream, full-line retail stores. Martell explains that mainstream retailers cannot ignore the natural market, particularly as the desire for healthy alternatives has expanded to mainstream consumers, driving them to natural foods stores, if need be.
“Supermarkets cannot afford to lose those consumers, so they are adding natural, healthy foods, looking carefully at what natural foods stores sell and adding those items. Those are the products we make—nondairy beverages, soymilk, rice milk, organic and natural broths and soups,” Martell says.
Key to Pacific's success has been the introduction of new products, presented at a no-holds-barred pace. “Ideally, it is four to six months from concept to shelf,” Martell says. “Our products are packaged in aseptic shelf-stable packaging with approximately a year's shelf life. That is another of the keys to our business.”
This breakneck approach to developing shows no signs of slowing. “Pacific's new product efforts are accelerating,” notes Martell. “It is safe to say new developments will not be limited to the current categories we are in. To come out with another flavor of soy is not what will provide us the growth. It will be something along the lines of the chicken broth. It could be anything—even market segments beyond retail grocery.”
Pacific Foods of Oregon
Sales: $50 million
Distinction: Developer of nondairy beverages, soymilk, rice milk, organic and natural broths and soups.
Galaxy Nutrional Foods Comes Full CircleThe Circle of Life - A desire to make a more affordable cheese for a pizza restaurant has spurred Galaxy Foods to hold a major stake in dairy alternatives.
Galaxy Nutritional Foods' founder, chairman and CEO, Angelo Morini, did not originally set out to offer a healthy choice for dairy lovers. In fact, with $167 to his name when he left military service at the age of 21, Morini simply was trying to make a go of it with a pizza restaurant. That business would provide the impetus for Galaxy Foods.
Morini recalls, “I was buying cheese every week or so, and the cost of cheese was always going up. I decided to make my own cheese but in a different way.” Morini read up on cheese manufacturing and determined to make cheese out of vegetable proteins as opposed to animal proteins. In 1967, he developed a new way to make dairy products with soy, rice and oats. “My intention was not to make something healthy. I just was looking at the price,” he explains. Morini went on to work at Pillsbury and Post but kept his cheese business, which began to grow because he could sell mozzarella and cheddar and other cheeses less expensively than conventional dairy manufacturers.
While Morini may not have had healthiness in mind initially, that subject began to play a major role in Galaxy's manufacturing practices, particularly after he read of the Framingham Heart Study. That 1948 report examined the growing number of Americans dying of heart disease, cancer and diabetes and would introduce Morini to a new term—cholesterol.
With the study in mind, Morini believed he could make a more healthful product, a no-lactose, cholesterol-free cheese substitute. That goal would propel Galaxy to new heights.
In the late 1980s, company sales climbed rapidly as Galaxy continued to refine its product, removing trans-fatty acids and introducing comparative labeling. Currently, Galaxy's products can be found in about 15,000 health food stores in the U.S., as well as in retail outlets, but the company is also experimenting with foodservice, coming full circle with an agreement with Pizza Hut.
“Pizza is how I started in the business,” Morini recalls. “Now, Pizza Hut is testing our veggie mozzarella in Fort Wayne, Ind. An article in a local paper noted that the patrons could not tell the difference between our veggie mozzarella and conventional mozzarella. Our biggest potential is in veggie mozzarella, a huge business.”
Galaxy also has a test with their veggie slices in more than 100 Subways in central Florida. The product has no trans-fatty acids, no cholesterol, no lactose, no saturated fat and has only half a gram of fat per slice, so it meets Subway's program of seven subs with six grams of fat or less.
All this and more—Galaxy's products are found in 26 different countries—have fueled the growth at Galaxy, which is not resting on its laurels. Company officials recently completed a $15.5 million program to enable the production of $1 billion worth of product, more than 40,000 pounds per hour, 6.5 million pounds a week—all part of Galaxy's plan.
Morini estimates, “The dairy business is a $150 billion-plus industry, and we think we can get a half a percent or more of that. That would make us a $1 billion company. That's our goal.”
Galaxy Nutritional Foods
Sales: $12 million
Distinction: Manufacturer of dairy alternatives.