How I Built This with Guy Raz - Live Episode! Tofurky: Seth Tibbott

Episode Date: June 3, 2019

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.

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The powerful backing of American Express, don't do business without it. Terms apply, visit Americanexpress.com slash business. 20 years, 20 years of losing money. I mean, how are you paying your employees? How are you, you know? Well, that was the question that my tax guy always asked me every year when I came in. He would say, I got two questions for you. How much money did you lose this year and how are you still in business?

From NPR, it's how I've been. built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they don't. I'm Guy Raz, and on the show today, how Seth Tibbet built a brand new bird out of tofu, then grew his company into a multi-million dollar business with one of the best names ever, Tofurki. 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 veg hasn't substantially increased since 2000. But there is a growing segment of the population 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. 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 Tibbet. 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.

Tempe. And for years, Seth barely scraped by. He even lived in a treehouse to save money. But everything changed when he started selling a frozen holiday roast called Tofurki, 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 Tofurchi 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. 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 to the baby peas, raw baby peas

which actually is probably one of the better foods you could eat. But, you know, 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 potato. I didn't like the green, but I didn't like any of the food,

cranberry, nothing. And my mom would be slipping me like peanut butter and jelly sandwiches under the table. I was a picky eater. And how would you describe yourself as a kid? Were you studious? Were you academic? I was maybe a B student kind of growing up.

Not really. I was more sports-minded. Followed the local sports team. and like to play baseball. My career goal was second base for the Washington Senators baseball team. Didn't happen, but... Not yet.

Yeah. I'm still here. Yes. It could happen. Still working on it. Got to get those senators back. All right. 1969.

We're jumping a hell of a bit. In 1969, you go to college in Ohio. I think you went to two different colleges. One was... Wittenberg. Wittenberg and then Antioch. And what did you... study in college?

Well, first just sort of general courses, and then 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 yeah, so I dropped out of school

and ended up in Antioch. So 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 70s, right? This is, just just, and this is a bit foreshadding, 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? Well, I laughed at business majors. Me and my friends, we did not, you know, Union Carbide, DuPont. Yeah, those generals, general motors, general electric, they were the enemies. It wasn't the hotbed of social change. So we really, I never took a business class in college. Never had any aspirations to be a businessman. No, no, none at all.

So after I dropped out of school, I became a naturalist, actually, a teacher naturalist at Glen Helen Allen 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. Around this time, you're in your early 20s, you come across this book, Diet for a Small Planet, which has a huge effect on you. What is the book for people don't know it, and what did you learn from that book? Well, this was a book by Francis More 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 this efficient way of producing protein for people, that there would be a lot less habitat loss. And that inspired you to become a vegetarian, like, right away?

Well, that and a meal from a beautiful young woman named Laurel McAllen, who cooked a recipe of lentils, rice, and onions. And she talked about not needing to eat animals, and I thought, boy, this will be great. I'll be a vegetarian. So when you became a vegetarian, what did your diet mainly consist of? Vanilla wafers. Young.

Candy bars. It wasn't so good. Right, because this was still kind of not mainstream, right? No, and there really wasn't a lot of knowledge about any aspect of vegetarian diet. 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. Right. Where you first discover this incredible thing called Tempe. What was that visit?

What was going on there? How did you end up there? 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 smoke. I smoked a lot of marijuana. Vegan food, marijuana. I'm really surprised that at a hippie commune in the 70s, they smoked a lot of marijuana.

It's just shocking. So is the first time you are introduced to this thing called Tempe. Right. What do you remember when you first tried it? It was like heaven. It was so good. You know, I remember making it in that hot Tennessee summer, which is a middle.

It's like Indonesia. It's human. Indonesia, if you haven't been there, is like about 88 degrees, which is a perfect tempe incubating temperature. Right, okay. 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 tinful.

