#276: General Mills Fruit Roll-Up – Good Food Marketed as FUN!
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Spotify First they tried to make a cake filling product, but figured out that healthier foods need to be fun for kids to eat them.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[Kooler Garage Doors Ad]
Dave Young:
Welcome back to the Empire Builders Podcast. Stephen Semple is here. I’m Dave Young, and then Stephen’s going to bring us part two of the engaging Fruit Roll-Up story, and this time we are heading to the evil empire of big corporate food.
Stephen Semple:
I was expecting that.
Dave Young:
It’s probably not evil empire, but it’s big food. I don’t know. How big is General Mills?
Stephen Semple:
Oh, god.
Dave Young:
They own pretty much all of it unless it’s owned by Nestlé. And maybe they own Nestlé or Conagra.
Stephen Semple:
Yeah. To put it in perspective, just their Fruit Roll-Up sales of their business is estimated to be like $200 million a year.
Dave Young:
Oh, okay. Just Fruit Roll-Ups.
Stephen Semple:
Just Fruit Roll-Ups.
Dave Young:
Forget about anything else you’ve ever seen with General Mills.
Stephen Semple:
Correct.
Dave Young:
Cap’n Crunch. I don’t know how big the Cap’n Crunch empire is with the-
Stephen Semple:
Yeah. General Mills is a massive, massive company.
Dave Young:
They’re huge. So if you remember where we left off, the Syrian immigrant and his son develops this Fruit Roll-Up product, fruit leather thing back in the early 1900s. It’s still going today.
Stephen Semple:
No, no. Sorry. The Fruit Roll-Up was 1960. Remember the early 1900s-
Dave Young:
Oh, it was [inaudible 00:02:50].
Stephen Semple:
…was when the father immigrated. He did this in the 1960s.
Dave Young:
Okay.
Stephen Semple:
Okay? Yeah.
Dave Young:
Okay. But he was still doing the bakery product, right?
Stephen Semple:
Yes, yes.
Dave Young:
That you could buy in strips at the bakery.
Stephen Semple:
Correct. Correct.
Dave Young:
So in the 60s he puts it out as an actual product that can sit on a shelf.
Stephen Semple:
Correct.
Dave Young:
And so I think we’re up-to-date, probably.
Stephen Semple:
Yeah. So last episode we basically met Louis Shalhoub, who was the son of the Syrian baker, who basically invented the modern Fruit Roll-Up as we know today, and basically in the 1960s in New York. Yet today, almost no one remembers Joray because that was what he called the product, and everyone knows about Fruit Roll-Ups. And again, we don’t know exactly the Fruit Roll-Up sales, but from what I’ve been able to find, it’s probably 100, $200 million a year in sales.
So what happened? Well, by the early 1970s, Joray had been selling Fruit Roll-Ups for about 15 years. The company expanded beyond New York. Other companies started expanding and copying the idea. Sunkist even introduces its own Fruit Roll-Up. And there was one trade publication that described Joray’s manufacturing process in enough detail that competitors realized that they can make similar products.
Dave Young:
Oh, no.
Stephen Semple:
And this was a mistake that Louis Shalhoub was being interviewed… He’s even been quoted as big mistake. I got a little too excited and expanded, talked about it too much.
Dave Young:
I understand that completely. Man, I get what happens when somebody’s interested and you’re trying to talk about the thing that you love and you say a little bit… It’s like Colonel Sanders giving up the 11 herbs and spices.
Stephen Semple:
Yeah. So the category is no longer unique to them, but at the end of the day, somebody would’ve been able to figure out how to do it anyway because it was based off of already a well-known product in the Middle East called amerdeen.
But here’s the part that surprised me. Fruit Roll-Ups did not begin as a snack project. So General Mills’ dessert division was working on new fruit fillings for a cake mix in 1975, and the fruit filling, they’re having a hard time turning it into a cake. So instead, what somebody inside the company realized is that the fruit paste reminded him of those fruit leather products. And General Mills openly admits they used an existing fruit leather product as their benchmark while trying to build something that they thought consumers would like. And this is almost-
Dave Young:
But they started by trying to put it in cake?
Stephen Semple:
Yes.
Dave Young:
Like what? Just a thing that you could just unwrap from the fridge and lay in between two layers of cake or something?
Stephen Semple:
No, a cake mix.
Dave Young:
Oh, a mix.
Stephen Semple:
A new fruit filling for a cake mix. Yeah. Yeah, that just didn’t work.
Dave Young:
Okay.
Stephen Semple:
It just did not work. But they went, hmm, this fruit product makes me think of this. Maybe we could use it for that.
Dave Young:
Do you know where I’d have gone with it in the cake lab?
Stephen Semple:
Where would you have gone with that?
