In December, San Juan Bautista-based organic food company Earthbound Farm was sold to WhiteWave Foods Co, based out of Denver, for $600 million. Earthbound, the largest private employer in San Benito County, launched in 1984 by Drew and Myra Goodman in Carmel Valley before the company was moved to San Juan Bautista in 1996. In early January, the company announced Kevin Yost, who previously worked at Saputo, Inc., a global food and beverage branding company, would take over for Charlie Sweat as president and CEO of the Earthbound division. Sweat had been CEO of Earthbound since 1999.
Sweat recently gave an exclusive phone interview to the Free Lance from his office in Palo Alto to discuss the sale of the company, its future and its role in San Benito as the county’s largest private employer.
Free Lance: What do you think is unique about San Benito County that helped your company succeed?
Charlie Sweat: I think the county in the number of years recognized the need to work with Earthbound to facilitate growth. It was a nice blend of business-friendly results with respect for neighbors. Success is always driven by the people involved. At the end of the day, it’s all about the people. They’ve created the sustainable business model that has brought a lot of jobs to San Benito County.
FL: What went into your decision making to sell the company to WhiteWave? Was it just a good time for the company?
Sweat: In 2009, we brought in a private equity firm, H.M. Capital (now Kainos Capital). They came into buy a controlling stake in Earthbound. They have a window of time they want to help companies grow. Usually, that window is three to five years. They were into our investment for four to five years. It was just kind of a normal time frame. After 4-and-a-half years, the business was doing very well. It made sense for them to monetize their investments.
FL: What did you hope to achieve with the sale?
Sweat: When we went into the process, we were looking for a good partner for Earthbound. There were a lot of people that are tied to Earthbound’s business model. We were looking for a perfect fit. We thought WhiteWave afforded Earthbound that outcome.
FL: What role will you play with Earthbound now that it has been sold to WhiteWave and Kevin Yost has become the new president?
Sweat: What I agreed to was to include a transition period of advising. My role is only for period of time in transition. I don’t know what I’m going to do (after the advising periods ends). I just wanted to free myself up from that responsibility.
FL: Earthbound is the biggest employer for the county and one of the biggest player in the agricultural market here. What do you think about the connection of agriculture to San Benito County and what do you think the future of agriculture in the county will look like?
Sweat: San Benito is a great agricultural community. It has been nice to see Earthbound become the largest employer in the county. There will be new products introduced by WhiteWave, which will allow increased opportunity for other products (to be produced in San Benito County). It will continue to grow jobs in the county.
FL: Going from a 2.5-acre farm in the Goodmans’ backyard to the multimillion-dollar company it is today, what do you think drove Earthbound Farm’s success? What do you foresee will be the focus of the company now and into the future?
Sweat: I think the growth will always be fueled by consumers looking to eat healthy food. I think organic food will continue to see high growth rates. I think the more companies like Earthbound can bring the benefits of organic food to people … I think consumption will continue to rise. I think it’s a good place to be. It’s been driven by the awareness (by people of the benefits of eating healthier). We figured out how to bring the benefits of healthy food (to regular people) without being a financial burden.