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 going to probably die. I mean this is this crazy guy. 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? Yeah absolutely. So Tempe is an Indonesian protein food from Indonesia. It's soybeans. And the way you make it is you take the haul off,

which makes the beans split into two pieces, two Caudelidins. You cook the beans and you dry the beans and unaculate them with rhizopis oligosporus, which is a 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. It's about the texture of like a paperback book almost, and you can slice it. So good. So, all right, so you're thinking, all right, this is actually pretty good.

Right. You, I guess, end up going back to Oregon after the summer in Tennessee, and you kept making Tempe, right? Right. So I started making tempe for friends and family, and there were retreat groups that would come out, so they wanted some tempe, and I got an old refrigerator. and I strung Christmas tree lights up inside. Inside the refrigerator.

As a heat source. Back then, not the LED lights. These were the big old lights. Oh, the big huge Christmas lights. And you plugged it in, close a fridge. Right. And then you had like a warm refrigerator to incubate the tent. Back when you could burn a house down with your Christmas tree lights.

And I'm imagining you were living in like a little apartment in? I was living in a teepee in the summer and a barn in the winter. And this is the most NPR. meets Portland conversation I've ever had my life. So, all right. So, and how are you

cooking the tempe? Just like, what was your, you were just cutting it up and frying it up, like bacon or what? 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. Yeah. Five pounds of tempe, you know, would bring in. $7. Yeah, so when did you, I mean, when did you get this idea to turn this into a business?

Like, how did that idea come to mind? 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 will. always this is a sign. And so I got to 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 tempe on the menu. And she goes,

you know how to make tempe? You know about tempe? 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 got to be good, Tempe. 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 Tempe. I brought brought it back, she liked it, and she ordered 10 more pounds. 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 as a business. As a business. Wow. And I mean, I have to imagine, like, 99.9% of the people you came across are like, what's Tempe? Like, what, like, Tempe?

Like, were you having to explain this over and over and over again to people? Oh, yeah. And not only what are, you know, people saying what is Tempe, but people were telling me, you know, this is a pretty bad idea. Yeah. It's weird. I was teaching at the school. school and 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 going to start making tempe. Yeah. And it was just like, oh my God, silence. Yeah. They were like, what? And then I was like, yeah, it's moldy soybeans. And they were like. That tastes like a paperback finding. I didn't mention that. Okay. Should have. But they, uh, and And then finally, one of the teachers said, well, you can always fall back on teaching. You always want to have a fallback. I always say that to entrepreneurs. Right.

You always want to, you know, if plan A doesn't work, you've got plan B. Right. Tempe and teaching. All right. And you were doing this all by yourself pretty much. Okay. I was doing it by myself and I was driving in my three-door beat up some body damage Dotson station wagon. Yes, Dotson.

And it was really the co-ops that kind of embraced it most at first. And who was buying Tempe in 1981? Was it just like really kind of hippies? I mean, just for the record, you know this. Because we talk backstage. I love Tempe. I make my own Tempe bacon. All right.

I'm just going to be clear about this. Full disclosure. Who was buying Tempe in 1981? It was the early adopters. Right. This is what I got to call in marketing terms. All right, so you're starting to get, you know, really starting to ramp up production. 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, and you moved to Hussim? 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 1,000 pounds of tempe a week. Wow. And I was making like 100 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 light of the local rufocited tohi population. Yeah.

So you had to find a way to do this. So I needed a bigger space now. We were grossing like $1,300 a month at that point. And so I started looking outside the Portland metropolitan area and I went up to Hussum, which is about 70 miles from. here, east of here, 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 the... It was not a Tempe kitchen. Let's just be clear. Well, it was in my mind it was a Tempe kitchen. It was a commercial kitchen, right?

It was a commercial kitchen. But you're looking at that, you're saying Tempe Kitchen. Yeah. And it had two big huge stainless steel sinks. It had stainless steel sinks. It had stainless steel tables, hood, and it even had two store rooms that were just the right size for a Tempe incubator. It was just sitting there, and it was the first 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 for the local school board. And what they think? Well, this is 1981. And people, even the early, they weren't the early adopters. Let me say that. All right. 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 yeah and nobody said anything for a minute and nobody said anything for a minute. And then this one woman who was kind of like really enjoying the tempe she goes, I say we take it. What do we have to lose?

