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Boulder Brands has Healthier Choices

Lisa Wirthman, Special to the Business Journal Although Stephen Hughes began his career working for food industry giants, he was always an entrepreneur when it came to product innovations.
As executive vice president of ConAgra Foods, Hughes introduced the Healthy Choice line in 1988, and built the brand’s revenue to $1 billion in four years. As executive vice president and general manager of Tropicana, he led a successful turnaround of the company’s U.S. business. Yet it wasn’t until his current role as chairman and CEO of Boulder Brands Inc. (formerly Smart Balance Inc.) that Hughes’ entrepreneurial vision really began to flourish. “I came to the belief that the food industry is one of the big drivers of the obesity epidemic,” he said. “I wanted to start with a clean piece of paper with the simple mission of changing the way we eat one product at a time.” Hughes’ company began as Boulder Specialty Brands Inc. in 2005, and changed its name to Smart Balance Inc. in 2007 after acquiring GFA Brands Inc., which owned the heart-healthy spread. The company changed its name to Boulder Brands in January, and is relocating its corporate offices to Boulder this summer. The acquisition was a huge financial risk for Hughes, who went five years without income. “I mortgaged everything to the hilt,” he said. “If it hadn’t worked out, it would have torched my life savings.” Hughes learned to compartmentalize his personal risk so he could focus on doing what was right for the business. “One way or another, this will be my legacy,” said Hughes, 58. That legacy includes sharing success with the company’s 180 salaried employees, who all own stock options. Hughes share of the company stock is capped at 25 percent. “Everyone can make a great living here,” Hughes told his team. “But if we’re successful, we can make a difference. We can help change the products that people eat.” Hughes already had some success on that front. As the company’s Smart Balance trans fat-free spread gained market share, competitors Unilever and ConAgra were forced also to introduce trans fat-free spreads. “They didn’t do it because they wanted to; they did it because they had to,” Hughes said. “We see ourselves as a pebble in a pond that sends out ripples that become waves.” Hughes hopes to achieve similar success in other food categories. With a declining spreads category, Boulder Brands shifted to a broader focus on natural foods, including the recent acquisitions of gluten-free food companies Glutino and Udis. Hughes also created the Boulder Brands Investment Group, which supports promising natural foods companies through minority investments. “If you’re in it to make money, you’re in it for the wrong reasons,” Hughes said. “You’ve got to really have a passion for what you’re trying to do.” Hughes keeps his $500 million company focused on innovation with a flat management structure and nearly 100 percent transparency. “The key is not to overly burden it with processes,” he said. “We need to stay on our toes to be sure as we go to a billion in revenue and beyond that, we don’t lose that edge.”