Steve Magami: Co-Founder & CEO of Fruitist

Episode 730

On this episode of The Kara Goldin Show, I sit down with Steve Magami, Co-Founder and CEO of Fruitist—the fast-growing fruit brand shaking up the grocery aisle and redefining what it means to snack healthy. What started as a bold idea to treat fruit like a branded CPG product has become a billion-dollar global company, with $400M in revenue over the last year and distribution in more than 12,500 stores across the U.S.
Steve shares the gritty details of what it really took to scale Fruitist—from controlling the entire supply chain to solving for flavor consistency in fresh fruit. We talk about why most people underestimate the power of brand in commoditized categories, how he built trust in an industry that historically lacked it, and why Fruitist isn’t just a fruit company—it’s a systems company.
If you’re curious how to build a breakout brand in an overlooked space, or what it takes to scale a values-driven business with real operational complexity, this conversation is full of takeaways. Now on The Kara Goldin Show.

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Transcript

Kara Goldin 0:00
I am unwilling to give up, that I will start over from scratch as many times as it takes to get where I want to be. I want to be you. Just want to make sure you will get knocked down. But just make sure you don’t get knocked out, knocked out. So your only choice should be go focus on what you can control. Control, control. Hi everyone, and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs and really, some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi everyone, and welcome back to the Kara Goldin show. Today’s guest is leading one of the boldest transformations in the food world. I’m joined by Steve Magami, who is the co founder and CEO of a company called Fruitist, and it is the global super fruit brand redefining how we snack and so so amazing and delicious. Have if you have not tried their blueberries, maybe you’ve seen them out on store shelves, but maybe didn’t know the name you will now, after hearing all about how these all came to be, but So, delicious. Steve didn’t just build another fruit company took an overlooked aisle in the grocery store and turned it into a branded, billion dollar experience. And fruit has started with a simple insight, if we brand chips, soda and candy, why not fruit? So from that idea came a vertically integrated powerhouse now doing hundreds of millions of dollars in annual revenue, operating in 28 countries and showing up in more than 12,500 stores across the US. So what makes this story even more remarkable is some of the background that Steve’s got in private equity, and some of the cast of characters that he has had joined him. I’ll leave it there, and we can talk a little bit more about that, but really, really honored and excited to hear all about your story. Steve, so welcome

Steve Magami 2:17
pleasure. Kara, thank you so much for that intro, and thanks for having me today. Super

Kara Goldin 2:22
excited to have you. So let’s start with the basics. So what is frutist And what problem were you looking to solve when you launched, we

Steve Magami 2:30
saw that there was a, you know, an inconsistent experience for for consumers in the produce aisle, particularly in the berry aisle. And we call that, we call that berry roulette, and we saw an opportunity to truly, to truly transform the produce aisle. And by taking a new approach, and we we’ve been on a mission to inspire healthy and enjoyable snacking the two together. And we saw a tremendous opportunity to do this, starting with blueberries, and that’s where we started, and we’ve since started to expand into blackberries and raspberries, and our future products that we’ve already made moves in to install production our cherries and Next up will be strawberries.

Kara Goldin 3:14
Wow, that’s That’s amazing. So what year did you start? 2012, Oh, wow. Okay, so you started, and you did not come from, you weren’t a farmer, you weren’t an agriculture but so can you talk a little bit about your background and how you decided to do this

Steve Magami 3:32
very unusual background for this industry? I came out of private equity. I was, you know, doing, making growth investments, venture capital investments, and doing buyouts in in the financial services industry, I was towards the end of the first decade of my career private equity deploying large scale biofuel deployments around the world and in kind of advantage locations and microclimates. So as I was traveling around, looking at the most unique microclimate to deploy these, these biofuel developments, where we’d have advantages in production, climate stability, etc, I realized that the greater opportunity was in in transforming high value stackable berries. And we started with we started with blueberries. We saw a very large market opportunity, and we knew it was all about the product and solving for the Barry roulette experience that I had, you know, going back to to me as a young kid.

Kara Goldin 4:32
So were you always a big blueberry fan? Like, what was the reason why you started with blueberries?