Wow. So you get amazing. So you get this commercial space an abandoned school for 150 bucks a month. You got to make a thousand pounds of tempe week. By the way, what did you know about running a business at that point?

Oh, I knew nothing. Yeah. Were you like doing... I was a Tempe maker. Yeah. 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. Did you even do any accounting or did you keep any books or anything like that?

No, no. No, no, nothing like that. No, no, right. You know, I've always felt like a little misfit in the business world, so still do in a lot of ways. So just to be clear, I mean, you're making Tempe. It's like 1983. You are not making money. You are not profitable, right?

No. 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? 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. Yeah. And so I was living rent free. And I was thinking, how am I going to 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. 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. And then I had this one more classroom. And I'm like, what am I going to do with those are a classroom? I couldn't find a rent it. This is a poor part of Click Attack 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. And I'm like, wow. Okay. And they said, and we tune pianos when the clown business, is soft.

Okay. And we need a space for our clown business to build props. Huh. And I was like, I think I can provide you that space. Yeah. And people were like, you're going to rent to these clowns? I'm like,

you had me at Asin's space. Yes. Right. So, but you're living rent-free, but eventually you got, well, you got kicked out of your apartment? Well, what happened? The rent market got a little better, and so now there were people that would really pay for that apartment.

So you got kicked out? Yeah. So I don't have a place to live, and one of my employees, Ambrie Ezek, had a piece of land right outside Hussam, and she offered to rent me four trees for $25 a month. Four trees for $25 a month. And then I could build a tree house. You could build a tree house for $25 a month. Which you did.

You lived in a treehouse for seven years. I did. Did it have, like, running water, electricity, phone? Oh, yeah. What did you have in there? 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 an 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 tree house was on a frisbee golf course. So I'm living on a golf course, American Dream. Pretty amazing, right? You are going to the school every day making Tempe. But no, I mean, seriously, like, 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 tree house, cool, but it's, you know, I just wonder, were you stressed out? Like, or was any part of you, like, I got to figure another, figure something else. I need a new strategy because I don't know if this is going to be a sustainable life. Yeah. The thought came up. And actually, in 1986, I had an offer to sell the Tempe business to a local tofu company, and they offered me $25,000. for the business. Which would have been life-changing money for me.

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, the business. I turn down the big money. Yeah. When we come back in just a moment, how Seth Tibbitt 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. Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's 1991, and Seth Tibett has been making Tempe 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, where your entire take-home pay over a period of eight years was $30,000.

31. Nobody could live on $30,000. $31,000 over an eight-year period. Period. Yeah. I mean... Nine years, technically. Did you...

I mean, were you ever like kind of... 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... Yeah. I had some existential nausea from time to time. Yeah. 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 going to take off. And I was looking for ways out. I guess around in 1989, you, you were dating somebody who would become your wife, Sue. Did you she move into the treehouse with you? Or, I don't know, like, how did that work? You know, it's funny because right now, people ask Sue, they go, did he make you sign a pre-nup?

And she goes, pre-nup. I was the one that needed the pre-nup. He lived in a tree. I had a house. So she saved you. You got to move in with her. So, yeah, she had a house on the ground. Yeah. He got saved. Yeah, and so, yeah. Eventually, 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 location? What was going on?

Well, towards the end of the Houston 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. It's now the firehouse of Husem, so it was a great deal. So you had to find a new space. And I had to find a new space. And there was an old tortilla factory in Hood River, which is 10 miles from Hussam. And we rented out 5,000 square feet of this 26,000 square foot building. And I borrowed the $160,000 from Bob.

Your brother. My brother. To finance a retrofit and to... And he always, in the early days, was a funder of... Your brother. Yeah. He had this like business sense. 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. 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 run like a vegetarian catering business.

