Written by Maggie Cramer | Photos by Anthony Harden (January 2017)
As our ScaleUp WNC case study reveals, Roots Hummus founder Matt Parris took hummus from a side revenue stream and turned it into the company’s main course.
As an adaptable, keen businessman and founder of Roots Hummus, Matt Parris has tried his hand at many food ventures: operating a cafe, offering catering services, providing bulk orders to wholesale clients, and, of course, selling product in the retail market. In other words, his company has looked very different from year to year over the past decade. But as these shifts between endeavors have taken place, one thing has remained the same: Roots’ purpose. As a social entrepreneur, Parris has had the consistent goal to create a viable company so that it, and he, can give back.
“The idea has always been to be ragingly successful so that the business can be used as a tool for good,” Parris says. But, he notes, he didn’t expect to be a raging success out of the gate, nor want to be a company that makes a huge splash in its debut, but struggles to keep up with demand, ultimately fading away. He wanted to carefully and consciously craft a business with staying power, for its customers and its beneficiaries.
His focus and intention has paid off: Roots has grown more than 50 percent every year since inception and recently established the nonprofit Roots Foundation, which pays it forward by building edible landscapes to strengthen communities.
Launching With Purpose
Mission in mind, Parris first launched Roots as a community café in 2006 in just 200 square feet of rented space at the back of the West Asheville Co-Op. Although not a career chef, he wanted to bring people together through affordable, delicious, and healthy food—made with fresh, local ingredients like he grew up eating from his parent’s backyard garden.
“The dream,” Parris explains, “was actually to help people convert their yards into productive growing spaces and sell part of the yield to Roots to provide income for the growers and erode social divisions.”
He wasn’t able to immediately source from neighboring yards, but he did bring in kitchen help that shared his vision of sourcing locally and organically, and together they served up a seasonal, farm-fresh menu of honest and nourishing eats—including scratch-made hummus.
Unfortunately, numerous rent hikes at the Co-Op compelled Parris to seek out a new location; rent increased from $250 per month at the outset to $2,650 within 18 months—a 960 percent increase. (The Co-Op would close in May of 2009 following a string of financial troubles.) Ultimately, he moved Roots to what is still its current home base at 166 West Haywood Street in the River Arts District (RAD). The new space couldn’t house a café right away, but he and his shoestring staff of two kept on cooking. They quickly reinvented the business model, taking catering orders wherever possible and forging a fruitful—and what would become pivotal—relationship with Earth Fare to stock their deli case with premade items like salads.
Near Wipeout: Bouncing Back from a Revenue Hit
While it wasn’t easy to keep the café closed and seemingly abandon his original focus, in late 2007, Parris turned the company’s attention almost exclusively to wholesale clients and the budding relationship with Earth Fare. He reminded himself that the business needed to be profitable in order to give back, and at the time, wholesale business was booming: The Roots team literally cranked out tons of deli salads, wraps, and hummus primarily for the Asheville-based grocer, which was deep in the process of expansion itself—opening stores throughout North Carolina and beyond.
“It was great because as Earth Fare grew, we were growing,” he shares. “We would have yet another store we were sending several hundred pounds to every week.”
When the relationship began, Roots sold Earth Fare their hummus in bulk, which each store would then package for resale with the grocery’s own deli labels. But in 2008, Earth Fare decided to go to with another bulk hummus supplier. Fortunately, they offered to still carry his hummus—if packaged in its own branded retail containers. It was a somewhat serendipitous “in” in a business where competition for shelf space is notoriously fierce.
Parris knew Roots had a standout product thanks to its pure, quality ingredients, and one that people enjoyed based on customer feedback to store deli managers, as well as previously at the cafe. So, he accepted the challenge to brand their hummus and sell it alongside the big guys. With encouragement from Earth Fare and an intense production push, the first labeled tubs of Roots Hummus hit the shelves that year. At that time, Parris also began investing in a local marketing team to help build the new brand and ensure the hummus sold, which it did… well.
He invested cautiously, not throwing all of his eggs into the Roots Hummus basket just yet. With a little change in his pocket, he reopened the café in the RAD location that same year. He later moved it to the Grey Eagle on Asheville’s Clingman Avenue because the bulk wholesale business continued to grow and demand space at their home base.
Although they had gone with a new bulk hummus supplier, Earth Fare kept Roots on for other deli orders. And even though Roots was selling, to start 2012, Parris and his growing team still directed much of their attention to bulk deli products—he closed the café for good in 2011, and early in 2012 took catering services off the table. But that fall, Roots got the news that Earth Fare had found a cheaper supplier, and that they’d no longer be ordering any of their bulk items.
“Everybody wears margin goggles in the grocery industry,” Parris laments. “That’s what drives their purchasing decisions. Even though volume may go down, if they get a higher percentage per sale, a cheaper source looks attractive at the beginning.”