Steve Magami 4:39
You know, we the reason was that the locations that we were looking at, locations where we were in blueberries were had been, just been proven, and the expression of the elite kind of varietals and these kind of wonders of the world were exceptional. The eating experience was exceptional. And we thought, okay, if we. If we take the approach that we’re thinking of taking, which is using technology, data and controlling the the entire value chain, we can really deliver that product quality all the way to the consumer on the shelf. And that’s that’s where we went.

Kara Goldin 5:17
So most people would have seen this as just a commodity and maybe logistics, maybe, you know, trying to figure out new ways to actually help farmers in some way, you decided to actually make it a brand and scale it and make it a tasty one. So when, when you think about the challenges that you’ve encountered, I guess, over the last 13 years, did you anticipate exactly what was going to happen? Did you think like this all out, it’s going to be just 123, and I’m going to have this company rolling. I mean, I can only imagine, and I read this earlier, but, but you have scaled it into 28 countries I read so, I mean, that’s incredible.

Steve Magami 6:11
Yeah, we operate, we have production, production facilities and operations in eight countries, in dozens of locations, and with the countries we sell into, we are in over 28 countries. The it’s never a straight line. Kara, right? We, we, you know, this was, this was going to be a heavy undertaking. This was going to require a lot of capital. This was going to require a very deep team to do what hadn’t been done before. And and, yeah, it was brick by brick, and the early years were very difficult. And if I knew how difficult it would be, I wouldn’t have I probably wouldn’t start the business again

Kara Goldin 6:53
today. So where are you producing today?

Steve Magami 6:57
Yeah, today we’re producing in these wonders of the world, these unique microclimates that include the northern coast of Peru, central Mexico, the southern coast of Morocco, the northern coast of Egypt. Very unique location in China, two unique locations in India, three locations in Oregon and and then southern Chile,

Kara Goldin 7:24
wow. So what was the single hardest part of scaling from zero to

Steve Magami 7:31
over 400 million? Yeah, we we knew that we were only going to be successful if we took a very long term view. So it was always about scaling with excellence. We’ve, we’ve, we’ve developed a bit of a reputation for having scale with excellence in our industry. And so the difficulty was going to be managing, you know, global growth, and that has been not without its growing pains and its challenges. Certainly scaling up a scaling up in eight countries at the same time, production facilities, not easy, right? And then at the same time, selling across dozens of countries around the world, sales teams across the entire northern hemisphere, dealing in different cultures, languages, at the same time, deploying our culture of innovation, disruption, competitiveness was was going to be a fun challenge, and it certainly has been a challenge.

Kara Goldin 8:27
Yeah, I can only imagine, and you own all of your farms, correct, and your supply chain, that’s

Steve Magami 8:34
right, the incumbent model was to outsource. Was out to outsource, and inherently, there was a disjointed value chain with the incumbent model where virtually every link in the chain was controlled by a different party, and that was what created that Barry roulette, that inconsistent experience, because that stifled quality amongst other things. And so we took the opportunity to take this different approach and build it all ourself, and it was the most difficult way, and that’s why it hadn’t been done before, and it was gonna take a lot of capital, and that certainly was the case. But we are today. We are only really in the, you know, first inning of where we’re going. We’re driving a massive amount of demand globally for healthier snacking, and we see that there’s a, you know, we’re in the middle of a silent crisis that’s unhealthy snacking, and so we’re excited to be to be addressing a global health and nutrition challenge.

Kara Goldin 9:33
I think that the one thing that I I noticed, and as I was sharing with you, my whole family noticed, is that the blueberries are consistent, consistently good, consistently large. So how do you do that?

Steve Magami 9:51
So it’s a combination of many things. The it all starts with the R and D, and we’ve been. We have been, from the beginning, always focused on being partnered with the best and brightest talent in the industry. And so we partnered with the very start, the right breeders who fo has, who have been focused on the R, the research, and we’ve been focused on the D and the development, the commercialization. I would say that’s, that’s the first component. Second component is microclimates. We are not going to places where we know people that have land and water and good climates. We are very deliberate in underwriting to the most unique microclimates, even if these are difficult locations to be in, and if you go to our operations, they’re not outside of big cities. These are in remote locations around the world, and in some cases difficult even to get to and but we, you know, we connected all the dots. We built the largest data set in the industry. We we harness that data. We leverage the data to predict, you know, to predict many things, including the right, you know, the optimal eating experience of the fruit, and how to how to develop it, and how to pick it right, and how to manage the shelf life and the freshness, so that when we’re delivering that to the retailer, we truly have an opportunity to inspire the consumer to to to snack healthier.

