🍝 NAKUL KAPOOR // LAZY FOOD CO. CO-FOUNDER & CEO

0:00I'm Sam Rose, and this is Commerce is Chaos, the podcast for consumer brand founders who know that building a business is messier than the highlight reel shows. Your supplier just missed their deadline, your top product is out of stock, and your competitors somehow just launched the same thing at half the price. Sound familiar? Every week, we dive into the real problems that keep founders up at night, from inventory disasters to supply chain nightmares, because surviving the chaos is what separates brands that fail from brands that scale.

0:31Okay, this is a perfect segue into lazy food.

0:36Nakul Kapoor:Exactly. How did you make the switch from cricket to tennis to padel to lazy food pasta? Well, you know, lazy food was never the target. It's just like, you know, sometimes you are just given an opportunity. And when you're like, and as an immigrant, you know, immigrants are always looking for something. And they're not like, it's not a linear path for them. And like for us, when we moved was like completely, we moved when I was in high school. And it was an abrupt move, actually. So we didn't even know we were going to be in the States. And like we came here on vacation and it became like actually a stay for us.

1:21Nakul Kapoor:so now we have to be like the type of people that have to be always on top of things trying to figure things out where's the opportunity and going there made me an entrepreneur a little bit and anyways in the beginning I always wanted to be an international something so I wanted to study economics and like that got into the IMF amazing first job yeah I was gonna say like international man of mystery or like what it became such a such a luck at the same time but at the same time it was such a great experience but when I was over there I got to go experience like traveling got to experience with some of the smartest people in the world it didn't fit me as well that was the main thing I and I realized I was making a big decision it's like do I go to the PhD route or do I do something else with my life and when you're like as it then goes back to the immigrants is like if it's too straightforward, I was getting uncomfortable.

2:16Nakul Kapoor:It's like if I knew it's too predictable, you know, economists are always trying to predict things. Right. So mine was like, okay, I'm going to try to figure myself out and then like go like I've developed a great understanding of how economics work. Fat story short, we go to like the MBA route to say, okay, that's something I'm going to do. Trying to like switch careers, go from like international economics to like startup world and start world takes me to like the next level of my life where like exposure to new skill sets different type of people and it was during covert time where i had to move back from europe to the states and was presented with an opportunity of people who were in the food industry that's how i got exposed to the food industry and got an experience I started realizing that okay there is actually a lot of opportunity in the food industry one is like people always have to eat you know this never going to go away second was that when I was watching as a the skills I learned at the IMF was the fantastic part was that you are always analyzing behaviors you're always analyzing a country you're always analyzing data and everything differently like showing traction but more so like you're analyzing things in a way and when i was in the covert era and i was connected with a lot of these food people i was looking at the behaviors that were happening in in the states we noticed that people were like looking for i don't know how you remember do you remember your like where you were and everything do you remember the feeling that you had are you gonna say like did i have a feeling of wanting to eat like potatoes and pasta no no basically the feeling was probably like you know you're trying to find ways to like entertain yourself and you know what happened was people were trying going back to cooking like cooking became a trend i was very much inside that trend i was making cooking tools so i was like yeah like at first i was i was jealous though because everybody else has got you know they got like their big covet bonuses and it was obviously like objectively terrifying but you know a lot of the folks that i knew were either like like furloughed or like on some sort of like work from home and you know my business inside what was effectively sort of food and hospitality but um but cookware just took off like a rocket so i've never worked harder in my life i've said that about a few things but like i worked right and i wish i had just been like enjoy cooking because that yes I know what you're talking about and um to all of you they got to do that like haha joke is on me no no but it was it was beautiful though right it's like people were trying to figure out how to just uh pass the the the time yeah and I I was seeing it in it from a different perspective like it's like oh my god people are getting trained to basically get back into cooking they're gonna get they're they're building a muscle and I was like okay they're building a muscle the second thing is that i noticed like d2c brands like blue apron hello fresh were growing up and they're training people how to make meals faster at home so i was more focusing on the behavior of what consumers are going to happen to and then i also noticed uh that i like i we all know that covid is not going to last forever it's going to end eventually and normal and people go back to normal yeah shopping again and everything and i i was like very had a very strong gut feeling that people are trained for easy things they want to cook and when they're going to shop they're going to look for things that are going to be healthy fast and tasty so that's where like the idea started to forming okay we're going to create something solve an area of providing healthy convenience for people who have been trained how to cook at home that was the ultimate goal for it.

