Following Tuesday’s announcement that it had acquired HPP juice brand Evolution Fresh for an undisclosed sum, a key Bolthouse Farms executive said today that Bolthouse wants to quickly scale the brand in new channels nationwide after the deal closes later this year.
Phil Kooy, chief customer officer for Bolthouse Farms, told BevNET in a call that the company will continue to run Evolution Fresh as an independent operation, maintaining its production facility in Rancho Cucamonga, Calif. as a “complement” to Bolthouse’s existing plant around 150 miles north in Bakersfield.
Evolution Fresh gives Bolthouse an opportunity to drive incremental growth and reach different kinds of juice consumers, Kooy said. While both brands check the box for “delicious nutrition,” he suggested that Bolthouse captures the segment for smoothie drinkers and functional products like immunity-boosters and protein shakes. Evolution Fresh, he said, is built around organic and cold-pressed properties that emphasize flavor and natural ingredients.
“This acquisition, I would say, not only illustrates our larger purpose, but also our pivot to growth in recent years,” Kooy added. “We’ve been very, very intentional about transforming our business to ensure that whether it’s the carrot acres we grow, or the beverages that we bottle, we have a positive impact on the land, on the people who make up our company, and on all people everywhere as we strive to expand access to nutrition across North America.”
Founded in 1995, Evolution Fresh produces a variety of organic, cold-pressed juices and smoothies.The products are sold in a range of sizes including single-serve 11 oz. and 15.2 oz. bottles and multiserve 32 oz. and 59 oz. packages.
The brand was acquired by Starbucks in a $30 million cash transaction in 2011 and is currently sold in about 10,000 Starbucks stores nationwide. The cafes will continue to carry the brand after the deal is completed.The juices are also available in retail, primarily through the natural channel, with partners like Sprouts and Whole Foods.
Evolution Fresh’s presence in on-premise and natural retail channels stands in contrast to Bolthouse, Kooy said, which has a footprint primarily in conventional grocery. In the immediate future, he suggested the company will aim to shift Evolution Fresh into conventional accounts alongside Bolthouse’s other products.
“We’re excited to share our resources, streamline supply chain, look for additional access to fresh produce and then, I would say, really combine our collective passion for innovation, [that] would be how we’re thinking about it currently,” he said. “Whether there’s opportunities for new Bolthouse distribution through this,we’ll find that out in the weeks and months to come.”
The acquisition comes as Bolthouse has seen a return to growth under the ownership of private equity group Butterfly, which acquired the company from Campbell Soup Company for $510 million in 2019. The sale came amid a downturn for Bolthouse and the sale price reflected barely a third of the $1.55 billion Campbell paid for the century-old company when it purchased it in 2012. At the time, the conglomerate’s Q2 2019 earnings showed a 7% decline in organic sales for the Campbell Fresh segment, in which Bolthouse was a significant brand.
But in the three years under Butterfly’s ownership, Bolthouse has rebounded to become one of the top refrigerated premium juice brands in the market. In the 52-weeks ending February 20, 2022, IRI reported Bolthouse’s refrigerated juice and smoothies were up 24% to $222 million. Its refrigerated vegetable juices rose 9.4% to $72 million in the period, nutritional liquids/protein drinks were up 28.3% to $67.7 million, teas increased 11.2% to $35.7 million, and RTD coffee improved 28% to $20.4 million. Smaller categories like refrigerated fruit drinks and blended fruit juice also saw gains in the period, while its pomegranate juice and lemonade drinks were down.
Though Evolution Fresh’s MULO business is smaller than Bolthouse, the brand has also seen sharp double-digit growth in the same period: IRI reported its refrigerated juice and smoothies were up 56.9% to $13.5 million, while orange juice rose 46.6% to $8.3 million and blended fruit juice increased 57.5% to $7 million. The brand’s vegetable juices and grapefruit juice also grew double-digits in the period, while apple juice declined.
Kooy pointed to the pandemic as one significant driver, as health and immunity trends gave a lagging juice category a much-needed recharge – particularly in multiserve – of which Bolthouse was able to take advantage.
Bolthouse’s growth has also come as shelf-space has been freed up in many parts of the fresh juice set, with The Coca-Cola Company and PepsiCo moving to discontinue or divest leading brands over the past two years. In 2020, Coke announced it was ceasing production of Odwalla and focusing its U.S. juice business on the Minute Maid brand, and last year PepsiCo sold off Naked and Tropicana to a private equity firm. As well, Coke passed on a chance to acquire cold-pressed juice producer Suja – a key competitor to Evolution Fresh – and last year the company was purchased by private equity firm Paine Schwartz.
Outside of Coke and Pepsi, other corporate shake-ups have also had an impact on smaller brands within the juice space. In 2020, Hain Celestial announced it was shutting down production of cold-pressed brand Blueprint, and the bankruptcy of Dean Foods that year prompted the founders of Uncle Matt’s Organic to purchase the brand and relaunch as an entrepreneurial company.
Kooy said he believes that the shakeup has benefited the overall juice category, particularly as health and functionality become top consumer concerns.
“There’s been a tremendous amount of change in the category over the past number of years, but one thing that hasn’t changed, in my opinion, is the consumer’s desire to access affordable, delicious nutrition via a beverage,” Kooy said. “I think what that’s done is it’s driven a tremendous amount of growth to the category and over the past number of years, the category has certainly not gone backwards with all the change. If anything, it has helped propel it forward.”