Mark Rampolla announced today that that he will be joining Beanfields Snacks, a Los Angeles-based bean chip brand, as CEO. Rampolla is the founder of ZICO Coconut Water, which was acquired by The Coca-Cola Company in 2013, and partner of PowerPlant Ventures, a plant-centric venture fund co-founded with Veggie Grill Founders T.K. Pillan and Kevin Boylan. Rampolla’s new role will be effective immediately. He will remain a partner of PowerPlant Ventures, focused on existing companies within the fund’s portfolio (REBBL, Beyond Meat, Hail Merry, Thrive Market, etc.)
In this new role with Beanfields, Rampolla will focus on growing the company while also accelerating a new revenue, equity, and job-creation partnership with local Los Angeles nonprofit Homeboy Industries, the largest gang intervention, rehabilitation, and re-entry program in the world, founded by Fr. Greg Boyle. Rampolla will not be taking compensation for this role.
We spoke with Rampolla about why he took the role, what the new partnership looks like, and how he hopes it can be a model for pairing business with impact in the future.
Tell us how you ended up deciding to take the CEO role again, and why this company.
Mark Rampolla: I was a small angel investor in Beanfields pretty much from the beginning. I stayed in touch with them and was helpful now and again on little issues that came up.
Meanwhile, I got to know Father Greg Boyle at Homeboy Industries, and decided I wanted to help them build more sustainable streams of revenue. I was thinking about launching a new beverage specifically for Homeboy. I would do some work on it now and again in the background, but I was partially terrified and keenly aware of the absurdity of launching a new beverage.
Late in 2016, Beanfields co-founder Reed Glidden approached me and said, “I need to get some capital in to help us grow. I’m not sure that I’m the guy and want to be running it from here, so I’m looking for an active investor. Is there any way you can get involved?”
My fund, PowerPlant, takes a passive role and is looking for management teams who want to run it to the finish line. So it didn’t make sense for us as a fund, initially. But the more I thought about it, I realized, “Wow, this could be it. This could be both a great business opportunity and something that we could weave into Homeboy.”
We were able to structure a unique deal and bring in some incredible investors. As I worked on it, I just kept getting more excited. I started obsessing around it and thinking about it all the time and realizing both that there is a big business opportunity in the snack food category and that this model we’re building with Homeboy could be a unique new social impact model. Finally I just decided I want to run it.
Tell us more about this unique social impact model you’re trying out.
MR: There are four pieces to it. First, there’s a revenue share piece: Homeboy Industries will get 1 percent of Beanfields’ revenue. Second, there’s an employee time piece; Homeboy will get 1 percent of employee time.
Third, Homeboy Industries is getting a share of equity in the business.
All the investors have committed to give at least 10 percent and some up to 50 percent of their gain to Homeboy, after we return their capital.
So if somebody puts in $100,000, they get that $100,000 back, and then Homeboy gets between 10 percent and 50 percent of the upside. So if that $100,000 turns into a million, then Homeboy gets a percent of that $900,000 of profit, so between $90,000 and $450,000 based off that investor’s return.
It’s a model investors are very familiar and comfortable with, because it’s the way funds work. A VC fund takes a carry; it pays back its investors and then it takes, typically, 20 percent of the gain. Investors can say, “Okay, great. I’m paying a carry to Homeboy.” The investors we gathered collectively own 51 percent of Beanfields, so effectively Homeboy winds up with a 5 percent ownership stake. It’s not voting. They’re not on the board. It’s just a pure percentage of upside.
The fourth piece is jobs. The goal is to create a program where we select some group of the Homeboy graduates to come into Beanfields. It might be summer internships, it might be full-time jobs doing demos, events, warehouse work, office work. Homeboy does a great job of helping people find jobs after they go through their programs, but this one is going to be a close, fresh relationship where we are actively looking to place Homeboy graduates. It’s going to start small and we’re going to build. This is a totally new program for Beanfields. I’ve got a lot of work to do to figure that out. At a minimum, we certainly will not have a policy of “check the box if you have a criminal record” It’s almost like some of these roles are going to be record-required.
