How do you take a product with no market growth, 70% waste, and no pizazz then turn it into a trendy product, with higher profits and significant market growth? You think fresh baby!
Baby carrots have become the snack food of choice for moms across the country. They are healthy, sweet, and bite-sized. For many health conscious eaters they are the "crunch" to have with sandwiches replacing the fatty potato chips or fries. I see baggies of them frequently on airplanes as passengers have learned in this age of "bring your own food on board" they are easily portable, need no refrigeration and are tasty.
In the 1960's the average American ate 6 pounds of carrots a year, today we eat close to 10 and a half pounds. What turned the tide for this veggie in demand?
It may be a surprise to many, but baby carrots aren't baby at all! They're normal sized fully grown carrots cut into 2-inch sections, pumped through water-filled pipes into huge drum peelers and whittled down to the munchies size Americans love to crunch.
Mike Yurosek of Newhall, Calif., got tired of seeing 400 tons of carrots a day being tosses away at his packing plant in Bakersfield. The carrots being thrown away are too twisted, unsightly bent or broken to sell. In some loads, as many as 70% of carrots were tossed. Mike considered how he could salvage the carrots?
Yurosek knew frozen food companies routinely cut up his long, well-shaped carrots into cubes, coins and mini-carrots. So why not package them fresh in smaller sizes? He did the first batch by hand with a potato peeler and decided this was a go. After some practice and investment in some machinery, Mike sent the baby carrots to a Los Angeles supermarket for a trial. The response he got? They only wanted those kind of carrots from now on.
The babies were a profit boom. At the time stores were paying 10 cents a bag for whole carrots and sold them for 17 cents. They now paid 50 cents for a 1-pound package of baby carrots and sold them for $1
Now it's your turn
Question 1: What are you accepting in your business because it's always been that way?
Question 2: What is one simple way you can change how your product is used to find a new market, increase profit or both?
Baby carrots are now a snack food, while the larger carrots never had been considered as anything more than a vegetable. By innovating the product, the product became more profitable in its new incarnation as a snack food.
My sister's family is a big fan of home delivery pizza. At the center of each pie is a plastic disk with three legs on it to prevent the pizza box from crushing into the pizza toppings. These are on every home delivery pizza, so I am sure they are of minimal expense. But what if the manufacturer of that piece of plastic knew of the alternative use we found for this throw away item?
Turn those plastic pieces upside down and they make the perfect hard shell taco holder! Now, does that plastic piece have more value? Could it be sold to the general public for more than it is sold to the pizza restaurants?
As one of my clients said, "Sometimes you have to ask someone outside of your family whether your baby is ugly or not." As far as the carrots go, these babies are beautiful.
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