How do you make carrots cool? In 2008, when I became the CEO of Bolthouse Farms, that was the question we needed to answer. Like most agricultural businesses, the company had been preoccupied for much of its 93-year history with supply: getting its products—primarily carrots but also juices and dressings—from the field and the factory to the family dinner table. We liked steady, predictable demand, of course, but no one was seeking step-change growth.
As a 20-year veteran of the soft drinks industry, I wasn’t satisfied with that. If Coca-Cola could persuade people to drink more than a billion servings of its soda each day, why couldn’t we do the same for a vegetable? Junk food companies were experts in demand creation; we just had to use some of their tactics.
We started with simple tweaks to our pricing and packaging strategies for juices. Then, in 2010, came the big push: a multimillion-dollar marketing campaign—“Eat ’Em Like Junk Food”—that used tongue-in-cheek TV, print, and digital ads to liken baby carrots to Cheetos, Doritos, and other snack food favorites. It was an instant hit, generating significant media attention and boosting sales by 13%.
But we didn’t stop there. We’ve put our products in vending machines, won permission to use Sesame Street characters on our packaging, and sold through retailers from 7-Eleven to Walmart. We’ve created carrot snack packs, with ranch and other flavorings; developed 27 varieties of juices and smoothies; and put tasty veggie and fruit purees in squeezable tubes. I don’t know that we’ve made carrots or other vegetables and fruits cool. But I do think we’ve changed their image in the consumer marketplace. (And we attracted the attention of Campbell Soup, which is now our parent.)
From Coke to Carrots
Growing up as the youngest of five boys, I always felt that my role was to challenge the status quo—at home, in school, and throughout my career. But by the end of my tenure at Coke, in 2003, I felt I was falling short. People drank enough soda; I didn’t need to sell them any more.
Keen to get into the better-for-you space, I left the company and did a short stint as the CEO of the snack food holding company Ubiquity Brands, overseeing its reorganization. When Madison Dearborn, the private equity firm that controlled Bolthouse, asked if I would be interested in the chief executive job, I jumped at the opportunity. Although Bolthouse was already a very successful business—one that had pioneered the “baby carrot” in 1985 and had launched a juice line in 2003—I thought I could add value by turning it from a family farm business into an innovative, professionally managed and branded organization. I made several critical hires—a new chief operating officer and the heads of sales, marketing, manufacturing, HR, and IT—to help me lead the change effort.
We logged one early win simply by applying a basic principle of the soft drink business to our juices: Beverages are adopted one drink at a time. So Bolthouse couldn’t just sell expensive quarts or gallons of its 100% Carrot or Vedge, as it had been doing; we needed single-serve bottles. We launched a new three-package strategy, with aggressive single-serve price promotion, and within nine months we had surpassed Odwalla to become the top-selling juice maker in the country. It was a big moment for the team: Everyone could see that these best practices were portable. And we now had the leeway to consider more-revolutionary moves—such as our crazy carrot-marketing campaign.
Of course, the idea for “Eat ’Em Like Junk Food” wasn’t that crazy. Some of the most memorable and effective campaigns in recent history have been for commodity products. Think of “Got Milk?,” Florida oranges, California raisins, and the pork industry’s “The Other White Meat.” When professors at the University of Michigan considered 68 such marketing initiatives, they found that 100% of them had succeeded in boosting demand. In 2009, although Bolthouse’s growth was slow and steady, we were propped up by our juice and dressing divisions; carrot sales were falling by 3% to 4% a year. Why not see if some clever advertisements could reverse that trend?
It took time to persuade the board and the management team. We were in a recession. Our private equity investors wanted to exit eventually, so we had to be disciplined about costs. And we were in the midst of an unexpectedly complicated plant consolidation. But another lesson I had learned at Coke was how important it is to invest during tough times, especially in marketing initiatives, because the return on investment is better: Competitors retrench, ads are cheaper, and customers appreciate and then reward your resilience.
We gave several agencies a simple brief—develop a campaign to accelerate the consumption of baby carrots—and ultimately hired Crispin Porter + Bogusky, which was on a creative hot streak at the time. Of the three or four ideas the agency presented, “Eat ’Em Like Junk Food” was by far the riskiest, but we knew it was also the best. A few people within Bolthouse thought we had lost our minds. The company had spent a total of maybe $100,000 on marketing before, and we were about to spend $2 million in a single year. But we took the gamble, and it paid off.
We supplemented our TV ads—one involved rockets and explosions, another a scantily clad model rhapsodizing about carrots—with a web series featuring two slacker grocery store clerks and an @babycarrots Twitter feed that poked fun at popular junk food brands. (My own Twitter handle is @ChiefCarrot.) We installed the first Bolthouse vending machines at two high schools, where they stood alongside traditional ones full of chips and soda. Our sales were up; our market share was up. Everyone was happy. But we didn’t want to revel in the success. We wanted to use it as a springboard into the snack industry—not just for Bolthouse but for the entire produce industry.
