Posted on Oct 4, 2013 by Andrea

Greg Blake: Cheese Whiz

Daiya Foods CEO has built his Vancouver-based company into one of North America's top makers of non-dairy cheese products.

For Greg Blake, the past six years seem to have melted together.

The Daiya Foods CEO, along with his partners, has turned the business from a small exporter into a leading manufacturer of non-dairy cheese in North America.

In the past year alone, the company has launched 10 different products ranging from non-dairy cheese slices and cream cheese-style spreads to its own line of branded pizzas. All 12 of the non-dairy cheese products made at its 30,000-square-foot facility near Rupert Street and Grandview Highway are now shipped to 12,000 retail outlets in the United States and Canada.

The company has continued to grow rapidly. It posted 50% revenue growth last year alone and now employs more than 120 staff. In July, the company shipped 228,000 kilograms of product, which was double the amount it shipped a year earlier.

"Everything in this plant is sold," said Blake. "The big challenge for our company is to build inventory."

The success has been remarkable, said Dan McDougall, a former partner at Ernst and Young (now EY) who has known Blake for the past four years.

"A hockey-stick growth curve [flat then almost straight up] in a food business is unheard of. To grow that quickly and demand the shelf space they are getting, from a company point of view, that sets them apart from a lot of other businesses I've seen."

The company has won a string of major awards, including the BC Food Processors Association's 2012 product of the year.

Blake and Daiya co-founder and vice-president of innovation Andre Kroecher won EY's Pacific region emerging entrepreneurs of the year in 2012, and Blake recently won the 2013 Food Industry CEO of the Year award presented by the Canadian Institute of Food Science and Technology.

The success to date is rewarding for the IT professional who first came to Vancouver more than 20 years ago to make music.

After 15 years in the IT field in Toronto, Blake moved to Vancouver in the early 1990s to try his hand at making a living as a jazz guitarist. It was a decisive change for the Ottawa native, but the career move was short-lived.

It was, said Blake, financially "brutal."

"I sort of scraped through a living for a couple of years, but my wife and I were going to have kids, and the whole $50 a day thing didn't really cut it."

But his musical foray did lead to the foundation of a lengthy and rewarding partnership with Kroecher. They met at a Vancouver music store and soon started composing songs at a small digital music studio they decided to build together.

"Writing music is a very creative process, and you are either going to get along or you are going to kill each other," said Blake, "and we got along by checking our egos at the door. That was the catalyst for us to explore other ideas, patent applications. We were always acting as each other's foil for ideas."

Since 2005, Kroecher had been working in his spare time on his formula for a plant-based, non-dairy, vegan cheese as he worked on other projects, licensing his technology ideas to other companies to develop. Non-dairy cheese alternatives have been around for decades, but like many vegans, Kroecher had been dissatisfied with the products that were available.

In the meantime, Blake had started his own company, Virtual Earth Media. It was initially focused on creating applications using Google Earth technology that could be used for real estate developers or as an investor relations tool for companies looking for funding.

He was making progress with his business when Kroecher approached him about starting a new vegan cheese venture in the summer of 2007. Blake saw the potential of Kroecher's initial havarti-style cheese product and decided to shut down his company to work with Kroecher to develop a cheddar and mozzarella-style allergen-free and vegan product.

They spent the next year in their kitchens coming up with the new recipes after receiving an initial friends-and-family round of financing.

"It was amazing how many mistakes were made," Blake said. "The two of us bashed away at it, not knowing what we were doing, which in this case was good, because we had no preconceived notions about what was possible."

In 2008, they hired local food scientist Paul Wong to refine the recipes for mass production. From a pilot plant in Abbotsford, they created samples for U.S. restaurants and other food manufacturers that might use their cheese in their products. Initially, they thought they would have to spend another six months to refine the product. "But without exception, everyone said they were ready to order."

And demand continued to grow. By 2009, restaurants that had bought Daiya shredded cheese were selling it to their customers.

"They were like bootlegging the stuff," said Blake. "Retailers were buying our five-pound foodservice bags, cutting them open and putting it in their own container with their own logo and 'Daiya vegan shreds' in [small font]."

A call from Whole Foods pushed the company to launch its cheese-style shredded product earlier than planned in 2010. The supermarket chain offered to give them a national listing in the U.S., something it only did for 5% of its vendors.

From September 2009 to February 2010, Blake, Kroecher and Wong essentially built their manufacturing plant from scratch at their Rupert Street location.

"We had to scale up and ship the product by February. It was insane," said Blake. "But the retail product just took off like gangbusters. It was just massive."

Daiya's success is revolutionizing the industry with several competitors looking to copy the company's products. But with $250,000 it won from a BC Innovation Council contest in 2010, it has managed to keep ahead of the pack. With the money, Daiya developed a new technology for its non-dairy cheese wedges (which were launched in 2011) and its slices and cream cheese-like products, which were launched in March.

McDougall said one of Blake's strengths has been his willingness to listen and learn. "He doesn't have an ego that a lot of CEOs have, and he's always willing to try to get that extra edge by asking 'What can we do differently?'"

Blake is focused on creating a culture and hiring staff that embrace change and innovation as the company grows.

"I came up with this phrase: 'Consider the outrageous and balance it with the pragmatic.' But it's considering the outrageous that is very important, and Andre, Paul and I, we really look for that in people. It doesn't matter if something fails, because you can learn so much from mistakes."

Blake added that one of the goals of the new products is to become ubiquitous in the alternative cheese market, which has been around for decades but still isn't as commonly accepted as milk alternatives like soy milk, rice milk or almond milk.

The launch of 10 products in March is part of their plan to establish the brand and expand their market, attracting not only vegans but also consumers with food-related allergies and anyone who wants an alternative to mainstream milk products.

"It was a land grab, basically. The opportunity is there and we have to establish ourselves. Vegan cheese and cheese alternatives have been around for a long, long time, but what hasn't changed is the fact that there is a real greenfield opportunity that exists. The opportunity is huge."

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