One of Austin's cult favorite brands is hatching something big. Vital Farms, which sells pasture-raised eggs and butter, is now a publicly traded company.
Vital Farms Inc. collected $204.6 million July 31 in the initial public offering (IPO) of 9.3 million shares of its stock. The company’s stock debuted on the Nasdaq Stock Market at $22 per share.
Founded in 2007, Vital Farms ranks as the No. 1 U.S. brand of pasture-raised eggs and butter as measured by retail sales, and the second largest U.S. brand of eggs. The company controls a 76 percent share of the U.S. retail market for pasture-raised eggs.
“Our mission is to bring ethically produced food to the table,” the company says in documents filed with the U.S. Securities and Exchange Commission. “We do this by partnering with family farms that operate within our strictly defined set of ethical food production practices. We are motivated by the influence we have on rural communities through creating impactful, long-term business opportunities for small family farmers.”
About 200 small family farms, mostly in the U.S., supply Vital Farms’ eggs and butter.
Vital Farms posted net revenue of $140.7 million in 2019, the SEC paperwork shows. More than 13,000 stores across the country sell its products.
Sales to Austin-based Whole Foods Market accounted for 31 percent of last year’s revenue at Vital Farms, with grocery chain Kroger responsible for 14 percent. Other customers include Albertsons, Publix, Sprouts Farmers Market, Target, and Walmart.
Husband and wife Matthew O’Hayer and Catherine Stewart founded Vital Farms on a 27-acre plot in Austin. “Armed with a small flock of hens, they maintained a strong belief that a varied diet and better animal welfare practices would lead to superior eggs,” according to the SEC documents.
Vital Farms initially sold its eggs to restaurants and farmers’ markets in Austin. Less than a year later, Whole Foods discovered the company’s eggs.
“Matt and Catherine saw the opportunity to do something more than sell eggs to a few stores,” the SEC documents say. “They chose to build a sustainable company that aligned with the family farming community and was able to profitably deliver quality products to a devoted consumer base.”
In 2014, Russell Diez-Canseco came aboard as the company’s president and CEO. His previous experience includes a stint at San Antonio-based grocery chain H-E-B, as well as jobs at consulting giant McKinsey & Co. and the CIA.
In a July 31 interview with Yahoo Finance, Diez-Canseco acknowledged his company’s products cost more than alternative offerings.
“But we won’t apologize for that,” Diez-Canseco said. “We really operate in a different way, using a multi-stakeholder approach to capitalism. We want to have better outcomes for small family farmers; we want to have better outcomes for consumers … and communities, and our people and shareholders. We think we’re on the right track to do that.”