# Vital Farms: Branding Eggs Through Stakeholder Capitalism

**Podcast:** How I Built This with Guy Raz
**Published:** 2026-03-23

## Transcript

From the time that you started with the first hens until the time you could actually sell eggs, was it weeks, was it months?
Uh, months.
I figured to get started, I wanted to start selling to restaurants.
But I was getting a lot of no's because they were paying they could buy eggs from Cisco for 89 cents a dozen.
And they're not going to pay me $4 a dozen when they can buy $39 cents.
I kept hearing from chefs.
An egg is an eggs and eggs and egg.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Roz, and on the show today, how Matt O'Hare was inspired to buy a Texas farm, 20 hens, and some trailers from Craigslist, and built a nearly $1 billion brand, Vital Farms.
So for as long as anyone can remember, eggs weren't really a brand business.
If you walked into a grocery store 20 years ago, you'd likely pick out a carton of eggs based on the size, or if you wanted brown eggs versus white ones.
No one gave much thought to where the eggs came from or who produced them, which is strange if you think about it, because Americans eat a lot of eggs, almost a hundred billion of them a year.
It's a huge industry, worth around $50 billion annually.
And yet, until recently, almost no one focused on building a brand and a story around eggs, which is part of why Matt O'Hare decided to do it himself, starting out on a scrubby patch of Texas land with a handful of hens.
The idea came to Matt in 2006 after reading an article by the founder of Whole Foods John Mackey.
John, who was actually on the show a few years back, wrote about a concept called conscious capitalism, the idea that a business should take care of its employees, customers, the community, and the planet.
Now, whether you're skeptical about this idea or not, Matt O'Hare became a true believer.
And in eggs, Matt saw an opportunity to take this concept and build a business.
And what he wanted to produce were eggs that were different than what was available at the grocery store.
Eggs that had bright orange yolks and didn't taste like they came out of a factory.
The hens would have space to roam outdoors and be treated more humanely than most egg-laying birds that are confined cages.
Now, at the time, Matt was in his 50s and had spent the previous few years as a charter boat captain.
He had absolutely no experience as a large-scale chicken farmer, and he didn't know much about selling food.
In fact, as you'll hear, before Vital Farms, Matt had launched a bunch of different businesses, which were complex and challenging in their own right.
Some of them did okay, and others fizzled out, but all of them contributed to the businessman that Matt would eventually become.
Matt O'Hare grew up in Rhode Island in the 1960s and 70s.
He decided to skip college and made his way to Houston, Texas, when he was around 20 years old.
He got a job there working for a carpet cleaning company, and one day, while sitting in his van, surrounded by a bunch of equipment, he thought maybe I should go into this business myself.
I saw the name on the back of the carpet cleaning machine, said Chemco Manufacturing Phoenix, Arizona, Model 75A.
So I got the phone number and called him up one day.
And we were just sitting in the I was in a kind of a commune house that I was living in.
And I called him up and said, Hi, this is Matt O'Hare.
I'm with, I looked up, I said, Super Steam Carpet Cleaning.
I just came up with a name.
And I'd like to order a Model 75A, you know.
And uh the guy says, Oh, we're having a special right now.
If you order two, you get a discount.
Like, oh, okay, whatever.
That sounds great.
You need any chemicals?
I said, Well, I need carpet cleaning solution.
Like, maybe by the gallon?
He says, We have 55 gallon drums.
Like, I said, okay, I'll take a 55-gallon drum.
And I was just being funny, you know, it's like have fun with it.
And pretty soon he had this whole order.
And it was like three or four thousand dollars, I think.
And I he said, Would you um a 30-day term's okay?
And I cupped the phone and I said, Anybody know what 30 day terms means?
Like, no one knew.
And I said, Oh, sure, that'd be fine.
Two weeks later, a big truck, yellow freight lines, pulls up in front of the house, the this this commune house, and starts unloading all the stuff in front of the house.
And I had to look up what 30-day terms meant.
And uh I'm I was all of a sudden in the business.
It's amazing to if you to think about how the world worked in the mid-70s where you could just call up a company, no credit check, no like and they say they just they said, sure, we're gonna send you one out, and it's 30 days two, and then they they're gonna expect a check within 30 days.
And you did not have three or four thousand dollars at the time.
I didn't have three or four hundred dollars.
Yeah.
And and you had you had worked for a previous company, so what did you you just started kind of like, I don't know, poaching their their customers?
Well, no, uh what I noticed is Houston was a boom town.
They were taking farmland and converting it at a rapid pace into subdivisions along my 10.
And the kids go out and play and they run around in the farm fields that hadn't been converted yet, and they'd run into these brand new carpets and get them dirty.
And I found that we were cleaning carpets out there all the time.
And were you I mean, how were you able to come up with the cash within 30 days to pay for the machines?
Well, I mean, it was quick money because people would, you know, come and they pay cash.
It was all cash business or a check.
Uh and I didn't pay it in 30 days.
What I did instead is every few days I'd send a small amount of money.
So fifty dollars, $100.
And after 30 days, I probably had only paid fifteen percent of it back.
But they thought they were probably laughing at their office because every day they got another check for me.
And I had more business than I could handle, so I ended up, you know, ordering a third machine and paid for it the same way.
And uh it just kept growing the business.
So I mean this is night in the late 70s, um and so you were bringing in uh do you remember even how much you were bringing in a year?
The company was by the time I sold the company our all in, because we were also got into equipment sales, we ended up being the top sales uh organization um in the country for that company, Silverman Machine, uh selling their couple of things.
Oh, you became an agent selling their their cleaning machines, yeah.
I think at the end by with by nineteen uh eighty we were a million dollars a year probably in sales.
Wow.
And uh I sold the carpet cleaning portion and shut down the equipment portion.
You you sold it in nineteen eighty.
Yeah, five years.
Okay.
Okay, and I guess you got a a small chunk of money from that sale.
Uh because I think I guess with that money you bought a like a plant nursery just outside San Antonio and you had like a little red chill, like a little farm there and and you even raised some chickens, which of would of course lay the groundwork for for later on.
We'll get there.
Uh but y I I guess you were kind of in a holding pattern, right?
Like y you were doing this for just a few years.
Yeah.
I had dairy goats and I had chickens laying eggs and stuff and um so uh, you know, and that's when I first learned it, you know, when their chickens were running around on pasture, they made these beautiful, delicious eggs, and I couldn't find them anywhere after that.
But yeah.
I saw them opportunity just to at least do that for fun while I decided what my next big move was going to be.
And I didn't know what I wanted to do, but I knew I wanted to ultimately move to Austin and I wanted to start start a company there, but I didn't know what yet.
So you all right, so you're in Austin around what, 1983, 84 time frame?
Okay.
So Matt, many of our listeners will who old listeners will remember an episode we did years ago, maybe 2017, 2018, with John Mackey, the founder of Whole Foods.
It's a great episode.
And um tell me about you met John Mackey and and he was just kind of starting out at that time, right?
I mean, he was really um getting into the into the natural foods business.
Yeah.
We had what we had in common, we were both entrepreneurs and young entrepreneurs.
I was 26 or 27, I believe.
And John was uh year and a half older than me.
But John had a really you know, Whole Foods was a great company, and and you know, but when I met John, he was you'd see him in the produce department packing produce, you know, um at the first real good sized store that he had, which is 10,000 square feet.
