Yo Mama's Foods with David Habib feature 117 of Together Talks
- KLS
- Apr 2, 2024
- 8 min read
Updated: Apr 14
"Together Talks" feature 117: Yo Mama's Foods presented by KLS, freight company
Some Background on Yo Mama's Foods
Today's edition of "Together Talks" campaign, KLS had the opportunity to interview Yo Mama's Foods Co and Founder and CEO, David Habib. In a world where food's validity is based on the latest fad, they strive to bring everyone back to their roots through healthy and delicious pasta sauces, salad dressings, and condiments. All are welcome, so dig in.
Devoted to making better foods and bringing people together. Whether it's their sauces, dressings, or other delightful creations, each product is infused with the passion and tenderness they experienced growing up. They want you to experience that same feeling of comfort and familiarity, as if you were sitting at your Mama's table.
Natural, known, back to your table
What has become a national an international brand actually started out as a basic idea. It started with David himself and his eating habits. He noticed he was suffering from bad heartburn anytime he consumed dark sauces. He never remembered feeling this way growing up. He started to dig into the back of the label and noticed how many sauces currently have fillers and preservatives. His idea was pretty basic, what if I make a sauce using only ingredients that my mom had in her pantry. This simple solution would immediately solve sugar and sodium content, while transforming the aisles of condiments as a whole. Most importantly he knew he could bring flavor back to the forefront with their products.
David told us he had no idea what he was getting into. "I didn't know what a co-man was, a distributor, anything related to CPG or grocery.", he told us. He previously was working in corporate America at Deloitte. He emphasized how it was a great training ground on how to engage and look at problems. David mentioned that he often shares with his team how they need to be really good problem solvers, because there are so many moving pieces when it comes to their business.
With his idea in mind the first thing David did was file for trademarks. Admittedly he is a visual person, seeing the logo and trademark made it tangible and real for him. In 2017, on Mother's Day, Yo Mama's Foods Co. officially launched. Shortly after they launched on Amazon and became the # 1 best selling sauce on there.
David understood the criticalness of having a natural and healthy product be reliable, but also taste great. His simple solution brought fresh ingredients to consumers, saving them time on hand crafting a sauce, dressing, or condiment. All processed ingredients are removed, it is a clean label, with no added sugar and 60% sodium less than any other pasta sauce. He explained to us what his true mission was, "I've always been excited about food and creating something with a mission tied to it. The hope was to sell that to people and give them an experience that gathers them together."
Team driven
The company is currently comprised of 21 members and incredibly none have prior CPG experience. David said while some would view this as a disadvantage, he believes it has transformed the way they think, approach, and maneuver as a company. Almost all of their decisions are geared towards their non-traditional path. He joked with us that if he knew everything that went into creating a CPG company, he wouldn't have had the courage to start it. . The diversity of experience their team possesses is such a competitive advantage he believes. "Creating a company anything food related is extremely competitive and even more challenging to survive. We have managed to do that without any outside capital, no third-party fundraising. We are extremely proud of our accomplishments so far.", David shared.
He from the start has encouraged the team to have a marathon outlook. They have been calculated to grow in a sustainable way. Everything they do operationally is structured to support a long-term growth. With no outside capital, cash flow is always the biggest challenge David mentioned. Running an inventory heavy business with retailers across the country and other countries as well, means they have to run as lean as possible.
One way they implemented this was early on in their journey transitioning from a co=packer model to toll model. Their first production run was 84 jars. The COGS of a jar of pasta sauce was $5.23, rough estimation David said would place the cost at the retailer around $18.99. He knew immediately that wasn't sustainable. They took everything into their own hands and 45 days later they were sourcing everything. This allowed them to control their spend and focus in on unit economics while also developing relationships. David continued, "Our glass supplier I bought the 84 cases from them in my trunk for our first run. Today we get over 6 million per year. We have continued to use them as the partnership has grown and developed." Controlling every aspect allowed them to possess buying and negotiating power which has permitted them to scale much more quickly sand efficiently.
