Live Episode! Tofurky: Seth Tibbott

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. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy 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.

• 0:24Guy Raz?

  20 years, 20 years of losing money. What, I mean, how are you paying your employees? How are you, you know?

• 0:31Speaker 01

  Well, that was the question that my tax guy always asked me every year when I came in.

• 0:36Guy Raz?

  I'm sure, I bet.

• 0:38Speaker 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?

• 0:50Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:01Guy 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.

• 1:17Guy 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

• 2:02Guy 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.

• 2:21Guy 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.

• 3:04Guy 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.

• 3:49Speaker 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...

• 4:32Speaker 01

  Peanut butter and jelly sandwiches under the table. I was a picky eater.

• 4:36Guy Raz?

  And, and what like, what, how would you describe yourself as a kid? Were you studious? Were you academic? Were you?

• 4:42Speaker 01

  I was maybe a B student.

• 4:44Guy Raz?

  Yeah.

• 4:45Speaker 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.

• 4:57Guy Raz?

  Didn't happen, but.

• 4:58Speaker 01

  Not yet.

• 4:59Guy Raz?

  Yeah.

• 4:59Speaker 01

  I'm still here.

• 5:01Guy Raz?

  Yes.

• 5:02Speaker 01

  It's, it's could happen.

• 5:03Guy 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.

• 5:16Speaker 01

  Wittenberg.

• 5:17Guy Raz?

  Wittenberg and, and then Antioch. And, and what did you study in college?

• 5:22Speaker 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.

• 5:39Guy Raz?

  Wow.

• 5:39Speaker 01

  And ended up in Antioch.

• 5:41Guy 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?

• 6:01Speaker 01

  Well, I laughed at business majors. Me and my friends, we did not, you know, Union Carbide, DuPont.

• 6:09Guy Raz?

  Yeah.

• 6:09Speaker 01

  Those are.

• 6:10Guy Raz?

  Generals.

• 6:10Speaker 01

  General Motors.

• 6:11Guy Raz?

  Yeah.

• 6:11Speaker 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.

• 6:21Guy Raz?

  Never had any aspirations to be a businessman?

• 6:23Speaker 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.

• 6:59Guy Raz?

  Wow. Around this time, you're in your early twenties, you come across this book, Diet for a Small Planet.

• 7:06Speaker 01

  Right.

• 7:07Guy 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?

• 7:13Speaker 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

• 7:56Speaker 01

  way of producing protein for people, that there would be a lot less habitat loss.

• 8:02Guy Raz?

  And that inspired you to become a vegetarian like right away?

• 8:05Speaker 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.

• 8:24Guy Raz?

  So when you became a vegetarian, what did your diet mainly consist of?

• 8:27Speaker 01

  Vanilla wafers.

• 8:28Guy Raz?

  Mmm, yum.

• 8:32Speaker 01

  Candy bars. It wasn't so good.

• 8:34Guy Raz?

  Right, because this was like still kind of not mainstream, right?

• 8:38Speaker 01

  No, and there wasn't any, there really wasn't a lot of knowledge about any aspect of vegetarian diet.

• 8:45Guy 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.

• 8:57Speaker 01

  Right.

• 8:58Guy 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?

• 9:08Speaker 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.

• 9:46Guy 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?

• 9:59Speaker 01

  Right.

• 9:59Guy Raz?

  What do you remember when you first tried it?

• 10:01Speaker 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.

• 10:20Guy Raz?

  Right, okay.

• 10:20Speaker 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.

• 10:59Guy 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?

• 11:11Speaker 01

  Yeah, absolutely. So tempe is an Indonesian protein food from Indonesia.

• 11:16Guy Raz?

  It's soy, it's soybeans.

• 11:17Speaker 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

• 11:31Guy Raz?

  A mold.

• 11:32Speaker 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.

• 11:47Guy Raz?

  So good.

• 11:48Speaker 01

  So.

• 11:49Guy Raz?

  So, all right, so you're, you're thinking, all right, this is actually pretty good.

• 11:53Speaker 01

  Right.

• 11:54Guy Raz?

  You, I guess, end up going back to Oregon after the summer in Tennessee and you kept making tempeh, right?

• 12:00Speaker 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.

• 12:16Guy Raz?

  Inside the refrigerator.

• 12:17Speaker 01

  Refrigerator as a heat source. Back then, not the LED lights, these were the big old.

• 12:22Guy Raz?

  Oh, the big, huge Christmas lights. And you, you plugged it in, closed the fridge.

• 12:25Speaker 01

  Right.

