Amid a portfolio of distressed assets up for sale by Dean Foods, juice maker Uncle Matt’s Organic may not have been the biggest potential get. But that depends on who’s buying: for founder and CEO Matt McLean, who secured a $7.25 million deal to reacquire the brand last week, it’s a chance for a fresh start.
Last week, Dean announced it had received approval from a U.S. bankruptcy court to sell Uncle Matt’s, which it had purchased in the summer of 2017, to Harmoni, Inc., a new entity founded by McLean, his wife and several beverage industry partners and he is now looking to continue on the 21-year-old brand’s current growth trajectory while transitioning back to an independent ownership model.
McLean signed the purchase agreement this week and the deal is expected to close within the next two weeks. Under Harmoni, McLean and his wife are the largest shareholders and will control the board of directors.
“I had continued to run the company but from an ownership standpoint I never thought twice that I would get it back,” McLean said in a phone call this week. “You sell to a publicly traded, multi-billion dollar company and you think that, you know, that’s pretty fine! Luckily, it was a no-stock, all cash deal. So that’s a good lesson to learn.”
Founded in 1999, McLean said Uncle Matt’s reported consistent, double-digit year-over-year growth under Dean’s ownership and was up 31.6% as of February 23, according to IRI, with over $12 million in dollar sales of its orange juice line alone. However, upon selling to Dean, much of the brand’s operations — including supply procurement, logistics, invoicing and distribution — were quickly integrated into the conglomerate’s system. The challenge moving forward, he said, is to “unweave the web” and reorganize the company’s infrastructure.
Yet the bigger task may be replacing Dean’s refrigerated DSD network, which was particularly important to placing Uncle Matt’s in food service and convenience channel accounts. He said the company is currently assessing which of these customers it will keep going forward and which accounts will need to be dropped.
“Everybody’s goal will be to see how we can best serve the customer,” he said. “I’m sure certain places we’re in right now, it’s not going to be efficient and it doesn’t make sense [to keep them]. And then there’s some customers that we’ll have a very good opportunity with.”
As well, McLean said the company is currently working to hire back old team members who had been with Uncle Matt’s prior to the acquisition and who were later relocated to other divisions within Dean.
Out the gate, Uncle Matt’s will continue to focus on expanding distribution for its recently launched products, he added, including a line of probiotic freezer pops which were announced last year and a new line of no sugar-added lemonades which were intended to launch at Natural Products Expo West 2020. The new lemonades are sweetened with stevia and come in original and strawberry varieties. McLean said the drinks have already been picked up by retailers including Kroger, Whole Foods and Stop and Shop.
With the Dean Foods experience now behind him, McLean hopes to return to an older, entrepreneurial style of brand building — now with first-hand knowledge of how conglomerates do business.
“We had pretty good freedom within Dean Foods,” he said. “They allowed us to operate within our mission of what we wanted to try and do. They did it, obviously, in a large company way, which isn’t as quick or nimble as you’re typically used to as a small business and as an entrepreneur. So out of the gate, we will want to really dive in deep around our current products.”