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%.
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.
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.”