Kara Goldin 11:20
Definitely, is there one country that you’ve opened in that you had to shut it down for variety of reasons? Maybe it wasn’t the right climate, maybe it wasn’t the government friendly or employee employer friendly, whatever.

Steve Magami 11:41
Well, fortunately, no, but we have been compelled and, and and attracted to, and we’ve been recruited to come into various countries that are really interesting on paper. And we’re, we’re disciplined about, you know, how thin we can spread ourselves and, and so we’re, you know, we are partnered with a couple of partners in countries outside of our eight countries. So we, for example, we have a partner in Romania who’s great and and we’re, we’ve designed this footprint not only to achieve the most stable, the most consistently inspirational eating experience with with all of our all of our tech and all of our kind of management excellence, but we’ve done this to deliver a 52 week a year round supply from different locations, right? And so it so it kind of works like an orchestra together across the year, the different locations. But there are, you know, certain locations that have been much more difficult, and we have gone more slowly, you know, than others in terms of scaling up. And we love, we love, we love the footprint we have. But they’re all, it’s all very interestingly different, but at the same time they’re complementary to one another. So it’s, it’s a lot of fun to see how we’ve, you know, see how we’ve we’ve kind of reached this point, and we’ve made the right decisions. Not that we didn’t make mistakes along the way. Of course we did, but we feel pretty good about the footprint

Kara Goldin 13:18
today. So trust in a category that has not historically focused on branding per se. What have you learned about that?

Steve Magami 13:29
So this is this, this is this is great because it goes back to our kind of premium brand playbook. So we, we knew the first step for us was to deliver a, you know, deliver a consistent eating experience, deliver a consistent quality, shelf life, freshness, etc, and scale that up, earn the trust of our retailers, earn the trust of our consumers, and then really lean into the brand. And so, you know, we have ultra high standards around food safety, around worker welfare. We are, we’re considered to be a showcase in terms of social impact the at the end of the day, now, we’re really leaning into the brand, because the brand truly stands for that quality guarantee, and consumers are starting to understand that they they’ve started to become we started to really penetrate enough consumers and to start to deliver that awareness. That’s what fruit is stands for. And so we, we’ve, we’ve sponsored our first professional sports team. We’re going to be announcing a partnership with a an NFL quarterback next month that I’m very excited to you know, to finally announce. And we, we’ve, you know, we’ve sponsored a university, a top university athletic program, and we have other others in the pipeline, and and these are athletes and programs are really, really leaning into our product. And, you know, excited about where the brand is going. Yeah.

Kara Goldin 14:59
Yeah, that’s awesome. So when did you know that frutist was really working? It’s, it’s, you know, it, it’s definitely, you’ve have not been in the brand building space. You’ve dealt, I guess, with consumers out there, but maybe a different type of consumers, and you’ve got, I guess, two audiences. You’ve got the retailers, the grocery buyers, but then you also have the actual consumer who is signing up and and looking for your product in the stores. But when did you know that frutist was really working? So

