Start Me Up Column: Peeled Snacks
Today we’re featuring Noha Waibsnaider, founder of Peeled Snacks. Noha’s story typifies the trials, tribulations and treats entrepreneurs face on a daily basis. In her interview below, you can learn how, despite disagreements with CBS Professors, and with a lot of persistence, you can attract the attention of clientele such as the Oprah and Virgin Airlines.
BL: Hi Noha. Thanks for taking this interview. Can you start by telling me some fast facts about yourself?
NW: I graduated from CBS in 2002, was one of three co-founders of the Global Social Venture Competition (GSVC) and spent a summer at Unilever, working on products such as Ragu Pasta Sauce and Lipton Tea.
BL: How did you get the idea for Peeled Snacks?
NW: While working at Unilever, what surprised me was that Consumer Packaged Goods companies are good at taking food and adding chemicals, salt and oil to it so that they have a 3 year shelf life. Additionally, other companies used regular products and added Vitamin C so that they could market it as good for you. In the end, these products were not close to being ‘food’ any longer.
So I came up with the idea of making food that looks and tastes like food. I am originally from Israel where they have several dried fruit and nuts products. But in the US, most of these snacks are peanuts and raisins containing maltose or palm oil. Instead, I decided to create a premium snack to fill this gap in the market. Before taking the plunge, I looked at what would happen in the worst case scenario as I had no idea what I was getting into and quickly realized I always had the fall back of a job.
BL: How did you get started?
NW: I had a few contacts from Unilever that helped me hire a nutritionist on a contract basis. I also found a scientist from recommendations and was referred to a designer’s wife who could put mock ups and conduct focus groups to get qualitative research – I also did lots of networking and research online. Our scientist tested out the product and made the necessary changes and modifications.
One hurdle that we overcame was that it was difficult to put nuts and fruit together because of the moisture difference. So I began with 1 smaller pack inside the bigger pack and spent $10,000 on bags. I remember calling Professor Bhide (from Intro to Venturing) for tips and he said it was a terrible idea! (his ex-wife had done a food business and in 7 years only generated $500,000). He added that it was impossible to make a success in this industry despite my semi-background.
BL: How did you get it into stores and how has it worked out so far?
NW: I started marketing it around local stores (but many would consider selling it only after seeing an actual product, rather than just the concept) before continuing to sell door to door. I also found an intern at the natural products trade show who helped Peeled Snacks get into many places. Since then, we’ve tried distributors, brokers, sales teams, in-house, our rolodex and haven’t yet found the perfect combination. We do, however, have many friends of friends, personal trainers, yoga instructors and nutritionists on our side.
We want Peeled Snacks to be positioned as a healthy, convenience brand so are in airports, gyms, corporate cafés, movie theaters, smoothie shops, over 50 airports across the country and Hudson news shops (who have 500 locations). More recently, we have become the snack of choice on Virgin airlines (a company that matches our brand as something that’s good for you) and are also in Whole Foods (in the organic line). Our product has even caught the attention of the O magazine, making it onto Oprah’s O list as one of her favorite afternoon snacks. Peeled snacks have also featured on the Rachael Ray Show, Good Morning America, Good Housekeeping, Time Out NY, Fitness Magazine, Self Magazine, Fit Yoga, Pregnancy Magazine, Cookie Magazine, Gluten-Free Living, The Daily Green, Phil Lempert, the Supermarket Guru, Today’s Grocer, AM New York, Fox, and ABC. Peeled Snacks received the 2008 “Best of Food” award from Health magazine and was nominated by The Nibble as a “Top Pick of 2007.”
BL: Wow, that’s incredible. Let’s take one of them- how did you get onto Virgin airlines?
It took a lot of time. We had been pitching, calling and talking to them for over a year as they are always looking for snacks for their customers. Then a new VP came in and wanted to focus on organic snacks and thought they would give us a chance. One presentation later and we had an order the next day before they launched a press release confirming the deal! The big accounts don’t want to waste time with you if you have no staying power so wait to see you can survive at trade shows 2/3 years down the road before they consider working with you.
BL: What CBS resources/ courses, if any, helped you get your venture off the ground?
NW: Intro to venturing was a great start (I went through the casebooks to refresh my knowledge) and Negotiations was the most useful class as you use it in everything. I also discussed ideas with Professor Michael Preston and he is now on the advisory board. He has been instrumental on growth and strategy. I keep involved with lots of Lang Center events and speak at classes/ panel discussions. I’ve built up my contacts and people have been very supportive (through websites, newsletters etc). I’m also a member of the Women’s Entrepreneurs Network which I find helpful and inspiring.
BL: Have you broken even? What are your projections for next year?
NW: I don’t know anyone who is profitable in food and it takes a whole lot of money before you can get economies of scale or break even. It also takes a lot of time to make it in this industry. The question is whether it is scalable. My goal is to grow to a sizeable business and then sell it to a big company or Private Equity firm.
BL: So how do you plan on growing it?
My husband (who was a previous school teacher) is now in charge of sales. It’s funny as being a teacher seems to bring strong transferable skills (which was proven by another teacher we employ). We’re in talks with Costco to add 500 more stores to the 600-1000 stores we’re already in. We just need to ensure we are in the right channels. Typically, we prefer gourmet groceries such as Whole Foods but it’s not the type of product you typically buy once a week.
In terms of staff, we hired a new VP of operations in the past summer who was also one of the GSVC founders, Dawn Techow. Thought that was a nice circle of events.
BL: What has been the best and worst part of owning your own company?
NW: Best: flexibility and a certain amount of control. Worst: a lack of control! This industry is always changing, with lots of stuff going on. In fact it’s like a dream I had, riding a rollercoaster- you have enormous highs and lows every time (3 of each per day) but at the end of the ride, you run back to beginning and get back on.
I draw comfort from the fact that, unlike working at a large Consumer Packaged Goods company, I know that the food is good and is contributing positively to society.
BL: What tips can you give CBS students who want to set up a venture during school?
NW: Make sure you raise money before you start (much more than you need) while it’s still a concept. People bet on you and the concept (financials always look worse than you want to so you wont get a high valuation once a business has started). Don’t try to gauge early investors as you may want to go back to them after the first round, and don’t start a business that you don’t plan on sticking to for a very long time!
BL: This interview has got me feeling hungry now- is it in the Deli?
NW: We’ve had 24 students try to get us in there but they already have specific vendors (maybe you should start a petition or riot!). The nearest one to Columbia is at Juice Generation on 104th and Broadway or Lenny’s on 72nd. Otherwise you can look out for it at airports, buy at Amazon.com or in bulk at www.peeledsnacks.com. In fact, just for CBS Bottom Line readers, I’m going to offer you free shipping if you order through www.peeledsnacks.com- simply use promotion code “CBS8” and enjoy…
BL: Thanks again Noha for your generosity. Best of luck with this venture!