Worthington Comes Back to the Adventists

(Spectrumbot) #1

Don Otis, founder of Heritage Health Food, has bought Worthington's frozen food line back from the Kellogg Company, as well as acquiring the Cedar Lake food company, and is working to bring back many well-loved veggie food brands to Adventist consumers and beyond. He talked to Spectrum about the deals and his goal of making Adventist food more healthful.

Heritage Health Food Inc recently acquired the Worthington frozen food and Cedar Lake brands. When were the deals finalized? Why did you decide to take these brands on?

We finalized the agreement with The Kellogg Company to acquire Worthington Foods around the end of February, and finalized the agreement with Cedar Lake in April.

Is it a coincidence that you acquired both at the same time?

Yes, I would say so. Honestly, we didn’t even have Worthington on our radar at the time.

But it was something I had previously hoped for.

I used to manage the Worthington brand for Kellogg for about 14 years. As the director of natural and specialty foods for Kellogg, I oversaw all the natural brands: Kaashi, MorningStar, Gardenburger, Loma Linda and Worthington. I knew that someday Kellogg may decide to divest of those brands.

I had that thought in my mind when I left Kellogg and started Heritage Health Food in 2009. (I made an offer for Worthington then, but they didn’t take me up on it.)

I called my company Heritage when we first started because I thought there might come a day when we could get these old Adventist brands, if the Lord saw fit, and I thought they would fit under the name “Heritage” really well.

Last year Cedar Lake contacted us, said the company was for sale, and they wanted to keep it an Adventist company.

We started negotiations that went on for about six months. And right in the middle of acquiring Cedar Lake, Kellogg called. I made an offer and got Worthington, too.

So you didn’t see eye to eye with the Kellogg bosses about the direction of the natural food lines when you were working there?

When I was there, I could see that market trends were for healthier, non-GMO products. But Kellogg decided to make all their products genetically modified, and used artificial flavours and colours. I couldn’t even sell to the EU anymore, a huge market, because Kellogg products didn’t adhere to the guidelines. They were just going in a different direction.

If market trends clearly showed a move toward healthier, non-GMO food, what was Kellogg’s rationale for not going that way?

They didn’t really have one.

Kellogg is a good company. They are good at cereals, pop tarts and Eggo waffles. They are a $16 billion company. And our products were just a few million. We were just a fly to the Kellogg giant. They didn’t want to put the energy into the health food arena.

They did decide to keep the MorningStar brand because it is vegetarian, but does not proclaim itself a health food.

So I saw the potential to get these brands back.

I wanted Adventist food to not be the worst vegetarian food out there. It is slightly embarrassing.

Kellogg didn’t have that interest — and I do.

What traditional products, which may have been discontinued, are you bringing back (to the delight of Adventist consumers)?

Worthington slices: chicken slices, turkey slices, wham and all that will be back right away. Golden Croquettes. And there are several other things we are looking at, but can’t name yet.

What does “right away” mean?

We are planning to start manufacturing the slices around August 15.

You have a lot of experience working in food. Is this where you always saw yourself?

I started out in publishing work for the church, and worked for the denomination for years. I never thought I would go into food and manufacturing. I always just thought selling food could help to finance the publishing. And I was good at selling.

As I got more into food, I saw more clearly the importance of the place of healthy food in our Adventist health message. I saw that the Adventist health message prompted the beginning of our food business in Battle Creek, Michigan, at about the same time as we received the doctrinal message. God had it in mind that the health message and spiritual message would go hand in hand.

But our church had sold it off, and walked away from the model.

At Kellogg, I saw Worthington being taken in a less and less healthy direction.

Our Adventist health message prepared us to become leaders in the industry, as consumers look for healthier options, but instead we have become followers.

That is why I started my own company — I want us to get out there in front again.

Heritage is a fairly new company, while Worthington and Cedar Lake are both very old Adventist brands. How does their acquisition change your company and its size?

Yes, Cedar Lake has been around since 1949 and Worthington since 1943. They are legacy brands, and they both have a loyal following. We will work to improve them, but we don’t want the products to go away. We will just add some things to the mix.