And you hope to replicate this funding model and partnership strategy more widely?
MR: The bigger play here is it creates a model for investors. There’s a structure that can work and we could theoretically replicate this across many, many, many different categories and segments and industries. But that’s only if we get it right and we document and learn and share as we go.
I plan on being as transparent and open as we can on how this works and why it works.
What I hope to prove with this is that there are a group of investors who will back this type of partnership. I raised a $42 million fund. I’ve helped companies raise a couple hundred million, and at the end of the day, most investors, even very socially conscious and aware ones, invest in things that make them phenomenal returns and then they decide on their own how to give that money away — if they’re going to give that money away.
Why not make money hand-in-hand with making a positive impact? If we can prove this out, I think we can go out and raise a fund or special purpose vehicles or on a one-off basis. We’ll have a framework where we can say to investors, “Look, we did achieve the returns that you would expect. We’ve delivered multiples of your money back.” But we also have a structure where, as part of that, every business we’re involved in has a nonprofit partner that’s going to benefit as the business scales. So it can help to create a level of sustainability and, frankly, shared wealth in communities.
That is not common. I’m not articulating it as clearly as I’ll be able to someday because I’m so focused on just executing it right now, but I’ve had conversations with multibillion-dollar funding groups that are looking at this saying, “Wow, this is a unique model. We knew there was a way to build this structure. We would be interested in supporting that.” Bringing nonprofits that we think are best in class and putting them in front of an organization that’s trying to build businesses that are best in class and almost have a matching program where you build these partnerships out of the gate.
When I think back to me as the young entrepreneur starting ZICO, if somebody out of the gate had said, “We’re going to back you. We know this industry. We’ve got a lot of support behind us. We want you to take a lower valuation, give up a little bit of upside, but we’re going to improve your probability of success and help you make a real impact at an even greater scale,” I would have been all over it.
What was specific about what you saw in Beanfields that made it a good candidate for this new model? How did you know it was right?
MR: I don’t do small, so when I was thinking about doing something for Homeboy, I didn’t want it to be a little cottage industry. I wanted it to be something that has a shot at least of being a billion-dollar business. I think this does.
I look at this similar to ZICO in about 2008. A lot of people had their doubts, but a lot people also believed that coconut water would become massive and there would be a couple of leading brands. I see a lot of similarities for where Beanfields is today. The snack food world is not that different than beverages. It’s a multibillion-dollar category with a couple of dominant players whose products are pretty much crap. I feel like consumers are ready for something new. Everybody loves these chips when I give them to them.
They already had a great product, ethically sourced, non-GMO. They’re a B Corp. The values were already in place. It’s an easy place to start versus having to build everything from scratch. They have good momentum. That said, Beanfields frankly probably wouldn’t have been funded It’s a great product, but not all great products get funded.
Why not take a salary?
MR: Father Greg Boyle decided 20-some years ago to dedicate his life to helping this community and people who really needed it. When I look at that, I feel like I can afford to put a year or two of my life into doing this without being compensated. I was too young when I did Peace Corps. I’ve always wanted to do it again. It’s sort of my second go around as a Peace Corps volunteer.
Are you an investor in the company?
MR: Not personally. I own a piece of PowerPlant and PowerPlant owns a piece of Beanfields so certainly I have an economic interest, but that’s it. Nothing beyond that.
What’s the reaction you’ve been getting from Beanfields’ current employees? It already was somewhat of a conscious/mission-driven company, but this is really taking it to a whole different level.
MR: From inside the company, people are thrilled. It’s elevated the level of passion and commitment like never before. Frankly, it’s going to be key to our strategy to attract and retain top talent. We’re doing some recruiting right now and I can tell you we’re tracking a whole other level of talent, in part because of that.