What does it take to remain an independent business? Managing editor Linda Baker talks to Bob Moore, the 82-year-old founder of Bob’s Red Mill Natural Foods, about not selling out.
Here’s how Bob Moore, the 82-year old founder of Bob’s Red Mill Natural Foods, describes the flock of venture capitalists, investors and large retailers who have expressed interest in buying some or all of his hugely successful whole grains company. “You have an apple pie waiting in the window and people think: how can I get a piece of that?”
I talked to Moore a couple of months ago in connection with my cover story this month on Oregon companies that sold to out of state firms. Bob’s Red Mill Natural Foods, a privately held company headquartered in Milwaukee that employs about 250 people, was to provide a counter example of an Oregon business determined not to sell. Unfortunately, his story didn’t make it into the actual article, so I’m sharing a few of his words of wisdom here.
Moore, who founded the company in 1978, says “I haven’t ever been tempted to sell the company — never.” But as the company has grown, “as the company became more recognizable around the earth,” the offers continue to pour in. “Seven or eight years ago, I was fielding three to four calls a day from potential buyers,” Moore says.
To deal with the onslaught, he hired Nancy Garner, his current executive assistant. “One of the conditions under which I hired her is under no circumstance would I accept any phone calls from venture capitalists, investors or companies who wanted to buy me out,” Moore says. “She did a magnificent job.”
Five years ago, Moore was at the trade show, Natural Products Northwest, where an unsuspecting salesman made a pitch for the company. Says Moore: “I physically took his two briefcases, and asked him to leave.”
That go it alone attitude has helped, not hurt, Red Mill’s bottom line. Fueled by global interest in whole grains and healthy eating, the company grossed $93 million in sales in 2010, and $115 million in 2011. Average annual growth is 25 percent. Five years ago, the company had a 50,000 square foot warehouse. Today, Red Mill’s manufacturing and office spaces occupy a 325,000-square-foot facility. Iceland and Mongolia are among the latest countries to have developed a taste for the company’s whole grain flours, cereals and bread mixes.
A few Bob Moore tips for staying independent:
“I’ve financed all my new machinery, inventory and growth out of earnings.”
“If you need money, go to the bank.”
“You can’t grow outside your territory unless you go to trade shows.”
“The person with the money always makes the decisions.”
Since Moore has no plans to sell, what are his plans for succession? He answered that question a couple of years ago, after handing the company over to his employees through an employee stock ownership plan. That move ensures Bob’s Red Mill will stay, in a manner of speaking, in the family. “If I’m good at anything, it’s picking the right people for the right job,” Moore says.
Linda Baker is the managing editor of Oregon Business.