It was a near wipeout: Roots lost half of its annual revenue in one fell swoop. But, as Parris explains, the financial hit was a blessing in disguise. “For several months, I had to pay people less and really dig into another aspect of the business,” he says. “It was a tough six to eight months. But the brand development that happened in that time may not have really taken hold had it not been required.”
A Rising Tide: Becoming a Hummus Brand
When Earth Fare opted for another hummus supplier, it was the first time, aside from efforts with the café, that Roots became a business and a brand. And marketing the fledgling brand is where all company energy was funneled after the big blow at the end of 2012. Luckily, it was a good year for hummus—and has remained so since.
“Hummus has been a growing product, and it’s a really high volume product,” Parris notes. “It’s now a staple in a lot of people’s homes.”
Not only was increased interest in hummus evident at Earth Fare, but Parris and his team saw its star rising at Greenlife Grocery in North Asheville, too, where they also began selling shortly after the first branded, packaged tubs rolled off the line. It didn’t take long for Roots Hummus to become one of the store’s best-selling products. In fact, the Merrimon Avenue location sold such a high number of Roots’ tubs that by the time Texas-headquartered chain Whole Foods had acquired and fully transitioned Greenlife to their store, also incidentally in 2012, they not only continued to sell Roots, but gave them shelf space in all of their North Carolina outposts.
Whole Foods also opened their store shelves to Roots in other markets, including Los Angeles. Parris spent four months establishing the brand in that region and building a marketing team local to Los Angeles. While there, he also recruited a West Coaster to join his management staff: His brother, Lowell, who left his long-time gig at Microsoft and helped usher in a new level of organizational competency that continues to provide a solid base for operations today.
And despite the fact that a bulk foods relationship with Earth Fare ended, a partnership remained intact. They welcomed Roots into their stores to conduct samplings and build their following: Area Roots marketers hit the road across the Carolinas, Tennessee, and Georgia for in-store product demonstrations.
In all markets, they let customers try the hummus for themselves, and educated them about its ingredients, or more so what it doesn’t contain: anything canned, powdered, or processed. “With few exceptions, it’s a difference people immediately recognize,” Parris says.
Thanks to intense marketing efforts and an increased presence around the Southeast and country, more and more people began to take notice—and take home a tub, or two, or three. In 2014 Roots even began shipping to a store in New York City, Murray’s Cheese, where buyers had heard of and loved the product. Eventually, Parris also traveled there for several months to build the brand and an New York City team. The Northeast is now Roots’ second-largest sales region.
“The market has been more and more ripe for local and authentic goods, and so we got the benefit of those doors being opened or being available to be opened,” he shares. “The time was right and that was the tide that was rising.”
Riding the Wave: Growing a Brand and Team Sustainably
Although he believes Roots is the best hummus on the market, had the tide been rising for salads or wraps, Parris admits, he would have moved the company in that direction. “The transition helped me hone in on the overall business philosophy: We’re about a really, really good product, and whatever that product is, we’re about using it to do good in the world.”
Parris credits this ability and desire to go with the flow with how Roots has not only survived, but thrived in the face of changes and setbacks. “There is no finish line that we’re trying to race to. It’s really about sustainable growth and the quality of the experience along the way.”
Thus, he’s continued to invest a considerable amount of money in marketing staff—12 out of his total 43 full-time employees work in marketing. Since a shift to full-time focus on hummus in 2014, their job has been to build a brand with, well, roots: To round up a loyal following that wants the hummus to stick around so that the company and foundation can dig in and help the communities in which it’s sold.
“There has been a lot to do as far as the marketing end of the businesses—establishing and fleshing out the soul of the business—and I think we’ve done a good job of that,” Parris says. “One of the ways that we market is to really get involved in our communities. And as we show up to do some of the good work that’s happening, with yummy snacks to share, we make real connections that translate into lasting sales. We plant seeds with the people that resonate with what we’re doing.”
He adds that his staff, particularly the marketing team, are also 100 percent on board with the company’s purpose. For example, the members that engage in outreach efforts around school and community garden events and workdays personally value Roots’ mission and sincerely believe in food as a powerful education and community-building tool.
Over the years as the company scaled, Parris says his role became predominantly about relationships and recruiting talent for his team. His loyalty, he says, is first to team members, with customers, distributors, and other partners a close second—though, he acknowledges, that each relationship is important and must be nurtured. While a chief focus for the company, hiring and team expansion happened organically and without a great deal of strategy. Rather, it depended more on Parris’ innate ability to find the right people.
“There’s some magic in there that is hard to quantify,” he says of his process. “When I’ve connected with someone with a certain skill set that I thought could be useful in the company, and I felt like they were a good person, then I have created space and developed a role for them.” But that’s not necessarily the path he’d suggest for other business owners: “It can drive some people a little bit crazy, because it can be distracting.” In his case, he’s certain his unconventional approach is the reason Roots has a strong team today.
