How This New Pasta Brand 3X’d Its Sales

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch.

1:59When you run a business, you are constantly making trade-offs. Doing an hour of one thing means not doing an hour of something else. And this can start to feel like an impossible choice because both things are important, but in very different ways. And you're not sure which one deserves your attention more. For example, I started an Instagram account where I was just documenting the food that I was eating. That's Arash, who I'll tell you more about in a moment. But for now, just know this. Arash built up a following. And he and his wife, Madalena, created a food brand that these followers were very interested in.

2:36Which meant that... I remember the first weekend where we said, okay, we got to get these orders out. We were up till about three o 'clock in the morning. We walked our dogs, I remember, at 3.30 that day. A.M. Yeah, 3.30 a.m. And we shipped this off to the customers. And very soon after that, feedback started rolling in. So now Arash is exhausted from packing boxes at 3 a.m. And he's busy responding to customers. And what he's not doing is making the content that excites those followers in the first place. And in turn, actually drives the business. And that was just the start of the trade-offs.

3:12Because many more trade-offs would come. And the question is, what do you do? How does a founder best use their time? Actually, better yet, how does a founder even claw back enough time to use wisely in the first place? Today, I'm going to tell you a story of one founding team who figured that out. Because these days, Arash and Maddalena's company is growing strong, and they're not just packing boxes in their basement anymore. Instead, they're thriving on Amazon, getting great retail placements across the country. And that Instagram account he started has 3.5 million followers. I met Madalena and Arash at Amazon Accelerate, which is a conference that Amazon hosts for its sellers.

3:54Today is actually a bonus episode of Problem Solvers brought to you by Amazon. You can watch the Amazon Accelerate general sessions on demand and learn about the many ways Amazon is helping independent sellers succeed. Just visit amazonaccelerate.com. And on this episode, I'm going to tell you the story of these two married co-founder Amazon sellers, Madalena and Arash, and the many pivots that they took in their business and the way that they took a once failing pasta business and turned it into a great success. So it is time now to really meet them. Hello, I'm Madalena Defta and I'm the CEO and one of the co-founders of Kaizen Food Company.

4:37I'm Arash Hashemi and I'm one of the co-founders of Kaizen Food Company. The word Kaizen, by the way, is a Japanese philosophy that focuses on continuous improvement, which is pretty fitting because the story of Kaizen Food Company starts with two big decisions that are all about improvement, but will sound almost counterintuitive and frankly might even sound a little crazy. But these decisions tell you a lot about this couple and how built they were for entrepreneurship. So the first decision comes from Arash. I was in a pretty great career in finance and accounting. I had done really well, but I'd always struggled with my weight my entire life.

5:17Despite a lifetime of yo-yo diets, I was over 350 pounds at one point. And so I knew I needed to do something different and take a different approach to how I was viewing my diet and what I was eating. And so I decided to walk away from my career and just go all in on becoming healthier. Arash quit his job to focus on his health. Now, lots of people should focus on their health. Everybody should focus on their health. But most people don't quit their job to do it. And Arash said, look, in truth, it wasn't just about the weight. He was miserable in his job. His life just wasn't where he wanted to be.

5:55That is also your health. And he needed a fresh start, which leads us to the second important decision. And that was Madalena's decision to support Arash in this major change. I mean, he didn't exactly know how he was going to make money once he quit his job. She had a good job doing mergers and acquisitions and was willing to adjust their lifestyle to a smaller income while Arash just worked on himself and figured it out. And counterintuitively, she says, her background really prepared her for a risk like this. I come from Romania. I immigrated in my early 20s with one suitcase and a couple hundred euros at the time to Amsterdam with no support system.

6:40Then I did it again when I moved to the U.S. So really perseverance, resourcefulness, resilience were really quintessential to my success. And it's really what led me through my career here. So when Arash told me that, it wasn't the first time that we really didn't have all the answers and all the plans. But when I had signed up for this, I knew I had the right partner. And while he didn't have all the answers, I knew he had the skill set. Isn't that a beautiful answer? I mean, you might think that she would say, look, I worked really hard to build a life here. I don't want to take a big risk on it.

7:17But instead, she said, I understand what risk looks like. And I know that I have the resilience it takes to get through a big challenge. And I know that my partner has that too. So let's do it. That really is amazing. And so the experiment began. Arash, like I said, had no plan, no idea of what would happen or what the next phase of his career would look like. Instead, he started by creating that Instagram account I told you about. It is, by the way, at Shred Happens. Shred Happens, if you want to check it out, 3.5 million followers. It was mostly healthier, higher protein, lower carb versions of my favorite foods.

7:54That's what I found kept me satiated and really excited about what I was eating. And I started building a community and an audience. And with all the recipes that he was posting, one thing kept coming up among his community more than anything else. And that was pasta. I soon pulsed my community and we really sensed that there was this major gap in the market in terms of a high protein, low carb pasta that actually tasted good, that had great ingredients because, you know, anything that was available either had questionable ingredients, tasted funny, didn't have enough protein, it was too high in starch.

