Anatomy of a Sale
The hippie endurance athletes behind Epic Provisions sold their natural food company to General Mills for a reported $100 million. It began as an unexpected love affair. Then, it got complicated.
"We went there as a joke, to see the inside of this mega-corporation and understand what we were up against." Taylor Collins and Katie Forrest, founders of Epic Provisions
On a cloudless mid-April morning in Texas’s Hill Country, about 60 miles west of Austin near a legendary honky-tonk town called Luckenbach, Katie Forrest and her husband, Taylor Collins, eye a herd of bison grazing in a pasture on the 900-acre ranch they purchased last year. About a dozen of the giant beasts have formed a protective circle around two baby bison as they amble, en masse, in their owners’ direction.
“Oh, my god, I can’t believe they’re coming over here!” Collins marvels, in the hushed, conspiratorial tone of a nature-show host. “This is crazy. This is as close as anyone will get to a week-old baby bison.”
This ranch, this field, this herd of animals, is what paradise looks like to Forrest and Collins. A couple of Austin natives, they bought the spread with money they made when they sold their startup, Epic Provisions, to the Minnesota-based consumer packaged goods (CPG) conglomerate General Mills in 2016, after a scant three years in business, for a reported $100 million. Barely into their 30s, they were suddenly rich beyond their dreams. They’d built the company, which makes meat-based snacks, without taking enormous amounts of outside investment, and managed to keep a majority stake in it when they sold.
They were also, like many founders of hip food and beverage brands, obsessed with making products that offered a healthy alternative to big food—healthy for consumers and for the environment, and humane to the animals. The ranch would not only be an outlet for their outdoorsy lifestyle, but also serve as a lab for regenerative grazing practices that they hoped to push more of their suppliers to adopt. They wanted Epic to be a force for changing America’s food system, and the ranch would help. They started raising bison, chickens, turkeys, ducks, geese, and bees.
Meanwhile, they were still running Epic, still working out of the back of the same one-story Austin building, behind a barbershop. They still went to work in flip-flops most days, still had half a dozen dogs wandering around the office. General Mills, one of the world’s largest food companies—the parent of such conventional mega-brands as Cheerios, Betty Crocker, Pillsbury, and Green Giant— might seem an odd home for the couple’s creation. But as big CPG companies have struggled in recent years with changing consumer tastes, they’ve begun to look at food startups as a sort of innovation pipeline. By buying a company like Epic, General Mills could get access to Millennial consumers. Epic, in turn, would get access to vast resources, with the potential for greater impact.
It sounds like a business fairy tale: Lovebirds build a mission- driven company, sell it for a fortune, and still get to keep it. Except it’s not that simple. There’s no shortage of cautionary tales among insurgent brands snapped up by the big guys, as when Kellogg’s acquired the cereal maker Kashi in 2000 and managed to turn eight years of impressive growth into declining sales when it imposed its bigcompany ways. Within months of Epic’s acquisition, it looked like the company might already be heading down that path. Forrest and Collins were chafing against their new owners, to the point that they began avoiding calls from unknown numbers at headquarters. “It was awful,” Forrest says. “It seemed like everything that was put on us went against our very core values.”
Yet here they are, two years later, not only sticking it out, but insisting that they’re not going anywhere. By Inc. estimates, Epic is now on track to top $80 million in revenue this year, more than four times what it did before the sale. But Epic’s journey has been neither a fairy tale nor a horror story. The reality of getting acquired, concedes Collins: “It’s hard.”
At least part of the Epic story actually is a fairy tale. Collins and Forrest first met in high school. He was a senior and she was a freshman and they passed in the hall one day. They didn’t say a word to each other, but something happened: “It was like an atomic bomb went off, like a burst of energy that shook my bones,” Collins recalls. “I remember it so clearly”—even though he never actually spoke to her, and then soon graduated.
Six years later, when both were attending college at Texas State and commuting the 30 minutes from Austin, Forrest got Collins’s number from a friend and asked if he would like to carpool. Then came a first date, and he told her about his memory of that day in high school; she recalled the same feeling. Within three months, they were living together. Both passionate athletes, they took up endurance racing together. They became vegans together. They began traveling together to compete in triathlons and
“We went there as a joke, to see the inside of this megacorporation and understand what we were up against.”
100-mile bike rides, a hobby that requires the kind of money and time broke and busy college kids usually can’t muster.
The solution: They started their first business, a commercial recycling company. Austin didn’t have a good system for restaurants and businesses to dispose of their recyclable waste, so Forrest and Collins scraped together $2,000 for a trailer and made weekly rounds to about 30 businesses.
It was “gnarly work,” Forrest says—“4 a.m. shifts, rats flying in your face”—but it earned them as much as $10,000 a month.
