John Foraker is the co-founder and CEO of Once Upon A Farm, a start up organic food company. Prior to that, Foraker spent more than 30 years in the natural and organic food industry. Foraker ran the natural and organic food brand “Annie” from 1999 to 2017.
He took the company public under the symbol “BNNY” before General Mills acquired it in 2014 for $820 million. For three years, he ran Annie’s operating unit and General Mill’s small business incubator 301, Inc., later continuing to work the General Mills in areas such as organic foods and regenerative agriculture.
Here are some highlights of his presentation to North Bay Business Journal's North Coast Specialty Food & Beverage Industry Conference on Jan. 31.
Corporate banker turned foodie
“This presentation is called the Power of Purpose. It’s really about the growth of the business of Annie’s, and lessons we learned, along with things I screwed up. I got a lot right, too.
“Purpose is the intention and reason for doing something. This is the single most important thing in business. You have to have an operating model and business model, but purpose is your north star. It’s the reason your business deserves to exist.
“Why does purpose matter? Consumers care a lot about it, and 75 percent are willing to pay more (for products from companies whose purpose they like); 66 percent are willing to pay more for companies that are doing good things for social and environmental (causes).
“In 2005 and 2005, we talked about changing demographics. There was this population bubble coming — millennials, roughly 18 to 35. Annie’s was growing rapidly. What we knew about them is that they were way different than their parents. It was so obvious. That is a tidal wave that is going to crash on your beaches. You should be in discussion with your grocery stores. That crash has obviously happened now. There has been more disruption in the last five years in the food business than in the prior 30 all combined. The next five years will be way more disruptive than that.
“As it relates to organic (food), there’s a big wave coming. (Organic food is) at $50 billion, about 5 percent of U.S. food, less than one percent of U.S. agriculture. Eighty percent of U.S. households bought organic last year. Only 25 percent of parents are millennials. Why is that important?
“My oldest son is about 25. I didn’t know anything about organics until I came home one day. My wife had gone shopping. She had created a whole shelf in our refrigerator called ‘Jack’s shelf.’ It had organic milk, which cost about four times as much then. It had awesome-looking strawberries that were about $8 a basket.
“I reached in there. She said, ‘No, no, no, no, no. You’re not touching that shelf. You’ve already been polluted.’ That was my introduction to organics. Organics come into the household in the biggest way when kids come into the household for the first time. Millennials will be 80 percent of parents in the next 10 years. That’s going to have a profound impact on the industry. I think the U.S. organics business is going to double in the next 10 years.
“The brilliance of Annie’s was back when Andrew (Martin) and Annie (Wilthey) started the company in 1989. They put lots of cool DNA on the package with a brand that stood out and did things differently. They were willing to stand up for social causes. From 1989 to 1998 when I got involved, it grew to about $6 million (in revenue), based in Massachusetts. They were ahead of the market. There was no mainstream organic food industry. They were told this stuff was hippie food. They persevered.
“We recognized this DNA. We built it (the company). In the mid-2000s, we were about a $40 million company. I was really cynical about mission and purpose. I knew a lot of companies that had mission statements all over the walls. Nobody cared about them.
“I was dead wrong. We wrote this stuff down, put it in place.
Spread health, goodness
(Annie’s purpose:) “To cultivate a healthier, happier world by spreading goodness through nourishing foods, honest words and conduct that is considerate and forever kind to the planet.
“There’s a strong set of core values behind this — how we would run the business. We were making quick business decisions about how to source, where to source, how to engage with the community, what things to support. Our mission guided us. This was the most important thing we did in the 30-year history of this company.
“After we started making decisions around that, our business exploded to $100 million by about 2010. We were willing to take positions that some people didn’t like. Too bad. We stood up for our purpose.
“You also need transparency in your supply chain, and connection between the way you run the business and your purpose, and driving positive social and environmental impact. We did a sustainability report, a score card, what we were doing well at, where we sucked, our aspirations.
“The consumer who is driving all your business, they don’t demand perfection. They demand honest intent and commitment. Be honest with them about where you’re at, if you have issues in your supply chain that you’re not proud of. Build trust in the brand. It’s one of the big reasons we’re successful.
Board fight on organic wheat
“In 2008, a big decision we made was to go all organic in our wheat supply chain. That was a fun conversation with my board. We made $1 million the year before. That decision ate away the whole $1 million and more. It was the right thing to do for consumers. It was in line with our mission. We built trust with consumers.
“Our customers love this brand, love Annie’s, and we love them back. We use the word ‘love’ all the time. I love my employees. I’m the CEO who uses the ‘L’ word all the time. That’s the way to build a brand if you want to connect. We get hundreds of letters a week.
“Next, wildly empower employees. The biggest challenge is attracting people who are amazing cultural fits and can drive the business forward. We hired incredible people at Annie’s. The reason Annie’s was successful is our people. You can grow a great business with great people.
Getting involved in Jennifer Garner’s new venture
“Once Upon a Farm. I knew I was going to go to something entrepreneurial. This thing is a really famous lemonade stand. I took the opportunity to do something new, change the game in a new category — fresh baby food. I invested in the company the day after I saw the branding.
“Jennifer Garner’s manager called us. She was interested in meeting. She spent 10 years in classrooms in underprivileged communities, seeing how crappy the food is and the challenge (that creates) in (creating) quality education. She wanted to do something with social impact. I met her in L.A. We talked about social impact.
“We joined the company in September (2017). I’m very excited about it.
“We had a mission statement on day one, and strong core values and principles. It’s about nurturing children, and health and happiness.
“Once Upon a Farm aspires to be a leading organic family food company that will fight for and support efforts to drive positive social change and food justice for the benefit of parents, kids and families. It’s with this mission that Once Upon a Farm strives to nurture our children, each other, and the earth to pass along a healthier and happier world to the next generation.
“There’s not a lot of really healthy kid food that kids will actually eat. This brand is going to attack that. We have fresh baby food in pouches. We process it with HPP (high-pressure processing) technology. It’s about five times the pressure of the deepest part of the ocean. It kills pathogens and gives extended shelf life. There’s no heat. It delivers better nutrition and taste.
“This is a $1.7 billion category. It’s had no innovation for a decade. We’re going after it. We’re going to take this brand and build it up. We’re off on our mission. We’re building purpose and impact into our business. It’s going to be about organic advocacy, educating children about real food, and increasing access to kids in need.”