Austin’s Vital Farms raises $11 million to continue growth


A decade ago, Matthew O’Hayer started a pasture-raised egg business with 20 hens in Southeast Austin.

Since then, the company has grown to a network of 100 family-owned farms in seven states, and its eggs are sold in 49 states. Vital Farms is the largest supplier of pasture-raised eggs to Whole Foods Market, and customers include H-E-B, Safeway, Target and Wal-Mart.

Now, the company is getting ready for another wave of growth after receiving an $11.1 million private equity investment from Sunrise Strategic Partners, based in Boulder, Colo., and other individuals.

Austin-based Vital Farms doesn’t disclose how much money it has raised since inception. According to securities filings, in 2015 the company received $8 million from undisclosed investors to expand its operations in the Midwest, and $4 million, also from undisclosed investors, to broaden its base of family farmers.

The new capital will allow Vital Farms to complete and open a new 85,000-square-foot egg washing and packing facility in Springfield, Mo., said O’Hayer, Vital Farms CEO. The company plans to open the facility in September.

“It is state-of-the-art, and contains all types of robotics and will be able to process every egg we can produce until 2020,” O’Hayer said. “We have software that tracks eggs from the moment they’re laid. We’re able to know exactly what farms they come from, and we track them from the time they leave the farm to the plant where they’re washed, graded, sorted and packed into cartons, and then shipped to the grocery store.”

Vital Farms’ farmers produce organic, non-GMO and conventional eggs. The thing all eggs have in common is they are laid by chickens that spend most of their time outdoors, with each hen receiving about 100 square feet of outdoor space and access to a hen house.

O’Hayer says that’s different than cage-free chickens, which don’t necessarily have space to roam or access to the outdoors.

“We believe that raising healthy, happy birds outside on fresh pastures produces the most nutritious and flavorful eggs,” O’Hayer said. Vital Farms prices range from about $5 for conventional pasture-raised eggs to as much as $7.99 for organic pasture-raised eggs, compared to less than $2 for a dozen standard eggs.

The company, which started out by selling at farmers markets, has expanded by partnering with family-based farms, and today has suppliers in Texas, Arkansas, Oklahoma, Missouri, Kansas, Tennessee, Kentucky and Georgia.

Vital Farms doesn’t have ownership in the farms, but it has long-term contracts with them and the farms are required to operate under specific guidelines.

Two years ago, Vital Farms’ flagship site, 27 acres along Onion Creek, was purchased by the city of Austin after being flooded. The company doesn’t plan to launch new farm operations in Central Texas, but has partnerships with farms in other Texas cities, O’Hayer said.

Today, Vital Farms has about 130 employees, including about 30 in Austin.

“As a result of Matt’s vision and perseverance, Vital Farms created the category of ‘pasture raised’ and has established the first-ever scalable and sustainable pastured model,” said Steve Hughes, Sunrise Strategic Partners co-founder and CEO. “We believe that once the consumer understands the difference pasture-raised eggs provide they will switch to Vital Farms and never look back.”



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