We are going from about a million dollars a year to $12 million a year in sales, with potential for much greater growth.

How were you able to finance such significant acquisitions?

We operated for our first seven years with no debt. Now we have both private equity and debt. We financed with about 50/50 using bank financing along with some private equity investors.

So you won’t change the brand names of the Worthington and Cedar Lake products?

No, Heritage will continue to manufacture four separate brands: Heritage, Kim’s Simple Meals, Worthington and Cedar Lake. The corporate company umbrella will be Heritage.

One of the most confusing things that we have found for people, is that two years ago Kellogg sold the Worthington and Loma Linda canned products to a non-Adventist health food company called Atlantic Natural Foods. They are now manufacturing them under the Loma Linda brand. (So Worthington Veja-Links will become Loma Linda Veja-Links, and so on.)

We bought the brand Worthington. Atlantic Natural Foods can use the name for another few years, but at some point it will belong only to us, and we will the Worthington name all as part of Heritage.

And actually, the fact that we were only buying Worthington’s frozen brands, and not the canned, is one reason we wanted Cedar Lake. Also the fact that Cedar Lake products are actually healthier.

We also have our own, new Heritage canned line, which is selling very well.

I believe you are closing your plant in Tennessee and moving all of your manufacturing to Michigan? Will all of your staff go there too?

Our corporate office will remain in Collegedale, Tennessee. But we are making a pivot now from a small family business to a multi-million dollar food company.

And yes, our manufacturing is all moving to the Cedar Lake plant in Cedar Lake, Michigan. We are moving up some of the Worthington equipment from Ohio, and also adding our equipment from Tennessee.

Does your marketing strategy focus more on Adventist consumers, or non-Adventists?

With heritage we focused more on the mainstream market. We are less than eight years old, and we don’t have as strong a following as Worthington and Cedar Lake. But we have distribution of our products in Whole Foods, Sprouts and many other major stores across the US. All the health food distributors carry our products. So now we have products that will play in every market: the traditional Adventist, the vegetarian consumer, and the in the mainstream market, where we have Kim’s Simple Meals.

Will you be marketing Worthington and Cedar Lake to non-Adventists?

Probably the Cedar Lake products, which already have some all-natural foods. For instance, we can introduce Cedar Lake to the deli at Whole Foods, where they have no vegetarian slices for sandwiches. So we have two marketing emphases: keep growing the Adventist market, and keep going hard after the mainstream consumer.

Of course the Adventist market is not what it used to be. If you are just trying to sell through ABCs, Adventist colleges, etc, you won’t make it. Those traditionally Adventist outlets aren’t there anymore. Adventist consumers are shopping at mainstream stores, so you have to reach them there.

You mentioned the Adventist health message, and its importance, but feel that the church had walked away from its health food business. Is there an opportunity the church as a whole is missing?

When I left Kellogg to start Heritage, I flew to Australia to meet with Sanitarium Health, one of the country’s largest food manufacturers, and wholly owned by the church. They are writing checks — they support the church's work there hugely.

Heritage supports ASI, and a ministry that digs wells in remote parts of Africa. We are on our third or fourth Heritage-sponsored well. As we grow and become more profitable I want to look for ways that we can support God’s work and mission work throughout the world.

Don Otis is founder and president of Heritage Health Food. For the first 22 years of his career, Otis managed Adventist Book Centers in Pennsylvania, Nevada and Massachusetts. He then went to work for Worthington Foods, and when it was acquired by Kellogg, he went too. He started his own health food company in 2009.

This is a companion discussion topic for the original entry at http://spectrummagazine.org/node/7573
(Rohan Charlton) #2

Get your act together and do what you should have done years ago:

  Make an SDA version of Subway/Chipotle etc etc.
(Elaine Nelson) #3

“All natural” is such an overused term in food, but what is the FDA requirement for calling a food “natural”?

Also, there is such a fear of GMO foods although many cannot even describe the meaning. We have been eating GMO food for thousands of years. Natural conditions and farmers have modified their crops to produce better yields almost since time has been recorded (Read the latest NatGeo for more info). There is nothing added or taken away in the GMO process and it only improve crop yields and ensures more healthful vitamins and minerals for our bodies. Read Center in the Science for Public Interest and their monthly _Nutrition_magazine to be better informed.

