In 1998, Mike Fata was a 22 year-old “hem-preneur” pressing oil from nutritious hemp seeds and selling it to four health food stores in Winnipeg. Due to lack of consumer awareness, regulatory uncertainty in the U.S., and the chaos of a newly re-established hemp farming infrastructure in Canada, success seemed like a longshot when he partnered with Alex Chwaiewsky and Martin Moravcik to form Manitoba Harvest Hemp Foods & Oils. As company President, Fata focused their resources on direct ‘grassroots’ interaction with customers at food shows, events and in store demos – a marketing strength that endures today.
Hemp itself is one of the hottest health food trends in the organic marketplace, and due to its sales growth of more than 1,000% over the past 5 years, PROFIT Magazine featured Manitoba Harvest in the PROFIT 100 list as one of the fastest growing companies in Canada. In 2005, Manitoba Harvest was named by Food in Canada Magazine as one of the Top Ten Emerging Food & Beverage Entrepreneurs and the prior year Fata was presented with the Business Development Bank of Canada’s (BDC) 2004 Young Entrepreneur Award. In October 2006, Manitoba Harvest was presented with the 2006 Socially Responsible Business Award for pioneering sustainable hemp agriculture in North America and for helping to spread organic farming.
Mike, can you give us a bit of your background, what got you into being an entrepreneur and specifically into this industry?
I was inspired to become an organic health food entrepreneur due to a life changing experience. In 1994, I was 18 and weighed more than 300 pounds. I undertook drastic “magic bullet” diets to try to fight obesity and lose weight. I learned the hard way that diet fads can be dangerous as a fat-free diet regimen made me very sick and almost killed me. I began researching nutrition, and learned that the body needs a critical set of good fats called essential fatty acids. The fat-free diet I implemented had been depleting me of these nutrients. A friend introduced me to hemp foods, a balanced vegetable source of essential fatty acids, protein and vitamins, which restored my vitality. The “power foods” that gave me the energy to implement a regular exercise program, including hemp seed, helped me get fit and slim down to under 200 pounds - a healthy weight and lifestyle I have maintained for more than a decade now.
In 1997, I met Martin Moravcik and Alex Chwaiewsky, the two other co-founders of Manitoba Harvest. Martin had been lobbying the government in Canada to legalize hemp farming and had just gotten the first crop in the ground. This motivated me to start a business that would help other people by offering healthy foods and education about healthy lifestyle choices, and that would support sustainable agriculture. We refer to hemp seeds as “seeds of change” and since our company’s humble beginnings, we have been inspired by a belief that this natural resource can be a shining example of sustainable agriculture and can drive social change in North America.
Hemp foods are gaining more and more recognition from nutrition experts due to their high and balanced concentration of Omega-3 and Omega-6 Essential Fatty Acids (EFAs), strong digestible protein profile, soluble and insoluble fiber content, and their host of vitamins and minerals. Hemp seed’s overall protein content of 34.6% is comparable to soy beans and is higher than that found in nuts, other seeds, meats, dairy products and fish or poultry. With regard to fats, hemp’s EFA profile is closer to fish oil than any other vegetable oil.
Can you tell us a bit about hemp and the operations of Manitoba Harvest?
Our mission is to create the healthiest hemp foods, to educate the public about healthy lifestyle choices and to support sustainable agriculture. Manitoba Harvest makes ‘staple’ hemp food products including cold-pressed Hemp Seed Oil, Shelled Hemp Seed, Hemp Seed Butter, Hemp Protein Powder and Hemp Protein Powder with Fiber, as well as Hemp Bliss (the first non-dairy organic hemp milk). We produce hemp foods for our brand, co-pack them for other brands, and sell them as ingredients to other food and cosmetic companies.
