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Samuel Kaymen and Gary Hirshberg were running a nonprofit organic farming school on a small New Hampshire farm when they began what became Stoneyfield farms. After starting with seven cows, now Stoneyfield sells hundreds of millions of dollars per year in smoothies, soy yogurts, frozen yogurts, milk and cream in supermarkets, natural food stores and colleges across the country. Their impetus to start Stonyfield had to do with seeing lots of family farms in New Hampshire go away while federal support for programs that supported healthy food development also went away at the same time. They felt starting a business was their recourse to support their mission and vision for a healthier food system.
They started out with a lot of passion and doing everything themselves, from milking the cows to processing the yogurt to sales. Both founders had no idea how big they needed to be, and had they known how much capital it would have taken to grow the business, they might not have undertaken the business path that they did. Samuel is particularly gifted at mechanical/electrical engineering and problem solving, which helped them with initial production challenges. They did not have any co-packers that they could have worked with given their scale and production needs.
Their first financing was a $35,000 loan from a collection of Catholic nuns. However, Gary quickly realized that they actually needed $250,000 in capital. The business then started in earnest in April of 1983. Once Gary quit the nonprofit he was working for and committed to the business (which supported a nonprofit itself) full time in September, he quickly realized that the business was at least $75,000 in the red for a business that only generated $75,000 per year. Gary was able to get some more money for equipment, but still not enough to be properly capitalized despite generating $250k then $500k in annual sales in each of the next respective years. They eventually sold the herd of cows to focus on production of products like their very popular yogurt.
Listen the full podcast on Taste Radio or using the player below.