Imagine Foods, Inc. Business Information, Profile, and History

Company Perspectives:

Imagine Foods' President and CEO, Robert Nissenbaum, says of his company: "Having experienced the benefits of a natural foods diet on my quality of life as well as the environment, I wanted to make great-tasting natural foods products that would make it easier for people to adopt a healthier lifestyle. It takes more time and effort to prepare healthy food and eat well, so our products help with that. Additionally I wanted to foster a work environment where people are encouraged to thrive--professionally, creatively and spiritually. I also wanted to give back to the community. People enjoy working at Imagine Foods for these reasons and it plays a big part in our success."

History of Imagine Foods, Inc.

Imagine Foods, Inc. is a multimillion-dollar producer of organic and natural foods products that are sold in more than 25 countries around the world. The company's nondairy beverages, frozen desserts, and organic soups and broths are category leaders and are sold under the popular Rice Dream, Soy Dream, and Imagine Foods product lines. In 20 years, company founder Robert Nissenbaum has taken Imagine Foods from humble regional beginnings to international success.

A Personal Passion: Imagine Foods' Beginnings

Robert Nissenbaum had an interest in natural foods, organic gardening, macrobiotic diet, and yoga, and in 1971, at just 20 years of age, he opened the Morning Dew Organic Food Market in St. Louis, Missouri. The Morning Dew Organic Food Market is often considered among the earliest modern natural/organic food stores in the United States. At the time the market opened, Nissenbaum's interests in healthy living and vegetarian diet were also being explored by a small, but active percentage of the population who were growing concerned with links between diet, health, well-being, and the environment. The Morning Dew Organic Food Market became a central meeting place for people cultivating these interests. The small store offered a place where organic and vegetarian foods--as well as ideas on healthy, sustainable lifestyles--were readily available.

With the small success of the Morning Dew Organic Food Market under his belt, Nissenbaum helped found the Sunshine Inn just three years later. Also located in St. Louis, the Sunshine Inn was another breakthrough in the early health foods market. The Inn was one the earliest and longest-lasting natural foods restaurants, serving customers for nearly 25 years before it closed. At the Sunshine Inn, Nissenbaum began experimenting with creating nondairy foods, many of which would eventually form the basis of Imagine Foods' product line. Aside from enjoying numerous vegetarian dishes, diners at the Sunshine Inn had the opportunity to sample Nissenbaum's creations, which included vegan shakes made with combinations of nuts and fruits.

In 1982, Nissenbaum and a partner formed Imagine Foods. Nissenbaum's nondairy concoctions, made popular at the Sunshine Inn, had led him to develop several flavors of rice-based milk. He also worked on perfecting an ice cream alternative, also based on rice, to give people who wanted to follow a dairy-free diet a delicious frozen dessert without milk or added sugar. Nissenbaum tested his frozen dessert, called Rice Dream, on friends and family, and began selling it in local co-ops and natural foods stores. Two years later, he brought the dessert to an Atlanta natural foods trade show, where it garnered significant interest. Several major American natural foods wholesalers wanted to place immediate orders for Nissenbaum's Rice Dream frozen dessert.

This quick success strained the small factory that had been producing Rice Dream, and Nissenbaum determined that for Imagine Foods to thrive, it would have to leave its Midwestern roots behind. Nissenbaum decided to move Imagine Foods to Northern California, where the company would be geographically closer to its sources of organic rice and other agricultural ingredients, as well as to the exploding natural foods movement on the West Coast, where vegetarian and organic eating was a major part of the culture. Nissenbaum rented a small house in Palo Alto, California, in close proximity to a small, family-owned ice-cream plant. The house became Imagine Foods' corporate headquarters and Nissenbaum convinced the plant to manufacture Rice Dream.

By 1994, Imagine Foods faced growing competition from such notable companies as White Wave and Tofutti Brands. But, the company continued to enjoy major success. In 1994, Imagine Foods' line of Rice Dream beverages became the number one selling product line across all product categories in the natural foods industry, a distinction they would hold for the rest of the decade.

