What is in this article?:
- What Really Cool Foods' closure can teach you about investment
- Are organic, natural companies still lucrative for investors?
Natural and organic prepared foods maker Really Cool Foods shut its doors Nov. 28, after it failed to gain investment to continue production. What led to the manufacturer's demise and should other producers in the natural and organic food industry be worried about the same fate?
If you visit the Really Cool Foods website today, you'll find a bare bones splash page that promises: "We're busy cooking up some REALLY COOL stuff and will be back soon. REALLY." But "really" in this case means "never." The organic and natural prepared foods purveyor failed to find a buyer or investors willing to keep production running and closed its doors in Cambridge City, Ind., on Nov. 28.
The company that had once planned to hire 1,000 workers instead will be laying off 131 people, the company's chief financial officer, Joseph Meyers, reported in a letter to government officials. In the three months Really Cool Foods has been on the market, no parties stepped forward and the company's lenders were unwilling to advance additional funds.
A 21-year-old Really Cool Foods worker, Josh James, offered his perspective on the closing to pal-item.com. James had been working for the company since 2010: "It was just sorry management, sorry people who were running the place. I had about five different supervisors on the projection floor and four different (human resources) directors," he said. "I'm more sad than anything else because the company had a lot of potential but didn't have the right person in the driver's seat."
Timeline of Really Cool Foods' struggles
A review of the company's timeline shows that Really Cool Foods did experience many problems during its short time in operation. Below are some highlights:
- In an October 2007 groundbreaking ceremony, Really Cool Foods announced it would make a $100 million investment over five to seven years in Wayne County, Ind., reported pal-item.com.
- In 2009, the company's production facility came under fire for wastewater treatment problems. The company had nearly 200 employees at the time.
- After two rounds of layoffs in 2010 and 2011, and more struggles and money paid to curb its wastewater problems, the company took a brief production break in October of this year.
- This month, the U.S. Department of Agriculture found evidence of Listeria at the plant, but the problem was remedied and no products were recalled.
- Really Cool Foods officially closed its doors Nov. 28, 2011. President Steve West said in a press release: "Although we have received support from both state and county officials, as a result of increasing costs and continuing delays in anticipated sales, we were unable to sustain our business and forced to discontinue operations."