6:15Also love that you, I mean, I trust you because your job was predicting things. Like COVID will end. Like I got to say, we're not all that certain about it.

6:26Nakul Kapoor:No, but you know, there's a funny joke with economists, right? They predict what's going to happen, but then tell you why it didn't happen. Yeah, totally. Yeah. It's like you get to be on both sides of it. Exactly. Juliet Wines, Allison, the founder, one of the co-founders of Juliet Wines came on and she had a similar experience of like she's at home, nothing to do. Her parents are buying like boxed wine in an ugly box there, but they're chilling and they're like having a great time together. And she's like, you know, this this experience could be beautiful and convenient instead of like being icky and convenient or beautiful, but like inconvenient.

7:03And so similar insight. And I loved I loved having her on and loved her story. but like how do we how do we take this thing that you know has become a comfort or a convenience to

7:12Nakul Kapoor:us and and elevate it exactly well when i was looking at like i further went to the research right and the idea was okay when you look at healthy convenience what's in the market you have in the market the microwave foods that's ultra processed people already know that is going to be not healthy and doesn't feel like cooking frozen foods it's a little rigid but it's it's delicious it's rigid but it's like it doesn't give that feeling of that emotional feeling it's like okay there's a gap in the market and right now what happens in the shelf stable space is that there's not much out there other than mac and cheese or like canned soup they say okay if we can tap this market provide the right recipes prior to the right product with flavors and also these lifestyle opportunities that people are looking for people trying to be healthy and all that kind of stuff and if you can actually figure this out in the supply chain and the product side of things I think we have something and that's where we start testing it out early on and but like small like very experimental and then we saw like okay there is something and let's keep on further investing into it and let my luck was that the team the network I had in Chicago because I was in Chicago at that time.

8:28Nakul Kapoor:And it was a person like my co-founder on the on the project. He was already like a food expert, like 20, 30 years of experience. He was a he was actually the person who was well connected with the gluten free pasta world. And the second thing was that he also supported with the development of the brand tolerance. So he was involved with the gluten-free process. And then the second person I had connections to was a chef. So having the perfect people, one from the supply chain side of things and the other one from the getting the flavor side of things was like the perfect trio to get these things like boosted and trying things out.

9:10It's so interesting how the world kind of brings stuff like that. You know, like you have an idea or maybe a compulsion or like an inkling. And then if you're surrounded by the right people at the right moment, it just helps. It is.

9:22Nakul Kapoor:it's all hit the ground there's luck to it right there's luck to it yeah but also at the same time you know there's two things though there's like one thing's luck plays a role the second thing is that you actually are paying attention that there is there's something around you and a lot of people like a lot of opportunities go by and people miss it and maybe this is the immigrant in me that I had because like you're always looking for you're paying attention to the small details and that helps you like really really find an opportunity and maybe that's why i've been like successful in certain areas but i like every time i go in certain areas i move on

10:03well you see the end of the opportunity and you're like let me take a right

10:07Nakul Kapoor:yeah yeah exactly right it's like what what more can i do basically it's like what can i do um talk about positioning for this product a little bit because from my perspective as a consumer and they're great products by the way so thank you for putting awesome stuff into the world um you have struck such a nice balance between the health positioning and the flavor first positioning um how would were you using market insights or like your gut to fit like literally and figuratively um to feel your way through that or um and and how are you sort of avoiding the traps of just like being a tip like a typical it's not this it's that you know it's not regular pasta it's gluten-free but um but but really has like a promise and an elevation that's so far beyond that well in the beginning the idea was mainly like you are looking for a area where there is an need and interest right the second one was always building your own data sets and it was all your own data sets were coming from like what i need to what do i need to prove wrong to move to the right direction.

