How Matt & Steve’s Builds One Of North America’s Fastest Growing Marinated Vegetables Brands Without Outside Investors
Longtime friends, Matthew Larochelle and Steve McVicker, cofounded Toronto-based Matt & Steve’s over a decade ago to spice up their cocktails with premium quality pickled beans and asparagus, and it has become one of the fastest growing marinated vegetables brand in North America with over 12,000 distribution points in retail and foodservice, according to the latest Spins data.
Capitalizing on an already high double-digit annual growth rate at over 70%, and the increasing consumer interest in gut health-focused food, the company behind two signature brands — The Extreme Bean and The Asparagoos — plans to further accelerate its business south of the border in 2021.
Larochelle notes how Matt & Steve’s has remained among the top three fastest growing brands in the category over the past year in the U.S., outpacing the overall pickled and marinated segment’s growth rate of 2-3% in retail, despite the pandemic and a lack of support from outside investors from the beginning.
‘Cut Through The Clutter’ With Quality & Sociability
He attributes the company’s resilience and success to its quality and sociability that allow it “to cut through the clutter” in a traditional $8.45 billion category that has been dominated by several legacy companies, including Pinnacle Foods, Kraft Heinz, and Mt. Olive Pickles.
“Quality remains our main focus first and foremost,” said Larochelle. “That includes a rigorous selection process of our unique bean variety that grows longer, sweeter and crunchier than a normal green bean, the right in-store promotions at the right time, and the right content we use on our social media platforms, etc.”
Owning its production is another way to ensure product quality, Larochelle added. Matt & Steve’s 40,000-square-foot manufacturing plant currently houses 86 employees and produces 25,000 jars per day.
The sociability element is rooted in Matt & Steve’s as it was created out of a need for adventurous cocktail drinkers, the very reason why the company started out in food service that currently accounts for 30% of its overall revenue. “You can put them into a drink, use on boards or eat as a snack while entertaining,” said Larochelle.
Expansion In U.S. Retail
The pandemic, however, has forced the company to think outside the box, leveraging more retail and social media to increase its consumer awareness.
“The initial days of COVID were very concerning. We lost nearly 100% of our foodservice business overnight,” Larochelle said. “To our surprise, the retail business accelerated to compensate for a large chunk of our loss. We also launched new products [including a ready-to-drink cocktail] in a budding beverage business. That’s how we were able to grow revenue by the end of last year.”
He acknowledged how selling through retail versus food service brings a unique set of challenges, since the team had to learn how to sell marinated vegetables as a standalone product directly to consumers instead of an ingredient in Bloody Mary.
“When selling to major retail players, they also have to provide good quality products at an affordable price to their customers while having an obligation to their stakeholders to run a profitable business,” Larochelle explained. “Our learning curve was steep as we tried to satisfy their objectives.
“In the U.S., we went straight to retail and did not have foodservice first, since we identified a void in the retail market that revolved around bringing excitement to the category,” he added. “We felt we could address that by using a different approach.”
The pickled vegetables category anticipates to grow steadily at a 3.5% CAGR between 2019 and 2025, reaching $10.6 billion in revenue at the end of the forecast period, according to Grand View Research, and Matt & Steve’s hopes to grab a bigger chunk of that market.
“The market has been around forever, and is not going anywhere,” said Larochelle. “However, we feel it is ripe for an all-natural brand to knock the dust off and have a little fun.”