Pod Insights How I Built This with Guy Raz Live Episode! Tofurky: Seth Tibbott About this episode Seth Tibbott may be the only founder in the world who grew his business while living in a barn, a teepee, and a treehouse. His off-the-grid lifestyle helped him save money as he started to sell tempeh, a protein made of fermented soybeans. Throughout the 1980s he barely scraped by, but things took a turn in 1995, when he discovered a stuffed tofu roast made in Portland, Oregon. Knowing vegetarians had few options at Thanksgiving, Seth named the roast Tofurky and started selling it at co-ops in the Pacific Northwest. Nearly 25 years later, Tofurky sells plant-based protein around the world, and has estimated sales of $40 million a year. Recorded live in Portland, Oregon.
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0:00 Guy Raz? Support for How I Built This and the following message come from American Express. You want to build your business? They can help build your business with financing solutions for eligible business customers. The powerful backing of American Express, don't do business without it. Terms apply. Visit americanexpress.com/business.
0:24 Guy Raz? 20 years, 20 years of losing money. What, I mean, how are you paying your employees? How are you, you know?
0:31 Speaker 01 Well, that was the question that my tax guy always asked me every year when I came in.
0:36 Guy Raz? I'm sure, I bet.
0:38 Speaker 01 He would say, I got two questions for you. How much money did you lose this year? And how are you still in business?
0:50 Guy Raz? From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
1:01 Guy Raz? I'm Guy Raz, and on the show today, how Seth Tibbott built a brand-new bird out of tofu, then grew his company into a multimillion-dollar business with one of the best names ever, Tofurkey.
1:17 Guy Raz? So if you're a vegetarian or a vegan, you may already be well aware that meatless meat is kind of having a moment. Restaurants that built their entire business models on feeding us ground-up animal flesh are experimenting with legitimate, plant-based burgers. Even KFC is experimenting with a new product called VFC, which is a bucket of vegan fried chicken coated with the Colonel's secret blend of 12 herbs and spices. Now, before we get too ahead of ourselves, I should mention that humans are consuming more animals than ever before. The percentage of vegetarians and vegans in the US hasn't substantially increased since 2000. But there is a growing segment of the population
2:02 Guy Raz? that is cutting back on meat. Not vegetarians, but flexitarians. And can I just say this as a guilty flexitarian myself? Eating meat is really bad for our planet, right? I mean, worldwide livestock production produces more carbon emissions than all global transportation.
2:21 Guy Raz? Meanwhile, a lot of innovative entrepreneurs believe there is serious money to be made in plant-based protein. Just last month, Ethan Brown's company, Beyond Meat, had one of the most successful IPOs of the year, and it's now valued at over $5 billion. And another company, Impossible Burger, just raised a bunch of money at a $2 billion valuation. Anyway, one of the people who envisioned this decades ago, or at least hoped really hard that all of this would happen, was Seth Tippett. Back in the early 1980s, Seth was a committed vegetarian living in Oregon, making and marketing a food that hardly anyone had heard of at the time: tempeh. And for years, Seth barely scraped by.
3:04 Guy Raz? He even lived in a treehouse to save money. But everything changed when he started selling a frozen holiday roast called Tofurkey, which was a turkey substitute made, as you probably guessed, from tofu. The Tofurkey quickly became a symbol of vegetarian pride and the butt of many, many late-night jokes. And all that helped raise its profile. And as more people became vegetarian or vegan, Seth was eventually able to grow Tofurkey into the roughly $40 million a year company it is today. The company now makes all kinds of plant-based protein in Hood River, Oregon, not far from Portland. I sat down with Seth in front of a live audience last month in Portland to hear more about how he did it.
3:49 Speaker 01 I was a scrawny little kid, and I was a very picky eater. I subsisted on brown sugar and butter sandwiches and little baby peas that my mom would shuck. And she'd leave me the baby peas, raw baby peas, which actually is probably one of the better foods you could eat, raw peas. But I grew up, and I actually kind of hated Thanksgiving, to be honest, because I would go down to my Aunt Glenn and Uncle Ned's farm in rural Virginia, Palmyra, Virginia. And I didn't like turkey. I didn't like mashed potatoes. I didn't like the green... I didn't like any of the food, cranberry, nothing. And my mom would be slipping me like...
4:32 Speaker 01 Peanut butter and jelly sandwiches under the table. I was a picky eater.
4:36 Guy Raz? And, and what like, what, how would you describe yourself as a kid? Were you studious? Were you academic? Were you?
4:42 Speaker 01 I was maybe a B student.
4:44 Guy Raz? Yeah.
4:45 Speaker 01 Growing up, um, not really academic. I was more sports minded, followed the local sports teams and liked to play baseball. My career goal was second base for the Washington Senators baseball team.
4:57 Guy Raz? Didn't happen, but.
4:58 Speaker 01 Not yet.
4:59 Guy Raz? Yeah.
4:59 Speaker 01 I'm still here.
5:01 Guy Raz? Yes.
5:02 Speaker 01 It's, it's could happen.
5:03 Guy Raz? Still working on it. Got to get those senators back. Um, all right. 1969, and we're jumping ahead a little bit, 1969, you go to college in Ohio. I think you went to two different colleges. One was.
5:16 Speaker 01 Wittenberg.
5:17 Guy Raz? Wittenberg and, and then Antioch. And, and what did you study in college?
5:22 Speaker 01 Well, first just sort of general courses and then I, when it came time to declare a major, I liked kids, so I studied elementary education until I started taking these classes and found out they were pretty boring. And, uh, yeah, so I dropped out of school.
5:39 Guy Raz? Wow.
5:39 Speaker 01 And ended up in Antioch.
