After a decade building the proof of concept for its sugar removal technology, NewTree Fruit Co. is finally ready to get going.
The Traverse City, Mich.-based company is looking to become a significant player in the de-sugared juice market after securing several patents for its proprietary technology which can remove up to 100% of the naturally occurring sugars in juice (fructose, sucrose and glucose) without impacting the fruit’s nutrient content and density – which it claims is a first in the industry.
Removing sugar from juice is not a new concept; major brands like Tropicana, Minute Maid and Simply have introduced zero-sugar or no-added-sugar SKUs in mass retail, but most of those products simply dilute the liquid with more water. NewTree is seeking to highlight the combination of pure flavor and nutrition; its process can produce de-sugared juice as a concentrate, puree or powder which can be integrated into a wide range of food and beverages.
The company holds multiple patents (U.S., Canada, Japan, Europe, India, Hong Kong) for removal of sugars in a continuous method, and is currently awaiting another set of patents in China and Turkey.
NewTree, co-founded in 2013 by Chad Andersen and food scientist Luc Hobson, never intended to spin off a brand; “As a bunch of technical people, we wanted to be able to answer the question of what does it taste like,” Anderson explained. This was the idea behind the company’s pilot launch of Edit Juice, which NewTree launched with limited distribution in 2016, selling 6-packs of 10 oz. bottles in apple, grape and tart cherry juice varieties. According to Andersen, the brand was “pretty well received” and did over a million dollars in sales.
But by the time Coca-Cola veteran Stephen F. Horgan, the co-founder of investment group InterContinental Beverage Capital (IBC), brought the firm onboard as a minority investor in 2017, the company had determined that evolving into an ingredient supplier was a more efficient vehicle for the underlying technology. Israeli company Better Juice has also developed similar processes for removing sugar from juice without degrading nutrition.
“The global food business is going to be [worth] about $9.5 trillion in four or five years, and we believe that at least half of that is impacted by sugar reduction, and that’s probably a very modest guess,” Horgan said.
Per company documents, the Traverse City plant can support $10 million in revenue at an operating margin of approximately 70%, but NewTree is already planning for the future: Two additional manufacturing hubs — each priced at somewhere between $5 million and $7 million, and likely to be placed somewhere outside the U.S. — are set to be built over the next two years. Creating and supporting a unit focused on business development, commercialization and marketing is also expected to cost approximately $40 million to $45 million over five years, with $17.7 million in the first two years.
How will the company seed that growth? So far, all research, operations, and assets have been funded through investments by the founders and investors like IBC, but the next phase will see NewTree targeting “somewhere between $25 million and $60 million,” Horgan said.
“There’s been a seismic change in what consumers are really looking for, and five years ago, when we were in the market as Edit, it just wasn’t the right time, people weren’t ready,” said Kimberly Anderson, NewTree’s head of business development. “People are ready now.”