Gary Hirshberg – Fast 50 2003


How do you maintain your privately held company’s well-known social mission and find an exit strategy for 300 shareholders (mostly friends and family) without going public? You find a big corporate partner (Groupe Danone) that is willing to pay top dollar for a big stake, leave you in charge, and keep your company’s mission and strategy intact.


Gary Hirshberg
President and CEO, Stonyfield Farm Inc.
Londonderry, New Hampshire


Tell us what you do (or what your team or organization does) and the specific challenge you faced.
Stonyfield Farm began in 1983 with 7 cows and a great all natural yogurt recipe and has had the fastest CAGR in the industry for over 12 years. Today, it is nearly the 3rd largest yogurt company in America. The company has built a national reputation for its leadership in organics, natural nutrition and environmental responsibility. Stonyfield is now the largest organic yogurt producer in the nation, boasting annual sales approaching $100 million. Since 1997, Gary Hirshberg, President and CEO, was looking for an exit strategy for Stonyfield Farm’s 300 stockholders. The challenge- he wanted a lucrative exit for them without selling the company or going public. Hirshberg wanted a deal that would ensure the continued integration of the company’s social mission and its products. He had seen Ben & Jerry’s and other natural products companies lose control after acquisitions by conglomerate food corporations, and wanted to avoid that fate.

What was your moment of truth?
Gary knew he needed an exit strategy for Stonyfield Farm’s 300 investors, most of who were family and friends. He felt indebted to them for all of the years when they backed him and saved Stonyfield, but Gary faced a personal dilemma. While the time was right from them to sell, he was personally intent on remaining and did not want Stonyfield Farm’s founding mission and founder-control to be compromised or evaporate, like it had for many other firms. He explored a DPO, then opted for an IPO until reality hit when one of his competitor’s stock nearly tanked. Gary decided to risk it all by seeking a large corporate partner who would pay top dollar to the exiting investors and provide efficiency synergies, but also allow him to remain in complete control. Sixteen suitors later, Gary found one firm that was willing to even listen to his extraordinary proposal. He offered to sell majority ownership for a top of the market price, provided that he retained unchallenged voting control for as long as he wanted to remain. The suitor, Groupe Danone, balked twice, but ultimately came to the table for what turned out to be a 2-year negotiation. (The exact date? 10/4/2000)

What were the results?
Stonyfield achieved a highly favorable liquidity exit for its investors and a strong growth partner. Groupe Danone entered the U.S. natural and organic products segment with the partnership. Group Danone purchased a 40% minority share, followed by an additional 35% purchase. Stonyfield remains independently managed and controlled by Gary Hirshberg. Numerous smaller, natural and organic product companies have been acquired by conglomerates, resulting in a change of control and management, as well as the demise of the founding mission, spirit and vitality. This deal is unprecedented in the food industry and serves as a model for mission and values-driven ventures.

What’s your parting tip?
Don’t let investment bankers tell you it can’t be done. Two willing parties can make anything come true. Realize, if you don’t ask, you’ll never get.