Start-up Stirs the Money Pot

Sept. 9, 2015

Many new food companies stake a claim in the healthier-eating space, but none can match the funding prowess of Hampton Creek founder Josh Tetrick.

Baseball slugger Reggie Jackson described himself as “the straw that stirs the drink” when he led the the New York Yankees to World Series titles. In the world of new food companies mining healthy eating trends, the straw may well be Joshua Stephen Tetrick.

Not in the product development sense, though Tetrick’s Hampton Creek Foods claims to be building a database of the characteristics and functional attributes of tens of thousands of plant materials that could be substituted for conventional ingredients in foods. Not in the social awareness sense, though Tetrick spent more than $1 million this summer on print ads in the Sunday New York Times to promote, healthy, affordable and sustainable vegan products. And not in animal-product substitutes, given his primary product replicates comparable salad dressings that substitute vegetable-derived protein for eggs.

No, Tetrick’s genius is attracting capital investment. “There’s nothing new, it’s all marketing and promotion, but he’s great at it,” sniffs an executive at another firm in the free-from, better-for-you space. “The technology isn’t new, but he’s creating a great model for raising money.”

That might be envy or admiration, but food entrepeneurs would do well to study the Tetrick model. Whether they are intent on changing the way people eat and agribusiness operates or simply want to make a decent living, those entrepreneurs aren’t going to accomplish much unless they can bridge the financial gap in maintaining operations while seeking a large enough customer base to grow.

Hampton Creek secured $30 million for its product-development phase and another $90 million is retail rollout took off. And there’s nothing shady or underhanded about Tetrick’s ambition: affordable, good-tasting food derived from sustainable agricultural practices. His back story suggests he’s sincerely pursuing those goals. After earning a degree in Africana studies from Cornell University and a law degree from University of Michigan, Tetrick spent seven years in Africa, where he worked as a Fulbright Scholar on a variety of social programs.

Tetrick has the flair of PT Barnum, and that can rub some people the wrong way. But Barnum was a shrewd businessman who delivered on the promise of a great show, and that’s not a bad business model, either.

Last week, Tetrick responded to my questions about the print ad campaign he ran this summer in the Sunday editions of the New York Times, the feedback he received and his vision of packaged foods.

An edited version follows:

A recurring theme in the ads is the building of a movement. How broadly is the movement defined?
The movement we’re building at Hampton Creek is not defined by food. It’s about people who believe that the right thing should be easier. The movement is about moms who love their kids. It’s about young people who want accessible, better-for-you food, and entrepreneurs who are inspired to build something better. It’s also about the outdated systems that just aren’t fit for the better world we’re trying to create.

Was there a previous open-letter campaign that inspired the ads you ran in the Sunday New York Times?
There are no precedents I’m aware of. Communicating authentically in this way is not about selling more, but about sharing a story. We are more than a food company--we’re an impact company. We focus on the impact we can have in shifting our society to use fewer resources and in improving the quality of the food that communities have access to. Also the impact we can have on policy in order to accelerate change in the system.

Which ad stands out as the most impactful?
I’d like to say “Dear President Obama” was the most impactful, but honestly it was probably “Dear Mom.” That was the most personal, and I guess it hit close to home for a lot of folks. From the responses we got, it seems like thousands of moms everywhere connected with it and the conversation around how to give better food to kids.

Why don’t the ads mention Hampton Creek’s products?
We’re not trying to sell more of our products with these letters. This is bigger than mayo or cookies. We’re trying to share a story about how food can be better and to inspire others to do something about it.

You were contacted by presidential candidates and their campaigns after the “Dear Presidential Candidates” letter that appeared July 26 and Aug. 2 Times ads. Who were they?
Those names are off the record at this time.

The June 21 ad features a list of companies and individuals who are part of the movement, including “two of the world’s largest food manufacturers.” Who were they?
General Mills is one of the major manufacturers we work with. We also work with Compass Group in foodservice.

Did you get any feedback from food leaders?
We got quite a few responses from big names in food. They thought it was pretty awesome that we thanked them publicly in front of millions. It made them even more pumped to participate in this movement and to work with us.

The “Dear Mom” letter was the only one that didn’t include your phone number and e-mail address. Why were they omitted?
My mom already has my number...

Millennials were addressed July 12. How likely is it that today’s 23 year olds will remain committed to their ideals when they are 53?
23-year-olds need to be given the opportunity to realize that they can put their strengths into solving the world’s biggest needs. If this generation can resist the urge to go into soul-sucking, brain-draining jobs, then the life path won’t be about burning out--it will be about thriving.

The pattern in the food industry has been major company acquisitions of successful start-ups. If Hampton Creek carves out a large enough niche, would you consider selling to a Kraft or General Mills?
If selling out means potentially considering those companies as acquisitions...then yes.

Affordability is emphasized along with nutritious, tasty and good for the environment. What will it take to deliver food that is “10X less expensive than crappy food”?
Making better food more affordable than crappy food will require a number of different approaches. One approach is to find better plants and plant ingredients out there that use fewer resources. Another approach is to create policies that encourage production other than just sowing corn. There also needs to more incentive for entrepreneurship, and the building of a public movement to stimulate all of these elements.