5:41 Guy Raz? So the, just to put this in context, I mean, this is like the height of the Vietnam War, like, you know, post Summer of Love, early seventies, right? This is, um, just, just, and this is a bit foreshadowing, but like, did you have any sense that you were going to do a business? And what did you think about people who had businesses? What was your mindset about that then?
6:01 Speaker 01 Well, I laughed at business majors. Me and my friends, we did not, you know, Union Carbide, DuPont.
6:09 Guy Raz? Yeah.
6:09 Speaker 01 Those are.
6:10 Guy Raz? Generals.
6:10 Speaker 01 General Motors.
6:11 Guy Raz? Yeah.
6:11 Speaker 01 General Electric, they were the enemies. It wasn't the hotbed of social change. So we really, I never, I never took a business class in college and, uh.
6:21 Guy Raz? Never had any aspirations to be a businessman?
6:23 Speaker 01 No, no, none at all. So after I dropped out of school, I became a naturalist, actually, a teacher naturalist at Glen Helen Outdoor Center, which was run by Antioch College. And it was there that I really discovered a love of doing things positive in the outdoors with kids and. I was like, this is what I want to do. I want to teach kids, but I want to be on the other side of the classroom, on the outside. So I learned that trade and then I came west and I got a job right here in the Portland area in Washington County, teaching outdoor school.
6:59 Guy Raz? Wow. Around this time, you're in your early twenties, you come across this book, Diet for a Small Planet.
7:06 Speaker 01 Right.
7:07 Guy Raz? Which like has this huge effect on you. What is the book for people don't know it and what did you learn from that book?
7:13 Speaker 01 Well, this was a book by Frances Moore Lepay and she was the first person to point out to the American public and to me personally, that the, there was no sense of feeding all of these grains through animals. You know, you take 15 pounds of grains and put it in to an animal and you get maybe eight ounce or a pound of meat, as opposed to if you feed grain directly to people, boom, you know, you've saved so much grain and resources and land and everything. And it made sense to me as a naturalist because I was really concerned about habitat loss. And I thought, well, if there was a sufficient
7:56 Speaker 01 way of producing protein for people, that there would be a lot less habitat loss.
8:02 Guy Raz? And that inspired you to become a vegetarian like right away?
8:05 Speaker 01 Well, that and a meal from a beautiful young woman named Laurel McCallan, who cooked a recipe of lentils, rice and onions. And I just, she talked about not needing to eat animals. And I thought, boy, this will be great. I'll be a vegetarian.
8:24 Guy Raz? So when you became a vegetarian, what did your diet mainly consist of?
8:27 Speaker 01 Vanilla wafers.
8:28 Guy Raz? Mmm, yum.
8:32 Speaker 01 Candy bars. It wasn't so good.
8:34 Guy Raz? Right, because this was like still kind of not mainstream, right?
8:38 Speaker 01 No, and there wasn't any, there really wasn't a lot of knowledge about any aspect of vegetarian diet.
8:45 Guy Raz? But then I guess there was a point in the summer of, maybe it was like 74, 75, you end up visiting a hippie commune in Tennessee called The Farm.
8:57 Speaker 01 Right.
8:58 Guy Raz? Where you first discover this incredible thing called tempeh. What was that, what was that visit? What was going on there? How'd you end up there?
9:08 Speaker 01 Well, they were pure vegetarians and they took a vow of poverty. They only ate beans and fruits and vegetables. They had soy dairies all over the world, Sri Lanka, Guatemala. And when the hurricanes and tornadoes would go through Tennessee, they'd go out there and they'd build houses for people. And they'd do really good. They were a great force for good in the world. And it wasn't just sit around and get high. It was, you know, although they smoked a lot of marijuana. Vegan food, marijuana.
9:46 Guy Raz? I'm really surprised that at a hippie commune in the 70s, they smoked a lot of marijuana. Just shocking. So, so is this, this is the first time you are introduced to this like thing called tempe?
9:59 Speaker 01 Right.
9:59 Guy Raz? What do you remember when you first tried it?
10:01 Speaker 01 It was like heaven. It was so good, you know, we, I remember making it in the hot Tennessee summer, which is a middle, it's like Indonesia. Indonesia, if you haven't been there, is like about 88 degrees, which is the perfect tempe incubating temperature.
10:20 Guy Raz? Right, okay.
10:20 Speaker 01 And Tennessee was the same way. And so I had the, all the staff was sitting around on a weekend and I was making the tempe. And I put the beans, the inoculated beans, out into a field, just in a stainless steel pan. And the next day, I went over there and I pulled up the lid of the tin foil and there was this beautiful white cake of mold growing all over the beans. And it had little droplets of water on it. And I was just like, this looks great. And everybody on the staff was like, we're gonna probably die from eating this, this crazy guy.
10:59 Guy Raz? Seth, I know that we are in Portland and so everyone in this audience can tell me everything about tempe. But just for the people who are listening, who don't know what it is, can you just tell me what tempe is?
11:11 Speaker 01 Yeah, absolutely. So tempe is an Indonesian protein food from Indonesia.
11:16 Guy Raz? It's soy, it's soybeans.
11:17 Speaker 01 And the way you make it is you take the hull off, which makes the beans split into two pieces, two cotyledons. You cook the beans and you dry the beans and inoculate them with Rhizopus oligosporus, which is a
11:31 Guy Raz? A mold.
11:32 Speaker 01 member of the mold family. And you incubate it for 24 hours or so at 88 degrees and it binds the beans together into this thick cake that's about the texture of like a paperback book almost. And you can slice it.
11:47 Guy Raz? So good.
11:48 Speaker 01 So.
11:49 Guy Raz? So, all right, so you're, you're thinking, all right, this is actually pretty good.
11:53 Speaker 01 Right.
11:54 Guy Raz? You, I guess, end up going back to Oregon after the summer in Tennessee and you kept making tempeh, right?
