Once Upon a Farm: Q&A With John Foraker
Once Upon a Farm: Q&A With John Foraker
By Steven Hoffman
John Foraker, CEO and co-founder of organic baby food company Once Upon a Farm, and former CEO of Annie's Inc., has been building national organic brands since the mid-1990s. An accessible business leader, he has served as an advisor to numerous emerging brands, and remains one of the industry's top advocates for organic. John recently shared his views during a Q&A session on business, organics, entrepreneurship, and today's market climate on the popular podcast Compass Coffee Talk, produced by Compass Natural and sponsored by Presence Marketing. Read on to learn more about John’s thoughts on today’s natural and organic products marketplace, how his company is navigating today’s economic climate, and how his perspectives can help your business.
Q: What inspired you to get involved in the organic food industry?
Before getting involved in natural and organic foods, I was a banker and worked about seven years in commercial corporate lending in the wine industry. I became super interested in brands as a result of that work, and I wanted to transition out of banking. So I went to a business school in Berkeley. While there, I got involved in a food startup between first and second year, and that's kind of where my attachment to food came. I come from an agricultural community and my family grew rice in the northern Sacramento valley. So I was always connected to food.
It was the early 1990s, and my son, who's now 30, was turning about four or five, something like that. He was young, and I came home one day and my wife had a separate shelf in the refrigerator and there were these beautiful strawberries on one shelf and then some good looking strawberries on the other. And I reached for the more beautiful ones and my wife said, “Oh no, no, those are the organic ones. Those are not for you; those are for Jack.”
And so I'm like, “Wait a second!” And it was at a time when organic products were still being sold in small natural food stores and independents. And then there was the specialty food business, such as Neman Marcus, Williams Sonoma, Fresh Fields, and others doing super specialty stuff, and to a lesser degree, healthy products. Those two worlds were so obviously colliding with each other — organic and better food. That led me to become interested in it from just a consumer standpoint and seeing the audience that was coming in, and also the business opportunity around it. I got involved in the space in my first startup in about 1994, and that led to an investment in Annies in 1999, and then there was the run with Annie’s.
John Foraker
Q: Baby food is often a gateway for families to discover the benefits of organic food. Can you talk about Once Upon a Farm and its commitment to organic and child nutrition?
Once Upon a Farm is committed to elevating child nutrition. The company was started in 2015 by Cassandra Curtis and Ari Raz in San Diego. Cassandra was trying to solve her own problems: she wanted better baby food for her kids. When she’d go into the grocery store, she didn’t like all the shelf-stable products that were there. So, she developed the first fresh baby food…and we brought it to market. I became an investor in 2016 and in 2017, they invited Jennifer Garner and me to come in as co-founders and take it to the next level. Not only have we brought it to the baby space, but we’ve been able to elevate it to kids ages one through seven. And it's turned into a pretty significant brand now, available in about 12,000 stores in North America. We're in Target, Kroger and the like, but, also, we have a significant business at Whole Foods Market and Sprouts Farmers Market. And also, the independent natural products retailers and co-ops are incredibly important to us. In fact, we really started there. Our products are well positioned for the independent channel, and we love it, so go support those retailers when you can; they’re doing a great job with our products.
The way I think about it in my own space is that I spent 17 years at Annie’s, and Annie's was a brand that really helped mainstream organic. We were not the only one, of course — there were other organic brands leading the way, too — but we were one of those brands that helped bring organic out of that spot at the back of the store and into the mainstream aisles. Also, at Annie’s, we focused on kids and kid nutrition, and we did it mostly in dry products. We worked hard to elevate the nutrition in those products and to have less sodium and obviously, none of the fake stuff, such as artificial colors and flavors. Plus, we were focused on organic to a great degree. Yet, it was hard to elevate the nutritional component the way I wanted to.
