The Portland startup Neutral Foods has a lot of new going on — money, store placements and leadership — in its bid to build a climate-friendly milk brand.
The company this spring quietly raised around $4.4 million in an equity financing round, according to a securities filing.
Then last month its carbon-neutral milk, which got early support from New Seasons Markets and Metropolitan Market in Oregon and Washington, went into more than 170 western U.S. Whole Foods stores. Distribution to the chain’s 500-plus outlets nationwide is set to begin in November.
There was one possible hiccup along the way: Founder Matt Plitch stepped down as CEO for personal reasons.
But Plitch remains a major shareholder and backer on social media, and the company landed a new chief executive who seems script-written for the post.
Marcus Lovell Smith is a former CEO of various startups, an entrepreneur in residence at Harvard advising on turning concepts into products, and, yes, a real live dairy farmer.
“My startup work with the environment and technology, and dairy farming, all came together in one company,” he said. “I couldn’t not but do this job.”
The New Hampshire dairy is called Boggy Meadow Farm, and its chief output is “a tiny amount of cheese,” Smith said.
While there are no designs on massively growing that operation, it’s a different story with Neutral.
“The reason we’re here is to do things at scale,” Smith said. “Otherwise, we’re not moving the needle on climate.”
Whole Foods represents a step toward that goal, and Smith credited Plitch and the Neutral team that was on board before him.
Plitch, in a LinkedIn post two weeks ago, said it was a process that began soon after Neutral’s 2019 founding.
“In January 2020, the amazing people at Whole Foods Market invited me down to their Austin HQ,” he wrote. “I was so worried that my only two sample cartons would get scratched on the flight, that I wrapped each one in my 1-year-old's Disney princess diapers.
“In the meeting, I had this very cool chance to share with their leadership what consumers had told me every single day since we'd launched 100 days prior. That we believed it was possible to disrupt the trajectory of global warming, if we grew foods radically and completely focused on the reduction of agriculture's carbon footprint.”
Neutral’s promise to customers is a rigorous accounting of its carbon emissions, which are then fully offset — and more.
“Buying offsets are a good step, but ultimately you’ve got to solve the problems within the industry,” Smith said. “And that’s what's exciting to me. We’ve now been actively engaged with seven or eight farms in the Pacific Northwest, breaking ground on projects, where we’re actually doing real on-farm work.”
He spoke with a conservation-minded dairy farmer’s excitement about the possibilities of new forage mixes and solid-liquid separation of manure to mitigate climate impacts.
“We’re coming to farmers with capital,” Smith said. “Sometimes it’s catalytic capital, which opens the door to other state and federal and nonprofit funding. But often it’s 100% of the capital. We’re doing projects.”
Neutral has declined to go into details about its funding, but Smith said the seed capital revealed earlier this year is helping pay to get projects going, and the company has plans to raise its public profile soon.
“You’ll be seeing some significant marketing spending in the Pacific Northwest toward the end of the year,” he said.