12:00 Speaker 01 Right. So I started making tempeh for friends and family and there were retreat groups that would come out. So they wanted some tempeh and I got an old refrigerator and I strung Christmas tree lights up inside.
12:16 Guy Raz? Inside the refrigerator.
12:17 Speaker 01 Refrigerator as a heat source. Back then, not the LED lights, these were the big old.
12:22 Guy Raz? Oh, the big, huge Christmas lights. And you, you plugged it in, closed the fridge.
12:25 Speaker 01 Right.
12:26 Guy Raz? And then you had like a warm refrigerator to incubate the
12:28 Speaker 01 Yeah, back when you could burn a house down with your Christmas tree lights.
12:31 Guy Raz? And, and I'm imagining you were living in like a, like a little apartment in?
12:36 Speaker 01 I was living in a teepee in the summer and a barn in the winter.
12:40 Guy Raz? And this is the most NPR meets Portland conversation I've ever had in my life. So, all right. So, and how are you, how are you cooking the tempeh? Just like, what was your, you were just cutting it up and frying it up, like bacon or what?
12:58 Speaker 01 Well, I was giving it to the cooks at the retreat center who would cook it. And there's a very talented cook. And so the retreat groups loved it. And it was little income from my pocket.
13:10 Guy Raz? Yeah.
13:11 Speaker 01 Five pounds of tempeh, you know, would bring in $7.
13:14 Guy Raz? Yeah. So when did you, I mean, when, when did you get this idea to turn this into a business? Like, how, how did that idea come to mind?
13:22 Speaker 01 Well, my girlfriend Kim and I moved into a house in Manning, Oregon, which is on the way to the coast on Highway 26. Right down the street was this restaurant called the Java Restaurant, and it was right in Manning, which is a town of about 50 people. It was the only Indonesian restaurant 100 yards from my house. And I was, this is a sign, and so I gotta go down and meet him. So I met this woman, Ina, and she was the proprietor of it. And I said, it doesn't look like you have tempeh on the menu. And she goes, you know how to make tempeh? You know about tempeh? And I said, yeah, I can make you some. And she said, really? And so she ordered two pounds. And I, and she said, but it's gotta be good tempeh.
14:06 Speaker 01 And if it is, I'll order more and I'll sell it to all my friends. So I went there and I made that tempeh. I brought it back. She liked it, and she ordered 10 more pounds.
14:17 Speaker 01 And because of that, I felt like, you know, this is a good sign. So I went to the local co-op, Forest Grove, and asked if they would rent me their kitchen at night. And they said, yeah, we can rent it out to you for $25 a month. So it was like, great. So at December 1, 1980, I sent in my stamped envelope to the state of Oregon and registered Turtle Island Soy Dairy.
14:45 Guy Raz? As a business?
14:46 Speaker 01 As a business.
14:46 Guy Raz? Wow. And, and I mean, I have to imagine, like, 99.9% of the people you came across were like, what's tempeh? Like, what, like, tempeh? Like, were you having to explain this over and over and over again to people?
15:01 Speaker 01 Oh, yeah. And not only were, you know, people saying, what is tempeh? But people were telling me, you know, this is a pretty bad idea.
15:08 Guy Raz? Yeah. This is weird.
15:10 Speaker 01 I was teaching at the school in Forest Grove, substitute teaching to make some money. And I went into the last day of teaching. I announced to the lunchroom of teachers that, you know, I'm gonna start making tempeh.
15:26 Guy Raz? Yeah.
15:27 Speaker 01 And it was just like, oh my God, silence.
15:29 Guy Raz? Yeah. They were like, what?
15:31 Speaker 01 And then I was like, yeah, it's moldy soybeans. And they were like...
15:36 Guy Raz? That tastes like a paperback binding.
15:39 Speaker 01 I didn't mention that.
15:40 Guy Raz? Okay.
15:40 Speaker 01 Should've, but they, uh... And then finally, one of the teachers said, "Well, you can always fall back on teaching."
15:48 Guy Raz? You always wanna have a fallback. I always say that to entrepreneurs.
15:51 Speaker 01 Right.
15:52 Guy Raz? You always wanna, you know, if Plan A...
15:53 Speaker 01 That's not a bad idea.
15:54 Guy Raz? If Plan A doesn't work, you got Plan B.
15:56 Speaker 01 Right.
15:56 Guy Raz? Tempeh and teaching, alright. And you were doing this all by yourself, pretty much?
16:00 Speaker 01 Yeah.
16:01 Guy Raz? Okay.
16:01 Speaker 01 I was doing it by myself, and I was driving in my three-door, beat-up, some-body-damaged Dotson station wagon. Yeah! And, uh...
16:10 Guy Raz? Yes, Dotson!
16:13 Speaker 01 And it was really the co-ops that kind of embraced it most at first.
16:17 Guy Raz? And who was buying tempeh in 1981? Was it just like, really kind of hippies? I mean, and just for the record, you know this, because we talked backstage, I love tempeh. I make my own tempeh bacon. Alright, I'm just gonna be clear about this, full disclosure. Who was buying tempeh in 1981?
16:35 Speaker 01 It was the early adopters.
16:37 Guy Raz? Right.
16:37 Speaker 01 This is why I give it a call, in marketing terms.
16:42 Guy Raz? Alright, so you're, you're starting to get, you know, really starting to ramp up production. Uh, we should put this in context, because you're not really making any money, but you had to find a bigger space, I guess, in 1981.
16:54 Speaker 01 Yeah.
16:55 Guy Raz? And you moved to, to Hus- to Husum?
16:57 Speaker 01 Well, yeah, so in April of 1981, a distributor called Applegate Natural Foods, out here in Tiger, called up and said, "We need you to make us a thousand pounds of tempeh a week."
17:10 Guy Raz? Wow.