11:13Nakul Kapoor:So in the beginning, what we were doing, we were testing flavors, if flavors was the first thing. The chef had a restaurant where we were testing flavors and giving opportunity to people to try and not telling them what it was. And then we were getting like early feedback without them knowing whether it's like, could they tell it was gluten-free? Could it, could they, did they like it? It was high protein. Did they like flavor one, flavor two? Why did they like flavor one flavor two so these were like ways of building a market research and i looked a little at public data that was available but most of the time i was building my own data sets creatively and it became my you know and like qualitative or quantitative data sets and it like allowed me to basically position the product and whether it was to decide in the flavor italian was important to us because one the chef had the the the differentiator on that like he could create amazing flavors that people have a memory of Italian food.

12:09Nakul Kapoor:And Italian food is one of the most popular foods for everyone. Everyone eats pasta. Everyone is familiar. So the goal was also that do not over-innovate. Go to an area people are familiar with and try to see, is this an interest and is this not an interest to them? And it was just always like every month I was running some random experiment just to collect the data and then putting it forward it's like okay this makes sense the issue with that is it's a slow process fair how long were you incubating until you felt like you had recipes and like something to share that was really ready for almost a year i would say we were like testing uh we did multiple tests we did tests at the market we tested with other chefs we tested with the students and we partnered with a marketing professor and it's like they would come to the the the chef's house and we're like put it in like blind testing we tested with like plant futures a program in berkeley so i was like finding creative ways of like just like is this does this work or not and once we figure out everything then we went to the online shop d2c It's like, okay, is there anything there?

13:25Nakul Kapoor:Are people willing to pay X price or Y price? Are they willing to pay which flavors they're going to play at? I had a quick trick for that one. So I went to my D2C website, and the idea was I do not know which flavors I want to further invest in. And I built a bundle and model. and you could either buy three you could buy six or you could buy nine and i put the number of flavors at five so that means when people are picking a bundle of three as a starter they will pick their three favorite and what were the two not favorites then when they were picking the six we know what was this which one they buy twice yeah and when it was nine which one they removed once i love this so that was my way of thinking is like i can build my cohorts that way and then I can figure out it's like okay these are the ones we will have to invest more in because this is what the market is telling me okay pasta doesn't work out this is a really good app idea it's like a better it's like multivariate a b c d e f g testing yeah like that that was lucky because it's like it's a combination of economics and combination of like uh I was in uh I was in Dubai working as a product leads over there so I was like doing all these tests and everything so It was that.

14:48Okay. Wait, I love, I love this line of conversation. Give us some other like hacks that like are completely left field. No one ever would have guessed. We'll make apps.

14:57Nakul Kapoor:I know. Right. It's like, but that's the beauty is like, there's, there's when you, when you go through so many different types of jobs and like different, like when I was in IMF, it teaches you certain skill sets, how to, how to not just like prove things, but understand why things are happening. That's the ultimate idea behind it. And the second, like going to the technical side, you were like actually learning how things work. But having experts around me was ultimately where I can hack, like actually try the experiments that I wanted to try. Yeah. That's really cool. You have shared publicly anecdotes about doing the wrong thing in a meeting with a buyer.

15:34I would love to hear that anecdote again. And in particular, like, you know, buyer relationships are really scary and intimidating. and being brave enough to break the rules, which again, maybe some of that comes from just like, you know, your heritage, like being in a position where you kind of always have to break the rules or are being made to play tennis so that you're not breaking the rules. But like, yeah, tell us how you're breaking the rules.

16:02Nakul Kapoor:Well, the funny thing was like, you know, I did not know what to expect. I didn't even know, like, I, like, honestly, I was like, first I thought the brand was going to be a D2C brand, not even a retail brand. And then only because we got into an Australian distribution that I switched the ideas like, okay, there is actually a retail opportunity over here. And it was much bigger than the online opportunity and faster. But anyways, I had no idea of retail. And because of that, I went to the meeting thinking like I'm pitching a startup. so in my pitch i was i had no like i did not have any competitor analysis i did not have category data i did not have uh margin i did not have velocity data i had none of the things that a buyer deck has and it was like the main thing i kept was mainly the philosophy like what are we building the team is like okay it's like the most important thing is the team team is the most important thing because ultimately things always go wrong is your team able to handle the things if things go wrong and that's what like i remember in the startup world is like you always tell me like how can we handle chaos like okay if a supply chain chaos happens i know i go to this person if it's a flavor chaos happening i'm going to this person if it's like marketing chaos i go to this person so it's like the team was the ultimate thing then it was then i would focus on a lot of behavior data.

