Natural-Product Businesses Thrive in Boulder, Naturally

Small Business
You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here's how we make money.
starting a business boulder colorado

Entrepreneurship in Boulder, Colorado, isn’t just business as usual; it’s a lifestyle.

The city’s locals love the outdoors and have a passion for healthy, active living — values that permeate their businesses. At the base of the majestic Rocky Mountains, Boulder has become a hub for natural food and skin care products.

“You might think you’re a little bit weird trying to change the world through tofu,” says Bill Capsalis of the industry group Naturally Boulder. “But then you meet someone trying to change the world through peanut butter.”

Jody Nagel was just trying to find food that fit her gluten-free diet when she started Boulder Granola in 2011. The business makes organic, gluten-free, vegan granola using her mother’s recipe from the 1960s, which fits right in with what some describe as Boulder’s hippie culture. “There’s something about being close to nature in the mountains,” Nagel says.

Nagel’s business isn’t the city’s only namesake; there’s Boulder Organic Foods, maker of gluten-free soups, Boulder Cookie, which makes packaged paleo cookies, and Boulder Organic Ice Cream, which sells its freshly crafted treats in stores and by the scoop.

Here’s a look at why the city is a thriving place for natural product businesses.

Industry veterans inspire novices

Boulder is home to nationally established natural food companies including the nut butter company Justin’s, Celestial Seasonings tea company and Boulder Brands, a publicly traded company that owns brands including Earth Balance, Smart Balance and Glutino. All these veterans “feed the ecosystem with experienced workers,” says Capsalis. The group hosts classes to teach more nascent food entrepreneurs about topics including how to get certified as organic and gluten-free, as well as food safety and handling.

There’s a natural progression that most Boulder natural food entrepreneurs take, Capsalis says. Many, including Justin Gold of Justin’s, start at the Boulder County Farmers Market, where they test products and get instant feedback from shoppers. Next, they’ll pitch to one of Boulder’s independent natural grocery stores and eventually to Whole Foods and other national chains.

Cindy Jones, founder of Colorado Aromatics, started selling her skin products in farmers markets too. “I think it’s really good exposure,” she says. Jones makes soaps, lotions, scrubs, balms and essential oils using herbs she grows on her farm. In 2014, she opened a small storefront in Longmont, Colorado, a city just northeast of Boulder.

Colorado Aromatics

Colorado Aromatics store/Colorado Aromatics

Although Boulder is crowded with natural food brands, Capsalis says the community is collaborative rather than competitive because companies share similar values.

The obstacles

But opening a business in Boulder isn’t all sunshine and mountain views. Challenges for entrepreneurs include an increasing cost of a living and a comparatively small pool of available workers.

The city’s median home value was around $562,000 in April 2015 — up $136,000 from five years prior, according to real estate website Zillow. As the cost of living increases, the cost of doing business does too, says Clif Harald, executive director of the Boulder Economic Council.

Boulder Granola

Boulder Granola/Boulder Granola

But even as prices rise, more companies want a physical location in the community, says Mark Gittes, assistant director of the Boulder Small Business Development Center. To afford it, he says, they’re sharing spaces with other businesses or moving to nearby places including Longmont, Louisville and Erie.

Additionally, Boulder’s unemployment rate is low: just 3.6% in March 2015, according to the United States Bureau of Labor Statistics, compared with the U.S. rate of 5.5% the same month. Lower unemployment means it’s more difficult for businesses to hire employees.

“Companies are having to become more creative about attracting and retaining talent,” Harald says.

Funding options for Boulder small businesses

There’s better news, however, on the funding front. Be it venture capital or nonprofit microlenders, Boulder has a community willing to inject money into new businesses. Here are just a few funding options for Boulder-based businesses:

The Colorado Enterprise Fund: This nonprofit lender loans up to $500,000 to businesses that can’t get traditional bank loans, with an emphasis on businesses owned by women and minorities, low-income borrowers and startups. It uses traditional metrics including projections, personal equity and collateral to evaluate borrowers, but it’s more lenient than a bank, says Lewis Hagler, the director of credit quality.

The Colorado Lending Source: The nonprofit resource connects small businesses with lenders who offer loans guaranteed by the U.S. Small Business Administration. It also loans up to $35,000 directly to businesses through its Colorado Main Street microloan program.

The Colorado Impact Fund: This venture capital fund invests in Colorado businesses that are making a difference in the community, including some natural products businesses. Its first investment in March 2015 was Bhakti Chai, a Boulder-based company that makes chai drinks with organic ginger and fair-trade certified tea.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Teddy Nykiel is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @teddynykiel and on Google+. Contact her at teddy@nerdwallet.com.


Top image via iStock.