In 2008, Living Harvest grew 48%. This year, the company expects to grow more than 65%, and its numbers so far show it’s right on target. So what is this company selling that makes it almost an anomaly among the retail world? Hemp-based food products.
Founded in 2002, Living Harvest’s founders started the company with a mission to find alternative sources of protein and soon thereafter launched the world’s first protein powder. Today, the company maintains its health focus but has moved beyond the world of oils and supplement-based products into the world of mainstream groceries. But with years of misinformation leading the way and a distribution market located within the only industrialized country in the world to still struggle with legalizing the growing of industrial hemp, informing customers of the health benefits of its products has not been easy.
“I was in the soy business when soy wasn’t popular. It took us a long time to educate people about what non-dairy beverages were,” said Hans Fastre, CEO. “What I’m seeing now is exponential growth and understanding of consumers on hemp, the benefits of it, and the sustainability behind it.”
To maintain legal legitimacy, the Oregon-based company sources its hemp seeds from Canada. If it could source the seeds stateside, not only would it add another sustainable crop to the US’s product list, it would give the company an estimated 10% to 15% cost advantage.
“A lot of cost goes into managing the harvesting and processing of hemp seeds before we bring them over the border. We need to ensure they are rendered non-viable while also maintaining their nutritional integrity,” said Fastre.
One of the first products Living Harvest introduced to move its product line into mainstream grocery was hemp milk. Fastre said it came first because it was much easier for customers to understand it was an alternative to soy as well as an alternative protein source. Next on the list was hemp ice cream.
In the past couple of years, however, it became apparent to the company that the old packaging was not conducive to mainstream grocery distribution (the old packaging focused on the hemp leaf). “Retailers knew us by the color of our package and not our brand name. This sent a red flag up for us,” said Fastre.
Because the company is still relatively small, with annual revenues in the $8 million range, the team decided to focus on rebranding. “We need to make our products as approachable as possible so we don’t deny anyone the goodness of hemp because of the stigma attached to it,” said Fastre.
Although Living Harvest’s supplemental line will continue under the Living Harvest brand, its more mainstream products, such as ice cream and milk, will be rebranded under the name Tempt. Fastre said the decision to rebrand has already opened new doors for the company, and many mainstream grocers are already approaching the company to develop distribution partnerships.
“Several retailers sort of said, ‘Okay, now we’re ready for you guys. You look like a mainstream company that’s very approachable,’” said Fastre. “We’re very excited and happy with the brand name we came up with and the packaging and the feedback we’re getting from consumers and retailers.”
Although marketing is an important way for Living Harvest to get the word out about its products, research and development back those products up by ensuring each container of milk and each ice cream pint tastes delicious. As a pioneer in the hemp-based food product industry, the company has had to develop its own way to make sure that happens.
The company’s patented hemp extraction process, said Fastre, is second to none. “There are many people who try to extract hemp using soy extraction equipment, but it doesn’t work,” he said. “We’ve had to start from scratch, learn, and understand how hemp behaves in different environments and create a process ourselves.”
In addition to producing great-tasting products, Living Harvest’s technology creates a hemp-based byproduct that is unique and is leading the company into new areas of product development. “We are confident we can mimic almost any soy product out there, be it yogurt or protein alternatives, and our ice cream was the first sign of that,” said Fastre.
The company’s goal is to look at products that are staples in peoples’ diets, and in the world of soy, most of these categories are flat or are losing popularity. This leaves a perfect opportunity for Living Harvest to continue growing at a rapid pace. Already, in 2009, the company has had to redo its growth forecast due to rapid growth. “We’re getting a lot of positive feedback,” said Fastre.
Looking ahead, Living Harvest will continue to focus on growth by creating new products but also educating consumers on the health benefits of hemp. A typical first response to the products involves jokes about smoking it; quickly thereafter, said Fastre, the conversation turns serious.
“When you go through the health benefits and nutrition of hemp and then follow it up with the sustainability story behind it, there are positive and often emotional reactions,” he said. “That’s been working very well for us, using the edgy side of the story and saying, ‘Yes, it is hemp, but listen to us; here’s our story.’”