And uh I was starting my company, which is um barter exchange.
Yeah.
So you all right, so you're in Austin and you are starting a new business, a barter exchange company.
So I know a bartering is like, hey, uh I can give you this in exchange for that, right?
Not exchanging money, but like services.
What what help me understand what this business was.
All right, so I didn't invent the concept of of of bartering, of parting company.
It's in the Bible.
Well, I mean, but of these companies what you know, where where you st you should stop doing the uh a quid pro quo trading, you know, this for that.
But instead you were doing uh you we have a currency.
And so the currency was called a trade dollar.
And so just to give you how big basic on how the business ran.
We only companies could join, and they would pay us $500 to join a membership.
It's a membership.
Right.
Annual membership or just one time?
One time.
Okay.
And and then you get a credit card, the barter exchange card.
And that credit card enabled you to go and shop at any of the other businesses in that community, uh, or nationwide.
My uh because this is a national company I was starting.
I I decided right on the bat I was going to build a national company, it was gonna franchise it all over the United States.
It was a you you would your business, and well, first of all, what kind of businesses are we talking about?
Uh doctors, lawyers, airlines, restaurants, uh manufacturers, radio stations, magazines, newspapers.
All right, so let's say you are a radio station and a doctor.
You I pay you five hundred dollars, and then that enables me to shop at any of these other businesses, but why would I even need to be part of this network to use their services?
I'll give you a simple example.
Let's okay, let's say you have a restaurant, and your restaurant is operating at about 60% capacity.
Every lunch, every day at lunch, you have 40% of your tables empty.
Um you have plenty more capacity.
Your food cost in a restaurant, typically 25%, roughly.
But your big cost in restaurant is your fixed overhead.
So you have this perishable commodity called the seat that's not worth anything if you can't fill it, right?
You got to you have to have a new driveway put in, a parking lot put in.
And the asphalt company came to you and said it's going to cost you $10,000.
If you join barter exchange, we're going to fill up some of those empty tables with customers you wouldn't have had otherwise.
We're going to send them in, they're going to use their trade dollars to eat in your restaurant.
And basically you're going to buy that driveway with incremental business.
And your promise, your value prop was we're going to save you money over the long term because bartering is gonna, you know, the cost for you to provide your service is much lower than the cost you would have to pay for someone else's services.
Aaron Powell In essence, yes.
But unfortunately, that restaurant owner probably can't find a driveway guy who wants to eat $10,000 in the meals at his restaurant, right?
And so what this does is basically the reason why barter, you know, is always it was the first form of trade, right?
It was barter.
Um that's why they call it trade.
Because it was trade or early on.
So this sounds like almost like it was a membership club.
It was a certain kind of entrepreneur who would join who'd be willing to do this.
But basic, am I right?
It's more more like a club.
They would operate like a club.
Yeah, but there were thousands and thousands of members.
You know, um at some point, at one point we were doing a hundred thousand, processing over a hundred thousand transactions a month.
And and help me understand.
So you got the membership fee, the one-time fee, but then how what was your recurring revenue?
We charge five percent cash and five percent to the buyer and the seller in each transaction.
Every time there's a transaction.
And there'll be an invoice, you know, just statement at the end of the month.
And also tell people this should not be how you oper operate 100% of your business.
This is a way to utilize excess capacity because there's nothing more perishable, you think about it, than an empty hotel room that didn't get sold last night or a 30-second spot on a radio station yesterday that never got sold.
They get nothing for that.
This is a fascinating business.
I first of all, do these businesses exist anymore today?
You know, I think there's one or two that might still be around.
Um how did the business do?
Was it was it successful?
Did you were you bringing in was profitable?
Uh yes and no.
The hard part about the business was that you could never consistently meet the customers' expectations.
Right.
Because it's you you wouldn't you don't have predictability.
They come in thinking it's going to save their company and it can help them, right?
Or or their their expectations are that I'm going to be able to, no matter what you tell them, they think I'm going to be able to use their trade dollars right away for everything.
And sometimes it's difficult to find something they wanted right away.
So sometimes as people, you know, weren't getting enough business and they they weren't happy.
And and and other people.
And I'm in, you know, I always said I'm I'm not I was never, you know, I hate wasting my time being CEO of a company because it really is takes a lot of work.
That was 13 years of my life in that business.
And this sounds like just a lot of moving parts.
Like I I can't uh what I can there's m thousands of cliches coming into my head like herding cats or you know, just I'm just thinking you've got your own, you're running a membership organization in a in Austin, then you're in charge of a network of membership organizations all over the country.
So you're dealing with the franchise owners, and then you're dealing with the businesses in your area and maybe businesses in other areas, and and I mean, this is before email and you know, you have fax machines maybe, but I'm just thinking like how you even deal with all the communication involved.
It was a pain in the ass, I'll tell you what.
And it's funny because you just named all the issues, right?
It was always something, you know, with always struggling with cash flow.
It was a really um knockdown drag out.
It was a really good education though, because one thing it taught me, I learned about so many different companies.
Because these they'd bring me in to cut clients would come and say, I've got this excess inventory and I can't move it.
And what can I do?
And how can I turn this into something I need?
And I did c business with some big corporations.
You know, we we did big deals with with airlines uh for for a lot of a lot of deals between travel-related assets in media related assets.
We did a lot of that.
We earlier made a lot of money in arbitrage.
We could buy something, move quickly because we could we we were the Fed.
We could loan ourselves some money or or or take it out of our uh trade dollar bank account and buy something and then flip it.
But it was always a struggle and can wear on you after a while.
Yeah.
Um you eventually sell this business, I think in 1995, um, and you make a little bit of money off of it.
Um I guess because you learned so much about the travel industry in this arbitrage and this sort of bartering business, uh, you wound up launching a new business for a very specific market, which is airline employees, I guess, flight attendants and and pilots.
Um, and the the way I understand it basically what you would like to broker deals with hotels and resorts for like inexpensive hotel rooms, and and then you would uh turn them around and sell them to airline employees who would could fly somewhere cheap, or you know, if they had some time off, is that is that right?
Yeah.
There were dozens of these little companies that former airline employees would start, and they would, you know, they would place or even existing airline employees and they would place they'd find get a deal with a hotel in a resort somewhere and say, airline employees will let you come for 50% off because they wanted to, because the airline employees key is they fly at the last minute standby, and hotels like to fill excess capacity.
And I had really good contacts in the resort travel business, my previous business at barter exchange, you know.
But I had general managers and sales managers from all the main major hotels and and and the resorts in Mexico and throughout the Caribbean.
So we started growing the business, and it was look it was easy to grow.
Uh there was a travel magazine that was out there at the time called Airfare magazine, I believe it was called.
I bought that magazine for cheap.
And we took that and turned it into a first class publication with a quarter of a million circ circulation called Interline Advanced.
And these were only airline staff over the city.
Yeah, there's hundred there's millions of airline employees.
And around the world, I would think that's worldwide.
Okay.
This is a good thing.
And there were 25, 30 companies doing this around the world at this time.
So there were other companies in the same business.
And I did a roll up.
I wanted to go and buy them all.
Yeah.
So you would really you could say, hey, come just roll your business up into mine, but then you'll have equity in this bigger business.
