B-Sides: Flavor, Sustainability & Profit with Yousuf Ahmed

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1:13It took me a while to figure this out because I tried doing like pizza, bagels, all sorts of stuff. And I was like, oh, this stuff is terrible. And then I started baking cookies, doing plays on Pop-Tarts. And that's when everything clicked where I was like, oh, instead of me trying to like shoehorn this ingredient in a direction I wanted to take it, why not like pay attention to the ingredient and formulate a product around that? This is Right About Now with Ryan Alford, a Radcast Network production. We are the number one business show on the planet with over 1 million downloads a month. Taking the BS out of business for over six years and over 400 episodes.

1:49You ready to start snapping next and cashing checks? Well, it starts right about now. What's up, guys? Welcome to Right About Now, your number one marketing and business show on Apple Podcasts. I'm Ryan Offit, your host. We thank you for listening, watching. Hopefully you're over there on YouTube, starting to blow up there. And of course, social media. You can consume the show wherever you want to, the short, the long, the middle, but you're going to want the whole story today. Because again, we'd like to bring you all the insights of what's happening now. We could talk about next year. We could talk about last year.

2:22No, it's right about now. That's why we've got the founder. He's the king of crunch of B-sides. What's up, Yousef? Hey, Ryan. How you doing? Good. Yousef Ahmed, the King of Crunch. I've already given him a name because he's a disruptor. He's from Goldman Sachs to the King of Crunch. You got quite the story there. Oh, yeah. I'm a curious guy. I feel like if you're going to try to take a swing in this world, you got to do everything that you can. I liked everything about this package when it hit our desk. Okay, we've got snacks. I'm a snack guy. Snacks. We got crunchy things like tasty flavors. B-sides.

3:07I got the music play there. So growing up in a very musical family, I love the brand. Sustainable. We checked a lot of boxes, Yusuf, in things that seem interesting and disruptive, but also cool. Yeah. Yeah, you know, I wanted to kind of throw everything against the wall. I thought that there are a couple of different ways that I could approach building a brand. And, you know, you hit them all in the head, right? Delicious stuff that also happens to be good for you, good for the planet. You know, what more could you want? Exactly. And look, you're right down the road. South Carolina is where we're in Greenville, South Carolina.

3:44Born and raised in Atlanta? Did I hear that? Born and raised in Atlanta. Yeah, born and raised in Atlanta. I went to undergrad at UGA. Oh, well, I won't hold that against you, but I'm a Clemson guy. I don't know how much you're into the – you've got to be a college football guy, right, if you went to Georgia? You know, it's so funny. I tried. I tried really hard, but I just couldn't get into it. We're talking about the music background. I started my career in the music business, actually, in Athens, a huge music town. And so I spent most of my time at the recording studio there, not at Sanford Stadium.

4:21Music, I mean, Goldman Sachs, like what got you to B-Sides? Let's give a little bit of that founder story of, you know, what got you into all this? If you look backwards, you can kind of connect the dots pretty easily. So I'm the son of a couple of immigrants who like did not want me to work in restaurants or work in food. But, you know, food culture was kind of always top of mind for kind of. I'm based both in the U.S. and abroad, and the business manager handles everything with regards to the money, both on the personal and the professional side. So you get kind of a holistic picture of how the business works, how artistry works, how these people kind of function in their everyday lives.

5:01And for a young single guy living in New York City in his early 20s, like it was a dream. But it's also like you're working investment banking hours for not even close to investment banking pay. So I kind of hung up that apron and like a good millennial, quit my job, traveled around the world, ran out of money, came back to New York, got a job as a dog walker and applied to business school. And then I switched over into investment management. So that's how I went to Goldman Sachs. So I spent the next five years managing money for the top, top 1 % of this country. So I was a private wealth manager.

5:39That basically means if you had 10 million bucks or more of investable assets, you were qualified to become a Goldman Sachs private wealth client. So that category is mostly entrepreneurs. And I did a lot of work in venture capital. And that's the financial side. And then I wanted to basically spend 10 years managing other people's money. And I wanted to do something entirely different. So I took the food out of the back pocket and said, okay, how can I plant a flag here? And that's essentially how I got to this company. The whole millennial journey there. You got the chasing the superstars and managing their money and their problems.

6:15And their problems. Yeah. And there are many. Any name dropping you can do? Yeah. So my biggest clients at the time were Arcade Fire, Cut Copy, GoTA, The Scissor Sisters, Vanessa Carlton, Hot Chip. So it's kind of a broad cross section of different genres. Whereas some of the artists had heydays in years prior, but were still living on residuals. Some of them were just coming into the forefront. And it was a fascinating time because, so this is like 2010, 2011. Spotify really, it had just started to percolate, but it hadn't changed the music business entirely. So there was tons of money to be made in the old model.