17:11 Speaker 01 And I was making like, a hundred pounds a night, on a good night. And a lot of it was coming out bad, and I was composting it in my garden, much to the delight of the local rufusited Tohi population.
17:24 Guy Raz? Yeah. So you had to find a way to do this.
17:26 Speaker 01 So I needed a bigger space now. We were grossing like, thirteen hundred dollars a month at that point, and so I started looking outside the Portland metropolitan area, and I went up to Husum, which is about seventy miles from here, east of here, a small little town. And I looked in... The window of a school building, there was an old vacant school building out there. And I looked in the window and there was this perfect tempe kitchen. It was like-
17:56 Guy Raz? It was not a tempe kitchen, let's just be clear.
17:57 Speaker 01 Well, in my mind, it was a tempe kitchen.
17:59 Guy Raz? It was a commercial kitchen, right?
18:01 Speaker 01 It was a commercial kitchen.
18:02 Guy Raz? But you're looking at that, you're saying "tempe kitchen."
18:05 Speaker 01 Yeah, and it had two big, huge stainless steel sinks, it had stainless steel tables, hood, and it even had two storerooms that were just the right size for a tempe incubator. It was just sitting there and it was a "for sale" sign on it. And so, I called up the superintendent and he was saying, "Yes, we really want to sell this." But as we spoke, he was thinking, "We haven't had anybody offering on it, so maybe we would rent it to you." So, I said, "Could you put me on the docket for the school board meeting?" And so, he was nice enough to do that. And so, my brother Bob came out and we cooked up some tempe-
18:47 Guy Raz? Wow.
18:48 Speaker 01 -for the local school board.
18:50 Guy Raz? And what'd they think?
18:51 Speaker 01 Well...
18:54 Guy Raz? Yeah.
18:55 Speaker 01 This is 1981-
18:56 Guy Raz? Yeah.
18:57 Speaker 01 And people, even the early, they weren't the early adopters, let me say that.
19:01 Guy Raz? Alright.
19:02 Speaker 01 They were skeptical, but they were open to the presentation. And I made tempe salad and I cooked up some tempe sort of strips. And I fed it to them and then the conversation turned to, "Well, how much could you afford for rent if we did rent this to you?" Which was the conversation I was dreading, because I didn't have much money. So, I said, "How about $150 a month?" It was just like silence.
19:34 Guy Raz? Yeah.
19:34 Speaker 01 And nobody said anything for a minute. And then, this one woman who was kind of like really enjoying the tempe-
19:44 Speaker 01 She goes, "I say we take it. What do we have to lose?"
19:48 Guy Raz? Wow.
19:51 Guy Raz? So you get, amazing.
19:55 Guy Raz? So you get this commercial space, an abandoned school for 150 bucks a month. You gotta make a thousand pounds of tempe a week. By the way, what did you know about running a business at that point?
20:06 Speaker 01 Oh, I knew nothing.
20:07 Guy Raz? Yeah.
20:08 Speaker 01 About running a business. I was a tempe maker. I felt like, I never felt like a, you know, a businessman. Like my third eye never opened up and said, "You are a businessman."
20:19 Guy Raz? Did you even do any accounting, or did you keep any books or anything like that?
20:23 Speaker 01 No, no, nothing like that.
20:24 Guy Raz? No double ledger?
20:25 Speaker 01 No, no.
20:26 Guy Raz? Okay, alright.
20:28 Speaker 01 You know, I've always felt like a little misfit in the business world. So, still do in a lot of ways.
20:33 Guy Raz? So just to be clear, I mean, you're making tempe. It's like 1983.
20:37 Speaker 01 Yeah.
20:38 Guy Raz? You are not making money. You are not profitable, right?
20:41 Speaker 01 No.
20:41 Guy Raz? You're living kind of, pretty modestly. I think at a certain point that year, you couldn't afford your rent. What did you do?
20:51 Speaker 01 Well, there was a couple of strategies. But one was, the postmaster of the town had given me an apartment to rent free. She said, "We just need somebody to live there."
21:03 Guy Raz? Yeah.
21:03 Speaker 01 And so, I was living rent-free. And I was thinking, "How am I gonna make money and turn this thing around?" And I said, "I've got three classrooms that I can rent out." And so, one classroom I rented out to my friends who had a graphic art business.
21:19 Guy Raz? Okay.
21:20 Speaker 01 And they were good payers. I had, the other classroom I rented out to a mom-and-pop wooden fruit basket company that were making fruit boxes.
21:29 Guy Raz? Okay.
21:29 Speaker 01 And then I had this one more classroom. And I'm like, "What am I gonna do with those are classrooms?" I couldn't find a rent it. You know, this is a poor part of Clickatack County. And one day, I'm sitting there in my office, and I look outside, and here comes this purple truck. And it's got a yellow umbrella on the top. And it pulls up, and these two guys get out. And they come in and they go, "My name is Ace, and this is Space, and we're clowns."
21:56 Speaker 01 And I'm like, "Okay." And they said, "And we tune pianos when the clown business is soft."
22:06 Guy Raz? Okay.
22:08 Speaker 01 "And we need a space for our clown business to build props."
22:13 Guy Raz? Huh.
22:14 Speaker 01 And I was like, "I think I can provide you that space."
22:17 Guy Raz? Yeah.
22:18 Speaker 01 And they were, people were like, "You're gonna rent to these clowns?" I'm like,
22:23 Speaker 01 "You had me at ace in space."
22:24 Guy Raz? Yes, right.
22:27 Guy Raz? So, but you're living rent-free, but eventually you got, what, you got kicked out of your apartment?
22:33 Speaker 01 Well, the rent market got a little better, and so now there were people that would really pay for that apartment.
22:39 Guy Raz? So you got kicked out?
