From Hormel’s purchase of Justin’s to PepsiCo’s acquisition of KeVita, large food and beverage makers are targeting upstart brands with fresh, organic and natural products.
Gold started Justin’s in 2004 after finding he wanted a good tasting, protein-packed nut butter to fuel his long bike rides. He knew he was on to something when his roommates at the time kept devouring his creations, prompting him to write his name on the jars in his fridge. Soon his nut butters became so popular that friends and family encouraged him to start a business to peddle his spreads.
As the company expanded and new product lines were introduced, the 40-year old entrepreneur —who would have preferred to keep Justin’s as an independent entity — grew concerned he didn’t have the resources to scale the business, and worried that one food safety or quality misstep could bring down the company Gold spent years building. Increasingly, a partner became a more enticing and realistic option …
Gold, who has watched as other founders have backed away from their businesses after being purchased only to see the companies flounder, insisted he remain involved with Justin’s to help nurture and grow the brand following a deal. Before deciding to accept an offer, he spent weeks interviewing other companies that could have been a good home for his nut butter firm to suss them out.
Once he homed in on Hormel, he talked with the founders of companies that were previously purchased by the Minnesota food giant to see how they felt about their deals in hindsight and whether Hormel executives kept their promises. About 18 months after Hormel first contacted Gold to gauge his interest in a deal, he agreed in May of last year to sell Justin’s for $286 million.
“It’s a marriage and you wanted to make sure if you get married to someone, that it’s forever,” Gold said. “When I look back, I think we made all the right decisions. Hormel has been great at keeping to their word and keeping us separate and letting us stay a mission-based organization.”
His advice remains the same to other young entrepreneurs who have been approached by large companies interested in a deal: do your research and stay involved with your business even after the transaction closes. Much like other companies gave him advice as he was considering selling his company, Gold has returned the favor, with several smaller firms reaching out to him.