Follow Your Heart: Savvy Vegan Businessman
This story appears in the September 13, 2016 issue of Forbes.
The founders of Follow Your Heart are now in their 70s. Their first product, in the 1970s, was Vegenaise, an eggless mayo. Since then the company has survived a bitter partnership dispute and the loss of its biggest client, Trader Joe’s, which once accounted for almost 20% of revenue. The company owns a 104,000-square-foot solar-powered headquarters and production facility in Chatsworth, Calif. and expects $50 million in revenue this year–but its world has changed.
Suddenly, vegan products are hot, and venture-backed competitors have surfaced. The largest, Hampton Creek, has raised $120 million and claims to have 500 products in its pipeline. Sir Kensington has raised $8.5 million and recently introduced its own eggless mayo. Kite Hill has $18 million to create a line of nut-based cheeses. The competitors have dramatically increased awareness of the product category, but they also have the potential to leave Follow Your Heart in the dust. “Hampton Creek has been very effective at promoting their products, and they have put a lot of money into that aspect of their business,” says Bob Goldberg, co-founder and CEO of Follow Your Heart. “We wanted to grow in a way that we could handle.”
Goldberg was an Indiana University music major who had moved to California at the prompting of his Army buddies, fellow musicians with whom he’d played trumpet at officers’ clubs. Between West Coast gigs he started hanging out at a Canoga Park natural food store endorsed by Johnny Weissmuller, the Olympic-medal-winning swimmer and star of Tarzan movies. Goldberg was soon joined in California by Paul Lewin, a college buddy.
Goldberg became a vegetarian, and Lewin followed. When the health food store went up for sale in 1973, they pooled their money with Michael Besançon and Spencer Windbiel, who worked in the store’s cafe, and bought it for $15,000. Soon after, the four partners learned that the FDA had shuttered the company that supplied the store’s eggless mayo, so Goldberg was sent to the kitchen to develop a replacement. It took until 1976 to find a suitable tofu-based concoction. And it took a few years to get the formulation good enough that they could partner with Nature’s Best, a southern U.S. distributor, to sell it in supermarkets.
Read the rest of the story online at Forbes.com or in the September 13, 2016 issue.