Catching up with Melt, as it spreads to new markets

Original story authored by Sharon Fisher on Idaho Business Review on November 26, 2019.

The wall o’butter in the Melt team room. Photo by Sharon Fisher

A booming Idaho plant-based food company is looking to expand, not just in products but in markets.

Melt saw $1 million in sales for the first time in the third quarter. The company’s plant-based butter is now sold in 12,000 locations in the U.S. and Canada.

In the first half of 2020, CEO Scott Fischer hopes to bring eight new plant-based products to market, including cheeses, cheese dip and other snacks. He wants to raise $8 million to $12 million to launch those products through a private equity firm connected to a strategic acquirer, rather than directly through another food products company.

“We’re taking advantage of the plant-based revolution,” Fischer said. “We’re up 100%.”

Melt’s main competitor, Earth Balance, is up 2%, while Smart Balance is down 3%.

Bill Benjamin

The changes in the company are getting attention in Idaho’s funding community.

“It is great to see innovation like this in a sector Idaho has been known for, and in a way that leverages Idaho’s resources and advantages in a sustainable, helpful and proud way,” said Bill Benjamin, managing partner of Galena Capital Partners, a Boise-based investment bank that is engaged with the company to raise money.

When Fischer first looked at Prosperity Organic Foods, which makes Melt plant-based butter, he was being brought in for his expertise, as founder of CFO Idaho, to perform due diligence on the company for Steve Hodges of Bluestem Investments, who was considering investing.

“I highlighted a number of opportunities to reignite the company in what we all agreed was an industry ready to take off,” Fischer said. “’It’s a great product at its core and there are things we could do to jump-start it.’ They came back six weeks later and said, ‘We agree with your assessment. Would you be willing to come in and do all these things?’”

When Bluestem promised to make a $3.5 million investment, Fischer joined the company as CEO in May 2018.

Scott Fischer. Photo by Sharon Fisher

The first issue Fischer had to deal with was a big one: taste.

“We started out by talking to our consumers,” Fischer said. “Consumers always know why you’re growing or not growing.”

Those consumers said was the butter tasted “coconutty.”

“A very small percentage loved it,” Fischer said. “Another percentage hated it. So I said, let’s get rid of the coconut taste.”

Some consumers also said the packaging was confusing and not relevant, so Fischer hired a microagency out of Santa Monica to do a redesign.

The company also looked at ways to save money on distribution and its supply chain, such as saving 60% on supply costs by switching to Uber Freight and consolidating all its purchasing through one broker and sending it to a single location, Fischer said.

“It used to cost $6,000 to ship,” he said. “Today it costs $350.”

Most important, Melt had to decide what its brand was – and Fischer got a commitment from the remaining six employees (now there’s 11) that they would live the brand as well.

“If we say ‘organic,’ we have to be organic,” he said. “If we say ‘save the planet,’ we have to save the planet. We have a set of values we adhere to and we do that every day.”

Fischer also altered the way the company was run, such as changing the CEO’s office to the “team room” and putting his office in the bullpen with everyone else so he’s more accessible.

“I trust these people. I hired them because they’re phenomenal experts at what they do,” Fischer said. “Nobody gets penalized for making a mistake. It’s different if you make the same mistake over and over again. We celebrate mistakes because we just discovered another thing we’ll never do wrong again.”

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Galena Capital Partners Inc.
800 West Main Street, Suite 1460
Boise, Idaho 83702
(208) 853-5200

Jerry Sturgill

Bill Benjamin

Juan Carlos Duque

Jeff Anthony

Juan Carlos Duque

Managing Director

Juan Carlos has held diverse executive roles in various industries during his 25+ year career:

  • Chief Executive Officer. Former CEO of Gina Cucina, a Colorado-based food CPG startup, and former
    President of Atlantica Hotels, the largest privately held hotel management company in South America, based
    in Sao Paulo, Brazil.
  • Family office investor. Former Vice President of The Pritzker Organization, a large family office, based in
    Chicago, Illinois.
  • Private equity investor. Former investment team member of Darby Emerging Markets Fund, the first dedicated Latin America private equity fund, based in Washington, D.C.