So, when the opportunity came to get involved in Once Upon a Farm, I jumped on board, because fresh is obviously a big thing on parents’ minds. And there was this technology out there, HPP high pressure processing pasteurization, which basically uses pressure instead of heat to take these wonderful fresh fruits and veggies, blend them all together, and never getting over 40 degrees using pressure to knock back any harmful bacteria and give you a little bit of shelf life. As a result, what's so amazing about our products is the flavor and the color and the texture and the phytonutrients, and all the things that don't get beat down when you process with heat. Everything we do right now is refrigerated, with relatively short shelf life. By the time it gets to retail, it's got 30 to 60 days on it. I had to learn a lot, as a cold supply chain is a lot more of a challenge than what I worked with at Annie's. When the four of us originally got together, Jennifer, Ari, Cassandra and me, we said, okay, “How are we going to bust this out?” The hard thing is, you're selling baby food and where do you put it in the store? There are no coolers in the baby aisle. We had to figure that out; we were creating a new category, which is fun but hard.
Q: How is your company managing supply chain, labor and inflation issues?
We're not immune from inflation. It's been endemic in everyone’s supply chain. The conversation we've been having in the organic industry is that the base of agricultural acres in the U.S. is still is very, very low. Yet, consumer demand for organic has been increasing significantly year after year and the industry's gotten bigger and bigger. So, the pandemic and the shifts in consumer behavior just put more and more pressure on that. What it's done for companies like us is we have to spend a lot more time focusing on where stuff's coming from in the next two years, not just right now, and developing supply relationships and adding growers to our network. It's a nonstop effort.
We were able to go through the pandemic and still fill our order rates in the 98-99% range, which is slightly miraculous, because it was really difficult and we've had to carry a lot more inventory. We source a lot of ingredients from the tropics, so I'd say about half comes from Mexico down to South America, and half of it comes from domestic producers. We've had to stuff warehouses with frozen IQF (individually quick frozen), high quality ingredients throughout this time. I believe we have 28 different warehouses across the country right now, just filled with materials to stay ahead of all the uncertainty that you have to deal with in the supply chain. Now, shipping has moderated and fuel surcharges have come down quite a bit. Some of the shipping lanes have gotten less expensive. However, there is still a shortage of labor and truckers. They are getting premiums, so I wouldn't say it's come way off, but it’s definitely come off its peaks. But, it's still significantly higher to ship in most places than it was a couple years ago. No doubt.
One of the biggest changes we made is we went almost entirely remote at the beginning of the pandemic because of the lockdowns. We had a corporate headquarters in Berkeley, CA, and we were headquarter centric, like many traditional companies. We adopted lots of tools to figure out how to do better remotely and work with each other that way. And then about six months in, we made the decision to do that permanently, and we've grown significantly. We've more than doubled the number of employees since then, and our mantra has been that we're going to hire the best talent wherever it is. We have people all over the country now. We’ve also figured out how to work it in the plants, though there are still labor challenges. Obviously, at the beginning of pandemic, the priority was working with the manufacturers to keep everybody safe, make sure that we had enough capacity, etc. It was really difficult, but that's moderated, and it’s gotten quite a bit easier. Still, it’s more expensive because we're having and wanting to pay a premium to get people who are going to stick around and be with us for a long time. But, that part at least has gotten a little more predictable.
Q: When you made the decision to go remote, how did your workforce respond in terms of loyalty and commitment? It's a looming question for many business leaders in keeping their workforce together and motivated. How do you do that when you're remote — have you learned any tricks?
I’d say we're on a learning journey. We haven't been doing this long enough to know, but I'll say a few principles. One is we've adopted technology to help us stay closer than we would otherwise. So we're a really strong Slack-using company. We use Slack for everything and that's helped because it can help emulate the visibility you get by walking through the office and talking to somebody on the right and the left that are different functionals and being able to see. That helps a little bit, and we've been focused on lots and lots of communication — communication about what the business is doing, how it's doing. Every week I write something that goes to our board and all of our employees. Also, we conduct monthly company meetings online that we spend a lot of time thinking about.