Steve Magami 15:38
I’m, I’m reminded of a time when we we had a consumer reach out and say to us that I have a new three I have a three year old who hasn’t been eating for days and days and days, and the first thing my three year old ate were your fruit as blueberries. And you can’t imagine how much joy that brought to you know that that brought to this consumer so very touching stories from our consumers who emailed us, who reached out, I remember the initial expression on the faces of youth football teams that we would bring our product to and to See, sixth, seventh, eighth graders that had never eaten a blueberry before, and I couldn’t, I couldn’t believe it, and they looked at me and said, How did you do that? Because it was not only the size that was, you know, kind of catching, but the crispness, the freshness, the crunch, the flavor and the juice and just how enjoyable it was. And to see, to see it at certain football camps, you know, a bunch of big football players snacking through a clam shell or a snack cup of blueberries is a lot of fun. So seeing the, seeing how the combination of the youth, seeing combination of kind of heavy blueberry consumers responding. They couldn’t find our product in the afternoons because it was flying off the shelf. And by the, by the, by the, by noon, it was gone. We were hearing that, you know, why can’t? Why can’t? We were hearing questions like, Why can’t the retailers stock more of your blueberries so we can buy them in the afternoon? And, you know, it got to a point where we had people lining up to sign up to a direct to consumer delivery. And so we actually have, we actually have a list of consumers waiting for us to roll out a direct to consumer which will never, you know, be a large business for us, but, but that would be fun if we launched that. And so I think, I think those are some of the examples and stories that I’m reminded of that’s

Kara Goldin 17:46
incredible. So in terms of the split of, I mean, you talked about direct to consumer, and you’re going to be getting into that, but you’re mostly retailers that you’re dealing with, versus food service. Or is food service a pretty big business for you as well.

Steve Magami 18:01
No retail. So we we are, and you can find our product in Costco, Trader Joe’s, Whole Foods, sprouts, ShopRite, giant Publix. And we serve, we serve Costco, I think, in seven countries around the world, not just the US and the you know, the reality is today, we’re short of demand that we have from our retailers around the world. We have, you know, we have 30 retail partners around the world that are super important to us, that we want to take care of and focus on and really deliver. They, they, they’re our number one priority. Food Service will come. We’ve been in some interesting discussions with the hospitality industry, and we expect to kind of to see demand from hospitality. But for now, we’re serving our retailers.

Kara Goldin 18:59
It’d be amazing to see you penetrate hospitals, and I had started a brand called hint. And you know, it was amazing seeing all of the roadblocks. I call it a healthy perception versus healthy reality that was out there. And you know, it was, I could imagine Fruitist making such an impact in in places that really are, hope, hoping to be healthier than they are.

Steve Magami 19:30
I love the hint. Flavored Berry. Berry. Flavored water, yeah? And you minimized water, yeah, in a way,

Kara Goldin 19:40
yeah, I mean, when we started, it’s funny, because there was just so many diet sweeteners that were hitting these, these drinks, and all I saw was that everything had something in it, and it was, you know, also not using real fruit. So, so we created our own extracts. In and did a lot to really change the industry. Didn’t add preservatives to the product, figured out how to use heat. So there were a lot of things that went on in the process of actually creating the product. So I have a lot of knowledge how hard this is behind the scenes, for sure, even though you make it seem so, so easy, so when you think about adding new categories, you touched on that cherries and blackberries and strawberries are just rolling out or coming next. So how do you ensure each product kind of delivers on the Fruitist promise.

Steve Magami 20:43
Yeah, you know what we have set up as a platform is very transferable to these products, these products we believe have the same opportunity. The berry roulette experience by consumers applies to these other products. They’re wonderful kind of snacking on the go products when they’re good. And the issue is, is the consistency. And the issue is they’re not always good. And the issue is that, you know, again, they’re the the way that the incumbent model has delivered these products results in that that route, that that crap shoot. So we have built our footprint to be leveraged across, not just our first product, blueberries, but across these other products as well. So the fun, the fun thing is that we are leveraging our footprint now to scale up in the other products. By way of example, you know, the number one location in the world for blackberries is where we are in Mexico. The number one location in the world for cherries is where we are in Chile. So, you know, and I can say the same thing for raspberries. And so it’s a lot of fun we have, you know, we have a an approach that we take where we don’t compromise on the recipe, the tech we need to deliver that, and we scale up accordingly. So we’re going to scale up kind of, in a in a measured way in these products, so that we don’t disappoint consumers. And you know, but the team is the team here, and our shareholders are super excited about, you know, what’s coming next.

Kara Goldin 22:24
So you just said the word shareholders. You have, have gained the love of a lot of investors. You came from the private equity world, but how did, how do you get investors? I mean, it’s one thing to come from the private equity world, and, know, a lot of these people, but it’s another thing to get them to actually invest more than angel money. Which which you’ve done? So how have you done that?