And I'd pay them, you know, they may have a small amount of money.
I don't I really don't remember the amounts, but it probably, you know, maybe a twenty, thirty thousand dollars might be enough to get them on board, and then we'd do an earnout, and they were happy with that ear that earnout.
So this is starting to look like this could really go somewhere because you had done the barter exchange and that was challenging, but this one really looked from what I read, it looked like it was really promising.
And you did actually take this public in 1998.
You went uh you you took the company public.
You guys were doing like fifty million in sales at at at its peak, I think, right?
Roughly fifty million.
We had a good group of people working at that um at headquarters.
We had um a first class magazine, but we were still, you know, struggling new company.
You know, we were all the all businesses are challenged, especially when you had when you're a mediocre uh operator like I was.
I would have to think, you know, I mean, you know, we had a couple of instances that set us back on our heels.
Um why do you think you were not a good operator at that time?
Well, what I've learned since then is I'm I'm really good at growing companies, but I get really bored at the blocking and tackling part, which is really an important part of it.
You know, that's really the important most important part.
I hadn't really learned a lessons that I've learned later in life, which is always hire people that are ten times smarter than you and ten times better than you to run every aspect of the business.
And I was still thought I was the smartest guy in the room.
And um, and I wasn't, you know, I it uh I had a lot to learn.
Did you have con I mean, because you here in this conversation you come across as very mild and you know chill and and but but you said you s you act like the smartest guy in the room.
Were you argumentative or you d were you dismissive of other people?
Maybe not uh ostensibly, but uh I'm probably was more than certainly not more than I am today, that's for sure.
But I I certainly lacked humility.
Um, and uh which I think is such an important aspect of being in business.
And I I I didn't do a good job making sure that I had the right people in the right seats in the bus, you know, and that's such an important lesson.
Yeah, for sure.
Um, but I mean, still the business was doing okay.
I mean, I think at its peak, you had like what, like two hundred people working for you.
Uh you people in in in the US and in Europe.
That's right.
But then, of course, 2001 rolls around, uh, and September 11th happens.
And and you're in the travel business, and and you guys take a major hit, as does everyone in travel.
And I I I read that actually on that day on 9-11, you were actually in New York City for a business meeting.
Yeah.
Got up early in the morning and um went for my morning run and came back and was taking off my shoes in my hotel room in Midtown, and I see an airplane.
I see that one of the World Trade Center towers burning.
Like, what is that?
Turn up the volume and said a small plane that crashed.
And while I'm watching it, the second plane hit.
I quickly laced up my shoes and decided I'm gonna run down, see if I can help with the World Trade Center.
So I ran down the West Side Highway.
By the time I got to Chelsea, um, the first tower came down, and I was surrounded by people that come out of the the the towers that covered in dust, and I realized that my sales were gonna go to zero for at least a period of time.
And we couldn't afford it.
We were still hand of mouth.
We were tight, you know, but we were we're okay.
Yeah.
So I got on the phone right before the second tower came down.
Got on phone with London and Austin laid off a hundred and forty people.
That day?
At that moment, before the second tower came down.
Because you well, all air travel had been suspended in the United States, but I I'm it just i it's i I guess uh well, I guess right away people couldn't travel, right?
What happened is 20% of all airline employees within days were laid off.
But you didn't know that yet on that day.
You just knew that there was gonna be some challenges in your business, and just so protectively you lay off people, but still thinking we'll survive this.
Yes.
Well, I wasn't sure, but I knew that we couldn't afford even a small bump on the road at this point.
We were hand to mouth, uh, cash flow-wise, it was too tight, so I knew I had to make some immediate decisions.
But I was really more concerned with life at that point.
I wanted to I you know I'm pretty good at triage, and I thought, well, maybe I can help.
And so I I got back and started running downtown.
How long were you in New York City before you head back to Austin?
Well, I got down to the World Trade Center, wasn't able to do anything because there was no nobody to help, and that was my and then I walked up back to midtown with the whole gang of us together and um came back to Austin a few days later.
So I ended up um basically selling the company.
I what I saw happen that day is my my net worth, which I calculated somewhere beforehand, was still in the tens of millions of dollars because, you know, of the value of the company.
Yeah, my my share of the c value of the company to zero overnight.
Okay, so you are now forty-five, forty-six, and uh and and broke.
Uh you know, by broke, I mean I own my house, which is really great.
I had built it largely in barter.
But you had no long-term security.
No.
But when the 9-11 happened, I was like, okay, now I got nothing, you know.
And I quickly got it like a like consulting gigs, you know.
Yeah.
I came in and helped a little bit of that.
But it was just, you know, nickel and dime.
And and that's it.
I mean, you spend about a year on help sort of unwinding it and dealing with creditors.
And what were you gonna do?
Yeah, I uh what I had always wanted to sail, sell my company and then sail around the world.
You know, I was always looking for the exit back then, you know.
But you know, sell my company, buy a big sailboat and sail around the world.
Oh, you grew up in Rhode Island, so did you grow up sailing?
Yeah, when I was a kid, I had a uh paper out when I was eight years old, and uh from eight to twelve, and it was you know, I saved my money and I I bought a sailing lessons at Rhode Island Yacht Club when I was 11.
And I I really learned to sail and I loved it.
Okay, so here was the opportunity to do it, except you didn't have the money to do it.
Oops.
There's that one little problem.
Yeah, I yeah.
But I had a little bit of equity in my house.
I had enough to to borrow 300,000, 330,000, I think I borrowed against against your house your house, okay.
So I decided it was going to be a charter captain.
Yep.
And uh I found a boat uh in the in uh the the British Virgin Islands that was a charter boat.
Um it was about five, six years old, four cabin, and um my new girlfriend and I, she was game to jump on board with me.
Like so you would be the captain of the boat and you would bring tourists on and and take them for a week long or three-day long.
Usually families.
Um I also was doing charters uh in the Caribbean all winter and spring and fall, but I would move up to New England and charter all new summer in New England, uh, you know, from Maine to to uh New York.
And you have a a girlfriend uh who I believe is your wife now.
No, she was my wife, but we were we were together for uh over nearly 20 years.
Got it.
Okay.
So I was captain and chef.
Oh, and were you a pretty decent cook?
I was.
I had gotten to be uh over the years, I'd got uh I had worked at the cooking business in Block Island in the summertime and you know, worked my way up to to I would call a land cook.
Yeah.
I I want to put this in perspective for a minute because you had gone from running uh 200 plus person complex business after 13 years of running a another very complex barter franchise business.
You had been the CEO, you had a big staffs, you had you know are on calls and meetings, and and you are pivoting to a career at 4546 as a a captain and cook of a charter boat, just you and your girlfriend.
That's a big change.
I mean, that is a that's a very big life change.
That sounds glorious compared to what the reality was which is I'm taking apart their toilet that they dropped the wrong stuff in and fixing it and I'm uh down in the engine room covered in grease fixing an engine and all this without you know I had a generator I had two big engines down there plus you have the sales and and you're cooking but you're also taking them to three, four islands a day and your tour guide and you're teaching them to scuba dive and wakeboard and you know all this stuff.
Yeah.
I was one thing I was really learning is that you know I was now my ego had gotten pretty well crushed down and uh which is in a good way.
