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Shrinking Market : Freeze-Dried Food Fight Is Taking Its Toll

August 19, 1986|MARTHA GROVES | Times Staff Writer

For the handful of tiny companies that make freeze-dried foods for backpackers, the last few years have been an uphill struggle.

Many of the nature-loving baby boomers who turned backpacking into a growth industry in the mid- to late 1970s are now more interested in raising families and buying fancy kitchen gear than in escaping to the great outdoors. And most of those who continue to haul heavy packs up mountains tend to buy ingredients and concoct their own recipes on the trail.

As a result, the already obscure market for lightweight freeze-dried foods for backpackers--estimates range from $4 million to $10 million a year--has been dwindling. Even the industry leader, a Philip Morris subsidiary called Oregon Freeze Dry Foods that controls an estimated 50% of the market with its Mountain House line, notes that sales and profits in that niche are declining.

Business Flattened Out

"The backpacking business took off in the mid-'70s and has kind of flattened out by leaps and bounds," said Deborah Nichols, vice president and general manager of Richmoor, a small, family-owned company in Van Nuys that packages dehydrated products under the Richmoor and Natural High labels.

To cope with this unsavory situation, Richmoor and its competitors are adjusting product lines and devising innovations to lure customers. With stores such as REI in Carson, they sponsor food tastings to win converts to the convenience and improved flavors of freeze-dried foods.

Even so, this is not a business for the faint of heart. Most of these cottage-industry companies have fewer than 25 employees and are operated by the people who founded them. They profess a love of what they do but frustration that the products are expensive to perfect and package and that profits are difficult to come by.

"Our dollar sales have fallen off" along with the interest in backpacking, Nichols said. "Blessedly, we've gotten a little smarter at how we run our business to where our overall financial picture has been doing real well."

Nonetheless, the 27-year-old company, which got its start supplying meals to Boy Scouts in New Mexico, has reduced its product line, conceding that most hikers are likely to buy their soups and breakfast cereals at supermarkets and count on companies such as Richmoor for main dishes.

Of the five main companies in the field, Oregon Freeze Dry, based in Albany, Ore., is the only one that freeze dries as well as packages food. In fact, according to William Impey, vice president of sales and marketing, backpacker food accounts for only about $3 million of the unit's annual total sales, which others in the industry estimate at $50 million.

The company also sells military rations to the government, provides freeze-dried ingredients to other food processors and does private-label freeze-dried products for such customers as Nutri/System, a weight-loss program.

Given the decline in backpacker business, "we have moved to simplify our product line," Impey said. The best sellers generally have been the company's basic entrees, but three gourmet dinners introduced in the last year have gone over especially well, he said. Other specialty dishes, including lamb curry and shrimp creole, did not win acceptance among outdoor buffs, who generally seem to prefer their food on the bland side.

Unit Still for Sale

Oregon Freeze Dry's parent, Seven-Up, a unit of Philip Morris, put the company up for sale the same day in January that Pepsico agreed to buy Seven-Up. Although that deal fell through after the Federal Trade Commission voiced objections, a Seven-Up spokesman said the intention is still to sell Oregon Freeze Dry so the company can concentrate on its soft-drink business.

Ken Fontecilla, the 69-year-old founder and owner of Wee-Pak in Reno, said his company "caters more to the older people that want to go out and eat well." Wee-Pak, which was started 12 years ago and has annual sales of about $500,000, also sells bulk freeze-dried foods to the Sierra Club and meals to universities with backpacking programs.

Fontecilla, who said he has no intention of "retiring--ever," is a big proponent of quality in freeze-dried foods. Although a lot of people still respond with a "yechh" at the mention of freeze-dried food, he said, "if you can get the people to taste the food, they'll like it." Fontecilla contended that dinner guests have not even noticed when he has served it.

The newest entrant into this market is 7-year-old Alpine Aire of Nevada City, Calif., which offers an all-natural line of products containing no preservatives, sugar or additives. Denis Korn, the founder, owned a food store years ago in San Diego, then, "through a series of unique circumstances," found himself making custom meals for backpackers who were enthusiasts of natural foods.

Best Sales Gains

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