Steve Magami 22:53
Yeah, we’ve done it the hard way. Which is, which is, we’ve, we’ve, we’ve deployed capital really efficiently every year as we’ve needed it. Issue new equity always at a step up, you know? And fortunately, the we have a we have a kind of an understanding of how to allocate capital. I’m blessed with an incredible team, very deep and for both insiders and outsiders, and the outsiders are as passionate about what we’re doing in the industry as our insiders, which is a lot of fun, and it makes for a really special recipe when you think about the depth on our board and the depth in our shareholder base, and what we’re able to the value that we’re able to get, and the brain trust that comes with all that. And so, you know, it’s, it’s not your typical company with a very deep base of shareholders. They look at this as a generational investment. This is not like a private equity play, right? This is not a five to seven to 10 year play. We’re building this for a generational horizon. I’m turning 49 and you know, you know, next week, and I’m looking forward to doing this for many more years to come, and then, and then passing the baton down to to the next, the next generation of our management, and watching this from the board be built for another, another 2020, years or so.

Kara Goldin 24:15
Do you think you’ll take this company public?

Steve Magami 24:18
We we don’t need to. We think this could be a wonderful opportunity to stay private, but we certainly have, we certainly are not going to rule out any options. We certainly have interesting, interesting possibilities, and the markets certainly are in favor of high growth, durable companies with strong fundamentals, and companies that are growing fast and that, you know, deploy capital for growth. So our profile could make sense for that, for the public markets, but we’re just focused on product, on our consumers, on delivering and on putting the pieces in place for the next the next. Chapters and phases of our growth.

Kara Goldin 25:02
What’s one myth about scaling frutus and scaling a brand in general that you wish more founders understood?

Steve Magami 25:12
It’s not a straight line. It’s it’s really fun how the the line looks like it’s plateauing, and all of a sudden you just keep doing, if you do the right thing, you keep delivering. How you will hit these, you will hit these inflection points, and what that does with respect to, you know, what that does with respect to brand recognition and the data, the data coming from, from, you know, from the industry, I think when I look around at at Brands Kara, I find that not enough have a sufficient level of differentiation. And we came at this from an absolute place of disrupting a sleepy industry with with an outdated model that, you know, that would be based on that product quality and that differentiation and the brand is really on the back of that quality and differentiation. And with that, I think there’s, you know, tremendous opportunity for brands that that have that.

Kara Goldin 26:26
So last question you, besides being excited for your birthday, which you just mentioned, what’s, what’s something else that you’re most excited about as it relates to fruit us

Steve Magami 26:41
the the future of having, having, penetrating the world of sports, fueling the future of sports with healthier snacking, driving, making an impact in global health and nutrition. We see that only the data shows that only about 20% of what the youth snack on is considered to be healthy. Sometimes wonder how it’s even that high. And if we could really kind of flip that and have see a future where we can drive towards 80% of what the youth snack on being healthy, that would be a huge win. We see tremendous healthcare costs being driven by diets, by poor diets, so we can make an impact in global health nutrition. We would love to do that. And on the way, we’re excited to be empowering communities around the world where we produce and be a real change agent in the lives of these communities, and we look to hopefully continue to be a, you know, a model corporate citizen in terms of environmentally and in terms of social impact.

Kara Goldin 27:49
You’ve done such a great job. Steve, thanks so much for joining us today and share and sharing all of the story of Fruitist is a great example of what happens when vision meets execution, and good luck with everything. I’m so excited about what you’re doing because I think it’s right on and definitely changing the food space for the better. So thank you again, and thank you everyone for listening. Goodbye for now. Thank you. Steve megami from frutist, Thanks, Kara. Thanks again for listening to the Kara Goldin show. If you would please give us a review and feel free to share this podcast with others who would benefit. And of course, feel free to subscribe so you don’t miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Goldin, I would love to hear from you too. So feel free to DM me, and if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my Wall Street Journal, best selling book, undaunted, where I share more about my journey, including founding and building hint, we are here every Monday, Wednesday and Friday. Thanks for listening, and goodbye for now. You.

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