22:40 Speaker 01 Yeah. So, I don't have a place to live, and one of my employees, Amber Yezik, had a piece of land right outside Husum, and she offered to rent me four trees for $25 a month.
22:55 Guy Raz? Four trees for $25 a month?
22:58 Speaker 01 And then I could build a treehouse.
23:00 Guy Raz? You could build a treehouse for $25 a month, which you did.
23:08 Guy Raz? You lived in a treehouse for seven years.
23:12 Speaker 01 I did.
23:13 Guy Raz? Did it have, like, running water, electricity, phone?
23:17 Speaker 01 Oh, yeah.
23:18 Guy Raz? Anything? What did you have in there?
23:20 Speaker 01 Well, it had a wood stove, so it was insulated, and, you know, it was very warm and cozy in the winter. It had three levels. It had a 11-foot by 16-foot ground floor, and then a sleeping loft above that, and a little cupola up on the top. And it was kind of the first tiny house. And the treehouse was on a frisbee golf course.
23:46 Speaker 01 So I'm living on a golf course. American dream.
23:49 Guy Raz? Pretty amazing, right? You are going to the school every day making tempeh. But no, I mean, seriously, like, you're, you know, you're sort of approaching your late 30s, and you're really, you're not making any money, and you're living in a treehouse, which is cool, but it's, you know, I was just wondering, were you stressed out? Like, was any part of you like, "I gotta figure another, figure something else. I need a new strategy, because I don't know if this is gonna be a sustainable life."
24:17 Speaker 01 Yeah.
24:20 Speaker 01 The thought came up.
24:23 Speaker 01 And actually, in 1986, I had an offer to sell the tempeh business to a local tofu company, and they offered me $25,000 for the business.
24:36 Guy Raz? Which would have been life-changing money for a while.
24:38 Speaker 01 Oh, yeah. And then I could go work for them for $1,000 a month. And I thought about it long and hard. It took me about nine months to decide, you know, whether I'm going to take this or not. And I went through a lot of those questions at that time. And the end of the line, I just said, I like, I'm growing and I'm going to stick with this. So I kept the business. I turned down the big money.
25:06 Guy Raz? Yeah.
25:10 Guy Raz? When we come back in just a moment, how Seth Tibbott eventually starts to make big money, his own big money, with a humble holiday roast made of tofu. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.
25:32 Guy Raz? Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's 1991, and Seth Tibbott has been making tempeh for about 10 years. And at this point, it is very safe to say, the business is not making him a rich man. I read that, and this is amazing, there was like a period of eight years, and probably these are the Treehouse years.
25:54 Speaker 01 Yeah.
25:55 Guy Raz? Where your entire take-home pay over a period of eight years was $30,000.
26:03 Speaker 01 $31. Nobody could live on $30,000.
26:08 Guy Raz? $31,000 over an eight-year period.
26:11 Speaker 01 Yeah.
26:12 Guy Raz? I mean...
26:13 Speaker 01 Nine years, technically.
26:15 Guy Raz? Did you, I mean, were you, were you ever like, kinda, I don't know, did you ever have anxiety over, would you ever think, I don't know what I'm doing with my life, or?
26:24 Speaker 01 Yeah. What was? I had some existential nausea. From time to time.
26:29 Guy Raz? Yeah.
26:30 Speaker 01 About that. You know, I did feel like a failure in the business sense, but I felt, like, the mission sense, you know, seeing this tempe business grow and seeing people eating more and more of the product, it was satisfying. And I was involved in local activism in the eco world. I had a very fulfilling life. I never, I mean, there was a period towards the end of that where I was really starting to wonder whether it was ever gonna take off. And I was looking for ways out.
27:03 Guy Raz? I guess around, around 1999, you, you were dating somebody who would become your wife, Sue. Did she move into the treehouse with you? Or, I don't know, like, how did that work?
27:16 Speaker 01 You know, it's funny, because, right now, people ask Sue, they go, "Did he make you sign a prenup?" And she goes, "Prenup? I was the one that needed the prenup. He lived in a tree. I had a house."
27:32 Guy Raz? So she saved you, you got to move in with her?
27:34 Speaker 01 So, yeah, she had a house on the ground.
27:38 Guy Raz? Ground. You got saved.
27:40 Speaker 01 Yeah. And so, yeah.
27:43 Guy Raz? Um, eventually, I guess, I guess around 92, you made your way to Hood River, here in Oregon, where your plant is still today. Why did you move from Washington State to that, to that location? What was going on?
27:57 Speaker 01 Well, towards the end of the Housam run, the school district had sold the building to a guy who turned out to be a crook and did jail time, but then it fell into the local firehouse, so the, it's now the firehouse of Housam, so it was a great deal.
28:14 Guy Raz? So you had to find a new space?
28:15 Speaker 01 And I had to find a new space, and there was an old tortilla factory in Hood River, which is 10 miles from Housam, and we rented out 5,000 square feet of this 26,000 square foot building, and I borrowed the $160,000 from Bob.
28:33 Guy Raz? Your brother?
28:34 Speaker 01 My brother.
28:35 Guy Raz? To finance a retrofit?
28:36 Speaker 01 Yeah. And he always, in the early days, was a funder of...
28:41 Guy Raz? Your brother.
28:42 Speaker 01 Yeah.
28:42 Guy Raz? He had this like business sense.
28:44 Speaker 01 Well, yeah, but he had a bigger heart than a business sense. And he was always loaning me money and I would be paying it back. Not always on time, but we paid it back.
28:55 Guy Raz? So, I'm curious, I mean, because this really is the, this is where the story pivots. This is where something totally unexpected happens. And I guess there's like these vendors that work with you. They run a catering business, this couple, the Robles. And they're, they run like a vegetarian catering business. They're buying tempeh from you.
29:15 Speaker 01 Correct.
