Smart Balance Keeps Tight Focus on Creativity†

Heart-Healthy Food Developer Outsources Manufacturing, Distribution to Target In-House Strength on New Products

Wall Street Journal, June 9, 2009 — The product-development laboratory at Smart Balance Inc., a food marketer keen to grow through innovation, contains chemical analyzers, lab benches and refrigerated cases. But there are rarely people.

"We don't have legions of white coats," explains Robert S. Gluck, Smart Balance's chief operating officer. Six of its staffers are charged with developing products, but they often work in suppliers' facilities nowhere near its headquarters here.

Smart Balance helps people stay lean with "heart healthy" merchandise, including low-cholesterol spreads, peanut butter, popcorn, cooking oil and milk. The company itself is lean as well, with just 67 employees and scant fixed assets. Its "virtual" business model outsources almost everything else, including manufacturing, product distribution and sales. The unusual approach is attracting attention, especially as recession-battered businesses slow new-product introductions.