Dave Young:
Fruit fondant. Turn it into a thick shell that you could put over the top of a cake.
Stephen Semple:
Oh, there you go. Okay.
Dave Young:
All right. Nobody’s invented that. There you go. Any of our listeners take that idea and run with it.
Stephen Semple:
Then there you are. It’s funny. When I think about things like this, I think about Apple computers. Apple never begins with what should we invent? Apple is famous for what already exists that we can make better, right?
Dave Young:
Yeah.
Stephen Semple:
That’s almost like a little bit of what General Mills, well, we’ve got this thing, what can we do? Oh, and there’s this other thing over there. What can we do to make it better? Because Apple didn’t invent MP3 players or smartphones or tablets or smartwatches, just like General Mills didn’t invent Fruit Roll-Ups. Instead, they asked, how can we improve the experience?
So they did a couple of things. They made them softer, they made them sweeter, they made them brighter, they made them more fun, easy to eat, easier to manufacture, easier to merchandise. Now, it’s not authentic, not traditional, but irresistible for kids anyway.
Dave Young:
I think that’s really interesting. And you think about an environment like General Mills, and so you have this kitchen lab, and you’ve got people working on all kinds of things in there. So you just throw a bunch of creative culinary people into a room and eventually things like this pop out.
And then if I remember the original fruit leather or fruit, maybe it was a Joray product I’ve seen, but they’re packaged bigger, if I’m not mistaken. The ones I remember the first time I ate it was like you’d end up with a piece of Fruit Roll-Up about the size of a dinner plate.
Stephen Semple:
Oh, wow. Okay.
Dave Young:
And then so General Mills made them snack-sized.
Stephen Semple:
Yes.
Dave Young:
Lunchbox-sized, not tear a piece off, roll it back up, put it in the package.
Stephen Semple:
Right, yeah. Now, here’s the thing that’s interesting. It seems like what I always find surprising when you talk about these kitchens is you would think that, oh, well, they just cranked this stuff out. It took them four years to get the formulation right. These things do take a lot of time and energy and effort. So basically by 1975, they started working on this and testing it and whatnot. And by 1979, they were ready to roll it out. It didn’t first launch as Fruit Roll-Ups. It was first launched under Fruit Corners label, which was a Betty Crocker sub-brand.
Dave Young:
Okay.
Stephen Semple:
And the early advertising was that it’s fruit and convenient and a wholesome snack. They went with, this is good for you. It wasn’t yet the playful candy-like brand that we see today. And the real breakthrough happened is when they noticed that kids were stretching them, peeling them, wrapping around their plate and playing with them. And basically when General Mills observed this, they leaned into it. So what’d they start doing?
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Using Stories To Sell]
Dave Young:
Let’s pick up our story where we left off, and trust me, you haven’t missed a thing.
Stephen Semple:
And the real breakthrough happened is when they noticed that kids were stretching them, peeling them, wrapping around their plate and playing with them. And basically when General Mills observed this, they leaned into it. So what’d they start doing? Peel out shapes, hidden pictures, stretchy faces, licensed characters. Playing with your food became the advertisement, and they leaned into it because they came out with Fruit by the Foot and all these other things that were really fun.
Now, what this made me think of is it took me back to a conversation I had when my kids were little, and it was with a friend of ours, and she was a vegetarian, very, very health conscious and all this other stuff. And I remember her talking about, she was like, “Why can’t these businesses that make these health snacks, why can’t they make them fun?” And I remember her literally saying, “I can’t compete. I’m having a hard time getting my kid to eat these better things. I can’t compete with the dinosaurs and the colors and all this other stuff.”
And so when I was reading this story, I went, “Wow, I remember that.” And here’s the mistake Joray made. They could have done that. They could have easily done that. It’s not like you needed to license a character. They could have done that. They could have leaned into it and done that. That very same thing was happening in front of them, and they didn’t grasp onto it. They stayed with the whole, it’s healthier, it’s better, it’s all that other.
And it got also, when I was thinking about this, I was at a health food store and I was wandering and I was like, yeah, the health food industry still hasn’t figured that out. They still haven’t figured out, hey, maybe it would be way easier for the parents to get their kids to eat these healthier versions if it was packaged more brightly and animals were printed on it, or whatever. Rather than sticking to the whole, this is better for you and healthier and whatnot.
I think a lot of businesses are missing the boat. And that’s where I give General Mills credit because General Mills noticed that, because they didn’t originally go that direction, but they noticed it and went, wait a minute, wait a minute, this is what kids are doing with this. We should lean into it and make that even more of the experience.
Dave Young:
They have, again, that whole breakfast cereal experience. They know how to make kids eat stuff that maybe isn’t very good for them by putting cartoon characters on it and making it fun, putting things on the box that are fun to read and prizes inside the box and all of the things that make kids demand that their mom buys it at the grocery store.
