Jake Goodyear, Co-Founder of Melt to Make – Interview Series

With the U.S. cannabis industry still relatively young, business owners operating within it often have fascinating backgrounds with regard to the industries in which they have previously worked. For Jake Goodyear, Co-Founder of Melt to Make, those previous roles include both private equity and industrial manufacturing companies. To find out how someone goes from the very defined world of private equity to the mostly uncharted territory of the cannabis edibles market, mycannabis.com had the pleasure of speaking with Jake Goodyear himself.

What subjects did you study in school/university, and what did being a college athlete teach you about teamwork and interpersonal communication? 

I majored in Political Science (for reasons unknown to me now), but took a wide range of classes, including statistics, economics, literature, history, biology and even synoptic meteorology! Perhaps the greatest experiences gained during my college years were through athletics. Although Lacrosse is a “spring sport”, it demanded year-round structure, dedication and commitment. The hard work, early mornings, travel and especially going to battle together created unique bonds with my teammates that still exist today. The teamwork and communication required for success in athletics hold true in business- especially when growing a small business!

How did you first get into the industry of private equity, and what were the most useful professional skills when working in that industry? 

I interned for 2 summers during college with a portfolio company of a New York based PE firm. After I graduated, I was offered (unsolicited) a position as a junior analyst with the firm, which I accepted. I never even applied! I gained immeasurable experience during my 7+ years with the firm. While many PE firms are more focused on financial structures that bring short-term returns than building long-term value for the stakeholders. The company I worked for did the latter and was deeply involved with their portfolio companies from an operations standpoint. I was exposed to all areas of our portfolio companies in various industries and even had the opportunity to run one of our companies under a turnaround situation. When I left (with financial backing from 3 of the partners of the firm) to co-found a manufacturing company, I was well equipped from my experiences in PE.

What did managing a portfolio company in the environmental/recycling space usually entail? What did that experience teach you about environmentalism and the importance of environmentally friendly programs?

Environmental businesses–at least for-profit ones–are in most ways like any other business. While their activities might benefit the environment, their primary goal has to be making money. After all, if they don’t make money, they will cease to exist along with the environmental benefits! It is great when a company can both generate profit and in some way help the environment. 

The truth is, while there were large environmental benefits to the business I ran, it was truly challenging to make money. The company did not provide great returns for its shareholders, but it did operate for many years after I handed over the reins, and recycled millions of tons of paper fiber that would otherwise have ended up in a landfill.

What type of components did Finebar manufacture, and what industries and factories were those components commonly utilized in? How would you describe the process of the company being acquired by a foreign conglomerate, and what all went into that? 

Finebar manufactured a patented line of refiner plates, which are a replacement wear component used to refine pulp fiber in the papermaking process. All paper mills have pulp refining systems, and the quality of refining is an economic driver for the mill. When we entered the market, refiner plates were considered a commodity–they were cheap castings and purchased based on price. Finebar refiner plates were fabricated using aerospace technology and were several times the cost of traditional plates, but there was a clear ROI due to increased pulp quality, energy savings and service life. 

The acquisition of Finebar was a 3 ½ year process. We were trying to find ways to increase our growth but had limited resources to scale so we approached a far larger company (that sold pulp screening systems) to explore if their global sales force would add our product to their quiver on a commission basis. The company agreed, but wanted an option to acquire Finebar at the end of the 3 year marketing agreement based on a per-determined EBITDA multiple. We reluctantly agreed. Amazingly, the agreement worked pretty much exactly as both parties had hoped, and at the time they exercised their option to purchase, our products were in paper mills in 25 countries around the world! The combined company is still going strong today over 15 years later.

What in particular inspired you to create the Melt-to-Make company? After a long career in manufacturing and private equity, did you have any professional concerns about leaving those industries? 

To be honest, starting our company was not my idea, and I was definitely hesitant to get involved with a cannabis business. Instead of saying yes to the offer to run Heritage (predecessor to M2M), I agreed to help write the business plan as a means to learn more, and it was only at that point that I agreed to co-found the company!

Even though it may have been different product types, how has your experience in manufacturing those industrial components become useful in producing the gummy bases that Melt-to-Make creates? 

Obviously manufacturing processes vary widely across different industries, but honestly there is far more commonality than meets the eye. The systems that drive manufacturing excellence are universal. I had a lot to learn about food manufacturing, but all world-class manufacturing companies need the same elements to succeed: great R&D, QA, production, supply chain, marketing, sales and administrative/finance teams working together toward a common goal!

What processes are most utilized to make sure that the gummy bases are cleaner and free from artificial ingredients? What are the usual ingredients in Melt-to-Make’s bases? 

Since day one we have been committed to using only all natural ingredients and prioritizing quality in everything we do. Our north star for quality is strict adherence to Good Manufacturing Practice, or cGMP. This is a rigorous quality certification that is globally recognized in food manufacturing.

What are some notable accomplishments that you’ve celebrated with the brand, and what have been the most high-profile cannabis and food conventions that you’ve promoted the brand at? 

When we created the M2M product line, we had no idea how big the opportunity was. We were desperate, losing money and had to figure something out…fast! The first big milestone was witnessing how it transformed the operations of our first (test) customer. They went from failure after failure in their attempts to make a consistent gummy product to literally an award winning gummy line within months. This was huge! We added customers quickly after that but I’d say the next big accomplishment was a year or so later when we actually turned profitable. At some point if you’re not making money, you are not going to make it as a company. Being awarded our 1st patent was another great milestone.

What percentage of total business would you estimate is cannabis gummy brands, and from a manufacturing and production standpoint, why do you feel that the Melt-to-Make is superior to the competition? 

Cannabis (including hemp) still represents over 90% of our revenue. While we still have large growth potential in these markets, one of our strategic priorities is to grow in other markets, such as the dietary supplement/nutraceutical space. 

We invented the intermediate gummy base industry and are committed to innovation, quality and superior service and technical support. While we will never let our guard down or assume we don’t have worthy competition, our commitment to these areas have made M2M the clear leaders in our industry.

What are some exciting future plans for the Melt-to-Make brand, and how does the company plan on being an appealing product for cannabis gummy producers?

Melt-to-Make will continue to innovate and offer our customers great new products that help them grow in a highly competitive space. Our new reformulated reduced sugar base is a great example of this, as are our tote products. We also constantly innovate with advanced manufacturing processes that improve our quality and reduce our production costs, enabling us to maintain healthy margins while offering lower product pricing. This enables us to offer clear value to increasingly larger customers.

Thank you for joining us, Jake! For more information on Melt-to-Make, please visit its website.