With growth, Roots has consistently provided raises for its employees, and everyone is paid a living wage. Staff members now get four weeks of paid vacation a year, and the company has a quarterly profit-sharing system and gives its employees a health care stipend.
“Obviously, the revenue has to be there to support the kinds of things you want to do for your team,” he says. “But I’ve really believed in this business and been very determined to make it sustainable and successful, and finding the right people and treating them right has always been a priority.”
As a result, he feels he has the perfect team to take on any future challenges and growth opportunities that come Roots’ way. “A lot of people have come through the business and a lot are still here that understand what the heart and soul of the business is about,” he says. “They’re not just there punching the clock; they actually bring themselves to the business, and I know that’s a huge part of why we’re successful.”
Manufacturing for Quality and Innovation
Much of Roots’ dynamo team is in manufacturing, which Parris notes is one of the more challenging aspects of the business. “There’s a reason that a lot of food companies don’t do their own production,” he jests. Not only is production difficult to manage, but being the manufacturer requires a significant financial investment up-front. However, as Roots has scaled and continues to scale, Parris says that being their own manufacturer was and will be much more profitable than paying a co-packer.
What’s more, keeping the manufacturing in-house allows Roots to stay acutely focused on product quality and consistency, as well as to innovate and set their eyes on additional sustainable growth in the future.
Parris likens these innovation goals to those of the craft beer industry—after all, Roots’ slogan is “the microbrew of hummus.” In craft brewing, manufacturing facilities often have experimentation labs, he points out, to help them stay ahead of the curve and expand on their techniques and processes. He envisions a Roots lab and test kitchen for everything from pressing oils to limited-run flavors to even further distinguish the hummus from others on the market in terms of quality, purity, and nutrition. But not only does he see such advancement improving the end product, he also sees it benefitting his team.
“I want people who have a real passion for great food to have the space and the environment to innovate and experiment,” he says, “to keep that spirit alive.”
Roots isn’t there yet, though, and Parris’ insistence on keeping manufacturing in-house has held the company back when it comes to increasing sales. They have had to turn down the opportunity to expand into a thousand new stores through another grocery chain because they simply didn’t have enough available production capacity at the time.
They’re outgrowing their tiny home in the RAD and are currently using satellite space for storage, as well as the shared commercial kitchen at Blue Ridge Food Ventures to cook their chickpeas. “That was a real bottleneck in our production,” he shares. “The beans are the most significant input. We were running almost 24/7 at our existing facility with just a few hours of downtime, so something had to give.”
That shift, he says, has helped with the manageability of the business. “It’s not just running all of the time. We can actually work Monday through Friday now, during normal business hours, which is a relief for the team.”
Spreading Its Roots
He recognizes it’s a temporary solution. “I’ve been at this point for a couple of years of really trying to find our next home and get a proper production facility set up,” he says. Once they do, Roots will be able to scale up further.
There is a good reason that Parris hasn’t already moved the company: debt—or lack thereof. “One of the things that I’m really quite proud of is that we’ve paid for most of what we’ve done with the revenue from the business,” he shares. Besides a local producer loan from Whole Foods that allowed them to buy a packaging machine, and small loans from Mountain BizWorks and individuals, also for packaging equipment, Roots has taken on very little liability. “I really don’t like to do it. It puts you in a position where you can’t roll with the punches as far as cash flow goes.”
However, a move may happen soon. “Financially, the company is in good shape and getting better,” Parris says. “Things come together for us to really create the kind of facility that can accommodate where we’re going, then we can start to focus on sales again; not just marketing, but sales.”
He’ll be leaning heavily on his team for that, which includes his brother Lowell as COO and Michael Porterfield as CEO, as well as Mark Rosenstein—whom Parris affectionately calls “the father of the local farm-to-table movement”—at the helm of the Roots Foundation. Parris has recently stepped away from the day-to-day operations of the business to explore personal interests, recharge from the decade-long marathon, and digest where the company has been and where it’s headed.
“I will continue to be closely involved, but not in the same day-to-day way, i.e., not like Michael and Lowell, and certainly not in the CEO position,” he explains. “The change in my role is permanent. The time frame before I fully re-engage in my new role is yet to be determined, but most likely at least another six months.”
However, he fully intends to remain independent as far as ownership goes.
“It’s not about trying to cash out. It’s about the long-term sustainability of the company, and becoming more and more capable of being a part of essential changes that we, as a society, must focus on and manifest.”
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Case study provided by ScaleUp WNC, a program of Mountain BizWorks that annually provides 30 regional entrepreneurs with intensive growth strategy development, mentorship, access-to-capital support, and a rich network of peer business owners. Find additional cases and learn more about the program at Capitalatplay.com/scaleupwnc.
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