Child's Play Pays Off

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

New Organics Company finds organic foods for kids not 'Scarry' at all.

"The most important thing we can do is make organic foods taste good," says Anthony Zolezzi, president and CEO of the New Organics Company. "People have a preconceived notion that because it is organic, it does not taste as good as conventional. This was why it was crucial that our new headquarters had a kitchen.

"We are a food company. We want to be able to cook our own products here, but more importantly, we want to be able to do our own research and development."

The New Organics Company has literally come a long way since its beginnings in Braintree, Mass., in 1997. Now head quartered in Long Beach, Calif., New Organics' offices have a total of roughly 9,000 square feet of space, with about 1,500 of that devoted to a fully operational test kitchen.

With more than 134 certified organic food products across 20 categories, New Organics' items can be found in more than 4,000 stores nationwide, including major chains like Albertson's, Kroger and Safeway. Not content to rest on the laurels of a 1999 fiscal year that saw sales jump more than 40%, New Organics in 2000 managed to forge a new category and a dominant place in the organic foods industry.

Kids: Door Into Organics

Recognizing the lack of organic foods targeted at two- to eight-year-olds, New Organics developed a range of products specifically for that audience. The line needed an identifiable pull to children, though one that offered a positive message.

"Marrying up Richard Scarry with our New Organics food line made a lot of sense," says Chuck Monahan, vice president of sales and marketing. "Scarry started as an author/illustrator in 1969, and his message to children was always positive-stop-look-listen when crossing the street, how things work, and about the joy of reading. What he wrote was a positive message to children."

According to Paramount Pictures, some 82% of parents know of the Richard Scarry characters, but would that make a difference in the shopping aisles?

"We have found it really does make a difference," Monahan says. "When we call on buyers, when they have a knowledge of Richard Scarry (either because the books were read to them or because they read them to their kids), it is amazing how easily we will get approval and acceptance. The brand name has really helped dramatically in placing the product and getting it into distribution."

As fresh and innovative as the Scarry line may be, New Organics focused on more than just their children's products in 2000, debuting 21 items in its adult line as well. Now, with products as varied as baking mixes, barbecue sauce, condiments, dressings and soy sauce, New Organics can be found in a number of different categories, all part of the master plan which saw the company debut 27 new children's products and 21 New Organics items in one year.

"With the Scarry line, we were concerned that if we came out with just a few SKUs," says Zolezzi, "we would get lost in a sea of 40,000. Plus, we wanted to make sure we had a billboard effect coming out the door, because we do not get enough exposure in retail as it is. So, I think what really differentiates us is our nimble ness, quickness and ability to come out with not one or two but 27 products in the course of a year. Nine to 10 months from inception, we were ready to go to market.

"New Organics' mission has always been to be the organic solution for mainstream retailers and consumers. Industry changes have not materially changed our mission, but it certainly has changed our timetable. We need to move faster than ever to get organic food products into the hands of mainstream consumers and give them a positive experience. As a company we want to be responsive. We are dealing in such a small part of food--l% of the total food supply. When retailers say, 'Can you do a soy sauce or a barbecue sauce?' We have to react quickly and do it, because if we don't, someone else will."

All of New Organics' products are co-packed, and according to Mike Rubic, senior vice president of operations and business development, most of their production is done on contract, a situation that brings unexpected benefits.

"We really take an ownership philosophy with our manufacturers, inviting them into the R&D component and into our sales plans and projections. The manufacturers are key to this development. As they do contract work for many companies, they see what is going on in the industry, and that is very helpful. Inviting them into the process saves a lot of time and work and is an intelligent way to have a partnership, while not relying too heavily on outside consultants."

Currently, the company has about 15 manufacturers producing for them and also work with another five. Three New Organics employees are dedicated to R&D, though that number can stretch to 15 when including developmental assistance from their manufacturers.

A Developing Situation

As Zolezzi notes, developing organically can have its challenges, but there are also areas where an organic alternative seems, well, natural--pasta sauces, salsas, tomato-based products, for example. The challenge can come in developing products where no organic alternatives exist.