Taking Chances

Prepared Foods, Oct, 2001 by William A. Roberts, Jr.

Never afraid to take a risk, Pacific Foods has extended its scope beyond the dairy alternative arena.

"Pacific Foods is not a large, massive food company that comes up with a new product idea that only sees the light of day after two years of extensive research and testing. We go a lot by our gut and go out and do it. We would rather be out there fast and make a few mistakes than take forever to get out there and be a 'me, too."

That "quick to market" philosophy, as stated by Ron Martell, vice president of marketing at Pacific Foods, has been the secret to the company's success, which has translated into an annual growth rate of 30-35%. Nevertheless, the road to success has not been a straight one.

Pacific Foods was founded in the fall of 1987. Martell recalls, "Originally, the founder thought tofu was an emerging item and would be big in the United States. Obviously, it did not take off as anticipated." However, one of the byproducts of making tofu is soymilk, and other companies asked if Pacific would co-pack soymilk. The company agreed because it had no use for it. As soymilk's popularity grew rapidly, Pacific realized this was the growing market and that it could do this under its own brand.

The ability to market behind an approved health claim (and its sheer popularity) has made soymilk among Pacific's most successful products, but the company has goals in other areas. In fact, according to Martell, Pacific has hit "a gold mine" with its chicken broth, whose popularity stems from being natural, organic and sporting the Pacific brand.

Most retail chicken broths are high in sodium, salty and watery tasting. Many consumers are looking for healthier products, which translates into natural items, which contain few or no preservatives and a lower sodium and fat content. "As we read the handwriting on the wall regarding consumer wants, we have been very quick and creative in coming out with products that answer those interests," Martell continues.

Pacific Foods began by targeting natural foods consumers, but--also like many of those companies--that range has expanded into mainstream, full-line retail stores. Martell explains that mainstream retailers cannot ignore the natural

market, particularly as the desire for healthy alternatives has expanded to mainstream consumers, driving them to natural foods stores, if need be.

"Supermarkets cannot afford to lose those consumers, so they are adding natural, healthy foods, looking carefully at what natural foods stores sell and adding those items. Those are the products we make-- nondairy beverages, soymilk, rice milk, organic and natural broths and soups," Martell says.

Key to Pacific's success has been the introduction of new products, presented at a no-holds-barred pace. "Ideally, it is four to six months from concept to shelf," Martell says. "Our products are packaged in aseptic shelf-stable packaging with approximately a year's shelf life. That is another of the keys to our business."

This breakneck approach to developing shows no signs of slowing. "Pacific's new product efforts are accelerating," notes Martell. "It is safe to say new developments will not be limited to the current categories we are in. To come out with another flavor of soy is not what will provide us the growth. It will be something along the lines of the chicken broth. It could be anything-- even market segments beyond retail grocery."

Pacific Foods of Oregon Tualatin, Ore.

Sales: $50 million

Employees: 125

Distinction: Developer of nondairy beverages, soymilk, rice milk, organic and natural broths and soups.