17:32So I had more behavior data in proportion to the traction data.

17:37Nakul Kapoor:So I was like, yes, we had amazing reviews. We are selling X amount, all these kinds of things. But I was showing them the experiments I had done related to Whole Foods. So I was like, how the consumer behaves to these product types and all that kind of stuff. And that was the ultimate way. I was basically telling them a story like a human and then i put them in the shoes of the the customer to say ah imagine the time that like you are you are you had a long day or a long weekend you're going home what are your options uber eats you're gonna spend a lot of money uh you're gonna try to cook it's gonna take you like 30 to 40 minutes plus you don't want microwave you don't want to go grocery shopping you want something quick and like this is where the pantry product fits in so when you grab you still have that experience of a high quality meal in 10 to 15 minutes where you get the protein you get everything and it's done and done fast easy just open the power that's it and the funny part was that i was so about the the whole story and this experience and like i forgot to even explain the product features the user it was until at the end of the meeting it's like okay so how does the product work and what could you tell us about the product but i think it was very passionate the way i was explaining and i was like but i was more focused as like hey one we can work on this together it's an opportunity this is how i see the opportunity i have tested experiments that showed this is how it can work but i also have failed experiments this is what the data is we don't know which flavor is going to be successful but it is basically how we work together that we can figure this out has an opportunity with and i think the most important thing they were betting on the team and like we do not know what's going to happen how much we're going to sell and all that kind of stuff but i'm going to try some creative ways look at data in every angle to figure out how what i need to do to solve this problem that's that's i think i was just giving them confidence yeah and the team no this is a whole new angle to pitching for cbg that like i remember it's the funny and like the even the funny part is like when i got then i started getting into the industry network and i saw the first pitch deck it's like wow i was way off i didn't include anything but they bought it um okay so so you you've kind of like you know develop some conviction around an opportunity you spend some time experimenting you bring the product market what has been for you the biggest belief that you had that was sort of validated by like actually getting to the market and then you can answer these in either either order also what's something that like really surprised you or like a thing that you never saw coming that uh is maybe you know like something that you learned that you weren't expecting at all?

20:44Nakul Kapoor:Very important questions and good questions.

20:52Nakul Kapoor:Well, the conviction was like mainly is it was to one was to understand the concept, right? It's like people were looking for something easy. And I saw it in the data. I saw in the customer interviews. I saw it in the, in any format I was trying, there was always a repeat. It was, yes, I need something easy. I need something tasty. And I need something with protein. Protein was like, at the moment, but I use it as a, as a, as a feature, not as the whole concept. I was like, the concept was convenience, ultimately. Like I was trying to, what, what was true for me was that I was winning back time for people.

21:36Nakul Kapoor:That's, that was true for me. So it's like, and it was true for everyone. What people always want is like, I do not want to spend too much time and I want to clean less. And it's like, okay, I had the product that actually solves that. So we tried, like, that's where we were given the more confidence on this. Like we go to market. And when we went to the market, people were buying. Like we did Facebook ads. We did all these things. We hadn't gone on Amazon yet. And we saw great data coming into play. It's like people are willing to spend decent amounts of money to buy these products. Then the experiment we were trying to figure out whether do people want, they care more about protein or they care more gluten-free.

22:17Nakul Kapoor:And that was experiments we did. And we saw that it was true. People care about protein. What surprised me was that how complex the supply chain for a product like this was.