To create our shelled hemp seed, hemp seeds are cracked to expose the nutritious inner ‘nut’ and the shelled seeds are then screened to remove shells and other debris. To produce our hemp seed oil, seeds are freshly cold pressed to ensure that valuable enzymes and nutrients such as chlorophyll and vitamin E remain intact. After the hemp seeds are cold pressed to remove the oil, the left over protein rich hemp “cake” is cold milled and screened to create our protein powder and bran dusted to create our protein powder with fiber. Our creamy hemp seed butter is a “living” butter that is made by grinding 100% shelled hemp seed in small batches at low temperature. All our products are gluten-free and contain no artificial ingredients or preservatives.
Hemp farming is sustainable agriculture at its best. It is naturally pest-resistant crop, and because hemp plants grow rapidly and close together, they crowd out weeds and don’t need herbicides. Hemp’s only fertilizer requirement is nitrogen, which can be provided by nitrogen fixing cover crops in an organic system. It is also a soil-building plant that is excellent for crop rotation. Its strong roots anchor the soil to prevent erosion and the leaves return nutrients to the soil.
Did the opportunity and its unfolding meet your expectations?
I knew it would be a long and bumpy road to get to where Manitoba Harvest is today, but it has been a very fun and rewarding experience. Although we have come a long way, it is exciting that hemp is thriving and we are optimistic that hemp will become the next agricultural boom crop – like soy.
When we first started, we felt that success for us would be to become a big business. Now we realize that we are not done, there are significant transitions from small to medium size, medium to large, etc. We knew we needed to establish the business and make it sustainable. We envisioned this objective and we have made it happen. Now, there are new challenges as we continue to grow, some that we didn’t originally anticipate.
What is the most significant achievement for you personally? For the company?
I think the most significant achievement for our team is to see how we have boosted awareness about the healthy attributes of hemp foods to the degree that it is now a common product stocked at ‘mass’ grocery store chains and is enjoyed by people throughout ‘mainstream’ North America. When we started out, hemp foods were a niche health food product enjoyed mostly by ‘hippies,’ and hemp was considered a curiosity or novelty due to its misunderstood association with pot. We were underdogs when we started out - even our friends and family thought our business idea was foolish and they thought we would fail. It is satisfying for our company to know that we have worked very hard to persevere and flourish. Hemp’s reputation, and our balance sheet, has changed a lot in the last decade.
For me, the biggest accomplishment is to know that our company plays a role in helping people achieve optimal health. We receive a lot of testimonials from people that use our products, and some of them are pretty emotional – like my own experience. I feel blessed to be able to help people, and to make a living doing it. Another accomplishment worth noting is our role in supporting sustainable agriculture. Hemp is an amazing eco-friendly crop, and we have helped a lot of farmers in Canada understand the value in growing without herbicides or pesticides, or transitioning to organic hemp agriculture.
What has been the biggest challenge?
I think the biggest challenge has been educating the public and policymakers that industrial hemp is not pot and that it is really good for you - and tastes good, too. We still hear jokes from people about ‘smoking it,’ but it is amazing how the conversation has changed over the last decade and to see how the pot joke silliness is waning. Even with all the progress, this issue is still a challenge today. There are still people out there that are unaware of hemp, or confused, and that is why we continue a grassroots approach to ‘take the product to the streets’ to meet people and enlighten them first-hand.
Regulatory issues have been a challenge over the years. In 2003, the U.S. Drug Enforcement Agency proposed regulations that would ban sales of hemp foods in the U.S. Other DEA actions forced retailers to remove our products from store shelves. We weathered adversity and prepared for the day when the legal issues were resolved. The tide really turned in 2004, when the Hemp Industries Association won their multi-year court case against the DEA. The U.S. court ruled that hemp foods are legal because they don’t contain THC, the drug found in marijuana, - a distant “cousin” to hemp. We were part of the coalition that defeated the DEA. Now the DEA attention has turned to continuing the ban on hemp farming in the U.S., but thanks to many hemp advocates the industry is making a lot of headway in states such as California and North Dakota and in the national policy arena. Since we are in Canada we can grow hemp and sell our products in the U.S., so the U.S. Agriculture ban is a less acute challenge for us, but it is significant for the whole hemp movement.
