Happy Family thrives in Boise

A baby-food company has kept its leadership and Idaho operations intact after a big-dollar merger

krodine@idahostatesman.comDecember 12, 2013 

  • ABOUT DANONE

    Danone, with more than $20 billion in annual revenues, is the world's second-largest producer of baby nutrition products, according to the company's website. Child nutrition is the second-largest of Danone's four divisions. The others are dairy products (think Dannon and Oikos yogurt), bottled water (Evian and others) and medical nutrition products.

This past summer, a big European company bought a fast-growing organic baby food firm dubbed Happy Family from its two founding partners for "hundreds of millions of dollars."

That's as specific as Chief Operating Officer Jessica Rolph, one of those partners, can get about the Groupe Danone deal she says left her company mostly unchanged.

It also provided a handsome - and unspecified - payday for Happy Family's other stockholders, who include friends, relatives and Boise angel investors. When the sale was announced in May, the Financial Times estimated its value at between $250 million and $300 million.

Among the things that haven't changed, Rolph says, is the company's strong Boise presence.

"Our biggest concentration of employees is here in Boise," she said. Thirty-two people work in the Boise office, and several new positions are in the works for research and development and quality assurance.

While founder and CEO Shazi Visram stayed at the New York headquarters, Rolph moved to the Treasure Valley about five years ago, running the production and development end of the business from here.

The business has grown by leaps, from $120,000 in sales during the first year, 2006, to more than $7 million in 2009 and to $63 million last year, she said.

"We expect over $100 million in sales next year," said Rolph, 39. "It's been quite a ride."

Rolph, who earned her MBA from Cornell University in 2004, was working on a project with the food andbeverage company Odwalla when someone at Odwalla suggested she get together with Visram, a like-minded MBA who was working on a separate project. They met and clicked.

Visram had an idea for a company to meet the growing market of parents who wanted a healthy alternative to traditional baby food but didn't have time to make their own.

"I was so enthralled with Shazi's idea," Rolph said. "It's a brilliant concept."

After graduating, Rolph worked at Whole Foods in Texas but kept in contact with Visram. About eight months later, she moved to New York and the two founded Happy Baby. That product-line name remains, but the overall company changed the name to Happy Family as its consumers and product lines matured.

Visram's initial idea focused on fresh baby food.

"We quickly realized it wasn't possible to scale a fresh product safely nationwide," Rolph said.

They switched to a frozen format. Their first product was frozen carrots and minty peas in a cute ice cube tray.

But much as they loved their idea, they just couldn't get the product to take off.

"Parents didn't look for baby food in the freezer," Rolph said. "We couldn't convince them."

The company's first big success, she said, was dry infant cereal with DHA, an omega 3 fatty acid said to boost brain development, and probiotics, bacteria that naturally occur in yogurt and other foods and are believed to strengthen the immune system.

"Our cereal products just took off, so we launched more evolved alternatives," she said, such as finger-food "puffs" made with brown rice flour and fruit juices.

Other products include beverages and gels, freeze-dried fruit and yogurt treats that melt in the mouth, and other fare in fruit and veggie flavor combos such as sunflower butter and berry jam; spinach, mango and pear; and blueberry, pear and beet. Many of their products feature nutritional additives such as Salba, a form of chia (remember those "pets" with fast-growing, leafy hair?) now marketed as a healthy "supergrain."

Increasingly marketed for the full family, many of the tot-tailored products make their way into parents' gym bags, Rolph said.

Products are developed and tested in Boise, but they are produced at plants in the Midwest, with raw materials and quality control overseen by Happy Family. Contracting with manufacturers is a smarter financial choice for Happy Family than purchasing the space and equipment needed for its product lines, she said.

Happy Family products are sold in 33 countries. In the Treasure Valley, a wide array of its baby and toddler foods line the shelves at Whole Foods and the Boise Co-op and also are sold at Fred Meyer, Costco, Target and Albertsons.

The company's baby food and tot treats do well at the Co-op, "and their line's expanding with the market, so that's a good sign," Manager on Duty Bob Thornton said Thursday.

Happy Family product prices at the Co-op range from 99 cents for a squeezable pouch of baby food to $3.99 for Happy Munchies freeze-dried fruit and vegetable crisp.

Recently, shoppers have been snapping up the crisps, Thornton said, and the baby-food pouches do well against similar products from Earth's Best, a leading national brand.

"Shoppers here try to support local businesses," Thornton said.

BABIES AND BOISE

Large photos of beaming babies, the children of Happy Family workers, bedeck the conference room walls at the company's Boise offices. Rolph's sons Leland, 3 1/2, and 14-month-old Thacher are prominently portrayed in their mother's office - with appropriate product placement.

The company was founded on Mother's Day seven years ago. Rolph and Visram both have young sons, but they started the company before they had kids.

"The first couple of years we were awake at quarter to five, spending the week at a plant in Utah, eating baby food for lunch and dinner," she says.

Rolph was back in the office a week after Thacher was born. He still comes to the office every day.

She moved to Boise because her husband, Decker Rolph, got a job here, and "we didn't see ourselves raising our family in New York," she said.

"We loved it here and thought it was beautiful," she said.

Rolph's side of the fledgling company took root in their basement, then moved through a succession of three office buildings as the company grew. Now Happy Family has about 8,000 square feet on the third floor of a building at 3380 W. Americana Terrace, just across the Boise River from Downtown.

The company grew with the help of more than $1 million from the Boise community, friends and families, Rolph said. The total invested in Happy Family was more than $20 million, she said.

"It was all common stock, no venture or private equity firms," she said. "We had almost 100 investors by the time we sold to Groupe Danone."

A WEALTH OF RESOURCES

Happy Family's success drew Danone's eye, but the attraction was definitely mutual.

"In our initial marketing-plan wish list of companies, Danone was at the top of the list," Rolph said.

She and Visram were friendly with Gary Hirshberg of Stonyfield Farm, an organic yogurt maker that merged with Danone, and Hirshberg sang its praises.

Visram and Rolph retain minority ownership and their leadership roles.

"Our team is very empowered to continue to make decisions to grow the company," Rolph said, "but now we have a parent with so many resources."

Rolph spent this week at Danone research and development headquarters in Utrecht, Netherlands, meeting with experts in infant nutrition.

The Happy Family partners always expected their company would someday be gobbled up by a bigger one. Idaho Angel Fund spokesman Kevin Learned said that is generally the expectation of angel investors: Their investments will pay off when the company is sold or goes public.

The Idaho Angel Fund and affiliated Angel Alliance contributed more than $300,000 to help Happy Family take off.

Learned wouldn't say how much the participating angels made when the company joined Danone, but he said the investment wound up being particularly lucrative.

"In angel investing, you hope to have a home run once out of every 10 or 15 investments," he said. "This certainly qualifies as a home run. A home run would be something that returns more than five times our investment."

Plus, he said, "the company stayed here and is expanding its employment. It's a win for the investors, a win for the company and a win for the community."

Kristin Rodine: 377-6447

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