Whether they want to hear it or not, Ray Lee has some harsh criticism — and some sage advice by example — for his competitors.
“If you look at the offerings of some of our competitors, their product lines look the same as compared to a decade ago. What they fail to realize is that, if you want to grow as an organization and corner your market, you can’t just continue doing the same things over and over,” says Lee, CEO of Country Pure Foods Inc.
“Our company’s philosophy is that, to be competitive, you must have a strong point of difference.”
As one of the nation’s largest independent juice processors, Country Pure’s core competency is processing, packaging and selling juice. As an organization focused on growth and market dominance, it has made its point of difference by developing different kinds of juices with alternative packaging choices.
Its vast line of fruit juices and fruit drinks includes 192 products in 34 flavors, with six packaging alternatives in 11 sizes. That’s been a big “wow” to the foodservice industry and retail markets it strategically targets.
In addition to its private label, foodservice and retail products, Country Pure provides contract packaging services for some of the largest nationally recognized juice companies.
“We try to provide as many commodity-based products and package types as possible so a customer doesn’t have to buy from several different places,” Lee says. “But, realizing that we can’t be all things to all people — meaning you can’t be the low cost producer and still offer the best value — we opted for the latter.”
Fostering that philosophy has enabled Country Pure Foods to emerge as the nation’s premier independent juice company serving foodservice, retail and co-pack markets, and the leading single-serve portion juice supplier to the foodservice industry.
Selling out to survive
Headquartered nationally on West Waterloo Road in Akron, Country Pure was formed by the 1995 merger of Akron-based Ohio Pure Foods — a Midwestern foodservice supplier established in 1948 — and Natural Country Farms of Ellington, Conn. — a Northeastern foodservice and retail juice supplier established in 1957.
Lee, former chief financial officer of Ohio Pure Foods, says Ohio Pure’s prior owners “sold out” so the business could survive.
“To grow, you need working capital for expansion, and the previous owners didn’t have that financial wherewithal. While the merger didn’t reduce our debt, it did provide access to venture capital that fostered our growth,” says Lee.
Country Pure is owned by First Atlantic Capital, a private venture capital firm in New York City that owns other food companies.
The sale also supplied crucial management resources the former company lacked.
“First Atlantic isn’t just a venture capital firm that provides money. They provided strategic thinking and planning guidance, and helped us hire more talented people to upgrade our management– the right people with knowledge in our field,” he says.
In many cases, entrepreneurial endeavors involve strategies to do things as cheaply as possible. Lee says that was a disadvantage to the predecessor company.
“First Atlantic took a different approach, wanting to help us grow this business to the point where it would double or triple in size.”
And so it did, with the 1998 acquisition of Ardmore Farms of DeLand, Fla., a brawny brand name in portion juice. That acquisition, and the purchase of other companies with customers in California and the South Central portion of the United States, enabled Country Pure to augment its product line and expand distribution, making it a diverse national supplier with unparalleled product and packaging breadth.
The merger also afforded the means for market research and product development, and led to the establishment of a national network of brokers and distributors to market the company’s products.
In retrospect, Lee says Country Pure’s current capabilities and staggering sales validate the shrewdness of the 1995 sale and merger.
“When I started at Ohio Pure in 1992, we were doing about $14 million in sales. At the time we merged, we were doing about $19 million. Now, we do about $40 million annually, and that’s just for the Akron facility,” says Lee. “This year, we’ll top $130 million companywide.” (See box, page XX.)
Forte + focus = foothold
The merger of each company’s forte, and the infusion of venture capital for strategic new product implementation, made Country Pure’s impressive sales numbers possible, says Lee.
The company has a market foothold in each of its product lines, but its foodservice line of chilled juices and frozen concentrates, shelf-stable aseptic juices and single-serve portion juices offers the broadest selection in the industry and brings in 70 percent of companywide revenue. In this market, 51 percent of sales are to health care institutions, 32 percent to schools, 7 percent to restaurants, 7 percent to business and industry, and 3 percent to airlines.
Country Pure’s most successful foodservice product has been its preportioned, ready-to-serve juice cartons and cups sold to health care and academic institutions. But its Ardmore Farms aseptic juice line, launched in 1999, holds great promise, says Lee.
