What started off as a fruit growing business in the late 1970s and turned into a small, fresh apple cider business has exploded into a juice company that boasts 65 bottled varieties and 30 frozen varieties. Old Orchard Brands, the Sparta, Mich., USA-based juice company, is now a US$150 million business, and the No. 2 brand in frozen juice and No. 4 in ready-to-drink, 64-ounce bottles. Company founder and president Mark Saur says that remaining small and independently owned and operated has provided Old Orchard with tremendous leverage and enabled innovation, with new products that respond to consumer demand for beverages that pack an increasingly nutritious punch, with no added flavors, colors, sugars or preservatives.

After getting its start in 1985 developing frozen concentrates in apple, grape and orange juice, Old Orchard grew from a US$4 million business to US$30 million in about a decade, enabled by consumers’ increasing gravitation toward non-carbonated beverages in the 1990s. “In the mid ’90s we decided to get into the ready-to-serve, 64-ounce containers.

We came up with four blended juice cocktails,” says Saur. In 1999, after a history of using co-packers, the company built its own 150,000-square-foot factory, which makes it responsive and flexible. “When you manufacture your own products you can have all your creative people right there and you can create products on the fly, and move products to market faster,” says Saur.

In the past two-and-a-half years, the company has upped the ante on its offerings of healthy, functional beverages.

Several years ago, Old Orchard introduced a reduced sugar/calorie line of beverages, which started out bearing the words “low-carb” and was rebranded as Healthy Balance in January 2005. (In June, the company added a reduced sugar pomegranate juice to the Healthy Balance line.) In conjunction with its Healthy Balance products, in fall 2005 Old Orchard announced a four-year partnership with the Juvenile Diabetes Research Foundation. Healthy Balance juices carry the JDRF’s endorsement and label, and Old Orchard donates cash and participates in JDRF fund-raising events.

Around the same time, Old Orchard announced its Old Orchard Organics line, followed by a line of frozen drink mixers and a relaunch of its 100-percent fruit juice blends. All of these developments then led to a very adult product: antioxidant-rich super premium juices, which arrived in spring 2006. The flavors and blends include tart cherry (courtesy of Michigan’s bounty), blueberry, black currant (imported from Europe) and the ubiquitous pomegranate; all fruits score high on the USDA’s Oxygen Radical Absorbance Capacity (ORAC) scale and independent studies tout their disease-fighting properties. They carry a premium, US$6.99 price point, which vice president of marketing Kevin Miller says would have been “totally foreign” just a year ago. But consumers keep getting smarter, and Miller says they’re “much more aware and willing to adapt and go out of their comfort level to try something different.”

In the past year, Old Orchard has introduced two unique products, and one of them, a 100-percent frozen pomegranate juice concentrate that reconstitutes to 48 ounces, feels a bit retro and risky. Although Saur admits that concentrates are not the moneymakers they used to be, the attempt to reinvigorate an old idea with a hot flavor may pan out, even if it is sporting a US$5.99 price tag. Miller describes it as a “total leap of faith.” Right now, the product only is available in limited distribution. The other product, Old Orchard Premium Tea, was announced in November 2006.

These juice/tea blends are certified organic and available in four flavor combinations: Green Tea Pomegranate, Green Tea with Lemon and Honey, White Tea with Southern Peach and Red Tea with Currant. Like most of the company’s products, the teas contain no high fructose corn syrup; the sweetness comes from the juice and organic cane sugar, keeping the products to 12 grams of carbohydrates. With the increased popularity and health benefits of teas--white, green and rooibos (red) tea also contain antioxidants--it is a fruitful combination. According to company materials, the ready-to-drink tea category is growing, up about 23 percent in 2006.

Recently, supermarket chain Kroger started carrying two of the blends. Nationally, Saur says, Old Orchard products are available in Target and Wal-Mart, and they are “very well entrenched in the Southwest and Midwest.”

The company’s innovation also extends to product packaging. Saur specifically cites a packaging achievement of getting the plastic bottle weight of 90 grams down to the 60s. A juice with a smaller carbon footprint costs less to ship and manufacture and, he says, “we don’t like waste.”

For other packaging innovations, Saur says the company listens to retailers, responding to suggestions about cap colors, verbiage on products and flavor requests, even going so far as to create a special “bilingual nectar product,” with flavors such as orange pineapple, papaya and mango, available in select markets. “We’re a small group and in the company we all think, ‘How can we do a better job?’ And that makes us successful,” says Saur.

Old Orchard’s approach to its relationships feels decidedly old-fashioned in an age of outsourcing customer service, and that personal touch extends to its 80 employees. The company keeps itself sustainable with little turnover thanks to tangible things such as good salaries and health benefits, profit sharing opportunities and a 401K. Plus, there’s always the opportunity to taste-test new products before they come to market. “You can tell what item’s going to be a hit just by looking at the lunch room and seeing what’s left on the table,” says Saur.

As for the marketplace, Old Orchard’s growth suggests it’s not just responding to the trends, but setting a few as well. Inc. magazine has recognized it as one of the 5,000 fastest-growing US businesses in its category with US$125 million
volume or more. With a three-year growth of about 32 percent, Old Orchard is the only juice company to make the list.

Miller admits that for a company that’s “rooted in juice,” Old Orchard is starting to become a “more multi-faceted beverage company.” When pressed about what that might mean for the future, Miller and Saur remain mum, leaving one to speculate about what kind of functional juice-based beverage is next. Will the next pomegranate please stand up?

VITAL STATS
OLD ORCHARD BRANDS
FOUNDER & PRESIDENT: Mark Saur
HEADQUARTERS: Sparta, Mich., USA
EMPLOYEES: 80
GOALS: To introduce innovative, better-for-you beverages while continuing its steady growth as a multi-faceted beverage company.

From Beverage World September 15, 2007