The $800M exit that started with a single muffin
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This Masters of Scale episode features Caitlin Smith, founder of Simple Mills, who built a better-for-you food brand from her apartment kitchen into a powerhouse worth nearly $800 million. Smith shares her journey from experimenting with almond flour muffins as a management consultant to creating nutrient-dense snacks with clean ingredients. (02:30) The conversation covers her bootstrap beginnings, strategic fundraising approach, and the eventual sale to Flowers Foods while maintaining the company's mission-driven focus.
- Core themes include bootstrap entrepreneurship, product positioning in crowded markets, capital-efficient scaling, and building a purpose-driven brand that prioritizes impact over profit
Speakers
Caitlin Smith
Caitlin Smith is the founder of Simple Mills, a better-for-you food company that creates snacks and baking mixes using nutrient-dense ingredients like almond flour. She built the company from her apartment kitchen while working as a management consultant and attending Chicago Booth business school. Under her leadership, Simple Mills grew from a single Whole Foods store to a major brand before being acquired by Flowers Foods for nearly $800 million.
Jeff Berman
Jeff Berman is the host of Masters of Scale, where he interviews entrepreneurs and business leaders about their scaling journeys. He brings extensive experience in business journalism and conducts in-depth conversations about the strategies and decisions behind successful company growth.
Key Takeaways
Start with Personal Pain Points to Drive Authentic Innovation
Smith's entrepreneurial journey began when she changed her diet as a management consultant and experienced dramatic improvements in how she felt. (03:30) This personal transformation drove her mission to help others access nutrient-dense foods more easily. Rather than starting with market research or trend analysis, she built Simple Mills around solving a problem she genuinely experienced. This authentic foundation gave her the passion and persistence needed to navigate the inevitable challenges of building a food brand.
Embrace Scrappy Resourcefulness Over Perfection
Smith demonstrated remarkable resourcefulness in her early days, from using 99designs for packaging to printing labels with a massive ink cartridge from China to keep costs down. (08:55) She took over roommates' kitchens, sold her car, and maxed out credit cards to fund working capital. This scrappy approach allowed her to validate her business model and build initial traction without significant upfront investment, proving that resourcefulness often matters more than resources.
Cast a Wide Net When Fundraising in Non-Trendy Categories
When fundraising in 2012, Smith faced the challenge that investors preferred tech unicorns over food companies. (18:18) Her solution was to talk to "eight different investors every day" and focus heavily on angel investor groups who could take more passionate and liberal approaches than specialized VCs. This strategy led to a remarkable moment where two potential investors found themselves discussing her brand while shopping in the same Whole Foods store, ultimately leading to her first significant funding round.
Prioritize Product Positioning Over Marketing Spend
Smith built Simple Mills' competitive advantage through "astounding ingredients" positioned in familiar, delicious formats rather than expensive marketing campaigns. (24:21) By using unconventional ingredients like almond flour in crackers, watermelon seed flour in cookies, and butternut squash in cheddar snacks, she created products that offered both great taste and health benefits. This differentiated positioning allowed the brand to stand out in crowded markets without the $50 million launch budgets typical of large CPG companies.
View Challenges as Strategic Opportunities
Smith's approach to difficulties like COVID supply disruptions exemplifies strategic thinking under pressure. Instead of just surviving the mass supply disruption that followed COVID, Simple Mills proactively prioritized maintaining a 96% fill rate when competitors were satisfied with 80%. (31:02) This decision strengthened retailer relationships and ensured their products remained on shelves when others didn't, enabling growth during a challenging period. Her philosophy, inspired by "The Art of Possibility," focuses on reframing obstacles as unique opportunities for competitive advantage.
Statistics & Facts
- Simple Mills maintained a 96% fill rate during post-COVID supply disruptions while competitors were satisfied with 80% fill rates. (31:02) This superior performance helped build stronger retailer relationships and kept products on shelves when others weren't available.
- Large CPG companies typically spend $50 million to launch a single brand or product line, highlighting the massive marketing investments required in the food industry. (14:35) This statistic helped Smith realize her initial $200,000 budget estimate was completely inadequate.
- Simple Mills raised less than $10 million in their first eight years of business, demonstrating exceptional capital efficiency compared to typical consumer brand scaling. (21:02) This allowed them to focus spending on fundamentals like packaging design, team building, and manufacturing operations.