Then the piece that we're still evolving, that I think is a core part of it, is we're talking about bringing everybody together at least two times a year, which is expensive. But when you think about, we don't have a real big office lease, so there are trade offs, right? Also, our company leadership is going out into the market and saying, “Hey, the marketing team's going to go to Denver for four days and visit with our partners there. So that's the kind of stuff we're doing, and so far, it's worked really well. I mean, our engagement's very high.
We have incredible employees, but I still do worry. Like, is there an end point to that? Do you start to get diminishing returns from it? I will say that as a general rule, our employees love it. They love the culture of flexibility and being close to home and being able to organize their work around their life in ways that are a lot more flexible than they were before. And so there's a lot of things they love about it, but as business leaders, engagement is the part that we all have to be concerned about, right?
Q: What's your outlook on the future for organic and regenerative food and agriculture?
We’ve been growing and scrambling so fast the last few years just to buy high quality organic ingredients and deal with economic conditions that honestly we haven’t had the chance to drill down to the next level like regenerative organic agriculture, but it is something we want to focus on in the future. The fundamentals around organic are incredibly strong and are continuing as the generation of Millennial households that came into parenthood when I was at Annie's care a lot more about where their food comes from and the transparency around it. When Annie’s was going into retailers, we knew there was a tsunami of consumer coming who are going to be interested in organic and clean food, and that for sure happened, and it’s continuing. So, I think the future is very bright from a demand side. I think the place where it gets more challenging is the supply side. And are we doing enough in public policy, through agriculture programs and the USDA to encourage organic transitions and support organic farmers and the economics required to make that a viable, lifelong pursuit. I think that's going to continue to be the challenge for the next decade: can supply keep up with demand?
Q: Are you innovating any new things going forward that you could share with our audience?
We have a lot going on in the innovation space. You know, you need to work on innovation a couple years before…easily, a couple years before you make it big. I can't really reveal any of that now, but I will say one thing that's pretty exciting. My first instinct when I came to Once Upon a Farm was that we were going to grow the fresh baby food business by building out coolers in retail. We started working on that but found it was difficult. We had to learn a lot. We ended up building the brand largely in refrigerated areas of the store where products such as yogurt and fresh snacking are. Today, that's a significant part of the business. Now, however, we never gave up on that ambition. We've been working hard for three years and have some pretty amazing things happening there. Over the next couple of years, you're going to see thousands of baby coolers in retail stores in the U.S. Freshpet did it in pet food, which is pretty unbelievable, and it always amazed me that nobody had done that in baby food, so we will.
Q: What counsel can you offer for brands trying to break into the natural and organic channel right now?
It is a very challenging time, maybe a more challenging time than ever. But I'll also say it's always been challenging. To succeed, build a network around you; reach out to people that can give you good advice and help. Learn from your peers. I had great mentors when I started my first company and have always been of the mindset that I wanted to pay that forward and be available for other people, which is why I'm pretty available. There's also a sense of humility that comes with that. I've been in this industry for a long time and have made many mistakes. I've learned a lot, but still don't know crap. That's my view. Frankly, I think I learn as much from entrepreneurs I engage with and help as they learn from me. I'm constantly looking for that too. It can be mutually beneficial to engage with really smart people who are passionate about starting something. The emergence in the last decade of digital marketing as an art and a practice is a great example of that. The scrappy ways that small entrepreneur companies grow have really opened the eyes of lots of people. And I've learned a lot from that. It’s hard, yes, but there are lots of good resources out there. There are lots of good books to read. Get involved in the Naturally Network or one of its regional chapters in Austin, Bay Area, Boulder, Chicago, Los Angeles, Minnesota, New York, North Bay, and San Diego. I wish that organization was around in 1994 when I was starting out. Learn from the people involved in that network and you'll avoid a lot of mistakes, if you just talk to people who have been around for a while. Because a lot of the same mistakes are repeated, you know, in the space. The talent that's in this industry now is just unbelievable. Every time I run into these entrepreneurs coming in, I just shake my head going, “it’s unbelievable.” We're pulling in the talent that used to go to the consultants and the investment banks and larger corporations, and it's fantastic.
This article was originally published in Presence Marketing’s October 2022 newsletter.