They're buying tempe from you. Correct. And they're making like this tofu roast that you kind of come across. What's the story? Yeah. So Hans and Rhonda Roble 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 heard. met. And he was in 1994, I was delivering Tempe to him, and he was making, I 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. And we had tried all these stuffed pumpkins

that kind of collapsed in the oven. and 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 possible. It's good. 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 tempe drumettes.

You made tempe drummets? We made tempe drummets. We made drumettes out of Tempe, right. And you went to the Robles and you said, what? You said, can we maybe collaborate on a thing? Right. And so that first year, we bought the Tofurki to market here in this city with Hans and his team. And what came with that?

So it was a frozen tofu loaf stuffed with? Oh, it was like wholeweed breadcrumb and cranberry stuffing. It was really delicious. And what else came in the box? And then there was a tub of gravy that once again Hans had created a nutritional yeast gravy. Okay. And then there was these eight tempi dromets. Because we thought that there was going to be eight vegetarians sitting around.

It's not an eight-legged, this is not an eight-legged turkey. No, but we didn't know what Tofurkeys looked like in the wild at that point. Yeah, that's true. But we knew they had eight legs. Wow. I'm just curious about, because this is important. Yeah. This name is super important.

They are making this stuffed tofu dome. It's around Thanksgiving time. How do you name it? How do you come up with a name for it? Okay, so I didn't invent the name Toferky, right? In 1981, when I was delivering Tempe around Portland, there was a Toferki sandwich, T-O-F-U-R-K-E-Y, and it was being made by King Harvest,

local sandwich maker here in Portland. And it was slices of tofu? Yeah, it was slices of tofu, sort of turkey-ish. Right, just baked or something. Yeah. Yeah. 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 because 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. Yeah. And then, you know, Toferi. 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 so Toferky right go Tofurkey All right so you guys collaborate you You decide to sell The first batch of Tofurkeys

I guess they were in the freezer section They were frozen 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 going to buy this? Yeah, we did, you know.

But once again, it was the co-ops that rallied to embrace the concept. And people loved it. I mean, we put self-addressed stamp postcards in every Tofurkey that year. We sold 818. And the postcards were for feedback? It was for feedback from the customers. People said, oh, my God, I've been waiting 20. years for this product. Wow. And it was just so heartening to right away feel like finally I can see my

way through this. Through Thanksgiving. Yeah, and through this Thanksgiving thing. Which is hard enough. 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. I think about just about a year after making the first Tofurkeys, You and the Robles kind of went your separate ways. 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 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, that Tofurchi was one of the first frozen products ever to be sold on the Internet. Oh, wow. The first thing that was ever sold online was a pepperoni pizza. Huh. In 1994, the first food was sold online.

So this is 1996. And you're selling to furkeys. 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 wasn't going to be spongy. Right.

So what did you do? 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, Meat of wheat. Yeah. Yeah. He had figured out how to extrude these roasts in have stuffing in the middle and they would have satan on the outside. 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. You mix the satan and the tofu. Yes. And it became Tofurky. And that's essentially what it is today. It's essentially the same thing. We ended up actually buying the recipe from them. The amazing thing, and I guess it's not that amazing when you think about it now, but because it was called Toferky, you got all this attention fast.

like the Today Show and comedians were joking about it. Oh, yeah. 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. 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 American meal and a holiday and everything. And bringing a Tofurkey to a dinner was always controversial. Yeah. Even into the late 90s, and you're really pivoting now to Toferky, your business is not yet profitable. You start this in 1981.

Correct. You are not yet cash flow. positive. Correct. How are you keeping the lights on? How are you keeping things going? Well, a lot of it was what they'd call a paper loss, but it was still lost. We weren't really making money, but we were, you know, paying the light bills and paying employees. But at the end of the day, and we were borrowing money where needed. But most of the money that was being borrowed was for investment into equipment and things like that. Did you, were you able to, in the late 90s, 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? Oh, yeah. Just from the first response to the Tofurki,

it just felt so different than anything I had felt before marketing Tempe that I really felt like this is going to really turn around at some point. And it really did. And you're right that a lot 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.