• 12:26Guy Raz?

  And then you had like a warm refrigerator to incubate the

• 12:28Speaker 01

  Yeah, back when you could burn a house down with your Christmas tree lights.

• 12:31Guy Raz?

  And, and I'm imagining you were living in like a, like a little apartment in?

• 12:36Speaker 01

  I was living in a teepee in the summer and a barn in the winter.

• 12:40Guy 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?

• 12:58Speaker 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.

• 13:10Guy Raz?

  Yeah.

• 13:11Speaker 01

  Five pounds of tempeh, you know, would bring in $7.

• 13:14Guy 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?

• 13:22Speaker 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.

• 14:06Speaker 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.

• 14:17Speaker 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.

• 14:45Guy Raz?

  As a business?

• 14:46Speaker 01

  As a business.

• 14:46Guy 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?

• 15:01Speaker 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.

• 15:08Guy Raz?

  Yeah. This is weird.

• 15:10Speaker 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.

• 15:26Guy Raz?

  Yeah.

• 15:27Speaker 01

  And it was just like, oh my God, silence.

• 15:29Guy Raz?

  Yeah. They were like, what?

• 15:31Speaker 01

  And then I was like, yeah, it's moldy soybeans. And they were like...

• 15:36Guy Raz?

  That tastes like a paperback binding.

• 15:39Speaker 01

  I didn't mention that.

• 15:40Guy Raz?

  Okay.

• 15:40Speaker 01

  Should've, but they, uh... And then finally, one of the teachers said, "Well, you can always fall back on teaching."

• 15:48Guy Raz?

  You always wanna have a fallback. I always say that to entrepreneurs.

• 15:51Speaker 01

  Right.

• 15:52Guy Raz?

  You always wanna, you know, if Plan A...

• 15:53Speaker 01

  That's not a bad idea.

• 15:54Guy Raz?

  If Plan A doesn't work, you got Plan B.

• 15:56Speaker 01

  Right.

• 15:56Guy Raz?

  Tempeh and teaching, alright. And you were doing this all by yourself, pretty much?

• 16:00Speaker 01

  Yeah.

• 16:01Guy Raz?

  Okay.

• 16:01Speaker 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...

• 16:10Guy Raz?

  Yes, Dotson!

• 16:13Speaker 01

  And it was really the co-ops that kind of embraced it most at first.

• 16:17Guy 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?

• 16:35Speaker 01

  It was the early adopters.

• 16:37Guy Raz?

  Right.

• 16:37Speaker 01

  This is why I give it a call, in marketing terms.

• 16:42Guy 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.

• 16:54Speaker 01

  Yeah.

• 16:55Guy Raz?

  And you moved to, to Hus- to Husum?

• 16:57Speaker 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."

• 17:10Guy Raz?

  Wow.

• 17:11Speaker 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.

• 17:24Guy Raz?

  Yeah. So you had to find a way to do this.

• 17:26Speaker 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-

• 17:56Guy Raz?

  It was not a tempe kitchen, let's just be clear.

• 17:57Speaker 01

  Well, in my mind, it was a tempe kitchen.

• 17:59Guy Raz?

  It was a commercial kitchen, right?

• 18:01Speaker 01

  It was a commercial kitchen.

• 18:02Guy Raz?

  But you're looking at that, you're saying "tempe kitchen."

• 18:05Speaker 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-

• 18:47Guy Raz?

  Wow.

• 18:48Speaker 01

  -for the local school board.

• 18:50Guy Raz?

  And what'd they think?

• 18:51Speaker 01

  Well...

• 18:54Guy Raz?

  Yeah.

• 18:55Speaker 01

  This is 1981-

• 18:56Guy Raz?

  Yeah.

• 18:57Speaker 01

  And people, even the early, they weren't the early adopters, let me say that.

• 19:01Guy Raz?

  Alright.

• 19:02Speaker 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.

• 19:34Guy Raz?

  Yeah.

• 19:34Speaker 01

  And nobody said anything for a minute. And then, this one woman who was kind of like really enjoying the tempe-

• 19:44Speaker 01

  She goes, "I say we take it. What do we have to lose?"

• 19:48Guy Raz?

  Wow.

• 19:51Guy Raz?

  So you get, amazing.

• 19:55Guy 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?

• 20:06Speaker 01

  Oh, I knew nothing.

• 20:07Guy Raz?

  Yeah.

• 20:08Speaker 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."

• 20:19Guy Raz?

  Did you even do any accounting, or did you keep any books or anything like that?

• 20:23Speaker 01

  No, no, nothing like that.