29:15 Guy Raz? And they, they're making like this tofu roast that you kind of come across. What, what's the story?
29:23 Speaker 01 Yeah, so Hans and Rhonda Robles run the Higher Taste, which is a great sandwich company. And it's been in business since the early 1980s. And Hans especially, anything he touches turns to gold. He's like one of the best chefs that I've ever met. And he was, in 1994, I was delivering tempeh to him. And he was making, it was around Thanksgiving, these stuffed tofu roasts that he had been working on. And he was selling them about to 25 or 50 a year. And they were, a dome of tofu with stuffing in the middle. And I was always looking for something to eat at Thanksgiving.
30:04 Speaker 01 And we had tried all these stuffed pumpkins that kind of collapsed in the oven.
30:09 Guy Raz? Right.
30:10 Speaker 01 Gluten roast that were too tough to cut with a chainsaw. So, we were failing. And then I saw with Hans, this is like something.
30:18 Guy Raz? This is kind of cool.
30:18 Speaker 01 Possible. It's good. And so, and Sue had been working on a burger at that point that we had rejected because it tasted like Thanksgiving. And we thought, hmm, I wonder if we make these into not burger shapes, but drumettes. And so, we made them into tempeh drumettes.
30:36 Guy Raz? You made tempeh drumettes?
30:38 Speaker 01 We made drumettes.
30:39 Guy Raz? Right.
30:39 Speaker 01 Out of tempeh, right.
30:41 Guy Raz? And, and you went to the Robles and you said, what? You said, can we maybe collaborate on a thing?
30:46 Speaker 01 Right, and so, that first year, we bought the Tofurkey to. Market here in this city with Hans and his team.
30:55 Guy Raz? And what came with that? So it was a frozen tofu loaf stuffed with?
31:00 Speaker 01 Oh, it was like whole wheat breadcrumb and cranberry stuffing. It was really delicious.
31:05 Guy Raz? And what else came in the box?
31:07 Speaker 01 And then there was a tub of gravy that once again Hans had created. It was nutritionally east gravy.
31:13 Guy Raz? Okay.
31:14 Speaker 01 And then there was these eight tempe dromets. Cause we thought that there was gonna be eight vegetarians sitting around.
31:21 Guy Raz? It's not an eight-legged, this is not an eight-legged turkey.
31:25 Speaker 01 No, but we didn't know what Tofurky looked like in the wild at that point.
31:29 Guy Raz? Yeah, that's true.
31:31 Speaker 01 But we knew they had eight legs.
31:32 Guy Raz? Wow. I'm just curious, because this is important.
31:36 Speaker 01 Yeah.
31:36 Guy Raz? This name is super important. They are making the, this like stuffed tofu dome. It's around Thanksgiving time. How do you name it? How do you come up with a name for it?
31:48 Speaker 01 Okay, so I didn't invent the name Tofurkey, right? In 1981, when I was delivering tempe around Portland, there was a Tofurkey sandwich. T O F U R K E Y. And it was being made by King Harvest, local sandwich maker here in Portland.
32:06 Guy Raz? And it was slices of tofu or?
32:07 Speaker 01 Yeah, it was slices of tofu, sort of turkey-ish.
32:10 Guy Raz? Right, just baked or something?
32:12 Speaker 01 Yeah.
32:12 Guy Raz? Yeah.
32:12 Speaker 01 And I thought I would buy those and I really liked it, but I always loved the name, Tofurkey. A lot of people were against the name, but at that point, I was ready to change something. Cause I had been trying to play it straight as a businessman and make it look like a hippie didn't get within 10 feet of this food.
32:32 Guy Raz? Yeah.
32:32 Speaker 01 And then, you know, Tofurkey, I mean, was more whimsical and fun. And I just thought it was more me. I wasn't getting anywhere by pretending to be a businessman, so why not just?
32:46 Guy Raz? So Tofurkey, right?
32:48 Speaker 01 Go Tofurkey.
32:49 Guy Raz? All right, so you guys collaborate, you decide to sell the first batch of Tofurky. I guess you, they were in the freezer section?
32:58 Speaker 01 They were frozen.
32:59 Guy Raz? Frozen, and you sold them for $30 each in 1995. That is super expensive. Did you get pushback from retailers who were like, $30 in the freezer section? Who's gonna buy this?
33:13 Speaker 01 Yeah, we did, you know, but the, once again, it was the co-ops that rallied to embrace the concept and, and people loved it. I mean, we put self-addressed stamped postcards in every Tofurkey that year. We sold 818.
33:28 Guy Raz? And the postcards were for feedback?
33:30 Speaker 01 It was for feedback from the customers.
33:32 Guy Raz? And people said...
33:33 Speaker 01 People said, "Oh, my God, I've been waiting 20 years for this product."
33:36 Guy Raz? Wow.
33:37 Speaker 01 And it was just so heartening to, right away, feel like, finally, I can see my way through this.
33:45 Guy Raz? Through Thanksgiving.
33:46 Speaker 01 Yeah, and through this Thanksgiving thing.
33:48 Guy Raz? Which is hard enough.
33:49 Speaker 01 PCC up in Seattle was another one that embraced it. They put in a Tofurkey hotline. They were getting so many orders and they were going crazy for it.
33:59 Guy Raz? I think about, just about a year after making the first Tofurky, you, you and the Robles kind of went your separate ways. You, you...
34:06 Speaker 01 Well, actually, no. The second year we were making, we went to a tofu maker and Hans had a baked tofu, which baked out some of the sponginess out of the tofu. And it, it didn't look so pretty plated, so it was still a problem. But that was the year that we actually went online and sold 300 of these online. You know, the Tofurkey was one of the first frozen products ever to be sold on the internet.
34:38 Guy Raz? Oh, wow.
34:39 Speaker 01 The first thing that was ever sold online was a pepperoni pizza.
