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NEW YORK -- Two years ago, nobody thought about pomegranate juice - and for good reason. The product barely existed.
Now it's everywhere - the fruit section of the local grocery store, on billboards, in food magazines. Nutritionists swoon over its anti-oxidant content, and “Pomtinis” were even the official drink of the Oscars and Emmys.
POM Wonderful, the brand that is behind virtually all things pomegranate, is owned by the very private, Los Angeles-based Roll International Corp. - owner of the Franklin Mint (along with Fiji Water, floral delivery service Teleflora and pistachio and almond farms).
The Los Angeles Business Journal reports that over the past five years, POM Wonderful planted thousands of pomegranate trees in the San Joaquin Valley, doubling the commercial market's size. It funded medical research at UCLA and launched a marketing campaign hinging on the fruit's benefits. And it purchased development rights to the method it uses to extract and process the juice, giving it control of production.
“They've singlehandedly created the market for pomegranate juice in the United States,” said Gary Hemphill, managing director of New York-based Beverage Marketing Corp., which tracks juice marketing and sales.
POM Wonderful owns more than half of the 15,000 pomegranate acres under cultivation in the United States, according to the Pomegranate Council, a non-profit trade group in San Francisco. The company dominates fresh fruit sales, and the juice, which hit stores in 2003, has already hit $50 million in sales, according to Beverage Marketing Corp. estimates. It ranked as the top-selling “superpremium” juice last year, a refrigerated category that includes Azusa-based Naked Juice Co. and Odwalla brands (owned by Coca-Cola Co.), according to market research firm IRI.
Roll does not disclose financial information, sales or marketing data. “We're a very lean operation,” said spokeswoman Fiona Posell.
But its track record shows that POM Wonderful, controlled by Franklin Mint founder Stewart Resnick (whose wealth is estimated by the Business Journal to be $890 million), has shown itself to be quite resourceful.
The company spent a mere $1.6 million on advertising in 2003, and $2.6 million in 2004 according to ad-watcher TNS Media Intelligence. Instead, POM Wonderful devoted more than $10 million funding medical research that shows how pomegranate juice is good for the heart. It's also committed another $5 million for continuing research into cardio-vascular and circulation benefits, and some cancer studies.
“That amount of money is almost unheard of in the food industry,” said Dr. Harley Liker, an internist on the faculty of the UCLA Medical Center. He also serves as the medical director of POM Wonderful, overseeing company-funded research being conducted by 20 scientists scattered throughout the world.
The most promising areas have been in cardio-vascular health, he said, where pilot studies in Israel showed that patients drinking pomegranate juice every day for two weeks lowered their systolic blood pressure by about 5 percent and lowered certain enzymes causing high blood pressure, heart disease and stroke by 36 percent.
Another small study showed that drinking the juice daily for a couple of years could reduce arterial plaque by 30 percent. POM Wonderful is funding a larger study of 300 patients in Chicago and Dallas, to see if it can replicate the results, Liker said.
Additionally, a recent UCLA study led by oncologist Dr. Allen Pantuck showed that the juice helped slow the advance of prostate cancer in a small group of patients; POM is now funding a 250-patient study. “We are finding the juice has more medical benefits the more we study and the deeper we go,” Liker said.
Also drawing note is the funny-shaped bottle that looks like the Michelin man, placed in the fresh-fruit section of grocery stores including Ralphs Grocery Co., Albertson's Inc. and Vons. Its minimalist approach won the 2003 award from the Glass Packaging Institute. All advertising, design and marketing is done in-house, Posell said.
The juice, which has a tart taste not unlike cranberry juice, sells for nearly $4 per 16-ounce bottle, making it about three times more expensive than orange juice. (The 100-percent juice product contains “natural flavors” in addition to pomegranate concentrate.)
POM may get away with keeping prices high because it owns the proprietary process it uses for extracting and processing the juice.
The processing equipment was designed by Paragon Integrators Inc., a Visalia-based industrial design firm, and its extracting equipment was designed by Potential Design in Fresno. POM owns development rights to the process, said Richard Todd, chief executive of Paragon Integrators.
“It is a very unique process in the industry,” Todd said, “We've been getting calls from everybody and their brother, asking us to do the same thing for them, but we have to tell them no.”
The juice contains the Wonderful variety of pomegranates, which tend to be larger and sweeter than many of the other 50 or so varieties of the fruit. The company still gets most of its revenue from selling fresh fruit.
There are a few other juice brands on the market. R.W. Knudsen Juices sells its unrefrigerated “Just Pomegranate” juice in health food stores and specialty groceries, and Trader Joe's Co. sells its own brand. AgroLabs Inc., a Texas-based nutritional supplement company, got its pomegranate juice supplement on shelves at retail giant Costco Wholesale Corp.
The competitive juices, as it were, have begun to flow.
AgroLabs Vice President of Markeing Cheryl Richitt points out that an 8-ounce glass of POM Wonderful has 140 calories and 34 grams of sugar, whereas her company's Naturally Pomegranate, defined as a supplement, has “all the anti-oxidant benefits without the sugar and the calories of a juice.” AgroLabs gets its pomegranates from outside the United States.
Part of the juice's success, according to analysts, is that it can appeal to a wider consumer audience for different uses. But some believe that enthusiasm for POM has a shelf life. “Blueberries have a higher antioxidant count than pomegranates, and blueberry juice is starting to rise,” said Phil Lempert, who runs Supermarketguru.com. “Nine months from now, there could be a pomegranate-blueberry war.”
Will there be enough demand to go around? “POM's long lead will shrink, but it doesn't mean they're going to decline or fade away,” he told the Business Journal.