Health Food Maker Shows It’s Fiscally Fit
Without traditional advertising and without a public relations department, Health Valley Foods has become a major player in a 1990s concern: the manufacture of health foods.
Founder George Mateljan (rhymes with Italian) personally tastes each new product that spews forth from his Irwindale factory and spends much of his time testing new ways to cut down fat and cholesterol and still keep the foods--which range from packaged meals to fast-food snacks--tasting good.
He reformulates his ingredients whenever there is a new nutritional finding from the medical community. He has lowered the fat content of most of his wares--and also every recipe in his latest cookbook--down to nearly nothing.
And, he maintains active correspondence with a mailing list of 300,000. “The customer has to come to us,” Mateljan said.
Mateljan expounds at length about the exact contents of every can of non-fat chili or each granola bar, but he is secretive about things such as sales figures on the 80 different products of the privately held firm, whose giant white factory sprawls next to the Foothill Freeway in Irwindale.
A spokeswoman for grocery industry analysts MAC Inc. of Westport, Conn., though, estimates Health Valley’s sales at $150 million a year.
It’s the largest independent company in the National Nutritional Foods Assn. and usually the largest exhibitor at the grocery industry’s health food trade shows.
According to Gina Geslewitz, editor of the grocery industry trade magazine Health Foods Business, Health Valley “was one of the first in the fat-free category and is now absolutely the biggest.”
“They’ve always been a health foods industry leader, with the widest product range and shipping more pounds of food than any other independently owned company,” Geslewitz said.
In 1992, the company contracted with farmers and millers for 50 million pounds of organically grown grains, dried fruits, spices and juices; 75 million pounds were ordered for 1993.
“My time should be spent making good-tasting food,” said Mateljan, 57, who has written four cookbooks, the most recent being “Cooking Without Fat.”
Health Valley packaging manager Harry Urist described the company’s taste-testing procedure: “First we test the products on ourselves and then at health food trade fairs. Often, children attend with their grocery store operator parents. If they spit the cookie back at me, we know we have to change the formula.”
Urist went on to describe the problem he faces every three or four months when the company changes the contents of a product, either because it has found a new organic source of a grain or fruit or because Mateljan has decided to reformulate it.
For example, after Mateljan read recent medical studies, he decided to take the fat out of a whole line of goods--soups, cookies, granola, chili. “Half my gray hairs I got from rushing over to the printer to change the contents on the box,” Urist said.
Health Valley’s fund-raising project for the American Cancer Society (a coupon-bearing flyer given out at grocery stores and placed in 5 million California newspapers, including The Times, on a recent Sunday) occurred because Mateljan’s recipes are compatible with the diet recommended by that health organization.
Dr. Diane Fink, group vice president for cancer control of the society’s California division, said the promotion, which bore the society’s logo, was “not an endorsement, but I guess they have the lowest fat. And we can reach many more people with our motivational guidelines by working with them.”
For each coupon redeemed on Health Valley fat-free cookies, the company pledged 35 cents to the society. Last year, Health Valley had a similar arrangement with the American Heart Assn.
A recent Wall Street Journal article described what happened when the paper queried--on plain stationery--Health Valley and nine other national food companies about ingredients in their products. Health Valley was asked about the amount of raisins in its cereal.
“This California manufacturer seemed downright pleased to hear of the perceived raisin shortage” in its cereal, the Journal reported. Mateljan’s fast, detailed response was typical of his correspondence.
The fastest of all those queried, Mateljan responded with a two-page letter, plus a replacement box of cereal, free samples of other products and information on cholesterol-busting diets.
The other manufacturers took up to several weeks to respond, and some sent form letters, even maintaining an evasive attitude when the Journal reporter phoned and revealed her identity.
Initially available only in health food stores, Health Valley foods now are on shelves of major Southern California supermarket chains. A rebate program described on each package is how Mateljan recruited his 300,000 pen pals.
Mateljan was born in Yugoslavia and came to the United States in the 1960s after graduating from the University of Belgrade, Urist said. Mateljan was in the seafood business, like his father, until he went into business for himself in 1970.
He began making and selling health food products because “I couldn’t find the kind of food I needed to stay healthy,” Mateljan said. “The stuff on the market then tasted terrible.”
The first Health Valley products were frozen fish and canned tuna.
Because the grocery industry is looking more intently at health food in the 1990s, any independent company is a likely subject for takeover scrutiny, said the spokeswoman for MAC Inc.
Asked if there have been inquiries, Urist rolled his eyes heavenward and sighed, “Every day.”
