By Stephanie Strom. Source: New York Times.
BOULDER, Colo. — Quinn Snacks was founded in Arlington, Mass., in 2011. The company’s goal was to “clean up” microwave popcorn, which had come under fire for the material used in its bags, and trans fats and other ingredients that many of today’s consumers find offensive.
But just a couple of years later, Quinn’s founders and three of its employees picked up stakes and moved to this city, which Coulter Lewis, a co-founder, described as the ideal place for a small food company.
“When we were getting started, Kristy was calling all over the place to figure out where to get ingredients and the packaging we’d need,” said Mr. Lewis, referring to his wife, also a company co-founder. “Over time, she was calling people in Boulder three, four, five times a week for advice, and we just realized that our support network was here.”
Boulder is perhaps best known for craft beer and bicycles — there’s almost one for every person living here — and for being home to Mork and Mindy. But among foodies, it is also known as the place where new companies are challenging the old guard in the food business.
Up-and-coming food companies like Purely Elizabeth, Made in Nature and Good Karma Foods have relocated to Boulder to take advantage of the city’s deep bench of food executives, a food retail environment that prizes innovation and experimentation, and a growing pool of money for investments in food companies, among other things.
And the infrastructure such companies need — brokers, distributors, contract manufacturers — is arriving as well. The second-largest natural foods distributor, KeHE, opened an office here in 2013, and the Rodale Institute, a nonprofit research group devoted to organic farming, is opening a satellite office here.
“There’s an ecosystem here that supports food entrepreneurs that you just don’t find in other places,” said Justin Gold, who founded Justin’s, a nut butter company, here in 2004. “Everything you need, including a lot of experience and expertise, is right here.”
The money flowing to food start-ups here still trails New York and Silicon Valley. Food and beverage start-ups in Boulder, which has just over 100,000 residents, attracted $76 million from September 2012 to September 2016, according to CB Insights, a research firm, compared with $315 million in New York and $616 million in Silicon Valley.
But the vast majority of the money in New York and Northern California has gone to just a few companies. In Boulder, the money is more widely spread among dozens of companies that make everything from gluten-free cereals to probiotic drinks.
Indeed, the founders of small food and drink companies based here say Boulder is hard to beat as a place to start and grow. Many of them cite the help of Naturally Boulder, a kind of support organization for natural product entrepreneurs that started in 2005.
The group offers classes and programs on things like “The Ins and Outs of Great Packaging” and “Capital Raising for Every Stage of Your Business.” It recently offered a program on how to make connections at a big annual foodie event, Expo West, in March.
And its monthly networking nights attract as many as 200 people, including luminaries like Steve Demos, the founder of Silk, which produces dairy substitutes, and Todd Woloson, a founder of Izze, the fizzy fruit-flavored drink company, who built businesses here long before Boulder became a foodie mecca.
Then, of course, there is Boulder’s reputation for good food. The city frequently is listed in foodie magazines as a great place to dine, and its denizens prize “clean” foods, making it a natural place to test new products.
“The household penetration of natural products is disproportionately high,” Mr. Demos said, “and the risk factor to prove viability is lower than it might be in the big cities on the coasts.”
And if entrepreneurs can’t make one of Naturally Boulder’s networking nights or morning mixers, they have a good chance of running into someone like Mr. Demos at the Whole Foods on Pearl Street downtown — a place that is to spotting food celebrities what the Polo Lounge is to spotting movie stars.
“I think that’s Mo in the checkout line over there,” said Tom Rich, vice president of Whole Foods’s Rocky Mountain region, squinting across the store at Mo Siegel, one of the founders of Celestial Seasonings.
“It’s a small place, really, and you just bump into people like that here and they’re going to give you their phone number or email address and actually respond when you call or write them,” said Mr. Rich, who got his start bagging groceries in the Pearl Street store and is now considered something of a legend by many food entrepreneurs.
Mr. Rich gave start-ups like Justin’s and Madhava Sweeteners a stab at selling in Whole Foods and has helped cultivate the infrastructure here that supports them.
For instance, he often refers small food businesses to Green Spoon, a broker that helps them with sales and distribution. His referrals also have helped Green Spoon grow, expanding its services into the Midwest and Mid-Atlantic States.
In addition to Whole Foods, other grocery stores in Boulder, like Lucky’s Markets, Alfalfa’s Market and even King Soopers, a regional Kroger chain, serve as a testing ground for young companies.
Birch Benders, a pancake mix business that is working to dent sales of Bisquick and Aunt Jemima, got its first shot at Lucky’s, an organic grocery chain that Kroger took a stake in last year. Matt LaCasse, one of Birch Benders’s founders, had landed in Boulder in 2011 after graduating from Yale and was looking for a way to stay at the end of a long ski season.
In 2011, Lucky’s asked Birch Benders to demonstrate its product in one of its stores. Customers flocked to its table for samples served with juice. But it didn’t move off the shelves.
The grocer stuck with Birch Benders, however, through four or five iterations of the product, Mr. LaCasse said. Once the company got the price down to $4.99 and $5.99 for a one-pound pouch, Birch Benders began flying off the shelves.
Now Birch Benders mixes are sold in Target, Safeway, Giant Eagle and Whole Foods.
“I don’t know that in another city, a retailer would have stuck with us for as long as Lucky’s did,” said Lizzi Ackerman, the company’s chief operating officer, who was just named to the Forbes “30 Under 30” list of food entrepreneurs. “They really gave us a chance to get it right.”
Birch Benders also tapped into other local resources. The company started with money from friends and family but was quickly able to get financing from Boulder Food Group, a private equity firm started by Tom Spier using money from the sale of Evol Foods, which he co-founded.
But B.F.G., as it’s known here, isn’t the only local investment firm focusing on the local food scene. Mr. Woloson, formerly of Izze, heads up Greenmont Capital Partners, which has made investments in Madhava Sweeteners, based in nearby Longmont, and Door to Door Organics, a grocery delivery business in Lafayette.
Now, other financial interests are circling. Last fall, Rabobank, a big Dutch bank, held its third Food Bytes conference in Boulder, attracting more investors and company executives than it had to previous rounds of the event, which were held in San Francisco and Brooklyn.
Then there’s New Resource Bank, which provides services for companies with so-called triple bottom lines — social and environmental, along with financial. It chose to open its second branch in Boulder last year.
“We looked at Los Angeles, Seattle and a few other places, and the Boulder area really came out on top in terms of having a critical mass of the types of companies we work with,” said Vincent Siciliano, the bank’s chief executive. “One of the big draws in Boulder is the fact that they have hundreds of start-up food businesses.”