22:36Nakul Kapoor:and how many stakeholders are involved to just get this on a shelf or into people's hands that was like the like i did not know how complex this industry is is even to prepare a recipe and all that kind of service like it surprised me the need that there is a huge need for it but you are also trying to innovate in a world where like it's like there are too many people involved yeah and how do you make everyone feel like uh connected um my anecdote i want to hear how you put it together my anecdote about this is like cheese and crackers could not be more different from a supply chain perspective like they go together at the same time you eat them at the same time but cheese and crackers are like here and there on it um so and you've like you know your bar is really hot you've got vegetables you've got pasta you've got the sauces how does it come together like give us a little bit um don't tell us so much that you have to kill us but behind the curtain of how you put it together well it is so complicated it's just uh the complex part is like you know there is like uh in the supply chain world one is to build a sauce and to build a sauce that is in the dry format and in the dry format you have to find like how it reacts with the cooking of the pasta.

24:01Nakul Kapoor:So is it going to create the creaminess or not? And that is like finding that formulation and the combination was one of the toughest parts. And then procuring it. How do you procure these ingredients? Some of them, like this formulation, they're complex and simple at the same time. So our main buckets are, you have a good portion of the seasoning blend. We have multiple seasoning blend where we have, we're using high quality ingredients always, clean ingredients always, and trying to produce a product that is like going to create that flavor profile that a customer can find in the restaurant.

24:43Nakul Kapoor:And that was the goal. And it was like keep on testing, working with the R &D chefs and working with the actual chefs, try to come together and figure out how can you actually get that. That was one complexity. then was the complexity where is this coming from sometimes uh the chef wanted the flavor like the the tomato coming from italy it's like how can we get a tomato coming from italy to be put in over here he's like if it's not san marzano i'm out exactly right exactly exactly no i went to italy once just to like talk to some of the the people to see if if there can be a relationship of like getting some wait that's a real question actually this is you you can you can settle a bet that i've long had an opinion on but i you know i need a second opinion san marzano tomatoes like hot or not does it really matter it's delicious no tomatoes play a huge role no but san marzano's in particular like i'll have some you know i've selling cook where for so long I have a bunch of friends who are chefs and some of them will be like I am only buying this brand of canned tomatoes like they can't and then I have other chefs who are like ah don't listen to that guy like it doesn't really matter um but uh I have to imagine if you're concentrating it into a bag and then asking that bag to stay delicious and flavorful over some period of shelf life it's only only gets harder no it is harder of course but it's the same thing like it's just like wine right like some is some years are going to be great some years are not going to be great and how was the soil at that time how was the sun at that time so it does matter the quality which uh who's uh product you're buying is there like a tomato terroir

26:32this one's from uh the southwest corner if there's one for every other product out there there of course i believe so um what was the hardest piece of the supply chain to kind of like lock in or like the last piece that fell into place before you could be like okay we're

26:50Nakul Kapoor:ready for showtime here uh it was the the hardest piece was to basically uh making sure the three the the seasoning the veggies and the pasta when they're blended together can actually happen in a scalable format because the issue is that when you're in a small artisanal way, you can be semi-automatic and you can manage all that kind of stuff. However, for scaling, it is purely difficult and that means you're always going to be stuck at this number and you won't be able to get to it and then there's no business model. And it was to figure out how to get this product, each of these recipes, that can they be transitioned if we went from like 500 cases a day to a thousand cases to 10 ,000 cases all that kind of stuff so ultimately that like figuring that part out was the most important for me because I was not thinking did we solve today's problem or it's like we'll be able to handle tomorrow's yeah well and I want to okay that that kind of flows into supply and demand which I want to talk about too like you have such an unfair advantage in this in that like you know how this works at a macro scale and I feel like so many founders you know they'll get into it because they're great they're great at product they're great at storytelling and the operations of the business are really where it gets hard like predicting supply outpacing demand you know like all you know all of the all of the things that really will have an outsized impact on whether or not like you're leaving demand out and like unfulfilled or you've got too much stuff aging on the shelf um how did you bring uh you know like your past experience to bear on kind of like getting around that corner or at least seeing around that corner and uh and how do you manage it how do you manage it now i mean your product's on fire so i have to i have to guess that it's like hard to keep up with it is it's getting super difficult and as you know supply chain is all about chaos management or I think it's crisis management it's like that's where it's operation and crisis management it was going to be commerce is crisis but that felt like a little too on the nose you know ultimately the way I saw things is I saw things as like there are there's a rhythm and I was just always trying to figure out what what is the rhythm of the flow on the supply side in the beginning?