What is the future of the hemp industry over the next few years? Will it grow and by how much do you figure it will outpace overall industry growth?
Hemp foods have experienced steady double-digit growth over the past five years, and industry experts expect that to continue for at least several more years. As an industry, we have only begun to scratch the surface of hemp’s potential. Hemp foods and cosmetics are just the tip of the iceberg. There are so many useful products just entering the marketplace or in development. All of these products flooding the marketplace in so many sectors, such as cosmetics, clothing, auto parts, textiles, paper, etc. - and this emergence will really boost the public awareness of hemp and its reputation as a valuable sustainable resource.
Back to hemp foods specifically, we expect many new innovations in how hemp seed products will be used as a nutritious ingredient in packaged foods and in a wider variety of recipes. The utility of hemp as a food is really just starting to evolve, and culinary creativity is starting to blossom. We supply hundreds of companies with our hemp seeds, oil and protein powder that are used as ingredients in bars, shakes, cereals, baking, cosmetics – and the list goes on. For a decade now, our business has continued to grow at 50% + per year. The overall hemp industry is growing at about 30% per year which overshadows the 15%-20% growth of the natural products industry.
Is hemp becoming more mainstream?
Yes, you can now find hemp foods in every major supermarket across Canada and the US.
It is exciting how hemp foods are being embraced by mainstream culture. Demand has really skyrocketed and hemp foods are now widely available including many mainstream grocery chains. Products like Hemp Bliss our new organic hemp milk have made it easy for people to try hemp, and then they move on to other varieties such as seed, oil, butter, protein powder and flour. It is also fun to see all of the new products that contain hemp as an ingredient. The ingredient side of our business is really starting to take off. Part of the mainstream success is the society’s general movement toward healthier foods and organics, and part of it is due to growing awareness of hemp’s own healthy attributes. I also think that because hemp is now being used in many products in different sectors, it is reinforcing it as a legitimate and useful thing.
Let’s talk a bit more about the ingredient side of the business. How significant is this to future plans?
We feel the ingredients side will be a major driver for the future. We’re currently expanding production and right now have more requests than we can supply. We’re looking forward to it catching on even more. Take a look at soy; we see a similar opportunity. Most of our activity currently is in Canada and the US, but we’re also selling some in the EU and expect that to grow, especially in the more established, mature markets, which are much like Canada with a good supermarket crowd. We’ll sell more throughout North America as well.
How would you evaluate the importance of sustainability, fair trade and other practices versus profitability for emerging companies in the natural products industry?
Implementing those practices is imperative, and a triple-bottom-line philosophy is at the heart of our company mission. I think those practices and profitability can go together. We run a pretty tight ship and are very efficient and resourceful, and that business acumen allows us to use resources on doing ‘good’ things while still maintaining profitability. Our customers really appreciate our mission, and in addition to quality and the other things we are doing well, they think our principles and mission are admirable and they reward us by ‘voting with their dollars.’ We in turn respect their love and strive to do even more things to make the world a better place.
Are you seeing and able to capitalize on consumers' desire to do business with companies 'doing good'?
Yes, savvy consumers now-a-days are educating themselves about the products that they buy and what the companies are doing “behind the scenes”. The day of the corporate giants that can sell a brand with a smiley face and behind the scene doing nasty things to the environment or not be involved in social responsibility are coming to an end. Consumers want to support “stand up” companies and Manitoba Harvest is a shining example. Our approach has always been to be a ‘grassroots’ company that is out there in the world meeting people at shows, during events, in stores, on the street, wherever we can be with them in person talking about the merits of hemp foods, sustainable agriculture and healthy lifestyles. We estimate that our team interacts with more than 250,000 people annually. I think they appreciate how passionate we are and they see us in many places. It’s a busy lifestyle out on the road but it is very rewarding.
What are the characteristics within you that allow you to be the visionary driving Manitoba Harvest? At what point will you know you've been successful?
