The firm, established in 1869, is comprised of 825 grower-owners who grow and harvest Concord and Niagara grapes.
Welch’s goal is to receive every grape from its owners and return the highest possible profit. In order to achieve this it has devised a new global ingredients strategy, spearheaded by Kevin Kilcoyne, vice-president and general manager of Global Ingredients.
He told us the plan had three key objectives, to increase its international presence, extend its business in wineries and distilleries, and expand its range of purees.
Japan has been a major international focus for the company for the past three decades, but Kilcoyne said the market was ripe for further growth.
He said it was looking at new packaging, products, categories, and premium offerings to expand its current Japanese business model.
“The concord grape is very well-known and highly-consumed in Japan,” he added.
“However, we have been predominantly active in juices, which has been great, but we are looking at options in other categories such as spreads, jams and jellies. We believe there is a gap in the market here for concord grape products.
In terms of business with wineries and distilleries, Welch’s focus has so far been on the US, but it is now keen to expand this further afield, both for the Concord and Niagara varieties.
“Historically, we have sold most of our ingredients to other juice manufacturers, where the pricing fluctuates quite a bit,” he said.
“But there are some healthy margins in the wine and distillery segment, and we believe our grapes have every right to play in these categories in Japan and elsewhere.”
He added the firm was investigating if its ingredients could be used as an ‘extender’ in wines, for brandy and in flavoured vodka.
China target
The final focus will be on purees, with the company producing a Niagara puree product for the first time last year.
“Niagara offers a puree with more of a white grape colour, while still having a robust flavor,” he said, adding that it would also begin producing an apple puree this coming season.
While Japan has dominated Welch’s APAC activity for many years, Kilcoyne added that China would likely be a future target market.
He said it would be carrying out some market testing this year with its finished products as a first step.
This would then be followed by some media work around the ingredients side of the business.
“The opportunity there is so massive in volume terms that we need to start to grow the brand and awareness of the ingredients,” he said, adding that two emerging consumer trends were proving cause for optimism.
“Globally, we are seeing growing interest in functional products and Asia is no exception, so we are also looking closely at this because studies have shown there are more polyphenols in Concord grape juice than many other juices.”
“We are also seeing that consumers are very focused on mindful choices, which plays to our strengths. In addition to being healthy, our Concord grape juice is made from family-farmer grown grapes so we have full traceability," he said.