As the 1990s progressed, Imagine Foods continued to expand their product line. In 1998, they introduced Power Dream, a soy-based, shelf-stable, meal-replacement energy drink, which quickly became popular among high-performance athletes. In 1999, the Food and Drug Administration (FDA) published a final rule in the Federal Register, authorizing foods that contained at least 6.25 grams of soy protein per serving, that were low in saturated fat and cholesterol, and that met the nutrient content for a "low fat" food, could legally make claims about the foods' role in reducing the risk of heart disease. Under these regulations, both the Power Dream drink line and the Soy Dream beverages qualified for this FDA heart-healthy claim. In 2001, Imagine Foods relaunched their Power Dream line and established a promotional relationship with Dave Scott, a six-time winner of the Hawaii Ironman and first inductee into the Triathlete Hall of Fame. The choice of Scott as a spokesperson for the beverage allowed Power Dream to gain additional legitimacy among athletes, and to secure its place in the competitive energy food market, which has traditionally been dominated by products in bar or cookie form.

In 1998 and 1999, Imagine Foods suffered a series of product recalls stemming from undeclared ingredients. In 1998, the company recalled 6,050 cases of Creamy Mushroom Soup because the packaging did not declare that the soup contained soybeans. The next year, the company had to recall a large quantity of Vanilla Swiss Almond flavor Rice Dream frozen desserts because they may have contained peanuts, which was undeclared on the package. The latter was a serious situation due to the strong, sometimes fatal allergies individuals can have to peanuts.

Moving into the Millennium: Becoming a Household Name

In 2000, Imagine Foods faced a packaging infringement claim brought against it by competitor Amy's Kitchen. Amy's Kitchen attempted to prohibit the company from shipping or selling any more of their Stuffed Veggie sandwich products. Amy's claim was that the Imagine package imitated a design and image that was proprietary to Amy's Kitchen. However, the United States District Court for the Northern District of California absolved Imagine Foods of the charges, and Imagine continued to sell the line. That same year, Imagine Foods voluntarily recalled 32 oz. packages of its Rice Dream Original Enriched beverages in 14 states. The product was suspected of being contaminated with Bacillus cereus, a bacterium that can cause diarrhea, nausea, and other harmful symptoms when consumed.

Ever since the 1999 ruling by the FDA regarding the potential health benefits of soy, soy foods had been attracting growing interest. Because of this, foods previously unknown to most North Americans--including the types of organic and vegetarian foods produced by Imagine Foods since its inception--were finding an audience and an increasing demand. Whereas many of their competitors had already introduced soy-based frozen desserts, which had begun to drive the sales and growth of that segment of the industry, in 2001 Imagine Foods introduced a soy-based companion line to their frozen Rice Dream desserts. Soy Dream frozen desserts and novelties hit the market, and again, like its rice-based predecessor, were followed by a line of soy beverages, called Soy Dream. The Soy Dream line also included an enriched series, which made the beverage nutritionally comparable to cow's milk.

Late in 2001 the company suffered another recall bump when it had to recall several thousand Rice Dream and Soy Dream frozen dessert containers because they may have contained undeclared milk protein, which posed an extreme health hazard for consumers with severe sensitivities or allergies to milk protein. Yet, despite these recalls and in the face of ever-growing competition, Imagine Foods has continued to produce some of the industry's top-selling products.

While its products have continued to gain in popularity, finding their way onto the shelves of traditional grocery stores as well as remaining a staple of the natural foods markets, Imagine Foods has continued to make community service an important part of its tradition, donating thousands of cases of food to nonprofit organizations, charities, and health-based organizations.

In 2002 the company celebrated its 20th anniversary. At the occasion, Robert Nissenbaum reflected on the success of his company, "Lots of things have changed since 1982, but our company goals haven't changed much since the early days." Bucking the trend of smaller natural foods companies merging with larger organizations, Imagine Foods has remained private, with Nissenbaum remaining the company's owner and main product developer. However, since its beginning, this small company has changed, moving beyond its humble local beginnings to become a multimillion-dollar producer of organic and natural foods products that are sold in more than 25 countries around the world.

Chronology

• Key Dates:
• 1971: Robert Nissenbaum opens the Morning Dew Organic Food Market in St. Louis, Missouri.
• 1982: Nissenbaum and a partner start Imagine Foods in St. Louis.
• 1984: Imagine Foods moves operations to Palo Alto, California.
• 1989: The company introduces a frozen line of Stuffed Veggie Pocket sandwiches.
• 1994: Rice Dream beverages become the number one selling product line across all product categories in the natural foods industry.
• 1998: The company launches Power Dream, a soy-based sports beverage.
• 1999: The company undertakes major product recalls due to undeclared ingredients.
• 2001: The company launches Soy Dream, a line of soy-based products.
• 2002: Imagine Foods celebrates 20th anniversary.