Amy’s Kitchen, the US frozen-food, organic and free-from business, is a quarter of a century old this year but there is a passion – almost a sense of mission – one would normally associate with a start-up. Dean Best spoke to co-owner Amy Berliner and European commercial director Damien Threadgold about the company’s plans.
When it is your name on the box, the belief in a product perhaps comes more naturally. Listening to Amy Berliner, the 25-year-old whose parents set up Amy’s Kitchen in California in 1988, there is almost a sense of vocation about a business that has grown to become one of the top ten frozen-food brands in the US and turns over the small matter of US$300m a year.
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Berliner, now co-owner of Amy’s Kitchen, insists her parents, Rachel and Andy, had other considerations when they founded the business. “My parents are very ethical, passionate people about food and about organics,” she says. She describes the company’s launch into the free-from category over a decade ago as a “service” to consumers.
It would be easy to be cynical but, speaking to Berliner in London, the company has remained steadfast in its beliefs, even as suitors have shown interest in a business operating in some of the more attractive categories in the market.
“Every single one,” Berliner replies when asked if larger corporations have knocked on the door with expressions of interest. “We’ve been getting offers since we were three years old as a company. We still get offers all the time. They have kind of slowed as I think they have finally given up and got the message.”
It is quite often the case that a fast-growing business that has carved out positions in buoyant categories does attract a lot of interest but Berliner insists a sale has “never been even a question in our minds, honestly”.
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By GlobalData“If we sold, we could be very rich and we wouldn’t be working all the time but we didn’t just start this business to make money [and] if we were owned by one of these larger brands, the food would immediately change quality. Bigger companies aren’t willing to make our food the way we do and so if they bought us, they would immediately stop. A lot of the products we make would probably disappear or become really low quality and they wouldn’t maintain the relationships we have with our farmers, they’d start just buying the cheapest. It’s never going to happen.”
Berliner is in the UK capital to attend a trade show with Amy’s Kitchen and its local team, headed by European commercial director Damien Threadgold, a former executive at Associated British Foods. Amy’s Kitchen had worked with an import agency in the UK since 2001 but, two years ago, it took the plunge and opened a plant in Corby in England.
The company has secured listings from the major UK multiples for products from free-from ready meals to vegetarian soups and, while its local business remains relatively small (turnover of around GBP1.5m), Threadgold is optimistic about Amy’s Kitchen’s prospects in the country. “We’ve got a long, long way to go but we’ve made some fantastic steps,” he says.
It was, according to Berliner, the company’s free-from products that opened the door to the UK’s major supermarkets. “It was one of the things that first introduced us into the supermarkets. The smaller independent natural markets were always taking our organic products but the real growth in Tesco, Asda etc has been in free-from,” she explains. “We realise it’s been so helpful for us that we’re catering for people with dairy, gluten allergies because the free-from market in the UK is exploding so that was a niche that ended up allowing us to enter even at a time when organics was decreasing.”
The free-from sector is taking off in the UK. In 2012, UK free-from sales in the UK were up over 25% at GBP288m, according to Kantar Worldpanel. Gluten free is the largest category, with sales increasing around 23% last year to GBP136m. Threadgold says most UK retailers (he cites Morrisons and Marks and Spencer as exceptions) have noted the increased interest in the sector, devoted space to free-from and are looking to heighten awareness, from which, he argues, Amy’s Kitchen can benefit.
“We are doing category promos with Tesco [and] Asda are going to do the same in the near future. They are trying to drive it,” he says. “The most important thing for us as a brand is we look after our coeliac customers or those that don’t want to eat wheat but we also drive more consumers into the category because there are a lot of people who take it as a dietary choice rather than a necessity. We think our brand really is a step ahead of other brands because it is considering these people,” Threadgold insists.
A growing category of course attracts interest and competition is heating up. Berliner is sanguine about rising competition in free-from. “That’s generally what has happened for us in the past. We were one of the first organic frozen food brands in the States and then a bunch of the big guys started to come in and that has helped us a lot actually,” she says.
Should Amy’s Kitchen invest more in marketing? “It would always be nice to invest more in marketing if we had money for it,” Berliner laughs. “We’ll do as much as we possibly can but at the end of the day, if doing more marketing is taking money away from the food, we’ll never do that. We think it speaks for itself better than any advertising can.”
Amy’s Kitchen is investing in further geographical expansion. The company has launched a range of free-from products in France and has been in talks with other retailers in the country. Threadgold predicts the company will have a “full range” of products on sale in Germany by the end of the year.
Threadgold, however, says it is still early days for the free-from sector in France and Germany. “It is behind [the UK] in terms of a free-from community. It is still very pharma in France whereas here there are a lot of lifestyle shoppers as well. They are probably six or seven years behind us. Similarly in Germany.”
The two markets, however, could, in the short term at least, be more lucrative for Amy’s Kitchen’s organic lines. The company sells organic products in the UK but the downturn has hit the sector in the country, with sales down in a number of categories.
“The organic market [there] has withstood the downturn a lot better than here,” Threadgold says. “The UK has a health food trade but they are not dedicated to organic. In France and Germany, they don’t have a health food trade, they have a ‘bio’ trade, bio stores. You have to be organic to be in those stores.”
Berliner adds: “They also have a larger bio sector. Here, the health food sector is small. Whole Foods is the first bigger organic natural retailer you have here. In France and Germany, their bio market is pretty well developed. You can have a sustainable business just existing within the bio market. That’s not our plan but that would be impossible here because it’s such a small market.”
The name behind and now co-owner of Amy’s Kitchen says the company is “extremely ambitious”. Back in the US, the company is about to move into fast food, with the opening of a restaurant in California. In Europe, the business has received interest from Scandinavia.
“The future is really exciting. We are growing a market and in a market that is moving forward,” Threadgold says.
Berliner says the company would “love to be all over Europe”, was eyeing expanding into Asia “in the next few years” and was looking at Australia and New Zealand. The word ‘mission’ crops up. “My mom’s mission has been to provide our food for as many people as possible no matter their financial situation, no matter where they live in the world.”