34:44 Guy Raz? Huh.
34:44 Speaker 01 In 1994, the, the first food was sold online. So this is 1996.
34:50 Guy Raz? And you're selling Tofurky.
34:52 Speaker 01 And we're selling Tofurkey.
34:53 Guy Raz? And, and when did you, I mean, at a certain point, you had to change the recipe, right? Because tofu alone was not going to cut it, right? You wanted to presumably kind of make it into a thing that you could slice and really it was, it wasn't going to be spongy.
35:06 Speaker 01 Right.
35:07 Guy Raz? So what did you do?
35:08 Speaker 01 So, the third year, in 1997, a friend of mine who had had a failed satan company called Meat of Wheat... Came to me and he said.
35:19 Guy Raz? Meat of wheat. Yeah.
35:21 Speaker 01 Yeah. He had figured out how to extrude these roasts in have stuffing in the middle and they would have seitan on the outside.
35:31 Guy Raz? Huh.
35:31 Speaker 01 And we tried it and we thought it's good, but I wonder what it would be like if we added tofu to it. And so we added tofu.
35:40 Guy Raz? You mixed the seitan and the tofu.
35:42 Speaker 01 Yes. And it became Tofurkey.
35:45 Guy Raz? And that's essentially what it is today.
35:46 Speaker 01 It's essentially the same thing. We ended up actually buying the recipe from them.
35:52 Guy Raz? The amazing thing, and I guess it's not that amazing when you think about it now, but like because it was called Tofurkey, you got all this attention fast, like the Today Show and comedians were joking about it.
36:04 Speaker 01 Oh, yeah.
36:04 Guy Raz? And you did not have an advertising budget. When you saw comedians joking about it and people mocking it, were you sad? Did you feel humiliated or were you like, yeah, right on, keep doing that?
36:17 Speaker 01 It was more like the right on. Because, you know, up to that point, our marketing and then all of the natural food marketing wasn't very whimsical or funny or fun. And this was like fun, but it was also in the early days, people kind of took offense to it a little bit because you were taking on an iconic.
36:37 Guy Raz? Turkey.
36:38 Speaker 01 American meal and a holiday and everything and bringing a Tofurkey to a dinner was always controversial and.
36:46 Guy Raz? Yeah.
36:48 Guy Raz? Even into the late 90s and you're really pivoting now to Tofurkey. Your business is not yet profitable. You start this in 1981.
36:57 Speaker 01 Correct.
36:57 Guy Raz? You are not yet cash flow positive.
37:00 Speaker 01 Correct.
37:01 Guy Raz? How are you keeping the lights on? How are you keeping things going? You know?
37:06 Speaker 01 Well, a lot of it was what they'd call a paper loss, but it was still a loss. We weren't really making money, but we were, you know, paying the light bills and paying employees, but the end of the day and we were. Borrowing money where needed and it was but most of the money that was being borrowed was for investment into equipment and things like that.
37:26 Guy Raz? Did you were you able to in the late 90s start to see a light at the end of the tunnel because I mean were you thinking God I've been doing this for 20 years and we are still not profitable or were you at that point saying you know what I actually can see where this thing might be headed?
37:41 Speaker 01 Oh yeah, just from the first response to the Tofurkey it just felt so different than anything I had felt before marketing Tempe that I really felt like this is gonna really turn around at some point and it it really did and you're right that a lot of the media exposure from the Wall Street Journal to the New York Times and at one point I had to put the Washington Post on hold to talk to the New York Times.
38:10 Guy Raz? Wow.
38:10 Speaker 01 It was just crazy.
38:11 Guy Raz? For Tofurkey.
38:12 Speaker 01 And so these that was like our bully pulpit kind of it it really then Thanksgiving rolled around the trees would turn gold and brown and here would come the Tofurkey and here would come the media to us and so we had millions.
38:26 Guy Raz? And I'm curious Seth as a you know now you're 20 years in I mean how was your business acumen at that point?
38:32 Speaker 01 A little better but you know.
38:36 Guy Raz? Like how were you like managing people did Sue help you? Did you have more?
38:41 Speaker 01 Yeah Sue was doing the books at that point and doing a great job.
38:45 Guy Raz? Good you were doing the books, good.
38:46 Speaker 01 So we had books.
38:47 Guy Raz? You had accounting, good?
38:48 Speaker 01 Yeah, no it was improving and I was becoming less stupid every month when we turned profit.
38:55 Guy Raz? Which was like 2000, 2001?
38:58 Speaker 01 Yep, right about then it became really profitable because we brought the production of the Tofurkey into in-house we were buying it from a manufacturer, a co-manufacture and then when we brought it in-house and we started making sausage and deli slices and we went to these same buyers and said hey would you like deli slices and we found that the Tofurkey and this new recipe sliced really well.
39:24 Guy Raz? So you could use the same recipe.
39:26 Speaker 01 Right.
39:27 Guy Raz? Spice it slightly different.
39:28 Speaker 01 Right and smoking it.
39:29 Guy Raz? And smoked it.
39:30 Speaker 01 We smoked it in a real smokehouse and created this smoke hickory smoke.
39:34 Guy Raz? So when did the slices first come out?
39:36 Speaker 01 Those came out in 1998.
39:38 Guy Raz? And, and then the sausages followed?
39:40 Speaker 01 And the sausage followed three years later.
39:43 Guy Raz? And did they become popular pretty much right away?
39:47 Speaker 01 They really did. They really took the industry by storm and we became a happening company.
39:54 Guy Raz? So when did you actually, I don't know, do you remember the point where you, I don't know, you woke up and you were like, "We're making a lot of money." Like, this is a, this is not me in a treehouse, churn out tempeh in a bathtub. Like, we're actually making a lot of money.
40:10 Speaker 01 Yeah, it was an odd feeling.