• 20:24Guy Raz?

  No double ledger?

• 20:25Speaker 01

  No, no.

• 20:26Guy Raz?

  Okay, alright.

• 20:28Speaker 01

  You know, I've always felt like a little misfit in the business world. So, still do in a lot of ways.

• 20:33Guy Raz?

  So just to be clear, I mean, you're making tempe. It's like 1983.

• 20:37Speaker 01

  Yeah.

• 20:38Guy Raz?

  You are not making money. You are not profitable, right?

• 20:41Speaker 01

  No.

• 20:41Guy 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?

• 20:51Speaker 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."

• 21:03Guy Raz?

  Yeah.

• 21:03Speaker 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.

• 21:19Guy Raz?

  Okay.

• 21:20Speaker 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.

• 21:29Guy Raz?

  Okay.

• 21:29Speaker 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."

• 21:56Speaker 01

  And I'm like, "Okay." And they said, "And we tune pianos when the clown business is soft."

• 22:06Guy Raz?

  Okay.

• 22:08Speaker 01

  "And we need a space for our clown business to build props."

• 22:13Guy Raz?

  Huh.

• 22:14Speaker 01

  And I was like, "I think I can provide you that space."

• 22:17Guy Raz?

  Yeah.

• 22:18Speaker 01

  And they were, people were like, "You're gonna rent to these clowns?" I'm like,

• 22:23Speaker 01

  "You had me at ace in space."

• 22:24Guy Raz?

  Yes, right.

• 22:27Guy Raz?

  So, but you're living rent-free, but eventually you got, what, you got kicked out of your apartment?

• 22:33Speaker 01

  Well, the rent market got a little better, and so now there were people that would really pay for that apartment.

• 22:39Guy Raz?

  So you got kicked out?

• 22:40Speaker 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.

• 22:55Guy Raz?

  Four trees for $25 a month?

• 22:58Speaker 01

  And then I could build a treehouse.

• 23:00Guy Raz?

  You could build a treehouse for $25 a month, which you did.

• 23:08Guy Raz?

  You lived in a treehouse for seven years.

• 23:12Speaker 01

  I did.

• 23:13Guy Raz?

  Did it have, like, running water, electricity, phone?

• 23:17Speaker 01

  Oh, yeah.

• 23:18Guy Raz?

  Anything? What did you have in there?

• 23:20Speaker 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.

• 23:46Speaker 01

  So I'm living on a golf course. American dream.

• 23:49Guy 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."

• 24:17Speaker 01

  Yeah.

• 24:20Speaker 01

  The thought came up.

• 24:23Speaker 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.

• 24:36Guy Raz?

  Which would have been life-changing money for a while.

• 24:38Speaker 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.

• 25:06Guy Raz?

  Yeah.

• 25:10Guy 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.

• 25:32Guy 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.

• 25:54Speaker 01

  Yeah.

• 25:55Guy Raz?

  Where your entire take-home pay over a period of eight years was $30,000.

• 26:03Speaker 01

  $31. Nobody could live on $30,000.

• 26:08Guy Raz?

  $31,000 over an eight-year period.

• 26:11Speaker 01

  Yeah.

• 26:12Guy Raz?

  I mean...

• 26:13Speaker 01

  Nine years, technically.

• 26:15Guy 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?

• 26:24Speaker 01

  Yeah. What was? I had some existential nausea. From time to time.

• 26:29Guy Raz?

  Yeah.

• 26:30Speaker 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.

• 27:03Guy 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?

• 27:16Speaker 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."

• 27:32Guy Raz?

  So she saved you, you got to move in with her?

• 27:34Speaker 01

  So, yeah, she had a house on the ground.

• 27:38Guy Raz?

  Ground. You got saved.

• 27:40Speaker 01

  Yeah. And so, yeah.

• 27:43Guy 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?

• 27:57Speaker 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.

• 28:14Guy Raz?

  So you had to find a new space?

• 28:15Speaker 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.

• 28:33Guy Raz?

  Your brother?

• 28:34Speaker 01

  My brother.

• 28:35Guy Raz?

  To finance a retrofit?

• 28:36Speaker 01

  Yeah. And he always, in the early days, was a funder of...

• 28:41Guy Raz?

  Your brother.

• 28:42Speaker 01

  Yeah.

• 28:42Guy Raz?

  He had this like business sense.

• 28:44Speaker 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.

• 28:55Guy 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.

• 29:15Speaker 01

  Correct.

• 29:15Guy Raz?

  And they, they're making like this tofu roast that you kind of come across. What, what's the story?

