As we’ve been dipping into the topics of innovation and food technology, we’ve been considering the spectrum of businesses in this break-neck space.
We’re particularly excited by the subset of mission-focused, tech-driven food businesses. And while the judgment is still out on plenty of apps, inventions and startups that aim to hack our troubled food system, one that is clearly poised for success is Hampton Creek, the San Francisco food maker we wrote about last fall that attracted the ire of Unilever when its eggless Just Mayo started bumping Hellman’s from shelves across the country.
The demand for their products has continued to increase since then and shows no signs of stopping in the midst of the current avian flu epidemic that’s driving up egg prices. If demand continues to rise, Hampton Creek could potentially be the fastest-growing food company ever (although their CEO insists that they’re a tech company). We recently caught up with Hampton Creek CEO Josh Tetrick to learn more about the company’s growth over the past few months.
The following interview has been edited for clarity and brevity.
Edible Manhattan: The last time we spoke, Hampton Creek, the company you founded in 2011, was preparing to upsize to a former chocolate factory in the Mission. Your team of chefs, engineers and data crunchers had successfully added over 4,000 edible plant species to Hampton Creek’s database used for building recipes with neglected and undervalued species. And one of the world’s largest food makers had just slapped you with a lawsuit on Halloween, October 31, 2014. The suit seemed to be dismissed by the public almost overnight, you were met with roaring support not just from your allies and investors — Bill Gates, Andrew Zimmern — but most major media. Then 34 days later, they withdrew it!
Josh Tetrick: The lawsuit was a really important moment for us. It captured what we always want to be resistant to, which is ever being characterized as an alternative, or as something for a certain segment of people. Everything we do needs to be about the uber mainstream; the idea that we’re an alternative rips away at our core philosophy.
Over 100,000 people signed a petition asking them to withdraw the lawsuit. Unilever’s Facebook accounts including their corporate profile, Hellmann’s and Best Foods were literally frozen for 20-plus days. Then unbelievably, our partners, these huge retailers and big food-service companies, were totally standing behind us.
“For us, [there are good signs] that maybe a different approach to food is headed in the right direction.”
EM: And then the same day the lawsuit was dropped, which had to have felt good, you closed on your latest round of funding. A $95 million Series C that included additional commitment from Bill Gates, Facebook co-founder Eduardo Saverinm, Mustafa Suleyman co-founder of DeepMind (the leading artificial-intelligence machine-learning company in the world) Blue Bottle Coffee executive chairman Bryan Meehan, as well as new investment from Marc Benioff, the founder of Salesforce.
JT: For us, that funding round was a testament to the kinds of folks that are energized by a different, better food system. We had folks like Vinod Khosla come in again, Li Ka-shing, the wealthiest person in Asia, come in again. We had what now amounts to 12 billionaires from all walks of life and from all sorts of different sectors putting capital into what we’re doing. For us, [there are good signs] that maybe a different approach to food is headed in the right direction.
EM: Among your most interesting investors is OS Fund, run by Braintree founder Bryan Johnson, which grew out of some of the work of Craig Venter [the humane genome decoder] and has a mission to rebuild the operating system of life. Its other investments include lifespan-enhancement, space exploration and development and synthetic biology around algae-based energy. Do you see Hampton Creek as being part of a future dinner plate that has some algae or healthtech from some other OS Fund project?
JT: I wanted Bryan to invest for a couple reasons. One is, clearly, he’s very mission driven. He cares about doing good, and that’s really important to me. Then the second reason I wanted Bryan to invest is because he has a system perspective. The reason it’s called the OS Fund is because it’s geared at rewriting the operating system. There’s an operating system of food. There’s an operating system of transport. There’s an operating system of energy. If I was engaged in any of those fields outside food, I think the way to go about it is to say, “What does it look like if we start over?” We haven’t talked with Bryan about any collaborations with their existing portfolio, but you never know.
EM: And you share an interest in tech-based solutions, of course. Hampton Creek’s team has as many data scientists as it has chefs. And your operations use tech through and through, from your social media scheduling to your consumer survey gathering and product testing.
JT: Tech is the only way that we can achieve what our real goal of blasting out the bad thing by making the good thing impossible to ignore. We have to figure out how we make that thing that is better for one’s body and for the planet and less expensive and tastes better than its competitors, all at the same time. You can’t make that happen by the typical approach, just like you couldn’t make a horse and buggy really go two times faster. You had to have a different approach, and that different approach back in the day was called the car.
EM: Speaking of the people that surround you, I saw that Stella McCartney, Russell Simmons and John Legend are all fans of your mayo and cookies. If you want to change the uber masses, do you need to have allies who are celebrities?
JT: This is going to sound a little morbid, but it’s the truth. The way I think about things is that in two years, if we didn’t maximize our impact — I’m talking about water saved, I’m talking about carbon emissions taken out of the atmosphere, land not utilized, healthier food eaten — then the world would literally explode.
We want to have an incredible group of influencers in all sorts of different fields around us to transmit that story and that message all over the place. There’s no one in the world — whether it’s an executive at a large food company, whether it’s an executive at a media company, or whether it’s influencers in design — who Stella can’t get us in touch with instantaneously. That is spreadable, right? Russell Simmons, godfather of hip hop, has become a great friend of the company. He has an incredible amount of credibility with urban youth and can connect with them on levels that I can’t.
“The thing that drove it more than anything else is telling them an authentic story about where we can take food together.”
EM: No doubt you attracted this latest round of investors not just with your conviction but with your rapid growth. In the last two years, you’ve gone from product in zero stores to being in thousands of retail locations across America including the top grocery chains and discount stores. How did you move so fast when many food makers struggle to get on any shelves?