But what a gift.
I know it was really what a gift.
I was you know taking care of people.
I was a nursemaid I was a diplomat I was you know solving marriage problems when I could and and uh uh I was tea you know was do teaching people to do a lot of interesting things and and I had a lot of kids on board you know it was you know it was really busy.
Was it a good business?
I'm just a small business.
It's it's you and Catherine, basically, and maybe some I don't know, part-time employees.
But was it a was it were you saving money?
I wouldn't say it was saving a lot of money, but I was um we we you know, we we would you know we're getting I think fifteen thousand dollars a week.
Um and after you cover all your expenses, you know, you got a little bit left over.
And there were tips.
Catherine kept all the tips, that was our deal, which was sizable.
I think we had you know forty, fifty thousand dollars a year in tips.
But also I saw an opportunity while I was doing this because I'm an entrepreneur at heart and I had a million ideas that I couldn't execute there.
But one that could was become a charter broker who would uh book on other boats.
Because we were oftentimes booked, and I get inquiries from my client base, and they say, uh, we need you for New Year's, I'm not available, but I can get you another boat.
And that was 15% off the top.
So I started booking charters.
I started a company, and it was called Vital Vacations.
And uh the first vital company.
It's interesting because uh obviously it's a connection to what you do next, but it's also connected to what you did cleaning carpets because you realize that the money actually was about provide you know, working with third parties and taking a cut, right?
Or even in the franchise business.
Like here, you realize that by brokering charters other people, it was it was a much easier way to make money.
Yeah.
But I was still doing charters and I I you know, and I really enjoyed being the captain, you know.
I thought I was gonna do it the rest of my life.
I really did.
Really?
Yeah.
I remember somebody, a mentor of mine early time, early days, she told me uh the average life of a charter captain is four and a half years.
And after that, you're done.
And I was like two years in like, I'm gonna do this the rest of my life.
Well, right around four and a half years, I was done.
I was like, okay.
What happened?
Well, I had a thousand ideas.
Poor Catherine at the time, you know, I feel because every time, like I'd come up with another idea, and her eyes would go, Oh my god, here comes another one.
And uh one thing that had happened is I'd read this um essay that had been written by John Mackie uh called Conscious Capitalism.
It was Yeah, which became his kind of mantra.
Well, it was a best-selling book after that, and now it's a whole a whole movement.
A whole movement, right?
But at the time it was a four-page essay, you know.
And uh it described that you know, businesses need to have a deeper purpose besides uh just making money.
And I was like, Well, that's interesting.
It was always for me how can I quick can I get in and quick can I get out with a lot of money?
And like that's it very interesting.
I liked that concept.
And then he went on to talk about stakeholders, and I never even thought of a business as having more than one stakeholder, me, you know.
Uh no, they're equal in a way, and described that you know what Whole Foods did is for their five stakeholders, which is the customers, the employees, the shareholders, the vendors, which I thought was interesting, treating them as an equal.
And then the last one was a communities slash environment where they operate.
So I was inspired by that.
I knew that whatever I did going forward, I wanted it to be part of that kind of model.
Okay.
All right, a question for you.
You were and have been a vegetarian most of your adult life.
At that time, you were vegetarian, but was an were animal rights front and center in your mind?
Was it something you thought about, or was being a vegetarian just a lifestyle thing that you you know, that you just kind of lived?
Yeah.
Well, my friend John Mackey would be angry if he if he heard me calling me a vegetarian.
He says, You're not a vegetarian, Matt, you eat fish.
So I I call myself a pesca v pesca vegan.
But uh Right.
So yeah, animal welfare is, you know, especially having chickens on a farm.
I mean, my chickens, they all had names, you know, they're all named after, you know.
This is when you ran the farm in San Antonio.
Outside of San Antonio, yeah.
That was uh years earlier.
Yeah, they'll jump on your shoulders.
And I saw their you know, I had little baby chicks, you know, that I raised up to laying hands, up to full laying hands.
And you know, they know you that they're sentient beings.
You can see that, you know, meaning they they feel happiness, they feel sadness, they feel anger, they feel hurt.
You know, all kinds of you they have personalities.
I I asked that because I you know, you're thinking about a bunch of different businesses.
You read conscious capitalism, and you decide to move back to Austin and actually buy a farm once again, which you had done in 1980.
Help me understand how you made that decision to to a move back to Austin and to buy a farm again.
Well, I knew I wanted to move back to Austin.
And so um and then John Mackey and I had gone with him and some friends on a long scuba diving trip.
So you had always kept in touch with him.
Yes.
When he we we gotten a lot closer um in since like 2004.
Yeah.
So we were on this trip and I was asking, you know, what's next for Whole Foods?
And he said, you know, well, this thing we're doing, you know, right now I'm funding this guy to um to do pasture raising of eggs.
But he he's decided instead he took the money and wanted to build a feed mill.
So instead of doing what I want him to do, I said, What did you want him to do?
And I said, Well, I wanted him to train farmers around the country to pasture raise chickens, meaning where they're out in pasture eating the pasture, because we want to sell those types of eggs from from chickens that are well maintained, plus the eggs taste better.
And I was like, holy shit, that's exactly what I was when I had my farm, I saw this huge difference in those eggs.
And I've been looking for those eggs.
I look for them all the time.
I stop at farm stands all the time, hoping that that farmer has let their chickens out.
Because what I found when I had my farm is when chickens wandered around on pasture and they ate something besides corn every day, which is what most chickens just get, primarily corn, a little bit of soybean meal, that the yolks get this beautiful orange color and they're they they're thicker and they taste much different, much better.
And I mean they're delicious.
I don't really like the ones with the pale yellow yolks.
And what I found is that of the 300 million chickens that are out there, 330 million chickens, even at that time, 95, 98% of them were living in in cages.
Uh four, five, six, seven, eight birds to a cage, unable to stand up, unable to turn around, unable to stretch their wings their entire lives.
What I classify as the most tortured farm animal in the world.
So John tells me the story uh about what he wanted to do.
And I said, Well, that won't work.
I said, What do you mean it won't work?
He said, Well, farmers aren't going to give you the consistency you want.
You need to have consistent rules, and you need to create what I would call uh an a franchise model, kind of upside-down franchise.
You know, I hit the experience in franchise.
Like, how would you do it?
And I said, Well, I would recruit farmers to follow our system exactly.
I would put them on a contract and I would buy all their eggs under that contract.
But they'd have to follow the rules that we set for them.
And then I would pack all their eggs into a single brand and sell them under that one brand.
And I would make sure the farmers did their job right like you would have, like a franchise would.
And he said, Oh, that'll never work.
When we come back in just a moment, John turns out to be wrong.
And Matt dives headfirst into the chicken business.
Stay with us.
I'm Guy Roz, and you're listening to How I Built This.
Hey, welcome back to How I Built This.
I'm Guy Roz.
So it's 2007, and after talking to John Mackey about the challenges of the chicken business, John moves back to Austin where he decides to buy a farm.
I had a real estate agent in Austin.
I said, send me anytime you see over 10 acres available for sale.
And uh he sends me twenty-seven acres South Austin for sale and for half a million dollars.
It wasn't developed, it was just of uh kind of scrubly land.
It was a flood zone.
And you were going to do what?
I wasn't quite sure yet.