It was just crazy. For Tofur. And so that was like our bully pulpit kind of. 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. 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? A little better. Like, how? I mean, like managing people? Did Sue help you? Did you have more? Yeah, Sue was doing the books at that point and doing a great job. Good.

You were doing the books? Good. Good. So we had books. You had accounting? Good. Yeah. No, it was improving.

And I was becoming less stupid every month when we turned profit. Which was like 2001? Yep. Right about then. it became really profitable because we brought the production of the toferky in a house. We were buying it from a manufacturer, a co-manufacturer. 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 toferky and this new recipe sliced really well. So you could use the same recipe, spice it slightly different. Right, and smoking it. We smoked it in a real smokehouse and created this smoke, hickory smoke. So when did the slices first come out? Those came out in 1998. And then the sausages followed? And the sausage followed three years later.

And did they become popular pretty much right away? They really did. They really took the industry by storm and we became happening company. 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 tree house, sure not tempe at a bathtub. Like, we're actually making a lot of money.

Yeah, it was an odd feeling. Do you remember that? Because I was pretty good at losing money. Yeah. Would you remember when that happened? 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. Was that, what, 2004, 2004, 2000,

Yeah, right in there, you know, it was really a new world for me. And people that wouldn't talk to us about Tempe were now clamoring for Toferky. And it took us, Tofurkey took us from being a regional West Coast distribution to a national distribution. I think today you've got a state of the art factory today in Hood River. We do. It's a lead certified building. You've got two-hour employees.

I think, I mean, your, your, your revenue is somewhere between 40 and 60 million dollars a year, which is unbelievable. I mean, 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? 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.

We love to see all great-tasting vegan companies succeed, partly because we're altruists and we're a mission-driven company and we want to see plant-based foods grow all over the world. But there's a business reason, too, which is that it's easier for us to place products in a category that's hot. And in mainstream places like Walmart and Target, right? I mean, it's Costco. So here's the thing, right?

You are entirely family-owned. Correct. 100%. You, your brother, maybe some other family members own Toferky. 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. Yeah, that would be correct. So why not cash in? Why not take the money? And, you know, you lived in a tree house for seven years.

You made $30,000 over nine years. I mean, right now, How only at this point in your life are you actually seeing real money? I mean, you could be rich beyond your wildest dreams and for the next six generations, why not take it? I feel like I'm rich beyond my wildest dreams right now, to be honest. I mean, to have, to be in this business has been, you know, a good joy and a great feeling of 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 non-profit groups like Vig January 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. Yeah. 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. We have just borrowed some money from an ethical investor that we really feel good about. But it's a loan.

It's not an equity. 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. Yeah. And just how you're asking you, what percentage of your sales now does Tempe account for? Tempe 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. Yeah, I just looked this morning at the new incubator, which we're building. It's going to double our Tempe capacity. So we're pretty excited about that. I just may have been about four decades early on the Tempe thing. And I have to assume that you're not using Christmas lights to make Tempe anymore? That would be correct. Okay. All right. So as you know, Seth, and as many of you know, I almost always end my interviews with one final question.

I'm just curious to hear how people answer it, you know, and we get a bunch of different answers. And I'm going to 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 this story do you think is just luck and timing? 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. Yeah, it's a good strategy. Seth Tibbitt. Thank you so much.

That's Seth Tibbet, founder of Tofurkey. In 2014, Seth's stepson, Jamie Athos, took over duties as CEO of Toferky. Last year, the company announced it had sold over 5 million tofurky rows. Oh, and you know what Seth and Jamie and others at the company call real-life turkeys? Fake Toferkeys! Hey, thanks so much for listening to this live episode of How I Built This. Our show is produced this week by James Delhousie with original music. composed by Rumtin Arablui.

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, Neva Grant, and Jeff Rogers. I'm Guy Raz, and you've been listening to How I Built This.