“There’s obviously mixed emotions that come with this kind of thing, but it’s really more excitement than anything because I know this is the right choice at the right time for the business,” CEO Jesse Laflamme, who took over the business from his father, told FoodNavigator-USA. “I did not take this lightly or in a cavalier way, but I am confident that this is going to be very, very positive for all our stakeholders and that we found the best partner possible.”
He explained that after growing the business 20-30% annually for the past decade and rising to meet increased demand of 30-50% during the pandemic, Pete and Gerry’s “has grown to a size that I honestly never could have imagined.”
To sustain and further accelerate that growth, Laflamme said Pete and Gerry’s needed a partner with a big-picture understanding of the industry and access to more equity than he could invest to meet the rising demand of both conscious consumers and large corporations that made high-profile and fast-approaching commitments to use only cage-free eggs by 2025.
“People are paying attention now more than ever to their food and how it is produced – whether that is animal welfare, which is huge and becoming even more, or organic or new things like regenerative agriculture,” all of which are central to the company’s brands, including Pete and Gerry’s Organic, Nellie’s Free Range and the recently launched Consider Pastures, Laflamme said.
In addition, he noted, the conversion to cage-free eggs by several major retailers, McDonald’s and other foodservice providers raised the bar from battery cages, but it also laid the foundation for additional disruption by driving consumer awareness.
“The tailwinds are at our back, which is exciting, and this [sale] will allow us to take full advantage” of the current momentum and upcoming opportunities, he said.
New doors, new facilities, new partners & new products
Specifically, he said, Butterfly will help Pete and Gerry’s expand distribution across the country more quickly, which will open the door for opening a new processing facility on the West Coast and partnering with additional farms on the West Coast.
The sale also will allow the company to explore more value-added options and bringing in-house aspects of the business currently outsourced, such as hard boiling eggs, he added.
Finally, he said, Butterfly will bring much-needed resources to expand marketing – which will become increasingly important as consumers learn and have questions about different standards of animal care and sustainable food production.
Deal reinforces company values
The decision to sell “wasn’t entirely about money – by a longshot,” it also was about finding a partner who not only shares Pete and Gerry’s values, but has a strong track-record of fostering and growing like-minded businesses without compromising their high standards, Laflamme said.
Butterfly is “very, very focused on environmental and social governance and they don’t want to change that about us. It was very clear from the onset that our B-Corp certification and focus on the environment was very, very important to them and continuing the integrity of this business is truly important to them,” Laflamme said.
He said he also was drawn to Butterfly because they know all sides of the agriculture business, “which is kind of rare,” through their work with Bolthouse Farms and owning a restaurant chain.
He also noted how Butterfly has upheld organic and environmentally-friendly values through its other investments, including in Orgain protein powder and their sustainable striped bass farming operation in Baja California.
To ensure that Butterfly executes against these strategies and values in the best way for Pete and Gerry’s, Laflamme will stay on with the company in an advisory capacity and as a member of the board of directors.
“I’ll be very active on strategy and working with team as needed, but also working on passion projects,” like automating production of the patented egg carton being used by the new Consider Pastures brand, he said.
Pete and Gerry’s current COO Erik Drake will step up to fill the role of CEO – further bolstering Laflamme’s confidence in the company’s future.