I had different ideas, but one of them was to do chickens.
Okay, and and for half a million dollars.
Did you by the way, did you have half a million dollars?
No.
Okay.
So I flew back to Austin and looked at it, and it was you couldn't even s it was covered in brush.
I had to p hack my way through the the brush just to find my way to the water.
It was beautiful.
Okay.
Yeah.
And uh I offered him half the price off from a quarter of a million.
And so uh the other I got owner financing and bought the farm.
For 250,000 bucks.
Well, bought a piece of land that we I turned into a farm.
Yeah.
Were you gonna live there on this farm or you gonna are you gonna you oh you had a house, you're gonna live in your house.
No, I had an R that house that we sold the it sold the house uh a couple of years earlier um by that point.
And we had we were living in the RV.
So this is like, again, you are now in well, you know, into your early fifties, and you're going to do I'm imagining you're gonna do some physical labor here to start to clear this farm.
Oh yeah.
It was it was uh I bought it, I bought a tractor.
And the brush, the bramble, what was it, like blackberries?
Like what kind of bramble did you have?
Oh, it's whatever weeds would grow on it.
Yeah.
And there was, you know, a lot of these, you know, little tiny trees.
And I got a big shredder.
And I got knocked over there almost unconscious with a tree brown on my head.
And it was quite a fun uh start.
But I had a I was having fun.
Yeah.
We're cleaning up the property, uh, I put in a vegetable garden, bought 20 laying hens.
Um and this is this is nice fertile land.
Yeah, uh but it wasn't made for crops.
I wasn't gonna do crops, I knew I was gonna do chickens.
And so I started with 20 and uh and they all had names.
And uh and then I bought um a thousand baby chicks and started raising them up.
And I built these pens made of of this electro plastic netting to keep the predators out.
And we'd move the pens and these little trailers around the property.
Bought some old trailers on Craigslist, house trailers, and outfitted them with nesting boxes, and every week we'd move them into a new plot.
How many uh how many chickens per per pen?
Each one's probably call it 2,000 square feet.
Um every week, you're moving them to fresh pasture.
Gotcha.
And and they're just eating grass.
Well, basically.
What I found out pretty quickly uh through trial and error is that if they don't get four ounces of 18% protein every single day, they will stop laying eggs within 48 hours.
Which is insects, I'm assuming.
In nature, it's insect uh seeds, little pieces of grain, uh bugs, worms.
Um but we we fed them their grain, and I try to do all kinds of things like you know, you fed them grain.
Well well, they all no matter what, they have to get four ounces a day of protein.
Got it.
And uh I would I would, you know, I got these raised these chicks from a day old and finally we got production going.
And and just to clarify, the the purpose here, the idea here was hey, we can make better tasting eggs if a bunch of things happen.
Like the chickens have uh free, like you know, can roam around.
The they eat are eating grass and eating bugs, and the result of that is a really deep orange egg.
Like that I I imagine it took you some time before you f you were like, Yep, we got it.
They're eat that these eggs are consistently orange.
Well, yeah, and and there's seasonality to it also because um you know in the summertime in Texas especially, you know, we had uh everything dies.
There's no water.
Yeah, well, even if it rains, but you know, it doesn't make any difference because if it's a hundred degrees, 110 degrees for sixty days in a row, yeah, that it dries up anyway.
Uh but the eggs started coming and I started packing them into cartons and I I I had a trailer, but primarily I was gonna start packing them into my uh my Subaru and take them out to restaurants.
I figured to get started, I wanted to start selling to restaurants.
And I start calling and calling and calling and calling restaurants, and they didn't want to pay for four dollars for a dozen eggs.
I think we're selling three ninety-three a dozen.
And it was that much because the costs, right?
Are so I knew I I could not make money unless I sold it for at least uh $49 a case for 15 dozen.
But I was getting a lot of no's because they were paying, they could buy eggs from Cisco, you know, for these restaurants could, or from the big food US foods or whatever, for you know, eighty-nine cents a dozen.
And I kept hearing from chefs an egg is an eggs and eggs and egg.
And pretty soon I'm backing that truck or my Subaru up and I'm loading it full of all these eggs and taking them to the food bank.
It was so disheartening because I did basically giving them away.
I had six months of raising these chickens from bay old and you know, and they find these great eggs, but no one knew what they were, and they're like, no one wants those eggs.
You know, they're four dollar eggs.
Who wants to pay four dollars, three dollars and ninety cents for a dozen eggs?
Especially when you're not serving it poached or fried, if it's just going into you know, cookies or something, and no one's gonna see it.
Yep, and I finally got one restaurant.
That first one came out.
I know what a pasture raised egg is.
I used to have chickens.
Uh it was called Fonda San Miguel here in Austin, Texas, and they bought two cases every week, and I was overjoyed.
Let me just ask quick, quick, quickly about the the orange yolk, right?
It it's beautiful, especially if you're making like fresh pasta, it's great.
Um, or serving it poached, but but from a nutritional standpoint, is there any difference?
It depends how you do it.
I mean, we don't make any claims um in my company because um every chicken on pasture can eat whatever he wants or she wants, she wants.
And so I mean, and the yolk color can change because some chickens, you know, decide to stay in all day.
You know, I'm just gonna stay home and eat grain, you know.
And you never, you know, they have the option to be on a hundred and eight square feet of pasture, but you don't have any guarantee that what they're gonna need.
So we don't we stopped on nutritional claims.
Right.
And also it opens you up to all kinds of class action claims and you know there's all yeah, right.
Okay, so so you're now you got hands, and and on the farm, did you build any buildings at the time, or was it just it was just 27 acres of land?
That's a lot of land and you were just it was just a huge pasture and you were just moving these trailers around we got about we end up with about four or five thousand birds on the pasture full time and I had help that live there in trailers because remember there's a flood zone so I had to make sure that if a flood came we could move it and we had numbers of floods where we'd have to get there in the middle of the night and move the chickens into the trailers and pull them off the farm to a place across the road where it was high water.
Wow and most of these floods for some reason happened at three in the morning.
I was like and we were out there loading chickens and pulling them in my Subaru the same Subaru that I used to deliver eggs to you know to the restaurants in I'm pulling these trailers off the farm you know so you now are you're trying to get restaurants in interested some of them mostly it's it's hard but you get in a couple places but you are also friends with John Mackey goes way back to when before he was a big success.
You'd known him since 1984 I gotta imagine you're like John can you know can you can you help me out here?
I like I've got these great eggs let's get them into Whole Foods.
I would never ask John to do anything with Whole Foods.
Uh I just didn't do it.
Okay.
Well, why?
Number one, I I know that I I wouldn't on a I didn't want to ask John ever to get my eggs into Whole Foods if I could help it.
You know, that was not what I wanted to do.
Uh I think he did get he did one time.
He actually he uh talked to he sent an email uh to somebody about it that I that that I was a party to.
But other than that, no.
But what I do know is that for a decade or more, John like was behind the scenes, never directly, and but was very helpful in the background.
Yeah, people knew that I knew John, but I met one of the um presidents of Whole Foods on a hiking trip we took together with John, and uh and his VP reached out to me and said we'd like to get eggs up in the Chicago Midwest region.
And it was my first real order outside of the uh I was just restaurants at that point and uh you weren't even in the Whole Foods in Austin.
