Founded in 2008 by a teen inspired by his grandfather’s applesauce recipe, Holmes Mouthwatering has grown from being a small business to a big retailer today.
“To date, we have processed by hand 500k pounds of apples from local Ohio orchards and made 250k units in-house for consumers across the USA., selling primarily in the Midwest and online, achieving lifetime sales of $400,000,” said Ethan Holmes.
Historically, applesauce has been labelled a sleep category and lacks innovation, but what makes Holmes Mouthwatering different is its focus on real-fruit ingredients, homestyle taste, creative flavours, and community involvement. Its products also have higher nutritional value and up to 40 percent lower calories than its competitors.
In addition to making and selling applesauce, Holmes Mouthwatering started the Holmes Entrepreneur Initiative, a community programme teaching entrepreneurship to youth in underserved communities through programming, internships, and workshops.
The company also participated in the Chobani Incubator in 2020 and the SKU Coca-Cola Accelerator in 2022 and has raised nearly a million dollars through grant funding and angel investors.
Holmes describes their products' flavour profile as homestyle inspired, made with a blend of apples and pears, focusing on the texture and the quality of ingredients.
“Our applesauce is not too sweet, with a little tart, and does not have a baby food consistency, but contains real pieces of fruit.”
During the pandemic, Holmes Mouthwatering did a virtual pitch at a rare Walmart Open Call event and received the buyer’s approval. However, the company decided to hold off on the opportunity due to internal production and supply chain challenges.
“We also doubted the competitiveness of a 16 oz glass jar at a higher price point when most of our competitors were 24 oz or above, at a slightly lower price, or for the same price.”
After signing a contract with global branding agency Moxie Sozo, Holmes Mouthwatering underwent a refresh and introduced a new line of products with increased competitive attributes and pricing, including the first pouched applesauce on the market with chunks of natural fruit, available in three flavours and eco-friendly packaging.
“It took half a million dollars, a six-figure, a year of research and development with four applesauce contract manufacturers before choosing the one in South America, two years of fundraising and keeping the brand alive with our current customers and Walmart to stay relevant, and capital to hire contractors for professional development, financial modelling, inventory, product samples, and our on-going operations.”
Today, Holmes Mouthwatering products are shelved at 128 stores, providing more sales and expansion opportunities to add additional SKUs. Its partnership with Walmart has been a significant revenue driver, and it hopes to continue building movement in stores.
“Our goal is to grow and expand into Walmart by the end of 2024, but we need to be careful not to put all our eggs into one basket. We are also building additional sales channels and customers through Target, Meijer, Kroger, Whole Foods, and Foodservice.”
With its applesauce being sourced and produced in Chile using only 100 percent natural fruit from the region and surrounding areas, Holmes believes that the company can serve as the brand to follow and mirror once they begin picking up traction due to its unique offerings and collaborations, and the most significant factor being making home-style and not commercial or artificial applesauce.
His advice to other small businesses looking to expand their business through Walmart is to ensure that their products are Walmart-ready in terms of presentation, quality and price. He also suggests looking out for the next Walmart Open Call or finding a broker to represent the company at Walmart.
With the year ending, Holmes Mouthwatering looks forward to bringing new homestyle flavour combinations and packaging to the market.