Once they finished school, they started a vegan protein-bar company called Thunderbird Energetica. Thunderbird drew the interest of Whole Foods, which gave Forrest and Collins a $100,000 loan and distribution in 30 stores, but the experience was a “disaster.” They made mistakes in everything from manufacturing to branding. The only upside was they discovered they worked well together: Collins tossed up wild ideas and Forrest would figure out how to actually implement them.
Then, Forrest started having health problems. After numerous doctors failed to help her, a holistic health practi- tioner suggested her vegan diet might be the culprit. “So we hit the reset button and started eating meat again,” Collins remembers. The paleo movement was just starting to take off, and as Forrest’s health improved, the two decided they should hit reset with their business as well.
They entered Incubation Station, a local startup accelerator focused on consumer products that is now called SKU. (See “How Austin Became a Food Startup Hub,” page 38.) By the time they had finished the accelerator, they were convinced they should pivot to meat. Epic, the new brand, were protein bars that substituted the powders in products like Quest bars with blended bits of meat, fruit, and nuts. An angel investor in Houston loved the idea and invested $750,000. (Forrest and Collins later raised an additional $3 million, mostly from a Colorado-based venture capital group.)
At the time, no protein bar of this kind existed, and it wasn’t easy to get the product right. Once, when they were experimenting with an extruder in their backyard, nuts clogged the system and caused an explosion that sprayed 10 pounds of raw
meat across the grass. When they needed samples for their debut trade show, they packaged their first batch of bars in their guest kitchen—only to find out two days before the show that not all the bars were sealed properly, which created “the most disgusting mold I’ve ever seen,” Collins says. Despite the setback, the trade show was a success, and they returned with $100,000 worth of order commitments from retailers.
Forrest and Collins had hit on a powerful formula for new food brands. It was a novel product concept that fused two hot categories, protein bars and meat snacks like jerky. There was their mission for a larger purpose—sustainable sourcing—and, of course, the couple’s own compelling story. It all added up to exactly the kind of authenticity that legacy companies only wish they could create on their own.
The first time Forrest realized General Mills was sniffing around was only a few months into the business. She noticed that someone in Minneapolis kept ordering multiple boxes of bars on a daily basis. Assuming it was a General Mills product-development person trying to copy their concept, she started canceling the orders as they came through online. Eventually a woman from General Mills contacted Epic and explained that she was actually from the company’s VC arm, 301 Inc (see “Destination: Minneapolis,” page 27). Forrest agreed to stop canceling the orders. Soon, General Mills went quiet.
Two years after that, in late 2015, the food giant surfaced again, and Forrest and Collins accepted an invitation to visit its headquarters. “We went there as a joke, to see the inside of this mega-corporation and understand what we were up against,” remembers Collins. The experience ended up being revelatory. Other large food companies had reached out to Epic over the previous three years, and every conversation felt like the start of a transaction, not a relationship.
General Mills seemed different. Rather than sitting down with a bunch of suits pumping them for financial information, “we spent the whole afternoon talking about values and mission and founding principles,” says Collins. The difference was even more striking when an executive named John Foraker stepped in to become Epic’s main contact. Rather than being rolled up into the giant’s snack division—the home of such brands as Bugles and Chex Mix—Epic would align with other natural and organic brands inside the conglomerate. Foraker, 55, had been the CEO of Annie’s Homegrown for a decade when that brand was acquired by General Mills in 2014, for $820 million. Foraker, who was supposed to stick around only a year after the acquisition, had instead settled in for what looked to be much longer-term involve- ment at General Mills. And Annie’s was thriving, launching new products and becoming the flagship of a growing family of natural brands at General Mills that included Cascadian Farm, Muir Glen, and Lärabar.
Collins and Forrest couldn’t have invented a better mentor and protector. “If we do this deal, you will report up to me and never have to talk to anyone else in Minneapolis,” they remember Foraker telling them. “We do this right.” It was everything the Epic founders wanted to hear. Foraker, who has a degree in agricultural economics, also felt strongly about GMOs and organics—one of Forrest and Collins’s highest priorities when they thought about how General Mills could help them muscle suppliers to adopt more regenerative practices.
When Epic agreed to a deal in January 2016, the threeyear-old company had a dozen employees and had brought in a reported $20 million in revenue the prior year. Things started out promisingly. Epic had long exhausted the meager North American supply of meat from grass-fed, grass-finished bison for making its most popular bar, and the company lacked the leverage to get ranchers to change. Forrest and Collins had started selling two versions of the bison bar— one of which contained grain-supplemented bison, a move that neither founder felt particularly good about.