Juan Carlos’s community service in Boise includes serving as past vice chair of the board of trustees and chair of the search committee for Riverstone International School. He is also a past trustee of North Shore Congregation Israel in Chicago. Juan Carlos holds a BSE from Wharton (University of Pennsylvania) and pursued a doctoral program in finance at Fuqua (Duke University). He lives with his family in Boise, where he enjoys snowboarding, reading history and science fiction, and hiking in the Boise foothills with his dogs.

Bill Benjamin

Managing Partner

Bill’s professional experience includes holding prominent leadership positions within both large and small companies, as well as serving on various industry and community boards:

  • Investment banker. Former Managing Director in the technology investment banking group at Piper Jaffray.
  • Wealth management. Former Managing Director and member of the Private Client Group Operating Committee at Piper Jaffray, Minneapolis. Head of Branch Strategic Development at UBS.
  • Chief Executive Officer. Former CEO of US Bancorp Investments, the Broker-Dealer and RIA of US Bank, and of Covr Financial Technologies, an InsureTech company.

Bill’s involvement on industry and community boards includes past vice chair of the Insured Retirement Institute, as well as past member of the ABASA board and the SIFMA Private Client Committee, Washington, D.C. He is also the former president of the Edina Baseball Association. Bill has an undergraduate degree in Mathematics and Economics from St. Olaf College and an MBA from the Carlson School (University of Minnesota). He enjoys the outdoors as an avid cyclist, skier, backpacker, and wildlife photographer.

Jerry Sturgill

Managing Partner

Jerry’s professional experience includes having been a business owner, a chief executive officer, an investor, an investment banker, and a Wall Street corporate attorney:

  • Investment banker. Managing Director of Capstone Headwaters, one of the leading middle-market investment banks headquartered in the United States, and co-founder of Outlook Capital Corporation, a registered investment bank.
  • Lawyer. Former corporate partner of Latham & Watkins, New York City, and Stoel Rives LLP, Boise, Idaho.
  • Chief Executive Officer. Former CEO of a regional security company with operations in ten Western states.

Jerry is the former board chair of the Riverstone International School, board member of the Idaho Conservation League, and board member of the Interfaith Sanctuary, one of the principal homeless shelters in Idaho. In 2016, Jerry was nominated to run for the United States Senate. He is also an avid outdoorsman, as a former licensed whitewater guide on the legendary Idaho Middle Fork, Main Salmon and Selway rivers, a skier, and a cyclist. Jerry earned his undergraduate and law degrees from Brigham Young University.

Jeff Anthony

Managing Director

Jeff’s professional experience includes extensive work with high growth businesses as co-founder, Chief Executive Officer, investment banker, and institutional investor:

  • Investment Banker.  Founder and former Managing Director of Corporate Finance Resources, a Seattle based middle-market investment bank and co-founder and former Managing Director of MALPAT Capital, a full-service broker/dealer and investment bank in Stamford, Connecticut.
  • Chief Executive Officer.  Co-founder and former CEO of SAFLINK Corporation, a publicly traded network security software company providing biometric identification solutions for government, enterprise, and Internet applications.
  • Fund Manager.  Co-founder and former Managing Director of Mallory Patterson Capital Management, a private equity and hedge fund of funds, and Shinnecock Capital, the Forstmann family office portfolio of value-added investments in high growth public and private companies.

Jeff co-founded and led the Washington Hunter Jumper Foundation, a 501c3 public charity providing educational programs and scholarships to expand and promote equestrian sport in the Northwest.  An avid outdoorsman, Jeff and his wife enjoy hiking, boating, golfing, and living the Idaho lifestyle at their home on Lake Coeur D’Alene.  Jeff earned his undergraduate degree from Vassar College.