4th & Heart Sees Leadership Changes

Today ghee brand 4th and Heart announced the appointment of Max Dichter as president following the departure of founder and former CEO Raquel Tavares. Dichter, who has been with the company for two years, first as VP of finance and strategy and then as CFO, is taking over after Tavares left the company in July. He previously was the director of finance at TrueCar and an investment banking analyst at Piper Jaffray.

Tavares will remain on the company’s board of directors and is a “significant” shareholder, though she no longer owns the majority of the company. Other shareholders and investors in the company include Harbinger Ventures, Boulder Food Group, Blueberry Ventures, Cambridge Companies SPG, Finn Capital Partners and Monogram Capital. In total the company has raised roughly $16 million, most recently closing a $7.6 million round of funding last July. Under Tavares’ leadership the brand has grown to be sold in over 10,000 doors with retailers including Whole Foods Market, Albertsons Safeway, Publix, Kroger, and Sprouts.

Tavares said she plans to take a few months to regroup and consider her future career options, adding that the reason for her departure was due to the changing needs of the company.

“It’s similar to when your baby grows up and they go to college and get married. It’s kind of time to let go at a point when it’s like you’re not helping, and you’re not hindering, but it’s not like it was in the beginning where you’re running at warp speed,” Tavares said. “It’s kind of a good spiritual exercise to be less important, like the Buddha says, letting go of the ego and all of that.”

In the interim between Tavares departure and Dichter’s promotion, the company operated without a CEO, she said. 4th & Heart has 10 full time employees and a contracted sales team of another 10 individuals.

Dichter will play a key role in reinforcing the brand’s strong ecommerce momentum, said Megan Bent, managing partner of Harbinger Ventures. Currently around 30% of the company’s sales come from ecommerce or click and collect sales, she added, and there’s only room to grow that business even further.

“It’s a natural moment for someone who is deeply operational, [who] understands what financially is now 30% of the business, e-commerce, to step into that president role,” Bent said. “In this Covid period, the ‘innovation’ that’s needed is supply chain innovation. It’s about being accessible and it’s about being in stock and delivering value to the consumer.”

This year, innovation will be largely limited to product improvements and pack sizes. For example, it recently launched a larger jar size on Amazon. The company will also discontinue some of its flavored ghees and two flavors of its Chocti chocolate ghee, in order to focus on its most popular products.

Although the company spent over a year refining and bringing its ghee and egg white Woke Bars to market, the line, which is sold in Sprouts, will see less marketing and sales investment for the near future.

“It’s about listening to the consumer and as a young brand being thoughtful to align your resources with what the consumer really wants,” Bent said. “Right now convenience for the consumer is making meal preparation at home easier and bringing joy as they bake and cook. On-the-go is just not a really material part of their lives right now or a concern.”

Tavares shared that the brand is deeply focused on improving its EBITA and had planned to raise another $2 million in funding this summer to support the bars’ launch through marketing and sales efforts. When 4th and Heart decided to hold off on fundraising, in part due to the pandemic, along with that went the budget Tavares said would be needed to “sustain new category growth.”

Instead Bent and the executive team see an opportunity to further invest in the brand’s liquid ghee oil and ghee spray, two newer formats that may be more familiar to the mainstream shopper. The company also plans to invest heavily in consumer education about both how to use the product and where to find it in stores. Although the company has built a base of loyal customers, it now needs to bring more consumers to the “top of the funnel,” Bent said.

“This category is still really in its infancy and that’s really exciting… household penetration in terms of awareness and trial is 2% so that’s a huge opportunity,” she said. “We don’t need a ton of new products to create opportunity, it’s right there. It’s really about education and it’s a marketing opportunity at this point.”