No, no, okay, not anyone in the southwest at all.
Okay.
So this guy got a hold of me and I I shipped him, you know, um half a pallet of eggs.
That's it was pretty funny because I had no idea even how to load a pallet.
I had a brand, I had a label.
And the brand, sorry, we didn't give you guys.
It was you called it Vital Farms.
Vital Farms.
And uh I bought I had cartons and I had a little label and I had uh boxes.
Um and then they said they were gonna come pick up this many eggs and it had to be on a pallet.
For one store in Chicago?
No, for the just for the Chicago region.
So it was gonna go into the four states.
And by the by the way, it was probably one case for every one of the stores.
And the case was half dozen eggs, fifteen dozen.
Just how many eggs is that roughly?
Yeah, probably three or four hundred, five hundred eggs, something like that.
So meanwhile, we like the guy was gonna come pick up the eggs, so it was onto my farm.
So the driver, truck driver pulls up there, probably a team sturdy, pulls in, and uh he said, I'm here to pick up a pallet of eggs.
I said, Oh, hi, great.
Can you open the back of your truck?
And I said, Yep.
Meanwhile, we're washing eggs by hand one at a time.
Okay.
And so we just had me and my little helper.
We we got uh I started building, I started putting one case at a time on the pallet.
And I get it all about three quarters of the way fill, and I'm looking around and like I'm out of eggs, and I needed like four more cases, and so I'm washing some of the eggs out of the the real refrigerators there and getting them in the cart, and he's watching me with an amazing.
He's never seen this before.
And then I'm still short.
So I run out to one of those little mobile units, the little trailers that had chickens in them.
I'm lifting up hens and I'm grabbing warm eggs out.
And uh I get these warm eggs and I put them in the carton, and uh and he's like, couldn't believe it.
And I and I finally had enough eggs done, and this is 45 minutes later.
And then I I grabbed, I'd been to uh U-Haul and got this shrink wrap, because they told me it had to be shrink wrapped.
And I'm walking around the back of this with this with this green shrink wrap on his truck on the semi.
Just walking around the pallet, shrink wrapping it.
Shrink wrapping it.
And then I jumped off and said, You're all set to go.
And he just like he looked at me and shook his head, shut his doors and drove off the farm on my little funky, muddy dirt road, and uh off he went.
And that was my first uh I was so happy.
I can't imagine.
I here's my question, right?
So these initial eggs go to uh you know, a dozen or so Whole Foods in the Midwest, right?
And I'm and this is two thousand and eight is 2008-ish, around then.
And I'm I'm walking into a Whole Foods, let's say in a Chicago suburb in 2008.
I I go go by the eggs, and I see this one brand, Vital Farms, and it's not, it's just like, you know, there's oh there's a Whole Foods brand, and there's and and they are saying cage free, and there's this one.
And why would I even pick this?
I mean, I didn't know knew nothing about it.
How how were people gonna even know about what this was?
Whole Foods were amazing partners.
They still are just an amazing partner.
And they stepped up because the the thing that they do is say that they really believe in what we're doing.
It's not just about the money, it's the it's the it's the stakeholder model.
And you know, they believe in what we're doing from an animal welfare standpoint, they believed in in that pasture's egg grew better for you.
So um, yeah, and so they did have great signage in the stores, but I was only on the shelf for about three or four weeks, and all of a sudden I got a call from the Bobby Turner, I believe his name, he's the vice president, and said, Matt, we've got a problem up here.
What the uh health department in Indiana's taken all your eggs off the shelf.
And why?
I said, Well, because your label's not correct.
You didn't have the size of the egg and three-eighths inch type, you didn't have a grade, a grade on it.
It had to say grade A, and it had to say extra large and yeah, all that stuff.
So they yanked them all off the shelf in all four or five states.
Chicago, I believe, Illinois, Wisconsin, uh uh, yeah, Indiana.
So they came off the shelf.
So I didn't get paid, and I had to go back and Whole Foods is very understanding.
And uh sure enough, instead of just saying we're done with you guys, they patiently waited for me to send them the next round of eggs, build the next pallet in the back of the truck and send it back up, and a month and five weeks later we're back on the shelf.
Wow.
So you had to re-re you had to basically have everything uh to standard.
I I I guess that within a year, you also got another lifeline from Whole Foods, which is uh and they they had I mean, at the time it was more like this.
I think it's less like this now.
They were really into local foods, like really and you could go to an individual Whole Foods and we've heard these stories in the show, and you could pitch the local manager, but they you got a uh a loan.
They gave you a hundred thousand dollar loan.
Whole Foods had a program to support local food producers.
That's right.
And it's like a low interest loan, right?
It was it was I think it was five percent interest, um, which at the time was was not low.
Uh I think it was it was normal, it was a fair market.
But a hundred, but uh but was a hundred grand in two thousand nine.
Was that critical?
Is that like life-changing money at the time at that point?
You know, it really wasn't.
I had sold my house, I had some capital from that, I had sold my boat, I had a little bit of money from that.
Um I really, you know, financed this thing 100% of myself.
I had gotten owner financing on the farm itself.
I really got the loan because I knew that what what came along with that was uh even more support from Whole Foods.
And I wanted them as a partner.
And we signed, we never missed a payment, never laid on a payment.
We paid it off in exactly in time.
And at the time there, you know, they had 11 regions of Whole Foods.
There was almost no national purchasing.
Each region made their own decision.
So you had five separate billion dollar company, or I'm sorry, eleven separate one billion dollar companies in essence, with their own presidents and their own buyers.
So you had to do one region at a time.
So so you so you were in the Midwest.
So you were not uh not yet na well, but but just out of curiosity, when did you when were you in all the Whole Foods nationally?
What year?
Well that really didn't happen until 2015 or 16.
Okay, so that would come many years later.
Okay.
So this is like 2009, and you are, but there's demand for this thing, and I have to imagine that you can't produce enough eggs on this 27-acre farm in Austin.
Like that it's just you don't have the capacity or the cash even to do that.
No, it didn't have the and plus it's not enough room.
You know, it 108 square feet per bird outdoors, you knew the math, it's that's that's a thousand birds per hectare.
108 square feet per bird is what is what you would require.
Correct.
We worked with um certified humane and other organizations to come up with the standard, and we adopted the European standard of a thousand birds per hectare, which is again 108 square feet per bird.
But that's not like if I start an egg company and I and I call it pasture-raised, um, just because I like that term, is that regulated?
Is that is that like a is it legal language, or is that still not no one's gonna know what that means?
It's actually self-regulated within the industry.
But I see there's been a couple of times when people have broken that standard and they've gotten sued and they've backed off.
And so we have competitors that would love to call their eggs pasture raised, but they call them free range instead because they have somewhere between two square feet outdoors, which is one animal welfare organization standard.
And so you can get away you can get away with that, basically.
Yeah.
So you now have to you cannot make enough eggs.
And you had experience with franchising in the past and working with partners.
So I imagine you reach back into your toolbox of of having done this in the past, and and you start to think, okay, to scale this, I can't do this just on this farm.
In essence, yes.
So um the first thing I did is started, I figured stick around Austin, it's convenient.
And I started adding farms around Austin, and basically a lot of them were farms of existing egg farmers.
Or individuals that wanted to raise chickens our way.