JT: It gets back to our interest in impact at scale. Most recently, we closed a deal with Compass Group, one of the largest foodservice companies in the world, which serves four billion meals a year. In the United States specifically, 92 percent of the Fortune 500 companies out there are working with Compass Group in some capacity to feed their team members. They do the food at Google and Microsoft. They do the food at small universities, large universities and big corporate cafés. Our agreement with Compass Group basically gives us, in almost the blink of an eye, a national distribution infrastructure that took companies like Red Bull, which has grown pretty fast, 10-plus years to build.
EM: So, you already have your mayo and cookies at stores like Wal-Mart, Target and the Dollar Tree. But now you’re also reaching into the restaurant chains and cafeterias where Americans do a lot of their away-from-home eating.
JT: Exactly. We now have nine different types of cookies and mayo in 90-plus distribution centers all around the country. Compass Group is literally switching out all of their Hellmann’s mayonnaise and replacing it entirely with ours, and their core Otis Spunkmeyer cookie and replacing it entirely with ours. They are moving them aside entirely.
EM: What did it take for you to engage them and close that deal? Is there a cost advantage?
JT: The thing that drove it more than anything else is telling them an authentic story about where we can take food together. It’s a story which can help them win new business.
Now, with that said, if the culinary leaders didn’t like the taste of our cookies and our mayo more, they never would have done it either … the taste had to be better for them to do it.
EM: You’re known for not wanting to offer a product that can’t be sold to billions of people. What got you thinking so big?
JT: When I was in Africa, I felt really frustrated trying to do good. I worked with farmers in northern Kenya. I worked with the Liberian government. I tried to help support kids in Cape Town, South Africa. I felt sad because I would tell people what I was doing, and they would say, “Man, that’s great you’re doing that. Good for you.” But when I was going to bed at night, I felt like I was lying to myself. What impact did I actually have for the energy, for the money, for the amount of time that I put in? The impact was so tiny.
EM: That’s a true definition of an entrepreneur. Yes, entrepreneurs sometimes make a lot of money, but they’re not in it for the money. They’re in it to actually make something happen. They like to see their ideas succeed. And succeed big.
JT: I’ve turned off some investors saying this, and it’s okay because it’s the truth — that I am not driven by spinning this into some acquisition and then having lots of money in my bank account. I don’t care. I’m driven by wanting to make this something profound to do a lot more impact because of a lot of the frustration I had when I was in Africa. I’m honestly, selfishly, a happier person when I feel like I’m acting in that way.
Maybe the best way to make the good thing happen is not necessarily trying to convince people to do the right thing, but by making the right thing so fundamentally better in every conceivable way that it’s impossible not to.
EM: How has the recent bird flu outbreak, which has driven up the price of chicken eggs, affected your growth?
JT: Because of the bird flu epidemic, we will more than double what our revenue will be by the first quarter of next year. [We will also] be expanding our manufacturing facilities, radically increasing volumes, and accelerating products from pancakes to muffins to new types of cookies.
“Maybe the best way to make the good thing happen is not necessarily trying to convince people to do the right thing, but by making the right thing so fundamentally better in every conceivable way that it’s impossible not to.”
EM: Of course, the ecological costs of factory farming is a big part of your value proposition. But did you ever see avoiding food safety crises as an inherent advantage of Hampton Creek?
JT: Certainly. When we think about what would it look like if we just started over, this is not just about helping the environment, it’s also most definitely about food safety. Why would we ever even make products with food safety issues? We’d rather make them a lot safer and, well, just a lot better. It just makes sense.
EM: You buy a lot of your ingredients direct from farmers. Can a company like Hampton Creek influence change in both directions along the food chain. That is, what impact do you hope to have not just on eaters, but also on the farmers you buy from?
JT: As you know, we’ve become a world of loving lots of soy and corn, which I don’t think is the best thing for a lot of reasons. One is soy and corn use a lot of land and a lot of water. I think that there’s this diversity of plant species out there that we’ve really forgotten about — 92 percent of the 400,000 plant species haven’t really even been looked at for how they can make food better.
It gets us really excited to think, whether it’s crops that are native to West Africa or northern Kenya or anywhere else, that we can work with farmers and help them tap into a new, better food economy. That’s to say that farmers in Liberia don’t just have to deal with rubber trees and cassava. They can actually expand the breadth of the crops that they’re growing to include new ones that can fit into a new, healthier, stronger and a lot more innovative food economy. That gets us really stoked.
EM: And most of the world’s edible plant diversity exists in the southern hemisphere. Are you sourcing from farmers in Asia, Africa and Latin America?
JT: We’ve begun very early discussions with farmers in the emerging world to get a keener sense of what they’re growing and potentially even help encourage them to grow different kinds of things, because it could fit into new and better foods that otherwise people weren’t even thinking about.
I mean, broadly, whether it’s farmers who are growing sorghum here in the U.S. in the Midwest or Canadian yellow pea farmers, we think there’s a huge potential to get farmers into growing things that are better for their land, use less water and hopefully help give them better livelihoods all around. We’re certainly not at the scale now where I could say we’re instigating significant changes in farming practices. That’s for sure, but that’s something that’s really, really important to us.
It’s kind of cool to think that, in some ways, there’s kind of a back-to-the-roots approach where we’re kind of discovering what we have forgotten, but then blending it with really hardcore data science and biochemistry and some other approaches that enables you to screen through things and do things a little bit better and eventually a lot better.