It’s not every day a company with 28 employees picks up and moves 1400 miles to North Carolina. It’s even more rare to do so without any financial incentives from local or state governments.
July 2, 2015
Inside a South Dakota Food Startup’s Move to Morrisville & Its Tom and Joe Inc. Investment
Fast-growing cultured and fermented food startup Cultures for Health is moving to the Triangle and hiring a bunch of workers.
But a fast-growing e-commerce company with celebrity customers wanted a more vibrant startup community, access to talent and a great place to raise a family. It also had advisors and investors in Canvas On Demand co-founders and Tom and Joe Inc. angel investors Tom Lotrecchiano and Joe Schmidt. And so in June, Cultures for Health, a six-year-old company that sells products that empower consumers to create their own foods or household supplies began its move from Sioux Falls, South Dakota to Morrisville.
Co-founder Julie Feickert (Feickert) is already living in town and starting the hiring spree, while her husband Eric Feickert will oversee operations in South Dakota until the move is complete in August. We caught up with Feickert and Lotrecchiano to find out more about the company and its move to the Triangle, and what to expect from Cultures for Health once it’s here.
The Feickerts are advocates of “Real Food”, which is food that “truly nourishes producers, consumers, communities and the Earth.” After having their first child and learning about the “Real Food” movement, they completely shifted their diet and began making many products like yogurt, kefir and bread in their home. But finding starter cultures—the base for the foods they made—wasn’t easy. Neither was learning how to make products from scratch that they were accustomed to buying.
To learn how to make the new foods, Feickert spent hours researching the best methods and products for each food. As a former professor who both taught and conducted research in business strategy, Feickert didn’t mind digging up the information, but she realized her time and ability to do so were a luxury many didn’t have.
The company also offers free recipes, advice and information through an active blog and social media presence—a YouTube video on How to Make Kombucha Tea above has nearly 380,000 views. And customer support is critical—support specialists are Real Food experts who have extensive experience in creating the same foods their clients are attempting to make. Thus, unlike the traditional customer support model, they can assist and advise clients while making the products rather than just helping them order or return products. Feickert says the reason for the focus on specialized customer service is simple, “we want everyone to be successful at doing this,” she says.
That focus on content and customer service is what drew in Lotrecchiano and Schmidt after receiving an introduction to Feickert last year, visiting Cultures for Health in South Dakota and “diving into all aspects of her business with her”.
“She’s got a fairly niche product and fairly narrow product line and even so, she’s got a legion of dedicated customers,” says Lotrecchiano, who along with his wife creates and eats many of the products. “She’s light years ahead of most of us in terms of content marketing (…) We know that’s hard work. You can’t fake it. And she just does it naturally.”
Lotrecchiano and Schmidt were so impressed by the following, as well as Feickert’s tenacity and the company’s steady growth and years of profitability, that they became her first outside investors in March, and when she began to consider moving the company, invited her to Raleigh-Durham to check it out.
Lotrecchiano admits he stumbled on a gem of a company that, “was hidden in South Dakota and in a niche that most of us know nothing about.”
But it’s one in the fast growing global probiotics industry that was a $23 billion global market in 2012 and projected at nearly $37 billion by 2018.
This is the second move for the company—the couple started out in Portland in 2009 and moved the company to the centrally-located Sioux Falls, South Dakota in 2012 so they could ship products nationwide more easily.
But in 2014, the Feickerts realized they wanted to grow the company more than “could be reasonably supported” by the talent pool in South Dakota. They were unable to find qualified workers in a timely fashion to fill open positions. While there were plenty of talented people in South Dakota, it was hard to recruit them away from other jobs. Just locating potential applicants for open positions could take up to six weeks. Finding physical space for expansion proved difficult too as available real estate was at capacity. So in 2014, they began thinking about relocating again.
After a visit to Raleigh, they immediately fell in love with the entrepreneurial community in the Triangle.
Between the large “impressive” talent pool, strong startup community and plethora of options for production and distribution, the Feickerts were quickly sold.
All of Cultures for Health’s business operations will be housed in the Triangle at first. Due to strict regulations around food production, it will remain in South Dakota until late 2015 or early 2016.
But the company is already hiring despite the gradual move—about 10 positions will soon be open including an office manager, wholesale coordinator and several warehouse positions. While offers were made to existing staff to move with the company, many chose to remain in South Dakota with their families. So while some new positions will be created because of the move, many of the new hires will replace those who did not move with the company.
But the move is already paying off in the hiring process. For one open position, more than 550 applications came in. The Feickerts have already brought on Megan Carriker—who has consulted in marketing and communications functions for various startups like FilterEasy, ndustrial and Freebooksy—to help with business operations during the relocation. Carriker says she was impressed with both the company’s potential and Feickert’s leadership and vision.
Once the company finishes its transition to the Triangle, the founders plan to focus on product development and growing sales.
That’s where Lotrecchiano and Schmidt will come in. They’ll use their experience in both direct-to-consumer sales and wholesale to help grow Cultures for Health far beyond where it is today both online and in stores. They’ve already started on a branding exercise with Feickert, in hopes of reworking packaging to better work for store shelves.
Lotrecchiano anticipates an even faster-moving and hiring company in the months and years ahead.
Here’s how Feickert feels: “We’re really excited we get to grow here.”
Laura Baverman contributed to this story.