Yeah.
So uh I got after, you know, about a year and a half of, you know, trial and error in Central Texas, uh, I got a farmer up in Arkansas that agreed to build purpose-built uh uh pasture-raised barns just for us.
Okay, and this would actually be the beginning of of your expansion, where you would start to partner with dozens of like these small egg farmers across the country.
Um but I'm curious, I mean, how did you like how did you make sure that they were raising eggs to your specifications, that they were going to be, you know, have those orange yolks and they were going to taste the way you wanted them to taste.
And like how are you making sure that they were doing things the way you wanted to we had to hire people uh to go out and and actually check the farms.
It didn't take much because we were paying a premium for these eggs for these farmers so they had to do our methods.
And if we found out for example that they were not letting the birds out first thing in the morning because you know uh then we'd let them know that it's not going to work and uh with them or if they were the pasture didn't look great uh we would get with them on that or you know we're much more sophisticated today but back then it was it was early on and we just yeah what I'm what I'm curious about is attracting these farmers right because you're you you're working with people who have are had already been raising eggs and selling eggs and people who weren't but I I guess the incentive for them was there was predictability like you were saying to them hey we're gonna guarantee you we're gonna buy your eggs at this price.
Is that what you could promise?
Yes.
What we did is not not only we promised that, but one thing we all knew, and that was, you know, in this country, farmers always lose at the end of the movie.
They just do.
Yeah.
And we wanted to take that out.
So we also knew that routinely, all the big chicken companies, egg companies, beef companies, they would always break their contracts whenever it was economically favorable for the for the big producer to do so, the big brands.
And um, so we went in early on and decided we're going to be different.
And we're going to be not only different, we're going to treat them like a full-on stakeholder.
And and was, I mean, was it just basically a combination of Whole Foods kind of promoting these eggs but and people discovering them that you you were, I don't know, you were just they were just selling?
Yeah, we we had a hard time keeping them on the shelf.
Um people found out about them.
At first, you know, we were expensive eggs.
You know, back then they were $4.99, which, you know, I was told by the the buyer head buyer of Whole Foods for early on, no one will ever pay five dollars for a dozen eggs ever.
And I'm now they're like eight bucks, I think or more.
Eight to ten.
Yeah.
Yeah.
Yeah.
But I had a philosophy early on that I've stuck with forever since then.
And it's I have to really keep explaining this to us.
Like we never ever are going to pound our chest and see how great we are.
And the the key to that is if you tell people how great you are, your customers aren't going to feel compelled to tell people how great you are.
You're already telling everybody.
But if you never pound your chest and see how great you are, the customers will look at what you're doing and say, someone needs to tell people how great these eggs are.
And so we end up with thousands and millions of customers bragging about our eggs, and they became a much better sales tool than we could ever do ourselves.
Well, we come back in just a moment.
How Matt gets inspired to turn his egg cartons into art.
Stay with us.
I'm Guy Roz, and you're listening to How I Built This.
Hey, welcome back to How I Built This.
I'm Guy Roz.
So it's 2010, and as Vital Farms continues to expand, Matt realizes he needs help, a new partner to focus on the nuts and bolts of the business.
I wanted a really strong operator that would do would you know really run the day-to-day operation.
So I found a young man named Jason Jones, who is a uh he worked for Motorola, and uh he came to work and uh you know I gave him his second MBA, I call it.
Uh he came to work for me.
He'd never worked for a startup before.
He um I sold him 20% of the business for $200,000.
And uh and he knew nothing about farming?
Nothing.
No, no.
He was just interested in this idea.
Yeah.
So he you wanted him to come aboard to do what?
I mean, he he had a business degree, but you also had a lot of business experience.
What was he going to bring to the business that you needed?
Um, primarily he was going to do all the blocking and tackling if or hiring was going to take place.
He did it.
He'd, you know, get on an airplane and fly somewhere if we had to.
Um, he was um, I was mainly doing I was I'm gonna be focusing on capital formation if we needed.
Uh I I wouldn't, which I really didn't because we were I wanted to make sure we're profitable right off the bat.
So at the very beginning, we were profitable every year.
I didn't want dilution.
I had learned my lesson, you know, about dilution and watched my friends had got diluted uh in their business by having to operate at a loss and having to keep raising capital.
But um yeah, he was helping instrumental in working with our our new partners at Arkansas.
Right.
And and he could quickly learn enough about how to do this that he could go and also, you know, explain to these partners in Arkansas what they needed to do.
That's right.
But pretty quickly we bought out the Arkansas uh operation after a number of years.
We bought out all their farmer network and purchased them.
Because they had their own farmer network.
They had built a farmer network for me.
There were 30 farms at the time, I think.
And in 2014 or 15, we bought them out and uh and that's when the business really started to take off because we're able to much more strongly enforce our standards and uh we built relationships with the farmers directly without a third party in between us, and that was a big jump for us.
All right.
Let's talk about branding for a moment.
It's Vital Farms.
The carton that they were coming in was black, which was very different because most egg cartons are.
It was green.
It was green until uh yeah.
I love I kind of fell in love with this chalkboard art you'd see at Whole Foods.
You know, they seems like every Whole Foods had a ch a chalkboard artist, you know, and they'd they put specials in the produce department.
It was uh looked like it was really cool.
We decided let's let's see if we can make a carton that looks like that.
Yeah.
But I remember I had run into uh Gary Hirschberg, who's the founder of um of uh Stonyville Farms.
Stonyfield, yeah.
Stonyfield.
And we had met at a uh organic trade association meeting in Washington, DC.
And we were talking, he'd just seen our eggs for the first time.
He said, Man, what you have is a great piece of real estate.
I said, What do you mean?
He said, I've got this little yogurt container about this big, these little cups.
You have this big piece of real estate in an egg carton.
You have such an opportunity there.
And I I knew we did, and all the labels are just boring, you know.
Yeah.
Egg cartons are boring.
It's just it's just eggs.
There's no information on it at all.
Yeah.
And I knew to get people to try your eggs.
It wasn't just going to be that, hey, these are pasture's, you know, chickens are well maintained or whatever.
We, you know, we take care of our chickens, we love our chickens, we call them girls, we call them ladies.
But it had to be something more.
And so we splurged on that uh label and we really turned that into a piece of art.
And people their eyes were drawn to our carton.
And that would and what we knew that like little cartoon, like drawing of an egg of a chickens and like like grass and flowers.
Then they start looking at it and you see all the different little messages.
Fresh air, sunshine, it would say on it.
Yeah, it was great.
And uh we knew that if anybody would just try an egg, same thing I learned when I when chefs were buying my eggs, right?
An egg is an egg's an egg, right?
Just try it.
Just try it.
So I imagine that part of the, I mean, the plan was to continue to find more and more and more farms and to build up the network.
But did you need to raise money?
I mean, was it was it capital intensive?
I mean, I I because I don't think you had raised money up until this point.
We're talking about like now 2013, 2014.
In 2013, 2012, I was approached by an investment banker wanting to raise some money for us.
And my experience with investment bankers in the 90s was right out of that Wizard of Wall Street, the uh DiCaprio movie.
Uh uh, yeah, right.
Uh it was uh that type of pump and dump kind of thing.
Yeah.