• 29:23Speaker 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.

• 30:04Speaker 01

  And we had tried all these stuffed pumpkins that kind of collapsed in the oven.

• 30:09Guy Raz?

  Right.

• 30:10Speaker 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.

• 30:18Guy Raz?

  This is kind of cool.

• 30:18Speaker 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.

• 30:36Guy Raz?

  You made tempeh drumettes?

• 30:38Speaker 01

  We made drumettes.

• 30:39Guy Raz?

  Right.

• 30:39Speaker 01

  Out of tempeh, right.

• 30:41Guy Raz?

  And, and you went to the Robles and you said, what? You said, can we maybe collaborate on a thing?

• 30:46Speaker 01

  Right, and so, that first year, we bought the Tofurkey to. Market here in this city with Hans and his team.

• 30:55Guy Raz?

  And what came with that? So it was a frozen tofu loaf stuffed with?

• 31:00Speaker 01

  Oh, it was like whole wheat breadcrumb and cranberry stuffing. It was really delicious.

• 31:05Guy Raz?

  And what else came in the box?

• 31:07Speaker 01

  And then there was a tub of gravy that once again Hans had created. It was nutritionally east gravy.

• 31:13Guy Raz?

  Okay.

• 31:14Speaker 01

  And then there was these eight tempe dromets. Cause we thought that there was gonna be eight vegetarians sitting around.

• 31:21Guy Raz?

  It's not an eight-legged, this is not an eight-legged turkey.

• 31:25Speaker 01

  No, but we didn't know what Tofurky looked like in the wild at that point.

• 31:29Guy Raz?

  Yeah, that's true.

• 31:31Speaker 01

  But we knew they had eight legs.

• 31:32Guy Raz?

  Wow. I'm just curious, because this is important.

• 31:36Speaker 01

  Yeah.

• 31:36Guy 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?

• 31:48Speaker 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.

• 32:06Guy Raz?

  And it was slices of tofu or?

• 32:07Speaker 01

  Yeah, it was slices of tofu, sort of turkey-ish.

• 32:10Guy Raz?

  Right, just baked or something?

• 32:12Speaker 01

  Yeah.

• 32:12Guy Raz?

  Yeah.

• 32:12Speaker 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.

• 32:32Guy Raz?

  Yeah.

• 32:32Speaker 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?

• 32:46Guy Raz?

  So Tofurkey, right?

• 32:48Speaker 01

  Go Tofurkey.

• 32:49Guy 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?

• 32:58Speaker 01

  They were frozen.

• 32:59Guy 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?

• 33:13Speaker 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.

• 33:28Guy Raz?

  And the postcards were for feedback?

• 33:30Speaker 01

  It was for feedback from the customers.

• 33:32Guy Raz?

  And people said...

• 33:33Speaker 01

  People said, "Oh, my God, I've been waiting 20 years for this product."

• 33:36Guy Raz?

  Wow.

• 33:37Speaker 01

  And it was just so heartening to, right away, feel like, finally, I can see my way through this.

• 33:45Guy Raz?

  Through Thanksgiving.

• 33:46Speaker 01

  Yeah, and through this Thanksgiving thing.

• 33:48Guy Raz?

  Which is hard enough.

• 33:49Speaker 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.

• 33:59Guy 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...

• 34:06Speaker 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.

• 34:38Guy Raz?

  Oh, wow.

• 34:39Speaker 01

  The first thing that was ever sold online was a pepperoni pizza.

• 34:44Guy Raz?

  Huh.

• 34:44Speaker 01

  In 1994, the, the first food was sold online. So this is 1996.

• 34:50Guy Raz?

  And you're selling Tofurky.

• 34:52Speaker 01

  And we're selling Tofurkey.

• 34:53Guy 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.

• 35:06Speaker 01

  Right.

• 35:07Guy Raz?

  So what did you do?

• 35:08Speaker 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.

• 35:19Guy Raz?

  Meat of wheat. Yeah.

• 35:21Speaker 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.

• 35:31Guy Raz?

  Huh.

• 35:31Speaker 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.

• 35:40Guy Raz?

  You mixed the seitan and the tofu.

• 35:42Speaker 01

  Yes. And it became Tofurkey.

• 35:45Guy Raz?

  And that's essentially what it is today.

• 35:46Speaker 01

  It's essentially the same thing. We ended up actually buying the recipe from them.

• 35:52Guy 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.

• 36:04Speaker 01

  Oh, yeah.

• 36:04Guy 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?

• 36:17Speaker 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.