(jeremy) #4

it’s good to see someone understanding the connection between our health products and our end-time message…

i was interested in the observation that adventist consumers aren’t really shopping at ABC anymore…this is the kind of insight that bodes well for worthington…if they can find a way to sell in mainstream stores, not only will they get their adventist contingent back - who will surely recognize the brand names, and buy out of nostalgia if for no other reason - but they’ll pick up other consumers, as well, and make much more money…this is what silver hills breads seems to be doing with their organic, non-GMO breads…i see silver hills breads basically everywhere i shop now…

(Cfowler) #5

I recently discovered Silver Hills bread. Love it.

#6

SDA version of Burger King, MacDonald, Wendy, Dairy Queen, A and W etc etc.

(Mercy triumphs over judgment. James 2:13) #7

Mr Otis, congratulations on the vision and expansion of your company. I hope the return of the slices includes Meatless Salami.

(Thomas J Zwemer) #8

My children call Loma Linda Foods Etc (food substitutes) Graham Maxwell lived it. TZ

(Kim Green) #9

I appreciate the interview, thank-you.

Here are some issues that Adventist- based “health” products face:

(1) Part of the problem selling to Adventists is that there are less and less vegetarians to begin with. Selling through the established ABC stores didn’t work so well due to their locations which weren’t the best for the consumers. Adventists simply aren’t living where they were selling.

(2) I am not familiar with the brand Kim’s Meals but I am with the rest of the brands. I know that the Heritage brand is very low salt and artificial flavorings, etc., which makes it not so palatable to the general public. Many of the “canned” products" are unappealing unless you “prepare” them in some way that most non-SDA veggies would not know about/care about.

(3) The other brands are not up to the competition of other non-SDA produced faux meat products in either taste nor in presentation though Mr. Otis has some of these brands in the national arena. Hopefully they are up to spending a lot in advertising and marketing their brands to compete in the booming Natural Market industry.

(4) I understand Mr. Otis’s zeal to establish the connection between health food and the Adventist message but I wonder if it is a little too late overall. The rest of the vegetarian consumer market has passed the “canned” foods phase a long time ago and aren’t waiting for the Adventists to show them anything new.

Nonetheless, I give him kudos for trying and there may be a small slice of the vegetarian pie left.

(le vieux) #10

One of Worthington’s problems, and one which they have not really taken seriously, is the fact that they have not kept up with the industry. They still use artificial ingredients, along with MSG. People who are into eating healthfully don’t want food with these ingredients. Many years ago the local Worthington sales rep told us that he had, on more than one occasion, tried to get the top brass to understand this, but if fell on deaf ears. And the products (such as Numete) which had good ingredients, were discontinued.

As a result other companies have taken over much of the share of the market. Who eats this stuff anymore, besides Adventists who should know better? We’ve discontinued most of their products, because very few people want them, and there are better options.

The sad fact is that these products were meant to help people to transition to a vegetarian diet, and were not intended to be a permanent substitute for meat. The average American eats way to much protein. With a balanced diet of fruits, nuts, and grains, along with vegetables, it’s pretty hard for a normal person to not get enough protein. There is a definite link between too much protein and calcium loss from the bones.

(Carrol Grady`) #11

Please, please, please make Nuteena again. When I heard it was going to be discontinued, I bought two cases, but they are long gone. It makes such a delicious sandwich. Have you tried marketing it to, for instance, Fred Meyer’s out in the west. Whole Foods is too expensive.

(efcee) #13

Kudos for Mr. Otis’ desire to make those existing products more healthful than they are currently, but everyone must understand that processed meat substitutes are not “health food” or “whole food” or “natural food”. They should be categorized as “convenience foods”. On the plus side for this industry, there are more vegetarians these days among both Adventists and non-Adventists, who are vegetarians for compassion reasons and not for health reasons. This should be a boon to the artificial meat industry.

