The Supply Side: ’Ugly’ fruit company owners get Walmart’s attention

Ben Moore, founder and CEO of The Ugly Co., and Matt Gorella, chief brand officer, have in the past year worked to get their all-natural fruit snacks into 400 Sam’s Clubs by January. The one order for Sam’s Club would keep 2 million pounds of fruit from being wasted, Moore said.

A second trip to Open Call in 2024 yielded the farm boys another golden ticket to get the dried fruit snacks into 175 Walmart stores by May 2025, with plans to expand later that year.
Moore, a fourth-generation farmer, grew up near Farmersville, Calif., in the San Joaquin Valley.

After college and one tour in the U.S. Army, he returned home and hoped to farm. He said industry consolidation rendered it impossible for him to acquire a farm. Since fruit farming was what he knew, he started a trucking business hauling waste from the fruit farms. Moore said he hauled between 6 million and 8 million pounds of fresh fruit each season to the compost pile.

“The farmers paid me to haul it off and dump the fruit that did not make the grade for retail,” Moore said.

He said the fruit, mostly peaches, apricots and other tree fruit, has to be picked early enough to withstand transportation through the supply chain and still have adequate shelf life at retail. Fruit scarred from weather or picked too late is routinely discarded and deemed “ugly” by retailers like Walmart because of its cosmetic appearance.

“I was hauling away so much ugly fruit that was perfectly fine to eat at the time, load after load going to compost. I was eating it, and then I remembered my grandmother, who was Swedish, used to take the over-ripen fruit, slice it up and dry it on the roof for our snacks. That got me thinking that might be a business for me,” he said.

Moore founded The Ugly Co. in 2018 and began working with farmers to give new life to fresh produce with minor cosmetic imperfections. He worked toward his master’s degree in business administration with Notre Dame that same year while working in the growing season hauling fruit and partnering with local farmers to begin finding markets for the “ugly” fruit.

The company started small as Moore began drying the imperfect fruit he purchased from farmers and packers. He labeled the packaged fruit “Hello I’m Ugly” to draw attention to the misconstrued conception of what was all-natural and delicious. He began peddling the fruit snacks online and visiting retailers to tell his story and hand out samples. Moore said the brand broke into retail in 2019 with 54 Whole Foods stores. Over the next few years, it’s been a wild ride for Moore as he worked to grow the business.

INVESTMENT AND SCALING
“I knew I needed to scale my business if I was going to make a dent in reducing the massive tonnage of wasted fruit,” he said.

Moore said some of the big commercial farms invested early because they were tired of seeing the fruit go to waste. He was able to raise $2.5 million through friends and family to help with infrastructure and equipment. Most of the funds came through the U.S. Farm Credit Administration. The company used the working capital to add machinery and people to help the business scale.

He pays the packing houses for the clean fruit harvested, chilled and culled. It is hauled to The Ugly Co., where it is peeled, sliced and dried with commercial dehydration. Moore said the fruit never breaks the chain of custody and comes from U.S. Department of Agriculture-certified farms and packing houses.

Gorella joined The Ugly Co. in 2022 as chief brand officer. In 2018, Moore met Gorella, who was completing his master’s degree in business administration at Nashville-based Vanderbilt University and the roommate of his best friend. Gorella is also from a California farm family who raises grapes and has sold dried raisins to Sun-Maid for more than 40 years.

The duo traveled to Bentonville in October 2023 for Walmart’s Open Call. They got a golden ticket and agreed to work with Sam’s Club. While they were over the moon with joy, they had no idea what it meant for their business.

“We had a short time to breathe after the initial meeting. Sam’s Club wanted to get the fruit snacks in clubs by October. First, they asked us about processing under the Member’s Mark brand, and we agreed. We were shooting for a seven-month turnaround. But that did not happen,” Moore said.

He said the many compliance hoops to maneuver and manufacturing approval slowed the process. Then, the Sam’s Club team decided that part of the brand’s appeal is in the name The Ugly Co., and it would be better to sell the product under that brand. The order was set for 400 clubs for delivery in January 2025.

Moore said he added 25 new jobs to help with the Sam’s Club order for 186,600 pounds of dried fruit. He said they processed 2 million pounds of fresh fruit to get that yield. To put in perspective how much the first order for Sam’s Club meant to The Ugly Co., sales for that order were equal to what the company had done the entire year before.

THE 2024 WALMART PITCH
Moore and Gorella were recently back in Bentonville for the Open Call 2024. The duo said they were far more confident this time with Walmart, given all the help they received from Sam’s Club over the past year.

“I want people to know that the help we got troubleshooting issues every time we asked was timely and relevant. We never had to wait long for the answers. That is not always the case when dealing with large retailers. We were pretty comfortable in our ability to serve Walmart with added capacity we now have,” Moore said.

Gorella said the meeting with Walmart was stellar.

“It started off strong, and we shared our sustainability story and let Walmart know how much waste they could save with help of The Ugly Company. They tasted the fruit, and we agreed to start with 175 stores to be determined for delivery in May. They asked for four different fruit flavors, which is great. We are hopeful that if all goes well, we can use next year’s crop to supply more Walmart stores,” Gorella said.

Melody Richards, executive vice president of grocery pantry for Walmart, stepped in to their meeting which was a surprise for Moore and Gorella who saw her visit as a sign that Walmart wants their product.

REDEFINING UGLY
The fruit band is “Hello I’m Ugly” which is key to the company’s mission. Moore said the brand challenges the ugly perception that things should be valued only by outward beauty.

“What really matters is what is beautiful on the inside — the fruit, how it tastes, and the nutritional value of the way the farmer grew it,” he added.

Moore said it’s unbelievable that an idea in 2018 is a growing company in 2024. In 2019, the brand got into around 50 retail stores, saving about 50,000 pounds of fruit waste. In 2020, the company ramped up, with product in 250 stores and preventing 200,000 pounds of waste. In 2021, the company expanded with national distribution to 450 stores that saved around 450,000 pounds of waste. In 2022, the company doubled the goal by getting into nearly 1,000 retail locations.

Moore said in 2023, The Ugly Co. prevented 3.75 million pounds of fruit from being wasted, and that will be more in 2024. The company’s vision is to achieve zero food waste at farms globally.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Firebend.