Applegate Focused On Bacon Specialization

Applegate Natural and Organic Meats is leading the way when it comes to organic and natural bacon. And pork giant Hormel Foods Corp., Austin, Minnesota, which acquired Applegate three years ago and operates it as an independent brand, is benefiting from the consumer shift in food preferences.

With all the types of meats Applegate sells, including bacon, the company features two lines in its products — natural and organic. “We’re the No. 1 natural and organic meat brand – and that holds in the bacon category as well,” explains Leah Sbriscia, associate product manager for Applegate, which is based in Bridgewater, New Jersey. The brand is 31 years old and was founded in 1987, as an independent company, with the idea of creating meat products as naturally as possible. During the summer of 2015, Applegate Farms was acquired by Hormel for $775 million. Three years ago, Applegate, now a Hormel brand, had annual sales of about $340 million. Applegate has 133 employees currently, but the number is growing.

Niche focused

According to Hormel, the idea behind acquiring Applegate, the leading organic, value-added prepared meat brand, was to give the brand a faster path to expanded offerings in this high-growth category, as growing numbers of consumers continue to choose organic and natural food products. At the time, Stephen McDonnell, Applegate founder and long-time CEO, said it was his mission from the start to change the way “we think about meat – how it’s raised and produced” – and the sale to Hormel was a continuation of that mission.

When Applegate was acquired, its products included bacon, deli meat, traditional Italian meats, burgers, breaded chicken, breakfast sausage, hot dogs, corn dogs, cheese, grilled chicken strips and dinner sausage products. That hasn’t changed much. But there’s no doubt that bacon is really the leader when it comes to the Applegate lineup of natural and organic meats.

“Bacon is a category that continues to grow,” Sbriscia says. “The bacon buzz is not slowing down.” She predicts the category is on track to reach sales of $5 billion by the year 2020.

The growth leader in the natural bacon category is Applegate Naturals No Sugar Bacon, launched last year. “Today, more than ever, consumers are aware of their sugar intake. The NPD Group reports that 65 percent of adults want to cut down on or completely avoid sugar, and that a number of popular lifestyle programs, like Whole30 and Paleo, stress no added sugars.”

Organic growth

Sbriscia says Applegate bacon products are on-trend with what consumers want today. The company offers all its bacon products in two main lines: Applegate Naturals and Applegate Organics. Within those two lines, the bacons include both pork and turkey. “Our full product line for bacon consists of eight retail products,” Sbriscia says. They include: Applegate Naturals Sunday Bacon, Naturals No Sugar Bacon, Naturals Thick Cut Bacon, Naturals Turkey Bacon, Organics Sunday Bacon, Organics No Sugar Bacon and Organics Reduced Sodium Bacon. “What we call ‘Sunday’ bacon is our signature cut, a traditional bacon style that we sell in both organic and natural,” she says.

There is also an increasing demand for turkey bacon that the company has become more heavily involved with. “About one-third of our bacon portfolio is turkey bacon,” Sbriscia says.

Sbriscia also talks about the rapidly growing organic trend in general, and how bacon has become such a big part of it. “Organic continues to grow at retail – there’s a proliferation of organic products available that are different from what are called ‘natural’ products. Today, you see more and more mainstream retailers, not just specialty retailers, offering organic products and creating organic sets within their stores,” she notes. “The Organic Trade Association reports 82 percent of US households are purchasing organic products.” She says Applegate has been a big supporter of USDA organic regulations and requirements, although the agency has been in the process of backing away from some of those requirements.