(Stephen Terry) #14

I am very curious about the money trail involved in this deal. The church has been burned repeatedly in the past by making sweet financing deals for entrepreneurs who promised all sorts of wonderful things for the church. In so many cases those supposed “money making” scams were really operating at losses and a considerable amount of tithe and trust fund money went down the drain because those “entrepreneurs” told us what we most wanted to hear, even though it was all lies. While I wish Mr Otis all the best, his family name has figured prominently in those previous fiascos, and he was really not very forthcoming in answer to the question about where the money was coming from in the article. Lack of complete transparency was what got us into trouble in the past. It will do so again if we continue to fail to learn from our experiences.

#15

For those of us vegetarians seeking proteins in our diets, these meat substitutes or analogs offer an excellent source of protein with low carbs. This means “healthy” for a lot of us consumers, and we appreciate this option. Not only are many of these foods convenient, they are delicious, versatile, and natural. I am a customer who appreciates these sources of good protein.

#16

Apostle Stephen Terry,
Mr. Otis, who is an Adventist, has purchased these companies privately. The Adventist denomination did NOT make this purchase according to the article. It is a private company, just like Little Debbie’s, etc. Have no fear. The Church did not make the deal. If it does not go well, the Church will not lose one cent. However, personally, I pray that it does well.

Praise the Lord! The cost of items under Kellogg’s was way too high, at least here in New York City. ($6.50 for a can of Big Franks or Scallops.) I truly hope you bring back Nuteena. I miss it dearly. I’m down to my last few cans (still good). And please get rid of the MSG in the products. It causes migraine headaches, hypertension, and is very unhealthy. Then again, you probably know this.

Also, many of the Morningstar frozen products were touted as vegetarian, yet they now contain egg whites. If we could fix this, it would be a plus for those who are vegan.

Blessings on you for following the vision and making this purchase. I like what I have read in the article. I pray for the success of your company. May God’s favor shine on it.

(Daniel Allen) #18

Will the company return to the old formula for making WHAM? It was gluten-free many years ago until Kellogg’s changed the formula. Also, as several people have already mentioned, is Nuteena going to make a comeback?

(Steve Mga) #20

At Kroger and Publix the Kellogg line of meat substitutes have VERY LITTLE space compared to other companies.

(Penelope Winkler) #21

Numete! Bring back Numete, please!

(Alita) #22

Kim, I think that many of your points are correct. I will say, however, that I think most of the Adventist brand fake meat is tastier than many of the more mainstream brands. I came across this comparison between veggie hot dogs the other day, where the (admittedly just a few, but non-Adventist) tasters ranked Worthington Veggie Links the top.


Of course, it’s Atlantic who now sells these, and not Heritage!
I think there is potential here - mainly because many of the competitor’s offerings are not all that great - and often not widely available.

(Penelope Winkler) #23

And bring back Nuteena too! … for those who prefer it.

Look, we all know that meat substitutes are in general unhealthier than, say, eating a raw food diet. But the point is to have variety. For those of us who grew up Adventist, these foods retain us in their cultural grasp. They are also much better tasting than the meat substitutes on the market today. You would no more make a steady diet of Wham than you would of cold cuts, however.

I grew up eating Numete with one grandmother and roast beef with the other. They were all good. My Alabama-raised, pork-loving Methodist husband won’t eat Saucettes, but kindly makes his famous collard greens with Stripples because he loves his vegetarian daughters (and you can’t much tell the difference, except in good ways). So let’s bring back some of the old-style Adventist meat substitutes and see how they do, toe-to-toe in the marketplace with a new generation of consumers trying to embrace vegetarianism.

If we can convert more people to eating vegetables rather than eating meat, it’s a win not only for their health, but for the planet and for the ethical treatment of the beings with whom we share it.

Penelope

PS. By the way, whoever wrote that post about GMOs? GMOs are bad for the environment because they encourage high amounts of pesticide and herbicide use if nothing else, the runoff from which is killing our major rivers and estuaries. Then there is the Monsanto corporate monopoly, not to mention that cross breeding two kinds of beans is NOT the same as putting fish genes into tomatoes–which may down the road trigger who knows what in the DNA of soil bacteria that have been evolving for millions of years. Sorry, I’m not convinced mucking about like that is a good idea, especially when most of the benefits go to big corporations and very little to farmers.