29:25Nakul Kapoor:And what's the rhythm of the flow on the demand side of things? And it was trying to figure out when you are finding, you have to find the velocities of like the POs, you have to find the velocities of the distributor pickups, and you have to see how each retailer picks. So I was going so granular on the data profiles, on like trying to find how does the, most people, you know, like in most people, when they look at data, their stock or their flow data right most people focus on the stock very few people focus it's hard for humans to actually think on the flow side of things it's very difficult so my goal was always from my past learnings was to create proxy data as much as possible of this flow in the in the build-up side of things and projecting that flow into like how the demand is going to behave because with marketing you can control a bit of the demand but ultimately one of uh if you went send too much water to the the river it's going to overflow if you said it's going to drought so that's like the ultimate is to like how do you control that thing in the beginning it didn't go always according to plan right however rather than getting chaotic around it we were under trying to understand where the problems are and trying to fix the system it It was just like building a system around it, how we can be better at doing that.

30:51Nakul Kapoor:And all of this was done in Excel. It's nothing like we created complicated. I was going to say, where are you making the work happen here? It's like I have so many tabs of these files that we were able to manage the flow. I was like, as soon as the Whole Foods data came into play, right? So we went into Whole Foods Regional. That's how we started at 65 stores. and I was going straight to the store level data and for the first month, I became obsessed about it. And I wanted to see each store, each area, how it's going to behave on demand side of things. And when I threw interventions like demos or promotions or whatever that actually influenced things, It's like, okay, how does it impact my demand?

31:46Nakul Kapoor:How does it impact my inventory levels? And then it was like, go back, fix it, add more layers to it, and all that kind of stuff. So it was basically a granular learning, but I was so obsessed with Whole Foods data that I was just like, I think of most retails, they give the best data. It's so beautiful. And I was going, okay, if the price drops, what happens? to the velocity if price increase what happens to the velocity like i was just like going through that and then i started building my models around that and then keep going sorry keep going uh then that was earlier stage so it was easy to that then became complex because that's one dc then you're bringing bringing more dcs into play then you have like okay what is the how does each dc behave with its own like i didn't always look at national velocity i was looking dc velocities So interesting.

32:42How does the weather impact this? If it's a really cold winter, does everyone just want to stay in bed?

32:47Nakul Kapoor:I started looking into that. Now with all these AIs, I just don't want to get into the rabbit hole that I forget to sell the pasta. That's fair. it's beautiful but now just because of our scalability now that we we brought in we went from a very small we were producing maybe maximum 1 000 cases a day kind of a production place and then now we are transitioned to that can manage somewhere between 10 000 to 30 000 cases a day so we build that system you built that is that with a co-man or is it internal No, I don't want to get into. It's too complex of a structure, I would say. It requires too many resources and brainpower to handle these things.

33:36No, you're going to be busy building your sampling app too.

33:39Nakul Kapoor:Exactly, right? How did I configure my model? Also, my first hire, because I built a whole company. Sorry, we built a whole company in a very lean manner. Everyone was a freelancer, even post-launch, post-national launch. It was at maybe when store counts went around 700 plus is when I got first full-time support. And it was on the supply chain. It's like I needed someone who can manage supply chain for me, who can manage all these things so that it's not going to get chaotic. Like the issue was that I had to, when everyone looks at my Excel files, they get overwhelmed. So I have to really, really, I get overwhelmed sometimes.

34:36I mean, this is how I became a software founder. Like the spreadsheets that we were using were like, you know, someone would put one wrong character in a formula. The whole thing would fall apart. You know, they'd save it or they'd save a thing as values or whatever. like i guess we have to put this on the cloud like people should imagine when i was working at the imf we were doing a whole countries and if you you cannot mess up do countries have erps