125 years of Beech-Nut
AMSTERDAM – Beech-Nut Vice President of Manufacturing Jeff Heiser has only been an employee of the baby food maker for about 30 of the company’s 125-year history, but it’s fair to say he’s almost seen it all.
When Heiser started at Beech-Nut the company was located at it’s original plant in Canjaoharie and employed about 800 people making mostly jarred baby food, perennially occupying the No. 2 position in baby food nationally. Heiser saw the company go through difficult times and multiple owners, including Kraft Foods, among others.
“There was really no vision, no strategy. It was to the point of we were just going to make what we make. We knew about every five years it would be somebody else,” said Heiser, who is now Beech-Nut’s vice president of manufacturing.
Some things began to change when Beech-Nut was purchased by Hero AG, based in Switzerland, in 2005 and moved the company to its $124 million, 680,000 square foot facility in the town of Florida business park in 2010. But it wasn’t until the company began producing cold pureed Beech-Nut naturals line, and consulting Heiser and his staff on how to make a baby food product line using only fresh ingredients, that things really began to change at the company.
“Even though this is a brand new plant – it wasn’t designed to do fresh -so we had to redeploy the plant in order to handle fresh ingredients like apples and pears. That’s going way back in our history, back to our roots,” he said.
Jeff Boutelle was hired as Beech-Nut president and CEO in 2012 and tasked with turning the company’s fortunes around. Boutelle said to go forward, Beech-Nut needed to reach back into its past.
“[When it was founded 125 years ago] it was one of the leading, most innovative food companies in this country. For example, they were the first to introduce peanut butter in the U.S., not Jiff, not Skippy, Beech-Nut. Beech-Nut made and packed coffee, bacon, beans, jellies, jams, Beech-Nut gum, candies,” Boutelle said. “Beech-Nut didn’t get the sustained focus and investment and love and attention that it should have. Most of [the company’s other product lines] were sold off until pretty much Beech-Nut became only baby food,”
Boutell said leading up to the company’s celebration of its 125 year history this year he researched the firm’s history and the context it gives to the company’s current strategy.
“I was brought in to lead a turnaround, which we call a transformation. Beech-Nut was rapidly loosing items or being discontinued at retailers. The consumption numbers were coming down and the [baby food category] was coming down,” he said. “Part of this transformation has been about rediscovering all of the roots and the culture when Beech-Nut was a force in the U.S. That’s why this 125 anniversary is more than just a number. We’re embracing the essence of what Beech-Nut was. It dovetails very nicely to our new strategy.”
Beech-Nut Vice President of Marketing Andy Dahlen said Beech-Nut realized it needed a new strategy when it studied the consumption habits of infants in the U.S. and determined that babies were only consuming about 1,200 ounces of baby food annually, compared to 1,700 ounces in 2005.
“It was a staggering amount of food to leave the category and nobody was talking about it, not our competitors, not the retailers. So, we started to spend time with moms to understand how they thought about this and we determined that home made was the gold standard; it’s the best thing that can be done for the baby, and [moms] said that a lot of the stuff out of the aisle seemed runny and watery,” Dahlen said.
Boutelle said organic baby food makers were eating away at marketshare with new products that included “super-foods” like pomegranate, asparagus and avocados. He said Beech-Nut launched its natural foods line with a new jar, new transparent label and only fresh food ingredients to take advantage of the organic trend.
“Once we redesigned our jar products then it was time to go and develop a pipeline of innovation against the objective of having the superior product in every single segment [of the baby food product category]. We have organic pouches being introduced, which is the fastest growing segment. By springtime, we will have a major cereal innovation and a major toddler innovation. In the spring, when the retailers reset their shelves, we will have the superior product in every single segment of the category.”
Dahlen said the new natural products have helped Beech-Nut capture about 17 to 18 percent of the jar and tub segment of the baby food products sold in the U.S.
“As we were undergoing this transformation, we were not in Target, we were not in Babies R’ Us and we were not in Safeway. We are now back in a good chunk of the Target stores with our organic line, the vast majority of the Babies ‘R’ Us stores with our organic line and about to get into Safeway,” he said.
Boutelle said Beech-Nut is also reconnecting with the local community, having recently given $35,000 to the Arkell Museum for its exhibit of the Beech-Nut miniature circus marketing campaign in the 1930s, which is scheduled to be up until Oct. 15.
He said he hopes the company will be able to add employees if its new products do well.
“Recently with the growth of our business and the expansion of the product lines we have here, we’ve crept up to 330 employees. Initially, we’re going to watch these new lines. It’s a tough category, you’ve got that big huge dominant Gerber, which is owned by Nestle, so if we can crack the code here and grow this business significantly than yes we will be adding new jobs,”