“Aseptic packaging has been on the retail market for about 10 years in the smaller consumer sizes. But we’re focusing on larger sizes — 100 percent juices and juice drinks in 1-liter, 46-ounce and 64-ounce sizes, and 23-ounce concentrates — and we’re strategically targeting foodservice markets,” he says, noting that the product’s point of difference is that it’s shelf-stable.
The line also benefits the foodservice market in other ways. For example, this packaging process retains more nutrients, preserves the natural juice flavors and colors and eliminates the metallic taste associated with canned juices. The “flip it, pour it and store it” container also has a resealable top to lock in flavor and freshness.
Safety is enhanced, since workers don’t have to handle heavy cans that have jagged edges after being opened. And 25 percent less cooler or shelf-storage space is required with the block-shape aseptic package, compared to what is needed for 46-ounce cans. The crushable cartons take up 50 percent less disposal space than cans, with 60 percent less packaging by weight than steel cans.
“It’s a bit more of an expensive package, but when you add up the advantages, this is the package of the future,” says Lee.
Country Pure’s rapidly expanding retail segment — comprising 24 percent of the company’s revenue — provides private label products to grocery and convenience store markets, such as Dairy Mart. One of its most popular products has been the nectar brand, launched in 1998.
“We developed our Natural Country Nectars for the fast-growing Hispanic market, which is expected to be the largest minority in the nation by 2004, and the product has gained strong mainstream appeal in this intended niche market,” says Lee, noting that in November 2000, his company introduced two new flavors — strawberry-banana and mango.
The convenience of theses noncanned, chilled nectars also generated crossover interest, says Lee. Health-conscious consumers are impressed by the nectar’s real fruit puree and 100 percent dose of the daily-recommended amount of vitamin C.
Company research also indicated that school students prefer nectars in radical flavors. So, in December, Country Pure started making its peach, pear, orange-mango and guava flavors available to school foodservice programs in 8-ounce economy cartons.
“This part of our business is part of our strategic initiative, and we’re going to be putting a more significant emphasis on our nectar products this year,” says Lee.
Since Country Pure prefers to package its own product to control quality and reduce cost, in 1998, it installed plant equipment for its recloseable cap cartons, and two years ago, spent $3.5 million to install aseptic packaging machinery in the Ohio and Florida plants.
Lee says these were strategic investments to support continuing expansion.
“The equipment enabled us to expand our aseptic product line to include concentrates and more single-strength flavors,” he says.
The move also bolstered the company’s co-packaging capabilities, providing customers with more one-stop-shopping packaging alternatives.
“Since we do have expertise and capabilities in packaging, we co-package for many of the country’s best-known juice marketers. We also package corporate brands in the customers labels — Aldi and Dairy Mart, for instance,” he says.
Country Pure’s state-of-the-art systems and strategically located processing and packaging facilities are a draw for these customers, says Lee, as are the myriad packaging choices, which include portion cups, eco-cartons, aseptic packaging, pure pack cartons, paper pouch-type packs, plastic and resealable cartons with twist-off caps.
While the co-pack segment currently accounts for only 6 percent Country Pure’s total revenue, Lee expects that to increase as the outsourcing trend grows.
Strategy that separates
In the scheme of a strategic initiative, Lee says Country Pure’s business strategy has set it apart from the competition.
“We’ve got leverage because we can make capital investments that we can amortize over all three segments of our business,” he says.
A classic example is Country Pure’s half-gallon package. In addition being used in the foodservice line, the packaging also works well for national and retail customers.
“Another key to our strategic plan is our multiplant locations that enable us to serve large national accounts. These big customers don’t want to go with suppliers that have just one plant. That’s yet another point of difference for us.”
Lee says all those capabilities add up to a point-of-difference that makes the company a preferred provider.
“Having that expertise and those resources has been extremely beneficial for us. And that’s what separates us from our competition.” How to reach: Country Pure Foods Inc., (330) 753-2293 or (877) 995-8423
Country Pure’s potent ingredients
- Akron (Corporate headquarters)
- Ellington, Conn.
- DeLand, Fla.
Warehouse and distribution facilities:
National product output:
- 40 million to 50 million gallons per year
- 16 million cases annually
Akron facility product output:
- 60,000 gallons daily
- 15 million to 20 million gallons annually
- 20,000 cases per day
- 5 million to 6 million cases annually
About $130 million per year
Akron location sales:
Approximately $40 million annually
About 400 — 110 at the Akron facility