Just five years ago, big wave surfer Laird Hamilton was having coffee in his Hawaiian farmhouse with Paul Hodge when his friend added some of Hamilton's plant-based creamer to his drink. When the two went surfing later that morning, Hodge noticed he had a lot of energy and approached the athlete with the idea of turning his interest in nutrition into a business.
Today, the pair are co-founders of Laird Superfood, the newest plant-based food company to go public with a goal of taking on large CPG companies and tapping into the market for natural, organic and functional foods and beverages valued at more than $150 billion.
"We believe this company has the capability to become one of the big food brands ... and the first to come natively from a natural space," Hodge, the company's CEO, said in an interview on the day of its IPO.
Laird Superfood is small in size compared to many companies that go public. The Oregon-based operation had revenue of $13.1 million in 2019 compared to $8.3 million a year earlier. In the first six months of 2020, revenue increased to $11.1 million. Although it is available in roughly 5,500 brick-and-mortar stores, 60% of its sales come online through its website and Amazon. As it continues to grow, the company is optimistic profitability isn't far behind.
"We do have a very clear path to profitability, within a couple of years," said Hodge. A big financial positive for the company is it has already invested heavily in building its manufacturing capabilities and infrastructure, meaning Laird Superfood won't have to spend as much to grow it going forward.
Laird Superfood's IPO comes as consumer demand for plant-based, better-for-you options have increased in popularity, momentum that has only increased during the coronavirus outbreak. Laird Superfood's portfolio includes creamers and hot chocolates with functional mushrooms, organic coconut sugar, coconut water with calcified red marine sea algae and coffees.
"We knew that there was a demand on Wall Street for natural food companies, and there hasn't been many that have gone public because of all the aggressive [venture capital] activity and all the M&A activity and the acquisitions that are happening, so we knew that we would probably be well received," Hamilton said.
So far, the decision has proven to be a sound one. Laird Superfood's IPO was priced $22 a share, but the stock has soared during its first week on the NYSE to about $46, giving it a valuation of $400 million.
"We want to create opportunities for everyone to experience what would normally be a luxury, which is healthier food."
Co-founder, Laird Superfood
The company's goal is to provide affordable products on a price-per-serving basis at multiple times throughout the day using only natural ingredients. The offerings are targeted at all consumers, from fitness buffs to stay-at-home parents, interested in eating healthier. Each product they sell has to meet three goals: be functional, be competitive on price and have good taste — a challenge given the ingredients Laird Superfood uses and the company's decision to get them from only natural sources.
"We want to create opportunities for everyone to experience what would normally be a luxury, which is healthier food," Hamilton said.
While Laird Superfood is predominately focused on beverages, Hodge said they are looking to move into other food products. "That will include starting to look at all of the grocery aisles," he added, declining to provide additional details.
Hamilton said "every category" was under consideration. He added Laird Superfood was targeting areas "that not only differentiate us from any other brand" but also where the company can provide consumers with a product containing attributes not already available.
Laird Superfood doesn't view its competition as other better-for-you, less processed food companies, for example, but instead products from CPGs such as Nestlé, PepsiCo, Coca-Cola and Danone, which it said can be sugar-laden, highly processed and have undecipherable ingredient lists.
At the same time, Laird Superfood biggest investor is Danone Manifesto Ventures, the corporate venture arm of the global food products giant. It has a 13.4% stake in the company. In April, Danone Manifesto Ventures invested $10 million in the company.
Despite competing against Danone in some areas, Hodge said Laird Superfood has benefited from the company's large scale, market insight and its B Corp certification. When asked if Danone approached Laird Superfood about buying the rest of the company ahead of the IPO, Hodge said while he couldn't discern what the dairy giant's interests are, "I think it's pretty obvious that they would have an interest in this company."
"But the fact is we're not for sale," Hodge added. "That's the reason we're doing this IPO is to avoid having to sell the company in the future."