The Three A’s
Our company is now organized around a new mission: to “inspire the fresh revolution.” Obesity prevention has become a major cause, championed by prominent people such as New York’s former mayor Michael Bloomberg and First Lady Michelle Obama, and ample consumer research shows that parents want more-healthful snacks for their kids. And yet as recently as 2012, the per capita consumption of fruits and vegetables was shrinking by 7% a year, according to data from the U.S. Department of Agriculture.
How can we turn that around? Our strategy, again drawn from my experience in the beverage industry, is three-pronged.
We’re co-opting the tactics of junk food marketers to create a healthier society.
First is accessibility—making our products more likable and desirable. We need people to want to eat vegetables. That takes not only ads that make carrots seem cool but also top-notch customer research and innovative product development. We relocated our corporate headquarters from Bakersfield, California, to Santa Monica so that we could attract the kind of talent necessary to conceive, execute, and sell the best ideas.
Take our Veggie Snackers. The concept came out of a Syracuse, New York, focus group. One 16-year-old boy wondered why, if our carrots were sold in vending machines just like Cool Ranch Doritos and Lay’s barbecue potato chips, they didn’t have flavors too. We asked our R&D team to explore the possibility, and the product line was introduced in test markets in 2014.
Our Fruit Tubes are another case in point. Children have grown accustomed to sucking yogurt out of inexpensive squeezable packages. Now they can get preservative- and dairy-free, no-sugar-added fresh fruit and vegetable purees in the same way.
Of course, we’re also still innovating on the marketing front. Earlier this year we launched an initiative (#urwhatupost) designed to encourage healthful eating through the sharing of “food porn” images via social media. Perhaps our biggest achievement, however, has been to work through the Produce Marketing Association to persuade Sesame Street to lend its brand to us and other association members without a fee. If you make a five-year-old happy to eat an apple by putting an Elmo sticker on it, you’ve won over two customers—the child and his or her parent—perhaps for life.
The second prong of our strategy is availability. We want our products to be everywhere. Whereas we previously relied on grocery store chains for distribution, we’re now also working with big-box retailers, such as Walmart and Costco, and encouraging the two groups to establish or beef up “snack” sections in their produce departments, stocking both Bolthouse products and those of our direct and indirect competitors so that the scale warrants the retailers’ investment. The goal is to give parents a destination in stores where they can reliably find fresh and healthful food for their kids, and pilot programs have been a success. Bolthouse was also an early convert to the idea of selling (and marketing) via online delivery services such as Peapod and Amazon Fresh. And we’re making inroads into smaller shops, including 7-Eleven and Walgreens, that serve as grocery stores for time-pressed families in some neighborhoods.
Our third prong is affordability. Coke does well because it sells each can for less than a dollar. Frito-Lay does the same with a snack-size bag of Doritos. We want to make sure our products aren’t any more expensive. Our Fruit Tubes, for example, cost 40 cents each. Our Veggie Snackers are 79 cents. As consumers become better educated about the importance of a healthful diet, we don’t want price to be a stumbling block. So we have worked hard to improve efficiency, keep costs down, and pass those savings on to customers.
In 2012, two and a half years into the implementation of this strategy (and before some of the success stories I’ve described took place), Bolthouse’s growth began to accelerate, prompting an acquisition offer from Campbell, which Madison Dearborn accepted. My executive team and I were pleased with the deal for a couple of reasons. First, Bolthouse remains its own business. Back-office functions such as finance and legal have been integrated, but we’ve retained control of operations, sales, and marketing, with the understanding that headquarters resources are available to us. We currently have two Campbell PhD food scientists on loan, and we take advantage of the company’s well-established relationships with big retailers. Second, we benefit from Campbell long-term outlook and financial strength. (Recently I was appointed the president of the Campbell Fresh division.)
Industry observers were initially puzzled by the acquisition, since there are no classic overlaps between the two businesses: Campbell sells canned goods in the middle of stores; we sell produce on the perimeter. But the deal was a diversification play. Campbell had the vision to see the potential in the fresh food category and in the Bolthouse brand.
We still don’t have brand name recognition on the scale of soft drinks. But our customer base is intensely loyal and growing. The success of “Eat ’Em Like Junk Food” gave us the courage not only to advance our own corporate agenda but to lead our industry into competition with the world’s less-than-healthful food marketers. Our aim isn’t to demonize them. We’re simply co-opting their tactics and, I hope, creating a healthier society as a result.
A version of this article appeared in the October 2015 issue (pp.43–46) of Harvard Business Review.
Jeffrey Dunn is the CEO of Bolthouse Farms and the president of Campbell Fresh Division.