8:26And so it was kind of our eureka moment. And naively, Madeline and I said, well, let's make a low-carb pasta together. Naively, because, you know, easier said than done, they went to a market and bought tons of ingredients and started creating pastas in their kitchen. Originally, they started using almond flour, which worked pretty well. But then when they went out to find a manufacturer, almost nobody wanted to work with a product that had almond flour because it's an allergen. They finally found one that was willing to do it, but it turns out that this almond flour recipe that they had made in their kitchen just did not scale at all.

9:02This is a common problem in food, as they would discover. The recipe that you make in small batches simply does not work at industrial scale. So they made a ton of adjustments. And finally, in 2019, we figured that one out and I said, okay, now the rest is really smooth sailing. We just got to ship this thing and we got a business. And that is not how business actually works. No, because we're still in phase one here. They ship three pallets of this pasta to their home. They put it up for sale. It sells out in 48 hours, which was incredible. Then they pack up all this pasta in their basement at 3 a.m.

9:39and hit those problems I told you about a moment ago. You know, Arash doesn't now have the time to make content for Instagram anymore because he's responding to his followers, who are now his customers, who have received the pasta. And now we have a new problem. They don't actually like this pasta. They wanted something that tasted better. The mouthfeel was better. So Arash and Maddalena make a hard decision to just call the whole thing off and start from scratch. They throw away their recipe and spend two years trying to make a better one. They discover the lupini bean, which works great as a base ingredient, and then they exhaust their manufacturer's patience as they keep trying new batches of pasta on the commercial equipment.

10:21And finally, finally, finally, they have something they're happy with. But before they release it, they think to themselves, okay, when we launched two years earlier, the ingredients were not the only problem with this business. The logistics were a problem too. They didn't want to go back to packing boxes in their basement at 3 a.m. They can't be scrambling around, unable to engage consumers where it mattered. They needed to do things differently. And here is where they started looking closely at Amazon. At first, they were really focused on what's called FBA or Fulfilled by Amazon, which is where Amazon holds your inventory and ships it out itself, which means...

11:00The entire process from customer service to the shipping and fulfillment was going to be fulfilled by Amazon. But of course, you don't just succeed on Amazon by putting your product on Amazon. Like any marketplace, you need to understand what works, how it works, what tools can help you grow. So I asked Madalena and Arash, how did you start to figure that out? We took a tiered approach with Amazon, similar to the other things that we did when we relaunched. And so we started by putting our listing up. And then from there, understanding, all right, where do we have opportunity to enhance the keywords that we're using to drive that better?

11:35visibility. For example, they tested a lot of keywords like high protein, low carb, keto, gluten-free. Then they watched the data. They saw that the term low carb was searched a lot, which was a surprise to them because when they first launched their pasta two years earlier in 2019, keto was all the rage and people searched for that a lot. But a few years later, not so much. So those insights helped Kaizen position itself. It leaned more heavily on low carb as a marketable attribute. And that was just the start. And we started using better imagery as time went on. And then we established an Amazon storefront finally.

12:12And we started getting a little bit better with ads and using brand tailored promotions. But I'd say the two things that really helped us was just one trial and error, going through the process and A-B testing in a way. There is Seller University that provides a ton of free videos and self-guided learning. but the biggest thing for us was like the Amazon seller community. We have a small network of friends that use Amazon and everyone's excited to talk about the latest and greatest thing on Amazon. Oh, you should do this. You should try this. And so for us, a big portion of our learning came from being in touch with that community.

12:50We know people, but there's also message boards, there's functionality within seller university, different forums, but that's been our biggest source of inspiration in terms of trying new things and just testing new things as we went along. And I think the other thing you talk about a lot is our promotion campaigns, the brand tailored campaigns. Yeah, for us, we started again, our goal was to drive visibility to our product. And so initially, we started out with doing more basic ads. And as we got smarter, we understood, okay, well, here are ancillary products that people are searching already on Amazon, they're already showing a demand.

13:27How do we get those individuals excited and those consumers excited and have them learn about Kaizen? Can you give me an example of that? So if somebody is already searching for, let's say, a low-carb tortilla or low-carb bread or sugar-free snacks or diabetic-friendly pantry items, I think those are an opportunity for us. And again, lion's share of our customers may be discovering us on social media, but there's a whole host of Amazon shoppers that may not even necessarily use social media or have seen our content, right? That last point is a really important one. At first, Kaizen was focused on keywords and positioning all around pasta because that's what they sold, although they have since also added rice.

14:05You know, they had a pasta, so they wanted to be top of mind when people searched for pasta. But eventually they realized, no, you actually want to be top of mind for your target consumer wherever they are, which means you want to anticipate and understand where they are. And if your target customer is searching for low-carb tortillas, for example, then you want to be around low-carb tortillas because they're probably interested in low-carb pasta too. Because there might not be another low-carb or keto pasta that's playing in that space. And so that's really where we've spent our time to be more creative, not only with the types of ads that we're doing to reach new customers, whether that's video or images, but also where we're looking for customers.