A year after the acquisition, though, Epic’s CFO and COO, Robby Sansom, traveled to Wisconsin with General Mills’ head of natural and organic ingredient sourcing to visit NorthStar Bison, a well-respected family-run farm. As they
Once, when they were experimenting with an extruder in their backyard, nuts clogged the system and caused an explosion that sprayed 10 pounds of raw meat across the grass.
sat on the porch drinking iced tea, they came up with a plan. With General Mills’ financial backing, Epic would prepay for 1,200 animals and enhanced infrastructure for NorthStar, two years in advance, if NorthStar would agree to raise them during that time according to Epic’s standards.
“General Mills, almost to our dismay, didn’t even bat an eye to cutting a multimillion-dollar check for product that we would not see for a couple of years,” Sansom says now. Besides the money that General Mills was able to provide up front— more money than Epic had raised before its acquisition—it also offered legal and deal-making expertise.
Suddenly, too, there were deep relationships with giant retailers that Epic could tap to reach new customers. “Epic’s biggest retailer at the time was Whole Foods,” Foraker remembers, while its mainstream grocery business was “next to nothing. Very quickly we got it in front of the key buyers in the main chains.” Because of General Mills, it was also able to lower costs for logistics such as trucking. “When you have a $16 billion company behind you,” says Foraker, “a lot of people will work for you for a lot less.”
From the outside, it appeared that a smart, strategic partnership was blossoming. But internally, signs of friction began to surface.
From General Mills’ standpoint, the Epic founders arrived with a chip on their shoulders, a perception that wasn’t helped by their showing up in Minneapolis at that first meeting in flip-flops and shorts, seemingly believing that because they had a unique product they were somehow special, that the usual norms didn’t apply. “Our battle cry was: Come and take it,” Collins admits. “It’s a tribute to the start of the Texas revolution. We were basically going to defend our culture to the death.”
Epic was “growing like a rocketship,” Foraker remembers, but there were all kinds of ways it wasn’t as efficient as it could have been. “These small companies don’t have superrefined systems. Their cost models aren’t great, they have a lot of yield loss. A big company wants to fix that stuff and improve margins. From a big-company perspective, that’s smart and fair. From Katie and Taylor’s perspective, they were like, ‘You’re holding back from focusing just on growth!’ ”
The Epic founders got testy. “There were lots of difficult conversations,” Foraker remembers. “Their style is extremely direct. For people who aren’t used to that, they can come off as caustic and obnoxious. They were just being themselves, and things like speed and candidness and calling bullshit are entrepreneurial trademarks that big companies are not used to.” Foraker found himself interpreting each side: “I often had to come in and moderate peace, make sure both parties understood each other.”
One blowup centered on a line of cooking fats that Epic was selling. At the time of the acquisition, Epic was ramping up a strategy it called the Whole Animal Project. As part of its mission to make its supply chain more sustainable, the company wanted to develop products that used as much of the animals it relied on as possible. So it came out with a line of pork rinds, bone broth, and cooking fats like bison tallow.
After the acquisition, a single General Mills staffer complained about an off-taste in one of the cooking fats, and the food-safety team launched a review, which found no contaminated products, but did find just enough variation in the products that it couldn’t rule out the possibility of contamination at some point. The company recalled the entire line—a cautious and probably wise big-company move that Forrest says Epic would never have done on its own: “It would have put us out of business.” It also effectively stalled the Whole Animal Project.
The recall came about halfway through a yearlong process that Forrest deems “the worst ever”—systems integration. A global company like General Mills can take advantage of its scale only if every part of the business talks to every other part—from communication systems to how financial results get reported to how UPC codes are handled and inventory is managed. These are slow systems designed to handle high volume, not quick adaptation, and implementing them in a scrappy startup can feel like installing the steering system of a school bus in a hatchback.
“Instead of focusing on selling and growth and marketing, all of the budget for those things got pulled back and we had to put our energy into this integration,” Forrest remembers, her exasperation still just below the surface. The frustration grew to the point that, if an unknown General Mills name popped up on her or Collins’s phone or in their email, they wouldn’t pick up, or they’d hit delete without reading the message.
Foraker remembers, “I would get calls from senior people at Mills that were like, ‘What the fuck? Can you help these guys understand what we are trying to do here?’ ”
Despite all the talk about maintaining Epic’s mission, there were fundamental differences about how much to focus on it. “When small companies come into big companies, they’re used to making decisions on the basis of social impact and growth and being badass innovators,” says Foraker. “The big-company goals are not the same. They’re focused on safety and quality, and they care a lot less about the other stuff,” he says.
In August 2017, as Epic was in the thick of its hell year of systems integration, Forrest and Collins got hit with what seemed like their biggest blow yet: Foraker announced he was leaving to join the actress Jennifer Garner in a new organicbaby-foods company, Once Upon a Farm.
“We were scared,” Collins remembers. “We didn’t know what was going to happen. We tried to tell our team that everything was going to be OK, but the only thing we could do was just see what happened.”
