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Investors in Freshpet, an upscale pet food maker whose stock soared during the pandemic but has since plummeted, are hissing and howling after learning that some of the company’s top executives and directors have been quietly moonlighting at a startup that also sells pricey pet food, according to The Washington Post.

Freshpet’s president and operations chief Scott Morris, who co-founded the Secaucus, NJ-based company in 2006 and is now its No. 2 executive, also mentions on his LinkedIn page that he created Hive Brands, a website that offers sustainable consumer items, in 2019.

A 4-pound package of grain-free chicken dried dog food from Honest Kitchen, recently advertised at $51.99, is among Hive’s pricier products. A 4.5-pound package of Freshpet shredded chicken dog food recently sold on Petco’s website for $42.89.
Freshpet’s shares plunged as low as $39 per share this month, reducing its market worth to $2.1 billion from a record of $8 billion in April 2021, when the company was at $184.
Jana Partners, led by billionaire activist investor Barry Rosenstein, purchased a 9.6% interest in Freshpet last month, pushing for a new slate of directors and suggesting that the firm consider selling itself. Freshpet’s stock jumped 16% on the announcement. On Friday, the stock finished at $56.59.

Freshpet announced decreased growth in its second-quarter earnings report last month, blaming it on “quality difficulties,” “labor” challenges, and inflation. According to Freshpet CEO William Cyr, the company’s quick expansion during the epidemic presented a “unique mix of possibilities and problems.”

Morris, meantime, was singled out in an op-ed piece published on CNBC on October 2 by Ken Squire, creator of 13D Monitor, an institutional research firm focused on shareholder activism.

“If you want to know how dedicated [Morris] is on the company, he co-founded a new firm, Hive Brands,” Squire wrote. “Surprisingly, the board had no objections to this.”

Morris isn’t the only one who has a Freshpet and a Hive. According to securities filings, Richard Kassar, Freshpet’s vice chairman who was also designated interim chief financial officer this month, resuming a post he held from 2006 to 2020, was also Hive’s CFO last year. According to a corporate insider, Kassar stepped resigned from that position in August.

J. is a new director. According to public papers, David Basto, an official at the buyout firm Carlyle Group, is also a director and investor in Hive. Meanwhile, according to her LinkedIn page, at least one Freshpet employee, Katy Pisick, has worked as a project administrator at both Freshpet and Hive for the past 18 months.

“The folks who are aware of this believe it’s the most crazy thing they’ve ever seen,” said a representative for a Freshpet institutional shareholder who declined to be identified.

“It’s quite strange that a top executive at a publicly listed firm is starting another business,” said another concerned institutional shareholder with a lesser position than Jana. “Most full-time executives have employment agreements that state that this is their sole full-time work and that they are not earning money from numerous jobs.”

Kassar, Morris, and Basto did not respond to requests for comment by email or phone.

A Freshpet spokeswoman responded in writing to The Post’s worries that Morris’ work at Hive was a distraction from his duties as president.

“While Scott co-founded Hive, he has no operational involvement with the firm and is not involved in any of its day-to-day business operations and decision-making,” according to a Freshpet representative. “The Board of Freshpet is fully aware of Scott’s association with Hive, which Freshpet has declared in its proxy statement and 10-K filing.”

The spokeswoman stated, “Hive is not a rival of Freshpet.” “Freshpet produces and sells fresh, refrigerated snacks and treats for dogs and cats.” Hive, as a shop, distributes a diverse range of goods, with pet food accounting for a negligible fraction of its revenues.”

Morris, a former Purina executive, founded both Freshpet and Hive from his home in Chatham, NJ, and his home address was listed as Hive’s headquarters as recently as December, according to government papers.

Morris said in a recent interview with the news site NJbiz that there are “many different sectors of the industry that we haven’t cultivated as much as we’d want,” including outreach to the veterinary community.

“I consider my function [at Freshpet] to be that of a helper,” Morris continued.

Morris, a former Purina executive, founded both Freshpet and Hive from his home in Chatham, NJ, and his home address was listed as Hive’s headquarters as recently as December, according to government papers.

Morris said in a recent interview with the news site NJbiz that there are “many different sectors of the industry that we haven’t cultivated as much as we’d want,” including outreach to the veterinary community.

“I consider my function [at Freshpet] to be that of a helper,” Morris continued.

Freshpet, which pioneered the refrigerated pet-food niche, has 27,000 specialized freezers in pet food aisles at major retailers such as Target and Walmart. However, it is now up against a flurry of new rivals, including Farmer’s Dog and subscription services like PetPlate and NomNom.


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