Stephen Semple:
And Joray could have done all of that. Okay, they wouldn’t have had the money to license a Disney character, but it doesn’t mean you can’t put a dinosaur, a card, a puzzle on the box. It was right there in front of them. They could have looked at what do the cereal companies and whatnot do to make kids like this product better, which frankly would’ve made the parents like the product better because it would’ve been easier to get their kids to eat it.
Dave Young:
Yeah, 100%.
Stephen Semple:
Going back to Joan voicing that, and this is like I’m going back 20 years, but it was funny when I was reading it, I could hear the conversation in our kitchen again. I could hear her voice again saying that. And I’m like, wow, this is an opportunity that they missed. I think sometimes we just get too much into our space of the reason why people are eating this or wanting it is it’s healthier, it’s better and it’s tastier and missing this extra opportunity because you don’t have to change any of those things. You could have just added this, and I think they would’ve been way more successful.
Dave Young:
Yeah, I agree.
Stephen Semple:
So that’s the thing I wanted to share because I think that was right in front of them.
Dave Young:
It’s hard to grasp some things like that when you’re knee-deep or eyeball deep in your business. We’ve said for, I don’t know, gosh, 25, 26 years now that I know of that it’s hard to read the label when you’re inside the bottle. And sometimes, and you and I both do advertising and marketing consulting, and sometimes the most valuable thing you can be to a client is that set of outside eyes that can walk in with a childlike curiosity and look at things and go, “Well, have you though about doing this?” Or, “What opportunities are you not taking advantage of?” I call it looking for an unleveraged asset. And so Shalhoub already was doing the product.
Stephen Semple:
Correct.
Dave Young:
And it would take hardly any work at all to change the label, to change the way it was cut up, to do all the little fun things and recognizing that the children is your primary audience or consumer.
Stephen Semple:
I like to think about it differently rather than the unleveraged asset. I like to look at it this way, become your customer. Observe your customer, become your customer. And here’s the part that’s unfortunate, they did it in step one where it was like, let’s package this differently. That was thinking like the customer, but they could have taken it to the next step. And to me, it’s a little bit sad. I would rather see them have the big success than the General having the big success.
Dave Young:
And at the same time, how much business did you say they’re doing?
Stephen Semple:
The estimate I was able to come across is probably $4 or $5 million.
Dave Young:
And a small group of 15 or so people.
Stephen Semple:
Yeah, they’re doing okay.
Dave Young:
They’re doing okay.
Stephen Semple:
They are.
Dave Young:
And it’s still a family business.
Stephen Semple:
It’s fourth generation.
Dave Young:
Employing people in that family and doing what they wanted it to do as opposed to selling it to General Mills, and one or two people in the family now have a nice home somewhere else and everybody else is mad at them because they got money and they didn’t, so. These things happen, right?
Stephen Semple:
Yes.
Dave Young:
In a tight, close-knit family, somebody cashes out and everybody else gets a little butt hurt and things get weird. But if you keep it in the family and you figure out how to do this for four generations, you have this thing that just keeps your family going. I love that.
Stephen Semple:
Yeah. Oh, so do I. So do I. Just it would’ve been nice for them just to have a little more success.
Dave Young:
They could still do it.
Stephen Semple:
They still could.
Dave Young:
Absolutely still could. Absolutely could just still do exactly what General Mills is doing.
Stephen Semple:
Yep, they absolutely could, absolutely could.
Dave Young:
And people say, oh, well, you’re just knocking off General Mills now. Well, they knock off us and it’s our turn.
Stephen Semple:
Yeah, exactly.
Dave Young:
Right. There’s nothing keeping them from doing that. I don’t think-
Stephen Semple:
That’s true.
Dave Young:
Unless you make it clear that your cutouts are actually the shape of Cap’n Crunch or the leprechaun.
Stephen Semple:
Well, exactly.
Dave Young:
Put in whatever shapes you want.
Stephen Semple:
No one owns the idea.
Dave Young:
Yeah.
Stephen Semple:
There you go. Well, and so we need to make sure that there’s some Joray Fruit Roll-Ups at the-
Dave Young:
Yeah, I would love to see that.
Stephen Semple:
Yeah. All right, awesome. At the academy. That’d be cool.
Dave Young:
We’ve got the Swiss Miss somewhere.
Stephen Semple:
All right. Awesome. Well, because that’s what you want in the Texas heat.
Dave Young:
Yeah, not this week, probably. But in the couple of cold weeks in February, it’s nice.
Stephen Semple:
There you go.
Dave Young:
Thanks for bringing us the Fruit Roll-Up story in two parts, Stephen.
Stephen Semple:
All right. Thanks, David.
Dave Young:
Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat, juicy five-star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.