Shortly after Foraker’s departure, Jon Nudi, who oversees all of General Mills’ U.S. brands—which have some $10 billion in annual sales—made the trip to Austin to visit Forrest and Collins. They had committed to staying at General Mills for at least three years, according to Nudi and the couple, and they were almost there. “It’s too bad you guys will be leaving soon, because we’re just getting to know you,” said Nudi.
Forrest and Collins looked at each other, startled, and then back at Nudi. Despite all the drama, leaving their creation behind was not something they were planning to do. “We didn’t ever think of the three-year deal as marking some kind of closing date,” Forrest remembers. She said so to Nudi, and explained her hope that Epic’s focus on regenerative agriculture could influence General Mills’ other brands and suppliers. That was something she and Collins could get excited about.
Suddenly, the fog lifted and the two sides saw each other clearly. It turned out Nudi was genuinely interested in bringing more of Epic’s insurgent energy into General Mills proper, and he welcomed Forrest and Collins’s bluntness and focus on mission, especially because sales of General Mills’ legacy brands have sagged. “Every one of our brands has to stand for something and have a point of view,” he says. “And we can learn from Epic’s agility and speed.”
A funny thing happened after Foraker left the company. “John sort of stood as a barrier between Epic and General Mills,” Forrest says. “His intentions were always super positive, like not wanting anyone to mess up the Epic culture, not wanting anybody touching it. So we thought there was nobody at General Mills who was excited to help us, because he was the gatekeeper. That was probably a good thing for a year. But it probably wasn’t for two years. So when he left, it opened a direct line of communication.”
In retrospect, even Foraker agrees. “I was able to help get issues resolved, but I’m sure one of the unintended consequences was that I was a buffer, not a filter, and at some point that was not helpful,” he says. “Their having to be more directly connected to the influencers gave them more credibility, and probably forced them to polish their edges in a way that they didn’t have to when I was there.”
One of the biggest tests since Foraker’s departure was the development of Epic’s first nonmeat offering. General Mills’ snacks division wanted to create a protein bar made with egg whites and dates, and the company asked to do it under the Epic brand—which would require a whole new supply chain to get cage-free eggs. “The Epic team sort of coached the snacks team through the process,” Nudi says. “There were some heated conversations, but ultimately it made the product and the branding better.” What’s now called Epic Performance Bar went
From General Mills’ standpoint, they arrived with a chip on their shoulders, a perception that wasn’t helped by their showing up in flip-flops and shorts.
“Their style is extremely direct. For people who aren’t used to that, they can come off as caustic and obnoxious.”
from concept to market in 28 weeks, he says, “faster than we’ve ever developed almost anything.” A couple of years ago, he says, “it would have taken us two years.”
One day this spring, the couple brought a bunch of General Mills brass out to the ranch for Epic’s first-ever Impact Summit, an attempt to rally other brands within the conglomerate to cooperate on sustainability goals. They walked around testing soil health and examined the effect of chickens’ pecking and pooping on grass growth. They slaughtered some birds for dinner and finally got around to talking about business.
An Annie’s executive discussed a partnership it had developed with a farm in Montana to create a line of organic mac and cheese with ingredients from regenerative agriculture. When the farm isn’t growing corn and wheat, it plants cover crops and rotates cattle.
Collins spoke up: “Hey, guys, don’t you know a company that uses beef? Can we expand this partnership [to Epic]?”
Then someone from Cascadian Farm added: “Their cover crops are oats, and they don’t know what to do with them— but we need oats!”
Similarly, General Mills recently purchased Blue Buffalo, a natural dog food company, and Collins sees that as an opportunity to revitalize Epic’s Whole Animal Project, in a new way. “With the eggs we’re using now, we use only the whites,” he explains, “but can Blue Buffalo use the pastured egg yolks? I see us being 85 percent animal utilization in bison, beef, venison, and turkey over the next year. What we don’t use, [Blue Buffalo] might be able to use.” Epic’s goals suddenly seem more achievable than ever, not despite but because of General Mills.
The couple have started spending every weekend on their new ranch, and they intend to turn it into a profitable business. Watching them bond with their herd of bison or marvel at the effects of chicken scratch, it’s easy to imagine them opting eventually for a full-time life on the range. And yet, Collins says, “that’s not going to happen any time soon.” It’s likely their roles at Epic will evolve after their three-year commitment ends, and they’ll relinquish some day-to-day management. But their new working relationship with General Mills presents too much opportunity for them not to pursue it relentlessly, like entrepreneurs, for the foreseeable future.
The relationship with General Mills, Collins says, is “kind of like an arranged marriage.” Unlike the love that led to his and Forrest’s marriage, this kind of love had to be learned.