Last week at Expo West, the largest natural products trade show in the world, I had the privilege to interview three natural products leaders who successfully sold their businesses to larger companies.
The theme of the panel was "selling without selling out." As someone who cares a lot about my family's health, and the future of the food system, this was a fascinating conversation. "Big food" is scrambling to survive as many 100 year old brands are starting to lose traction, and companies like Campbell's, General Mills, Kelloggs, Kraft and Danone are snapping up better-for-you brands like Justin's, Annie's, and Noosa Yogurt.
Justin Gold, Founder of Justin's, who sold to Hormel last year for $286 Million, is a bit of a legend in Boulder, Colorado, as well as in the natural products industry. Gold started Justin's - like Olomomo - at the farmers market in Boulder. The company grew to about $100M in sales over about 12 years, and Justin survived a really interesting gauntlet. As a company grows like that, so do the need for serious resources.
Gold emphasized the need for finding a partner who could provide the resources to take the brand into global and more mainstream channels, while allowing the Justin's brand to maintain its autonomy, culture and values. Justin chose to continue leading his brand despite the acquisition, but cited challenges around his employees maintaining their drive.
Although Hormel might be perceived as a "big food" company, its history is remarkable. Founded in the late 1800's by a butcher who escaped the likely brutal meatpacking assembly lines, he developed a company that led to innovations in the great depression, supplied food for the armed services in World War II, and created a foundation that gives back to society. It's not unlike other American Dream entrepreneur stories, actually.
Justin's is an unlikely fit at first blush with a brands owned by Hormel, like SPAM, but keep in mind that SPAM was born out of a consumer need for convenience in the 1930's. Hormel also acquired Skippy, the leading peanut butter brand, recently as well. Justin's was acquired as a way to help clean up Hormel and enjoy the rewards of a fast-growing brand that can go literally anywhere.
What I was inspired by in interviewing Justin Gold is his continued sense of commitment to the brand, and his desire to do good in the world from within the "system." We need more leaders like Justin who are relatable, humble, super motivated, have values, and can also navigate the practicalities of big business. On a personal note, Justin is also relentlessly disciplined, and would not have achieved such success without his commitment.
John Foraker, the CEO of Annie's, acquired the brand several years ago and grew it into one of the largest natural product companies. Horaker is also a bit of a hero in the industry, and likewise didn't take an acquisition from a company like General Mills lightly.
"I stayed up for about 48 hours straight reading about 20,000 comments on Facebook from people who were in love with the Annie's brand, but concerned about "selling out" to General Mills."
Foraker stressed that General Mills is full of good people who are trying to do the right thing. Acquiring Annie's was similarly a way to help General Mills make the shift into the fast-growing natural products industry and meet the new consumer demand for better, healthier products.
Foraker's story is fascinating, and similar to Justin's, he ran quite a gauntlet to make it as far as he did. There were many times where he had to raise additional capital and was close to running out of cash. At one point, he was driving though a toll booth on the highway, and even his personal credit card didn't go through because it was maxed out.
Foraker has stayed on to run Annie's, and I think it's testament to General Mills' willingness to adjust. They also saw other brands like Kashi struggle when Kellogg's attempted to pull them under the corporate structure, so more recent acquisitions have left the brands alone to maintain the magic that's already working.
And like Hormel, General Mills has a fascinating origin story that goes back to the late 1800's when the milling industry started in Minnesota. In the 1920's, General Mills was born through an entrepreneur who figured out how to consolidate the failing flour industry, and the rest is history. Like Hormel, Mills has been one of the backbone food companies of US history. Despite some questionable practices around GMO's and food dye and high fructose corn syrup (which all were basically incentivized by the government as well), General Mills has had a siginificant impact on the US economy, helped the WWII effort, and somewhat quietly give back through their foundation as well. I happened to work on promoting their Join My Village campaign through my work with Care2.com, that was providing education and entrepreneurship opportunity to women and girls, and ironically, General Mills foundation didn't really want credit for it. That program was later transitioned over to CARE for management.
Finally, Koel Thomae from Noosa has a remarkable story. She was visiting home in Australia and fell in love with a uniquely brewed yogurt at a corner shop. It became a mission to recreate the recipe in her new home of Boulder, Colorado, and like Justin's and Olomomo, had a presence at the Boulder Farmers' market.
Thomae partnered with a local dairy farmer in Colorado, and cracked the code on a vertically integrated business. In about five years - which is really, really fast - they needed some serious capital, and partnered with a private equity firm.
Similar to Foraker and Gold, Koel Thomae was trying to create meaningful work for herself. As a part of the IZZE team who sold to Pepsi several years ago, she caught the bug for working in the natural products industry after an early career in IT, and found a home making and selling food. She's still working in the company today, helping to lead the growth of the new category of Australian yogurt that, like Greek Yogurt, has just exploded with several copy-cat brands.
All in all, this was one of the most interesting and exciting panels I've had a chance to participate in. Both as a founder of a company that is trying to grow and change the way the food system operates, and as a representative of a community of 40 million consumers at Care2.com who want to vote with their dollars and support brands that support their values.
At the end of the day, we need more companies to make it this far so they can leverage market forces to do more good and prove to "big food" that you can do good, create healthy products, and make money at the same time. Those factors aren't mutually exclusive.