Back in 2011, Keeley Tillotson and Erika Welsh were college roommates at the University of Oregon who loved peanut butter. So they started making their own in their tiny apartment that mixed in new flavors, like cinnamon raisin, and chocolate coconut, without the high sugar content typical of such snack foods. One thing led to another, and before beginning junior year of college they ended up on Shark Tank, and suddenly realized: Either they needed to drop out of college or let the business go.
They dropped out.
Fast forward four years from the Shark Tank airing, in May 2012, and Tillotson, now 23, and Welsh, 25, are running Portland-based Wild Friends, a nut butter company with sales expected to reach $7 million this year and distribution in Whole Foods, Costco, Kroger and a number of other supermarkets. At a time when funding has gotten tighter for many startups, the duo recently raised $1.4 million from investors on CircleUp, including a $100,000 investment from John Foraker, president of Annie’s, the prominent natural and organic foods company that is now part of General Mills, who they consider a mentor. Oh yes: Tillotson’s dad, Bruce Tillotson, 54, who previously worked for Honest Tea, is their chief salesperson, responsible for flying around the country to get the brand into stores.
“I always joke that I’m going to write a book about how to work with your dad and your best friend,” says Keeley Tillotson, Wild Friends' chief executive.
In the beginning, Tillotson and Welsh, both college athletes, simply mixed up their own peanut butters with unusual ingredients and less sugar than the products they saw on the shelves. “It was exciting and fun, and so we started selling at farmer’s markets and street fairs,” Tillotson says. “We set up an online account so that our friends could pay us. We would make it all night long, and do deliveries during the day. It got to the point where the company was taking over our lives, and we were hardly going to school.”
Neither of them really understood the business side of things – Tillotson was studying Spanish and journalism, while Welsh was an environmental studies major – and at first the business just grew haphazardly. Even their original name, Wild Squirrel, turned out to be a problemwhen they were sued by Squirrel Brand, a longtime peanut butter maker, for copyright infringement. (The girls changed the name of their business to Wild Friends in 2013.)
Instead, between the taping and the airing, they turned to Kickstarter, the crowdfunding site where entrepreneurs can give their backers "rewards." The $10 backers got a two ounce packet of nut butter, a handwritten thank you note and company stickers, while the $100 ones received a five-pack of nut butter jars and a Wild Squirrels t-shirt. They raised a total of $10,687. “That allowed us to produce 10,000 jars of nut butter, which we brought back to my parents’ garage and sold all over Oregon,” Tillotson says.
While there are a lot of nut butter companies, something about their healthy but offbeat flavors like chocolate coconut and cinnamon raisin clicked with consumers. It’s not cheap, at $10-to-13 for a 16-ounce jar on Amazon, versus $3 for basic Jif, but as an indulgence it’s not particularly expensive either. Ben Lee, CircleUp’s director of business development, calls it “a more craveable, indulgent version of a standard product.”
Today, Wild Friends nut butters are on the shelves at Whole Foods, Costco (where its honey sunflower butter comes in giant 26-ounce jars), Kroger, Target and thousands of other outlets. To get into Costco, they went to a local vendor fair and did road shows, where you bring the product on consignment to test it out. “You set up camp, and listen to your customers,” Tillotson says.
Even in the early days, Tillotson says, they got a lot of advice from her dad, Bruce Tillotson, who had been a salesman for Honest Tea. After Coca-Cola acquired Honest Tea in 2011, he joined his daughter’s startup full-time as chief of sales, helping them sort through the thorny issues of pricing as well as getting the product on the shelves. At the end of 2011, Wild Friends was available in just 30 outlets; today it sells in 12,000. “My dad and I have a call every single morning to make sure we are on the same page. Because he is such a sales guy, I feel like I wouldn’t have known him fully without working with him,” Tillotson says.
In 2013, Wild Friends raised $450,000 on CircleUp, an investor platform that’s helped 183 companies raise more than $240 million. Then, with revenues of nearly $4 million last year, it went back for more financing this year. This time, it raised $1.4 million in a convertible debt offering. Annie's Foraker was among the investors. Other prominent investors who joined the round through CircleUp’s Growth Fund include Walmart’s former vice chairman Eduardo Castro-Wright and Duncan Niederauer, former chief executive of the New York Stock Exchange. Tillotson and Welsh remain the company's majority owners, though they won't disclose the exact ownership breakdown.
“I had tried their product once, and I thought it was really great, and then I was actually watching TV one day and I saw their piece on Shark Tank in reruns,” Foraker says. “I was like, ‘Oh, that’s really cool, I know that product.’” When Foraker tweeted to them, Tillotson recalls, “we freaked out. What are we going to do? We tweeted back, and asked him if he’d be willing to talk on the phone.”
He was, and ultimately became a mentor, advising them as he does with a dozen food companies he’s taken under his wing. He helped them think about the brand, and what it stands for, as well as some of the practical aspects of running a business, like contract manufacturing and capital-raising. “They are classic entrepreneurs,” Foraker says. “They are young and hungry and full of passion for their product, and they have grown their business really fast without losing a lot of money, which is really hard to do.”
Still, there are limits to the crowded nut butter category, and with 11 flavors of peanut butter, almond butter and sunflower butter, plus seasonal offerings like gingerbread peanut butter and sugar cookie peanut butter, Wild Friends may be approaching them. The company had hoped to reach $9.2 million in sales this year, but expectations slipped as the hiring of additional salespeople got pushed back to the second quarter from the first. Tillotson says they’re looking to launch new snacks (though she won’t say more) where, as with the nut butters, they can make an indulgence that people love with less sugar and more healthy ingredients.
As a Millennial, Tillotson wants to create products that appeal to others of her generation – and as an entrepreneur she’s dreaming big. “There is such an opportunity in the Millennial generation. We all eat healthier and buy healthy foods. We spend more than our parents’ generation on healthy foods, and we want to have brands we can connect with,” she says. “I think the opportunity is to build this generation’s Annie’s.”