Eden Prairie’s SunOpta finds quiet success with real-fruit fruit snacks

Many of the fruit snacks lining grocery shelves, beckoning kids and parents with bright colors and packaging proclaiming “real fruit,” are really anything but.

To avoid these essentially sugar-sweetened gummy candies, shoppers spend extra time studying labels and ingredients. And more are picking “better-for-you” alternatives.

Eden Prairie-based SunOpta is benefiting from that shift with its take on real-fruit, no-sugar-added fruit snacks that have been selling as fast as the company can make them: Production capacity is at the limit to keep up with demand, CEO Brian Kocher said.

“It really hits a lot of the big consumer trends,” said Kocher, pointing to simple ingredients, convenience, price and, importantly, taste. “If you think about the evolution of better-for-you products, and it’s not just our products, but over the course of the last 10, 20 years, they’ve really started to taste better.”

SunOpta, best known for manufacturing plant-based milks, has no fruit snack brands of its own. The company makes them for other companies, including store brands for major retailers. While those customers are a secret, consumers buying fruit snacks that are closer to fruit leather than Fruit By The Foot might actually have SunOpta products in their carts.

Demand is so great that the company is adding a $25 million addition to its plant in Omak, Wash., which is close to the source of the main ingredient: apples.

“The only sugar in our better-for-you portfolio is the sugar that comes from the apple puree and the fruit juices we use,” said Heidi Teoh, vice president of research and development at SunOpta.

Part of that growth comes from the company shedding many of its less-profitable businesses, including frozen fruit and sunflower seeds, as part of a longer overhaul away from commodities and into value-added products.

“The critical few priorities are probably more impactful than the many,” Kocher said about SunOpta’s tighter focus.

Snacking in general has seen consumers gravitate toward lower sugar, organic and vegan/vegetarian options in recent years.

“No-sugar claims have absolutely seen dramatic growth in the snacking universe,” said Sally Lyons Wyatt, chief adviser for consumer goods and food service insights at Chicago-based market research firm Circana.

While these “clean-label” products tend to be pricier, a majority of consumers are OK spending more to chase health and wellness benefits from their snacks, surveys have shown.

SunOpta was poised to capture the growing demand for fruit snacks with a plant in Canada and the Omak facility, which already expanded once before in 2023.

“The single biggest customer acquisition event that we have is when a customer comes to us and says they’re having problems with supply. That is the single biggest reason that we gain market share,” Kocher said.

Without marketing and other brand-building concerns to worry about, the company can spend more time on efficiency to keep meeting that growing demand. SunOpta increased fruit snack production 22% without any additional equipment in the past year, Kocher said.

Alongside steady growth in its plant-based milk and protein drinks manufacturing, SunOpta recently raised this year’s revenue expectations to a high end of $815 million or 13% above last year.

While profit margins have historically been thin at SunOpta, Kocher said a continued high level of growth will trickle down to earnings.

Being a go-to supply chain solution for growing categories like better-for-you fruit snacks makes that an easier proposition.