Hundreds of Millions from Happy Hens
In 2007 Matt O’Hayer started Vital Farms. His idea was simple. Ethical eggs.
He started with 20 Rhode Island Hens on a 27 acre farm. Matt gave each of them names (after a 1950’s sitcom female) and quickly bonded with them. He noticed they had feelings and thought it was inhumane to shove them in small cages. So he let them wander around.
The pasture raised hens were happier and produced better tasting eggs with thicker, darker yolks. Customers noticed and Matt had success selling them at farmers markets and to restaurants.
Then in 2008 Whole Foods stocked their eggs and they were off. They were expensive, up to $10 per dozen but over half of the people that become aware of ethical, pasture raised eggs end up buying them. And 36% of Vital Farms customers will actually leave without eggs if they’re out of stock.
The business grew and by 2015 they were working with 50 farms. Eight years later they have 300 partner farms across nine states with one “Egg Central Station” that has the ability to clean and pack 6 million eggs per day.
Vital Farms Egg Central Station, September 2023 Investor Day Presentation
They’re projected to generate $465 million in revenue in 2023. That’s a compound annual growth rate of 35% since 2015.
The company is now public (around $450 million market cap), is the 2nd largest egg brand in the $14 billion U.S. egg market and their products are carried by 24,000 stores.
Vital Farms continues to add products to their line up and is also building a restorative egg brand which focuses on traditional farming techniques to increase soil health.
Legislation is helping them too. There are now 10 states that passed legislation to remove caged eggs and three states with legislation in progress.
Vital Farms September 2023 Investor Day Presentation
I think the ethical farming trend will only move in one direction as more people are made aware of the sourcing of their food and more options become available in their local store.
Key Takeaways
People will pay more for happy animals
Once people learn about a better supply chain option for their food they are reluctant to go back
Legislation is moving to improve animals living conditions
Sources:
2023 Investor Day Presentation
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