• 36:37Guy Raz?

  Turkey.

• 36:38Speaker 01

  American meal and a holiday and everything and bringing a Tofurkey to a dinner was always controversial and.

• 36:46Guy Raz?

  Yeah.

• 36:48Guy 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.

• 36:57Speaker 01

  Correct.

• 36:57Guy Raz?

  You are not yet cash flow positive.

• 37:00Speaker 01

  Correct.

• 37:01Guy Raz?

  How are you keeping the lights on? How are you keeping things going? You know?

• 37:06Speaker 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.

• 37:26Guy 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?

• 37:41Speaker 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.

• 38:10Guy Raz?

  Wow.

• 38:10Speaker 01

  It was just crazy.

• 38:11Guy Raz?

  For Tofurkey.

• 38:12Speaker 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.

• 38:26Guy 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?

• 38:32Speaker 01

  A little better but you know.

• 38:36Guy Raz?

  Like how were you like managing people did Sue help you? Did you have more?

• 38:41Speaker 01

  Yeah Sue was doing the books at that point and doing a great job.

• 38:45Guy Raz?

  Good you were doing the books, good.

• 38:46Speaker 01

  So we had books.

• 38:47Guy Raz?

  You had accounting, good?

• 38:48Speaker 01

  Yeah, no it was improving and I was becoming less stupid every month when we turned profit.

• 38:55Guy Raz?

  Which was like 2000, 2001?

• 38:58Speaker 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.

• 39:24Guy Raz?

  So you could use the same recipe.

• 39:26Speaker 01

  Right.

• 39:27Guy Raz?

  Spice it slightly different.

• 39:28Speaker 01

  Right and smoking it.

• 39:29Guy Raz?

  And smoked it.

• 39:30Speaker 01

  We smoked it in a real smokehouse and created this smoke hickory smoke.

• 39:34Guy Raz?

  So when did the slices first come out?

• 39:36Speaker 01

  Those came out in 1998.

• 39:38Guy Raz?

  And, and then the sausages followed?

• 39:40Speaker 01

  And the sausage followed three years later.

• 39:43Guy Raz?

  And did they become popular pretty much right away?

• 39:47Speaker 01

  They really did. They really took the industry by storm and we became a happening company.

• 39:54Guy 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.

• 40:10Speaker 01

  Yeah, it was an odd feeling.

• 40:12Guy Raz?

  Do you remember?

• 40:12Speaker 01

  Because I was pretty good at losing money.

• 40:14Guy Raz?

  Yeah. Do you remember when that happened?

• 40:18Speaker 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.

• 40:28Guy Raz?

  Was that, what, 2004, 2005?

• 40:30Speaker 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

• 40:47Guy Raz?

  A national.

• 40:48Speaker 01

  National distribution.

• 40:50Guy Raz?

  I think today, you've got a state of the art factory today in Hood River.

• 40:55Speaker 01

  We do.

• 40:55Guy 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?

• 41:16Speaker 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.

• 41:47Speaker 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.

• 41:53Guy Raz?

  And in like mainstream places like Walmart and Target, right?

• 41:56Speaker 01

  Correct.

• 41:57Guy Raz?

  I mean, it's Costco. So here's the thing, right? You are entirely family owned.

• 42:03Speaker 01

  Correct.

• 42:04Guy 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.

• 42:21Speaker 01

  Yeah, that would be correct.

• 42:22Guy 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?

• 42:45Speaker 01

  I feel like I'm rich beyond my wildest dreams right now, to be honest.

• 42:49Guy Raz?

  Yeah.

• 42:50Speaker 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.

• 43:18Guy 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?

• 43:33Speaker 01

  Right. We've, we have just borrowed some money from an ethical investor that we really feel good about.

• 43:42Guy Raz?

  But it's a loan, it's not an equity investor.

• 43:43Speaker 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.

• 43:56Guy Raz?

  Yeah.

• 43:57Speaker 01

  And...

• 44:01Guy Raz?

  Just out of curiosity, what percentage of your sales now does tempeh account for?

• 44:06Speaker 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...

• 44:16Guy Raz?

  Growth phase of tempeh.

• 44:17Speaker 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.

• 44:28Guy Raz?

  And I have to assume that you're not using Christmas lights to make tempeh anymore?

• 44:34Speaker 01

  That would be correct.

• 44:36Guy 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?

• 45:02Speaker 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.

• 45:31Guy Raz?

  Yeah, it's a good strategy. Seth Tibbott, thank you so much.

• 45:40Guy 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.

• 46:03Guy 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.