Education — As an ethnic brand, we focus a lot on educating the customer about our products, flavors and where the cuisine comes from. We spent our promotional dollars on demos and building stories around the origins of our dishes to get folks to try the products because if they don’t know what Chicken Tikka Masala is, they won’t buy it if it’s $7.99 or if it’s on promo for $4.99.
As a part of our series called “5 Things You Need To Create a Successful Food Line or Specialty Food”, I had the pleasure of interviewing Sameer Malhotra, CEO and Co-Founder of Cafe Spice, a leading manufacturer of high-quality prepared international cuisines. He grew up in the fine dining restaurant business and took his passion for food to the next level after graduating from Babson College’s entrepreneurship program. Cafe Spice’s line of restaurant-quality meals are found across the nation in the gourmet fresh aisles of grocery stores.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
I was born into an entrepreneurial restaurant family. So needless to say, food and business is in my blood. Growing up, my weekends were spent in restaurants. My friends were the restaurant staff and their families. As I grew older, my family and I had various roles at the restaurants on the busy holidays and weekends. My parents were working at the restaurants during the week, so my grandmothers played a huge role in raising me, which is very important in our culture — values are passed down from generation to generation.
Can you share with us the story of the “ah ha” moment that led to the creation of the food brand you are leading?
Cafe Spice was originally a chain of restaurants. I went to Babson College, and during an Entrepreneurial Studies and Franchising course, I created a business plan to expand the chain of restaurants with a hub & spoke, commissary model, and open a Cafe Spice restaurant in every college town. However, this changed when Whole Foods Market asked my family to reimagine our foodservice offerings that were a part of the Whole Foods hot bars to create grab-and-go dishes. This was my “ah ha” moment. Why take on the capital cost of opening physical restaurants, when I could have as much success selling grab-and-go meals with my signature recipes? I was excited about the opportunity to have Cafe Spice available throughout the US, and reach more consumers than just college students.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Definitely know your audience. I was 23 years old when I had my first meeting with Whole Foods Market. Obviously, it was a different time and things were just evolving with dress codes and company culture. I wore a suit to this meeting, and was greeted by a buyer in birkenstocks and cargo shorts. I felt completely out of place. While this time around it didn’t hurt my business prospects, I learned that it is important to research who you are meeting with to understand the best way to approach them. Today, Cafe Spice has a casual dress code that creates a more relaxed company culture.
What are the most common mistakes you have seen people make when they start a food line? What can be done to avoid those errors?
I’ve seen a lot of founders that are too set in their ways. Be nimble, and willing to make changes on the fly to ensure success. I know most people will tell you to stick to your guns, but I feel that in order to be successful, you need to adapt to the market or the capabilities of your team and partners in order to see your vision come to fruition.
Let’s imagine that someone reading this interview has an idea for a product that they would like to produce. What are the first few steps that you would recommend that they take?
Have your friends and family try it. They love you unconditionally, so they will give you honest feedback. If it is not the best, they will let you know. While it may hurt at first, you’ll come to realize they have your best interests at heart.
Try to create a team. As my son’s teacher says, “ team work makes the dream work!” Launching a new product comes with it’s ups and downs. However, an optimistic and solution-oriented team can find ways to overcome the hurdles.
Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?
It’s always a good idea to create a business plan so you can visualize the success your product will have. Choose the right people to help get the product to market. A nice mix of driven team members and industry experts are needed to compliment your vision because you can’t do everything yourself. If you are going the investor route, look for strategic investors who will add value to the entire process as opposed to just financers.
There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?
Being a manufacturer, in addition to having my own food brands, I found it beneficial to build our own internal commercialization team. However, many start-ups don’t have this luxury. After working with many of these types of brands, I did find that hiring a strong developmental and commercialization consultant helps. Founders are very tied to certain thoughts, and sometimes that doesn’t cross over well to scale. The right consultant has lived and learned, and can add a lot of value.
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
We have always been bootstrapped, but a big part of our business is production. It allows us to make our own decisions, because we are doing it with our own funds. That said, I feel the VC culture implements much more structure, such as creating strong KPI’s. A few years ago, my team and I started to create a more data-driven business model and it has made a big difference. But that said, having venture funds can also make it so that certain projects that should be no-brainers, but are capital intensive, happen faster. Having this funding allows you to be a bit more aggressive.
Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?
Sourcing ingredients is extremely important to our company. We work with local distributors who buy locally. Our suppliers work with local farms as much as they can. We believe in a clean label and use antibiotic and hormone free meats that are Animal Welfare Certified. Searching the internet is a good start, but your best bet is to look for a local distributor. They have a lot of knowledge and can be a great resource for any business. Having the ability to speak and meet with a local distributor allows you to develop strong relationships. If their company doesn’t carry, for example, that special pepper you need, they can still help you source it.
We manufacture our own products, but if we had to look for a manufacturer, it would have to be someone who made our product with our quality specifications. If the manufacturer takes short cuts or puts your product on their back burner, they probably aren’t the right partner.
In our case, we walked into a Whole Foods Market and luckily made our pitch to the right person at the right time. However, we also feel food trade shows are a good way to showcase your product to retailers. With Covid, trade shows have stopped, but once they are back on, it’s usually a good investment to make. Buyers and distributors are always looking for new products at trade shows. Many trade shows have sections where you share a space with other new products so you can share the cost of the booth.
Here is the main question of our discussion. What are your “5 Things You Need To Create a Successful Food Line or Specialty Food” and why? (Please share a story or example for each.)
- Deliciousness is most important — Make sure you would eat it, love it and feed it to your family before putting your brand on it. Our innovation team creates amazing products that we taste as a family and share with those close to us. There is no compromising on taste and quality, ever.
- Team — A successful food line can’t be done by one person. Empower your team to make decisions as you go through the commercialization process. We are in the midst of relaunching a line of sandwiches made with Indian naan bread. In the past, we called them Naan Sandwiches. However, this time, my team felt it needed more character and recommended calling them Naan Toasties. I hesitated at first, but after discussing their rationale, I knew this was the right way to go. Plus, having the team’s buy-in helps to keep them excited about the brand.
- Vision — Fads can come and go. When our innovation team is working on a new project, they want to ensure that the product will still be on shelves 10 years later. Innovation is great and using data to back it up is even better. However, try and see through the trends that are going to be short-lived. Many people thought plant-based diets could be a fad, but obviously, it is here to stay. While we are lucky that Indian food has always been heavily plant-based and high in protein, we continue to produce new, innovative plant-based meals.
- Accessibility — You could have the best product, but customers need to be able to find it. This was a big struggle when we started. Distributors did not want to take a risk with a niche line like ours. We had to take risks by guaranteeing sales, enhancing sales and merchandising to make it more foolproof. Now in 2020, we have launched nationwide with Amazon Fresh. This is a big win, because I finally have an answer for all those thousands of emails I receive on “Where do I find your product near me?”
- Education — As an ethnic brand, we focus a lot on educating the customer about our products, flavors and where the cuisine comes from. We spent our promotional dollars on demos and building stories around the origins of our dishes to get folks to try the products because if they don’t know what Chicken Tikka Masala is, they won’t buy it if it’s $7.99 or if it’s on promo for $4.99.
Can you share your ideas about how to create a product that people really love and are ‘crazy about’?
Start with quality ingredients and make a product that either gives consumers something new to try or that is nostalgic. We’ve found that our consumers are those who love to try new flavors and those who have either traveled to or had memorable meals at restaurants, which serve the same cuisine.
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
Amongst other charities, we partner with Whole Planet Foundation. We’ve been to India with them and seen how their microloans transform the lives of many women and their families. We also donate to food banks and support our community’s charities. It’s truly amazing to be able to support both global and local initiatives.
You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
Childhood hunger and families who don’t have enough to eat is a critical global problem. One way to combat that is by reducing food waste.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
Oddly enough, I’ve had the pleasure of speaking with many high profile people during their meal when our family ran one of the best fine dining Indian restaurants in New York City. However, if I were to pick someone today, it would be Elon Musk. He’s one of the greatest innovators of our time. A modern-day Thomas Edison. I would love to know how his mind works and how he takes his amazing ideas and makes them a reality.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.