14:46And as they got deeper into advertising and optimization, they discovered something really cool. Advertising isn't actually all that different from the thing that launched this business, which was helpful content. Customers are really looking for value in terms of education, in terms of giving them something. Ads that do best for us is when we're providing customers value, not just talking about our product attributes, but also maybe sharing a recipe with them, showing a photo, showing what's possible, showing them here's a standard bowl of pasta or rice with X number of calories, X number of carbs, X number of protein.

15:18You could have this identical thing for nearly half the calories, double the protein, 85 % fewer carbs. And that's what gets people excited. It's content that creates value for them. It's what can you do for them versus what they can do for you. And then as they got stronger on Amazon and their sales strategy really grew, something very surprising happened. They discovered that their online sales data from Amazon could help them grow in other channels like brick and mortar retail. Here's how that works. So there's this section called brand analytics, which I absolutely love. It's got a few features, one of them being consumer behavior analytics, and one section specifically, it's called demographics.

16:07So it shows you your sales and it's broken by age group, it's broken by income bracket, and it's broken by geography. So our product, because it's got all these fantastic attributes, it's made with above average expensive ingredients relative to the traditional pasta, therefore it comes at the premium price. So when we talk to retailers, especially to the category managers, they already pigeonhole us or have a preconceived idea as to who our buyer is or who we would appeal to, especially from an income bracket perspective. And my favorite part about this analytics, and it's actually dispelled the myth that even I had about our customers, it's really shown that, in fact, customers across all income brackets value our product and see value in the product, which even I was surprised by it.

17:01And secondly, the sales velocity, right? As a premium product, the sales velocity has been a really powerful piece of data to show that there is demand for the product. And when you layer the geography piece of it, that not only helped us drive conversations with retailers, but also has impacted our retail launch strategy in terms of Which geographies do we want to access based on where we see demand? So it's helped us use that data in more than one way beyond impacting how we think about our Amazon business. Oh, that's really, really interesting. And so useful when you're sitting down and talking to a retailer who might otherwise be a little skeptical.

17:42You know, you could easily be seen, if nobody knew anything about you, as a niche product for a high-end consumer. And that's not something that a mass market retailer is interested in. But if you're able to say, no, actually, look, we have all this demographic data. We have this location data. We know that this connects with the people who are walking into the store. That's a different conversation. Data is powerful and data is undeniable. So no need to say anything else. You know, we started this episode with a problem. Entrepreneurs have to make trade-offs about what to spend time on and what not to spend time on.

18:18And so the question is, how do you decide where to spend your time? But after talking with Madalena and Arash, I got to thinking, you know, maybe that idea of a trade-off is a trap. Maybe, you know, you don't want to be limited to just two options, do this or do that. Instead, you want to zoom out and say, all right, what were the options supposed to accomplish in the first place? What is it that I actually want to do? And then you build a solution based on that. You pick your options rather than be limited by them. Madalena and Arash started with a problem. When they focused on logistics, they weren't focused on their customer.

18:58And when they focused on their customer, they weren't focused on logistics. So they looked outside of that little trap. Amazon was a solution. Of course, it's not the only solution that anyone needs in business. There are other channels to sell in, other ways to reach customers. But they said that, interestingly, working with Amazon helped inform those other channels. They sell through Kaizen's website, which means that they need third parties to run their direct-to-consumer fulfillment. And they used Amazon standards as a way to judge which third parties to use. And the Amazon data, as we talked about a moment ago, also helped them enter retail.

19:31You are never limited to just a few choices. In fact, sometimes one choice reveals and creates another. Madalena said it nicely as we were wrapping up our conversation. You need to take yourself out of the equation a little bit. It's really not about you. It's really about the value you're looking to create. so you you kind of need to keep that at the forefront like what am I solving for what's the value I'm looking to create and what's the best way of doing it sometimes you may get very excited and it's it's kind of like oh it would be great to be in this store or it would be great to say I did that and then you kind of lose sight of what matters so looking back and reflecting on our first experience and why we rushed into things and didn't really take our time.

20:24Some of it was inexperienced, but some of it was probably us being overly excited. I would say just don't lose sight as to why you're in it and focus on the mission rather than the personal. And when you do that, the solutions available to you become a lot clearer. And that's our episode. But hey, let's keep the conversation going. I write a newsletter called One Thing Better, where each week I offer one way to be successful and satisfied and build a career or company you love. You can find it at one thing better dot email. That's a web address. Just plug it into a browser. One thing better dot email.

21:07And if you respond to any of those emails, I'll get it. and I promise to reply back. Problem Solvers is a production of Entrepreneur Media and it comes out every Monday morning. So make sure you're subscribed so you don't miss an episode. Thanks to the team at Entrepreneur and particularly Deepa Shah for production. My name is Jason Pfeiffer. See you next week.