I think a key characteristic of mine is that I am passionate about the planet and people’s health. Hemp is a vehicle to make the positive change. I am blessed that we have a team of people that share this passion. It is more than just a business or job to us, it is a lifestyle.
I think we have already been successful by helping hemp get from where it was in 1998 to the hot category it is today, but to answer your question more directly, I would say an ambitious goal would be for sales of hemp in North America to be on par with sales of soy or flax, and for Manitoba Harvest to still be the leading brand.
Do you and if so, how do you differentiate between building the company and building the category?
We have spent so much time, energy and resources on educating people about hemp foods in general that I would have to say that a good chunk of our efforts have gone toward building the category – which is rewarding, too. Only recently have we focused more on telling the story about what makes us special versus the competition. We distinguish our company from the competition by controlling production from “seed to shelf.” Because of this advantage, we are better able to ensure freshness, price stability and quality for our customers. Freshness is critical in the hemp food business because improperly processed, stored or packaged products can become rancid. To ensure nutritional value and flavor, we create products fresh on-demand daily. We stay focused by being the largest hemp food-only processor.
I am on the board of directors of the Canadian Hemp Trade Alliance and help to guide the association through projects focused on expanding the category. We are also members of the Hemp Industries Association and Vote Hemp, the two driving trade associations in the US.
Are there other collaborations you’re exploring?
Yes, there are. We’re investigating ingredient supply partnerships, and we are looking into the potential to co-brand with cross promotion.
Who are your mentors and what have they taught you?
Although there are many people in the natural products industry that I respect a great deal, most of my most practical mentors are in a peer group that we call the “Power Foods” group. This marketing and social initiative that we all started a few years ago includes Sambazon Acai, Dagoba Chocolate, Guayaki Yerba Mate and Amazing Grass. We often share resources on ads, event booths, product demonstrations, event sponsorships, and communications, as well as co-sponsor industry parties and ‘summits.’ This group practice: gets more bang-for-the-buck; magnifies their common social missions; creates a larger, fun lifestyle vibe; and uses our combined cultural appeal to cross-educate customers. Each of us follow the 'triple-bottom-line' business philosophy of measuring social, environmental and financial success. In a “tribal” sense, the Power Foods Group members have each taught me a lot of things about business and integrity, but most valued is the communal sense that we are all moving forward together and are always there to provide practical advice or to share an important contact or concept. The Power Foods Group has also reinforced my philosophy that business should be fun and you should love what you do, or do something else.
What would you like to teach those that emulate and those that follow? What would you do differently?
My advice would be to find something that you are passionate about and create a business associated with it. Then, try as hard as you can at it, stick to your mission and principles, be prepared to experience some tough times and build mutually beneficial relationships with peers that can help with that, - and you can return the favor some day. From a business perspective, I don’t have many regrets, but I do wish we had introduced Hemp Bliss our organic hemp milk sooner, as we had it on the drawing board for a while and now it has really propelled the whole hemp foods category forward.
What's in the future for Manitoba Harvest? For Mike Fata?
Over the years, I think that Manitoba Harvest has taken a prudent, sustainable growth approach, and this has helped us stay healthy during the ups and downs of the marketplace. Now that there is steady category growth and regulatory stability, we are focused on expanding our capacity to meet the growing consumer demand. We are pleased to be expanding to a larger facility in our community in the next few months that will allow us to hire more people to help the local economy. In the near future, we also plan to partner with more farmers and will assist them with converting to eco-friendly and organic hemp farming. As consumer awareness of healthy hemp foods continues to grow, we must meet the demands and interests of consumers and adapt with innovative new products. The most recent example of innovation is our new Hemp Bliss organic hemp milk. This is the first organic hemp milk in North America. In addition to pursuing growth of our branded products, we also will be expanding the bulk ingredient supply part of our company, as there is great potential for hemp to be a popular healthy ingredient in a wide range of products.
As for me, I am enjoying every minute of it all, and I plan to keep balancing the demand of my busy work schedule with quality time with my friends and family, at the dinner table, on the snowboard or at the beach.