David mentioned the importance of looking at all options and being aware of how to adapt. He was 24 during the first production run and said it was very possible he and the company were being taken advantage of, given it was assumed they wouldn't make it and survive in the highly competitive CPG space. but failing was never his mindset, remember it is a marathon in his eyes. Instead he took over control and started to foster relationships that still serve the company today. He said it isn't beginners luck, but beginners curse with how many failures there are in the industry due tot he complexity. But those that can be nimble and pivot quickly will propel themselves to the best chance of survival followed by growth,
Strike 1, Strike 2, Whole Foods Nationally
Being a natural product, Whole Foods is generally the pinnacle a company can reach. With Yo Mama's headquartered in Florida, they tried getting in their state region, but were turned down. They then tried the southeast region, but once again were denied. They gave it one more shot in 2018 on the national level and got acceptance. David stated how impactful it was to the timing for their brand and trajectory, but it also embodied their perseverance. This was the first big opportunity that would serve as a huge educational foundation for the company to comprehend how distribution and scale truly worked. David said he is extremely proud that Whole Foods is still a partnership today.
After two straight denials, David admitted he and the team started doubting the ability to get into Whole Foods. But collectively they believed they were on the right track and just had to endure the current struggle by remaining on their path. David referenced a quote from Phil Knight's book, Shoe Dog, "The cowards never started, and the weak died along the way - that leaves us." He shared how he thinks about that often and centers himself on the fact that everything happens when it needs to. instead of getting caught up on wins or losses, they focus on the process and embrace the journey. David believes they wouldn't have adequately handled the volumes they have today if awarded those opportunities back in 2018 when they first sought them out. "While it would have been great and we would have figured it out, we would not have been as prepared and efficient as we are today.", he explained.
When the company got into Walmart early on it was a turning point for them. David says that partnering with Walmart makes your company a better operation across the board David believes. While mistakes with them can be very costly and expensive, it has propelled them forward to be more prepared for other opportunities to say yes to.
Bigger Impact
Coming up on seven years of running the company, David told us he most appreciates the variety of running his company. The fact that not only every day is different but often each hour allows him to constantly work with his team to problem solve. Not knowing what is coming can make for very rewarding outcomes, but also challenging times, but they rely on their cumulative outlook of the impact they are building. "Getting caught up in the weeds sometime sit is easy to lose sight of the responsibility and opportunity we possess, but we take a step back and on the macro level we understand what our business stands for. And ultimately what we are creating. That is really fulfilling and our driving force.", David explained.
One of those challenging moments was a truckload of sauce that ended up being stolen. David told us about a school district in Texas that reached out to source their pasta for their lunches. David and his team thought it was a great initiative and partnership. The truckload was delivered and on 30 days they had not received payment. Getting in touch with the AP, they discovered that the email used for the PO was .edu instead of .org. The scammers had done their work and utilized all of the correct names to forge the documents. David said it was a very hard pill to swallow, but he reflected back on what his mom told him, "Just be glad it happened now with 1 move instead of a customer of 25 moves. That was excellent perspective. It turned out to be a great learning lesson, we tightened up some of our procedures to be even more thorough moving forward.", David mentioned.
With the long-term outlook David said it can be difficult to appreciate and celebrate the smaller victories. One way he does this is walking into their warehouse and seeing all of the different states they ship to on a daily basis. Getting to know they are reaching so many people puts everything back into perspective for him. The fact that they have outgrown their immediate geographic footprint is one of the milestones they set out to hit. David shared with us a quote her heard recently, "The top of one mountain is the bottom of the next", he said how this hits so close to home because of their true end goal of being a household name internationally. The team's focus to continue building and executing their growth is all part of their plan to make their mission of people gathering together as abundant as possible. David reflected on a moment he is most proud of, in 2019 they purchased their building they are in today. At the time everyone from the banks to mentors and advisors tried to talk him out of it. David told us, "Everyone said I was crazy, it was way too large for us. but they didn't see my vision for our company. Fast Forward to today and we are looking at a new building because we have outgrown that one." It has been such a moment of validation for their company and team to achieve such great growth he told us. Ultimately he described it as the best example of following your gut and daring to be great by going against the grain.
Piece of Advice
Our conversation with David ended with him sharing his piece of advice:
"Start small, think big, scale quickly.
1st production run was 84 cases. I had goal to one day to ship globally. But that time wasn’t a massive production run. Be nimble and take feedback to make quick changes.
Be very intentional on thinking big, setting a plan and path for your team to navigate. Milestones and targets to strive to hit and how to achieve that together. That has proven to be a good driving force for us.
Scale – saying yes and figure things out later. It is kind of like jumping off a cliff and learn how to build the plane before you hit rock bottom. Most successful businesses have many periods where they may not be ready for something, but figured out how to execute the opportunity."
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In Closing
KLS wants to thank David Habib, Founder and CEO, of Yo Mama's Foods Co for today's "Together Talks" feature. Follow along for their journey with their social handles below!
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