The brand line, which is produced by soy foods pioneer Naturade, is being marketed to underserved populations via a partnership with the hip hop artist Styles P. Meeting consumers where they are was a big part of the marketing equation, according to private equity partners Claude Tellis and Kareem Cook, who own the company through their firm Towerview Capital Management.
“Our overall strategy is to be very credible in the vegan community and the vegetarian community with a plant-based product that had great efficacy. Ultimately where we wanted to go was the urban community, the hip hop community, and make our product cool there,” Cook told FoodNavigator-USA.
“Hip hop has always been two things. It has been the voice of the politically active, and it also been an aspirational language for the urban community and the global community. While it is a vehicle of vanity for rappers themselves it also gets the message out that this product is the best,” Tellis said.
“Styles P understands that you have to meet people where they are and you have to be a bit braggadocios. The message is that this is what the cool people take, what the hot people take. That fact that we are doing these two things together (marketing an efficacious, plant-based product with a hip hop message) is something that we believe has never been done before by a company that is also inside of Whole Foods,” Tellis added.
LA wake up call
Cook and Tellis, who formed a bond in their undergraduate years at Duke University, moved to Los Angeles after completing their MBAs with the dream to found an entrepreneurial enterprise. But when they landed in LA in 2002 they were in for a shock—barely a beach body was to be seen.
“Claude and I had known each other since 1991 when we were at Duke together. We had this perception of what LA life was like and that wasn’t the reality. We saw a lot of obese kids,” Cook told FoodNavigator-USA.
'In both of our families, if you live long enough, you most likely will die from a disease based on your diet'
The pair saw an opportunity in that sad revelation and founded a healthy vending business. Their first big target was the local YMCA and then they moved on to the Los Angeles Unified School District with more than 130 high schools and middle schools. That market was up to that time dominated by machines featuring Coca Cola products. Cook said he and Tellis could see that making high sugar, high calorie products easily available to school kids was setting them up for future health failure.
“In both of our families, if you live long enough, you most likely will die from a disease based on your diet, things like diabetes and heart disease,” Cook said. “We convinced one high school principal to make healthier options available, things like juices and waters.”
Cook said that provoked a strong reaction from Coke, which he said threatened to use its power to flatten the gnat-like upstart. Cook said the pair fended off the attack by playing PepsiCo off against its rival, offering to feature the healthier Pepsi products in their machines. Cook said he and Tellis then participated in the overall LAUSD policy shift toward healthier cafeteria food and vending machine options.
Meal replacement opportunity
That led the entrepreneurs to look at other opportunities to move the nutrition needle for underserved populations. Cook said he and Tellis believed that misinformation was a big part of the problem—if healthy food choices weren’t modeled for children in the home, dangerous diets tended to perpetuate themselves.
Many other problems play into the picture, such as the food desert phenomenon, which is not exclusive to Los Angeles. In the city of Denver, for example, the heavily Hispanic Westwood neighborhood, which has the highest proportion of children per household in the city, has long featured many more liquor stores than grocery stores.
The pair decided to look for a brand that already had traction within the natural channel as a vehicle to promulgate a healthier option for these types of families. They settled on Naturade, a legacy soy foods brand that had fallen on hard times and was just in the process of recovering from a bankruptcy when Tellis and Cook bought it.
They raised the capital through their investment arm called Towerview Capital Management. They found investment partners though connections that included the Duke University Board of Trustees, one of whom is Janet Hill, who has an MS in mathematics from the University of Chicago and also serves on a number of corporate boards. She also happens to be the mother of Duke standout and NBA star Grant Hill.
“We wanted to make sure we bought a great company that was either profitable or was on the road to be profitable. Naturade was innovative from the 1950s with plant-based protein, and we thought meal replacements was a place where we could get a lot of traction,” Tellis said.
VeganSmart, which was formulated with the help of a contract manufacturer, is billed by Cook as a complete meal. The product is positioned as a tub-form meal replacement but is labeled as a dietary supplement. It packs into its 160-calorie serving a full suite of vitamins and minerals and 20 grams of protein from five non GMO sources: pea, quinoa, chia, potato and chlorella. The company has a sub brand of the product called Love is Love that is being marketed in conjunction with Styles P.
One problem often cited for the obesity epidemic among under served populations is that healthier food tends to be relatively more expensive while bad food laden with fats and empty calories tends to be cheap. Tellis argued that this doesn’t have to be the case.
“As minorities we were raised on eating black eyed peas and collard greens. These are healthy foods that are cheap. People don’t understand that it is a matter of the choices you make,” he said.
“We start with something that is fun and clean and cool and can be used to improve people’s diets. We can provide a full meal of high quality food for less than $3 a serving,” he said.