And this guy was different, and he said, We only uh I only raise money through private equity funds that are uh what do you call impact investors?
They're only interested in the triple bottom line.
People, profit, and planet type of thing.
They want to make sure we're making a profit, but they're more interested in in what we're doing for the planet.
So and there's 250 of these private equity firms, and we hold conferences with them every year.
And if you're interested in raising capital, and I said, Well, I'm not interested in doing anything about a way, but what do you think I could sell a little bit of my personal stock for?
And he he gave me a number like the company's worth that much.
I was shocked.
And I said, Well, let's run a process.
I've never had any money personally.
I'd you know, been blocking and tackling my whole life.
Never, yes, I had been worth money on paper, but I'd never actually had any real money.
And so he ran a process for us for us to sell 10% of the company.
And came in at twice the the number that he had said.
And I'm like, wow, for the first time I had, you know, some real money.
I could do something with it myself, you know, buy a house and do some things.
And the company didn't get any of that money.
It was basically we sold I sold a little bit of my stock.
And so we did a couple more rounds of that.
And the following year we did one that was two and a half times it would valuation again.
So I had sold about 20% of the company.
I I wanna I want to focus in on on something else just for a sec.
Um which is this idea that that you didn't really like being the day-to-day operator of the business, right?
Like that wasn't where your heart really was and you eventually gave up the title of CEO.
And I think this is around 2019.
And the person who took your place is a guy named Russell Diaz Conseco, um, who I I guess kind of worked his way up the ladder, right, to to become CEO.
Yeah.
And Russell really took the bill by horn.
He moved up from director of operations to COO and president.
And then when I decided I wanted to take the company public in 2019, we decided it was time for him to move to that title.
Yeah.
And the stakeholder model is strong in this company today, it's probably much stronger than when I started.
I walk into meetings and no one knows who I am.
And I'll I'll hear a bunch of 20 somethings in a room full of all the marketing people that work for us now.
And they're they're talking about how what the impact could be on this particular stakeholder of doing something like this and like I love it.
You know, they're they it's it's in the fiber, which is really wonderful.
Well one of the things, right, that I'm sure you've heard and and I and we'll definitely hear from listeners is like I buy your eggs, okay.
I can I can afford to buy them.
And it's it's a it's a price I am willing to pay because I like them and I think they're they're good.
Um but they are in some cases two or three times more expensive than right, this battery cage produced eggs.
And is is it really just it's is it just the price of doing business?
Like it ha they have to be that expensive because of how they're produced?
Well, the it costs more.
It's a lot more expensive to produce eggs humanely.
We have to pay the farmers.
You know, they buy they get loans in the banks, you know, when interest rates went from one and a half percent to six, seven percent to buy a farm, that was more expensive for the farmers.
We have to pay them more.
And we want to make sure the farmers, you know, we take care of our farmers.
We have five hundred and seventy-five at the end of last year uh uh farmers, and we hold their feet to the fire advice on the other way around as well.
What I mean I mean, how much of an impact would you would you say that Vital Farms has had on other farms and the way they raise their eggs, their chickens?
Well, we haven't changed I think the factory farming method, the you know, the the battery cages are still there, right?
But instead of being ninety-five, ninety-seven, or eight percent, whatever it is, it's around fifty or so today.
I don't have the exact numbers, but somewhere in the half.
So we've had a pretty big impact and it's three hundred and thirty million laying hands and um 150, 160 million of those are now no longer in cages.
So it's been a big big change.
You know, when you started, you weren't even a a a rounding error, right, in terms of how m how much you how much of the market you had.
What what percentage do you estimate of the egg market does vital farms have today?
Like five percent, ten percent?
I think we're under four.
That's I mean in a country of three hundred million people, that's huge.
Yeah.
Yeah, well, you think about it, we're uh we're in about uh I can't remember eleven million households today, twelve million households.
And and really, you know, the company is grown every single year.
And and uh our earnings are growing every year.
I mean, just in line, straight, you know, every single quarter exceeded the previous year, same quarter.
Every single for that consistency.
And uh I'm a largest shareholder and always have been.
Matt, you um you're only seventy.
I mean, you know, with with modern technology you could live like thirty plus more years, right?
I'm just approaching middle age.
Right.
So uh and you once had a dream of retiring and sailing off into the sunset, which you did for a few years, but you got bored.
What do you what do you think you want to do for the rest of your life?
And I don't know, any thoughts?
I've started four or five new companies this year.
Oh wow this past year.
In you're like incubating them or you are literally you are starting.
I mean, we started Blue Zone Kitchens a couple of years ago and then hit a $12 million dollar run rate in our second year of frozen entrees from the blue zones.
This is with Dan Butner, the blue zones, right?
Dan Butler and I and Scott Marcus, my former CMO of Vital Farms is a CEO.
And then um I'm I have a uh a number of other projects.
I just bought a an aviation company.
Like building planes.
No, it's a charter, uh air air charter uh service.
And I I can sit on a beach with a with a you know uh my tire margarita uh for about 15 minutes and then I want to do something fun.
And I find starting companies and building companies to be a lot of fun.
And that fortunately I've gotten a lot better at it than I was, you know, in my 20s and 30s and 40s and 50s, you know.
I've just gotten to be, I haven't had a failure in years and you know, since before, really before the sailboat days, you know, when I that lessons I learned as a captain, you know, I had to lead people every day and I had to serve them every day.
And so when I go into a new business today, it is with first and foremost, what is the deeper purpose of that business?
What can I do to really, you know, serve?
And um, yeah, I I want to be profitable.
But at the same time, I don't need to make a lot of money.
How much of of of where you got to today do you attribute to to the work and the grind?
Did you put a lot of work in a lot of tractors and clearing brush?
And how much do you think had to do with timing, being lucky?
I uh that's an interesting question.
If I had looked at it, I'll tell you what, 20 years ago I would have said, uh, it's all me.
And that that's shifted constantly over the years.
I had a really strong realization probably three years ago, and I realized this thing about gratitude.
I realized that everything I've earned gotten in my life is is a result of being lucky.
You know, my fiancee has a hat for me, says I'm luckiest guy alive.
And if you think I was not born in the streets of Mogadishu, uh, where with the machine gun fire happening around my head, I was born in a middle class family in the United States.
Every single thing I've I've gotten in business has been a gift from other people in a way.
Comes from lessons people taught me about hard work.
Every bit of my success has I could name the people, the situations, and the the people that inspired me to do it the right the right way.
So I would say, in one sense, it's 100% luck.
And from just being in the right place at the right time.
That's Matt O'Hare, founder of Vital Farms.
By the way, the company went public in 2019 and is listed on the NASDAQ.
As for Matt, he formally stepped off the board in early 2026, but will continue to serve the brand in an advisory role.
Hey, thanks so much for listening to the show this week.
Please make sure to click the follow button on your podcast app so you never miss a new episode of the show.
And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyRoz.com or on Substack.
This episode was produced by Carrie Thompson with music composed by Ramteen Arablui.
It was edited by Neva Grant with research help from Casey Herman.
Our engineer was Robert Rodriguez.
Our production staff also includes Catherine Cypher, Chris Messini, John Isabella, Sam Paulson, Alex Chung, Ramel Wood, Nora Gill, and Elaine Coates.
I'm Guy Roz, and you've been listening to How I Built This