40:12 Guy Raz? Do you remember?
40:12 Speaker 01 Because I was pretty good at losing money.
40:14 Guy Raz? Yeah. Do you remember when that happened?
40:18 Speaker 01 Well, you know, when we, I do, and at the end of the year, you know, and having enough money to give some nice bonuses and pay off a lot of debt.
40:28 Guy Raz? Was that, what, 2004, 2005?
40:30 Speaker 01 Yeah, right in there, you know, it was really a, a new world for me. And people that wouldn't talk to us about tempeh were now clamoring for Tofurkey. And it took us, Tofurkey took us from being a regional west coast distribution to a
40:47 Guy Raz? A national.
40:48 Speaker 01 National distribution.
40:50 Guy Raz? I think today, you've got a state of the art factory today in Hood River.
40:55 Speaker 01 We do.
40:55 Guy Raz? It's a LEED certified building, you've got 200 employees. I think, I mean, your, your revenue is somewhere between 40 and 60 million dollars a year, which is unbelievable. I mean, and you're everywhere, right? You're not just at like Whole Foods and Co-ops and Trader Joe's, you're like Walmart and Target and like, right?
41:16 Speaker 01 Right. What we're seeing right now is the mainstream, you know, plant-based foods. And we're in 27,000 plus stores worldwide. It's really a friendly world for plant-based foods now. It's, we love to see all great tasting vegan companies succeed. Partly because we're altruist and we're a mission-driven company and we want to see plant-based foods grow all over the world.
41:47 Speaker 01 But there's a business reason too, which is that it's easier for us to place products in a category that's hot.
41:53 Guy Raz? And in like mainstream places like Walmart and Target, right?
41:56 Speaker 01 Correct.
41:57 Guy Raz? I mean, it's Costco. So here's the thing, right? You are entirely family owned.
42:03 Speaker 01 Correct.
42:04 Guy Raz? 100%. You, your brother, maybe some other family members own Tofurkey. I have to imagine, over the years, certainly over the last few years, you've been approached by private equity, by big companies, who have offered you a lot of money to buy you out.
42:21 Speaker 01 Yeah, that would be correct.
42:22 Guy Raz? So, why not cash in? Why not, why not take the money? And, you know, you worked, you lived in a treehouse for seven years, made $30,000 over nine years. You, I mean, right now, only at this point in your life, are you actually seeing real money. I mean, you could, you could be rich beyond your wildest dreams and for the next six generations, why not take it?
42:45 Speaker 01 I feel like I'm rich beyond my wildest dreams right now, to be honest.
42:49 Guy Raz? Yeah.
42:50 Speaker 01 I mean, to have, to be in this business has been, you know, it's a joy and a great feeling in my life and it's taken me places that I still, I'm able to travel around the world, I'm able to work with nonprofit groups like Veganuary that are just getting going over here. I can't think of a better dream at this point in my life. I just feel like the luckiest guy in the world.
43:18 Guy Raz? Yeah. So, so this is important, because I've been reading that you actually cannot produce enough of your products for the demand. It seems like the answer to that challenge is a cash infusion to build another production line, right?
43:33 Speaker 01 Right. We've, we have just borrowed some money from an ethical investor that we really feel good about.
43:42 Guy Raz? But it's a loan, it's not an equity investor.
43:43 Speaker 01 No, it's a loan. We haven't sold equity yet. You know, we'd like to keep our equity so that we can keep the mission at the center of our lives and so that nobody can tell us what we can do or can't do.
43:56 Guy Raz? Yeah.
43:57 Speaker 01 And...
44:01 Guy Raz? Just out of curiosity, what percentage of your sales now does tempeh account for?
44:06 Speaker 01 Tempeh is roughly 10 to 15% of sales, but it's really outpacing some of our other products in growth right now. So we're just doubling...
44:16 Guy Raz? Growth phase of tempeh.
44:17 Speaker 01 Yeah, I just looked this morning at the new incubator which we're building. It's gonna double our tempeh capacity. So we're pretty excited about that. I just may have been about four decades early on the tempeh thing.
44:28 Guy Raz? And I have to assume that you're not using Christmas lights to make tempeh anymore?
44:34 Speaker 01 That would be correct.
44:36 Guy Raz? Okay. All right. So as you know Seth, and as many of you know, I almost always end my interviews with one final question. And I'm just curious to hear how people answer it, you know? And we get a bunch of different answers. And so I'm gonna ask you this question, which is: How much of this story and the success of this company do you think is because of your hard work and your work ethic and your skill and your intelligence? And how much of the story do you think is just luck and timing?
45:02 Speaker 01 Yeah, it's a good question. Certainly luck and timing come into play. I was lucky enough to jump on this jet stream of natural foods that was just starting up in the 1980s and 90s, and then helping blaze a trail for other meat alternative companies that come on now. But a lot of it, you know, is just persistence and hard work and trying to be less stupid.
45:31 Guy Raz? Yeah, it's a good strategy. Seth Tibbott, thank you so much.
45:40 Guy Raz? That's Seth Tibbott, founder of Tofurkey. In 2014, Seth's stepson Jamie Athos took over duties as CEO of Tofurkey. Last year, the company announced it had sold over 5 million Tofurkey roasts. Oh, and you know what Seth and Jamie and others at the company call real-life turkeys? Fake Tofurky.
46:03 Guy Raz? Hey, thanks so much for listening to this live episode of How I Built This. Our show was produced this week by James Delahoussaye with original music composed by Ramtin Arablouei. Thanks to our live events team, Ali Prescott, Nicole Schaller, and John Isabella. Thanks also to Casey Herman, Rachel Faulkner, J.C. Howard, Julia Carney, Candice Lim, Neve Grant, and Jeff Rogers. I'm Guy Raz, and you've been listening to How I Built This.
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