Boulder Brands, the US free-from business recently acquired by Pinnacle Foods, has seen mixed fortunes of late, with its brands delivering a patchy performance. Even with the ink on the Pinnacle deal still drying, the owner of brands including Udi’s and Glutino nevertheless has a clear strategy to grow and attract new consumers through innovation and marketing. Katy Askew spoke to Wendy Acheson, Boulder Brands’ vice president and general manager of sales, at the Natural Products Expo West trade show in California to find out more.
Boulder Brands is a significant player in the faster-growing natural and organic food category in the US. The company boasts a stable of brands including long-established gluten-free names such as Udi’s and Glutino’s.
As Boulder vice president and general manager of sales, Wendy Acheson, explains, the company’s business touches on some of the most dynamic categories of the US food sector – where consumer demand and interest is rapidly rising. “We are a health-and-wellness platform with our products for a plant-based diet, Evol protein and then gluten-free,” she tells just-food at the Natural Products Expo West trade show in California.
In a consolidating market, with some of the major names in the US food sector turning to M&A to boost top-line growth, it should perhaps have come as little surprise then when the Boulder Brands was snapped up by a larger player. Late last year, Pinnacle Foods struck a US$975m deal to take control of the business.
It has, however, not been all change at Boulder Brands since the deal was revealed four months ago, Acheson reveals. “We don’t know how integration [with Pinnacle Foods] will play out yet. There should be more detail some time in April,” she suggests.
But Boulder Brands’ managers and employees are not stuck in limbo. There is no uncertainty about the group’s immediate objectives and they are progressing with a clear strategy laid out prior to the acquisition. “We have our plan in place and that is what we are working to. We have our targets for 2016 and we know exactly what we need to do,” Acheson insists.
While Boulder Brands is heavily exposed to high growth areas of the US food sector with its free-from and better-for-you brands, the company is facing a series of challenges that mean its sales performance has been mixed. In Boulder Brands’ most recent financial update for the first nine months of 2015, the company said Udi’s sales were up 7.7% in the third quarter but gluten-free stablemate Glutino’s saw sales drop 5.9%.
The company confirmed its powerhouse gluten-free brands are under-performing the wider gluten-free market. Issues with quality had dampened Udi’s sales, while, more broadly, both brands have been facing increased competition, management revealed at the time.
For Acheson, the proliferation of companies investing in the gluten-free space is proving the greatest challenge for Boulder Brands, which is seeing pressure on volumes and pricing as a result. “There is more attention [in the free-from space]. There are some new companies that have come out… there’s a lot more regional brands that have come out. Everyone has something new,” she notes.
Acheson does not believe the dramatic increase in gluten-free SKUs is proving beneficial to the category. “Maybe there are 160 [gluten-free] SKUs on-shelf now. It is not good for the manufacturer or retailer. You get lower sales densities, pressure on pricing.”
The gluten-free market has witnessed dramatic growth in the US – but the pace of expansion is now easing. According to research from Packaged Facts, sales increased 34% in the five years to 2014, rising to a total value of $973m. However, growth is expected to decelerate in the coming five years and Packaged Facts predicts a compound annual growth rate of 19.2% annually through to 2019.
However, Acheson is quick to brush off any concern over cooling demand for gluten-free products. “Gluten-free is still a viable growing need. It is a need that continues to grow. It is not a fad,” she insists.
Boulder Brandsis responding to an increasingly competitive and lower-growth environment by raising its game on innovation and marketing. Acheson explains: “Our marketing team has taken an extensive look at all our products and how we communicate with consumers. We want to appeal to new consumers through innovation and marketing.”
While Boulder Brands’ gluten-free brands are witnessing some challenges, some of the companies other brands are faring better. In particular, Acheson singles out Evol as an example of innovation-fuelled growth at Boulder Brands. “Evol is our fastest growth brand. It is probably our smallest brand, but we have put a lot of innovation into it and that is paying off,” she notes
Evol is a frozen, ready-meal brand that combines convenience with a commitment to “bringing down the broken food system” by using “simple, recognisable ingredients”. The brand’s range includes burritos, entrees and breakfast items. Boulder Brands is also witnessing significant growth through Evol’s recently launched snacking cups, Acheson says.
“What we do know is that we eat constantly. Snacking is becoming more of our everyday. Our innovation is really focused on this. We are expanding our reach in meal occasions. We are launching a lot of SKUs out there. It is really an exciting time.”
Elsewhere, through the Earth Balance brand, Boulder Brands is working to meet the significant growth being witnessed in the US plant-based sector. According to the Plant Based Foods Association, the category – which offers products that are free from animal products – now generates sales in the region of US$3.5bn annually and has grown at a rate of almost 9% over the last two years.
Boulder’s Earth’s Balance brand offers plant-based products including spreads, dressings, mac and cheese and nut butters. Like Evol, the business is also stepping up its presence in the snacking category, with products including crackers and puffs.
Acheson says demand for these plant-based products continues to rise – and is even accelerating this year – as non-vegans are attracted to the sector. “Plant-based is on fire. There is [strong demand] for high-protein plant-based products, such as our pea protein products. It is definitely a viable choice for more and more people. Dabblers, who incorporate some plant-based options in their diets, are a bigger sector than vegans nowadays.”