6:56And we were just transitioning into this new kind of streaming model. So lots of personalities, lots of personality management, you know, part therapist, part accountant. It was always fun. Was it the name? I mean, obviously your own guy. I mean, probably impressed by that, like, but obviously getting to flex your kind of business management, you know, muscle. I mean, was it like the chase of, you know, the buzz of working with celebrity artists, but also getting to do the business out of what you like? Was it the combination of the two? Yeah, it was both. My very first job in the music business was at a recording studio.

7:31I wanted to go to where the artists were. So that was like the natural kind of, okay, every artist has to record an album. Let's go do that. And then it was like, to become a recording engineer, you have to be a special kind of masochist that I just was not. And I wanted to, in your words, kind of flex the business muscle of it and figure out how this, like I said, the music business was in flux back then. And I really wanted to figure out where the money was going, how to help artists capitalize on different things. So the allure of business management was the peak behind the curtain and sitting on the same side of the table as a lot of these artists.

8:07Yeah, the names are, they make the job, gives it a sense of cachet. there are plenty of artists that you have probably never heard of that I also worked with who also need help, you know. But it's the bigger the the bigger the artists, kind of the bigger the personality. And that can start to become grading over time. Yeah, I'll use the word for you. Ego. Your word, not mine. Yeah, I know. You didn't say that. You enjoyed every moment of it. But I've just heard that some of them have egos. it's a fascinating business and that could be another episode for another day talking about the evolution of that the music business but why the hell do you want to become an entrepreneur man I mean managing other people's money sounds awesome sometimes when I own five companies now and you know it's it's I love it and I don't I wouldn't go back but at the same time was it just you wanted to do your own thing I think you just phrased it perfectly right like you love it and you wouldn't go back.

9:09Once you kind of scratch the itch, there's no going back. Look, so a couple of different things. One, I'm a super curious person. I think to be an investor, a successful investor, you have to have a sense of curiosity. And private wealth management, so the way that Goldman Sachs' model worked is here's a phone, here's a computer, go build a book of business. So it was quite entrepreneurial in that regard, right? Like I I could go prospect across every sector and, you know, you're just cold calling, dial in for dollars. The dollars just happen to be like very big in size. But to become fluent in the language that a certain sector uses and how that sector is organized with regards to access to capital or how these entrepreneurs themselves became very successful.

9:57And then getting to the table of the entrepreneur and meeting them and learning about their journey and their goals. All of that was so captivating to me. And it kind of just, I just kept taking it one step further, right? I basically said, okay, I think I figured out what traits are common to a lot of these successful entrepreneurs. I think I know how the deck is stacked with regards to fundraising. I have a pretty good network here. What's the sector that I really want to take on that I'm really interested in and food and in particular upcycling, which I'm sure we're going to touch on at some point.

10:28It was a question that nod on me for, man, like over a decade before I actually like decided to plant my flag and say, okay, I'm going to figure this out. And that's how I got into it. Now I can't imagine not doing it. If you're watching, we do have the goodness here, which I'm going to be taking my first sampling here shortly as we get used to talking about the product. But I'll tell you what, food innovation, like you had me at food. Then, I mean, innovating, you know, like something like a cheese puff. When I first got this package, I was thinking like back to, I was a kid, you know, like the, uh, that was like my first favorite snack was the cheese doodle.

11:07I think that's what they were called, but they called cheese doodles or Cheetos, but not the small Cheetos, it's their big round ones. Yeah, I know exactly what you mean. Totally. I used to love that stuff too, man. That's why I started on the, on puffs. I feel like every American has this childhood memory, whether it's at summer camp or on road trips or whatever. And you got Cheetos, Doritos, Fritos, basically anything from the Edo family, salty and just, you know, I'm the biggest doom snacker that there is. I'll stand at the pantry and just crush anything that's in there. And so for me, when I wanted to get into food, I knew savory snacks was going to be part of the equation just because I loved them so much.

11:46And I wanted to figure out how can we kind of push the boundaries in a admittedly overcrowded, hyper-competitive space? Upcycling. That was the first. You mentioned it a second ago. I want you to talk about product development and what you've learned, but definitely want to go down that upcycling. I mean, I had not heard that term. Now I think I understand it, but explain to me sort of product development and what the hell upcycling is. To be fair to you and all your listeners, upcycling is something that I didn't even know. That was like the catch-all phrase for the sector. And this is something that I had spent a lot of time thinking about until I really rolled up my sleeves and just got my hands dirty with this stuff.

12:28So upcycling in a nutshell is taking byproducts from food manufacturing and putting them back into the consumer food system. The easiest kind of example that I tell people is like, you ever wonder what they do with a leftover oats for making oat milk? And the answer is usually they get thrown out. And I wanted to figure out what else could we make with those oats besides oat milk. And the crunch puff that you're holding is powered in part by the leftover oats from making oat milk. And this kind of example exists all throughout the food system. If you think about the leftover grounds from brewing coffee or the leftover pulp from juice presses or the leftover grains from brewing beer and distilling alcohol.

13:16There are ingredients to be recaptured all throughout the food system. It's literally just back solving for a supply chain problem is essentially what upcycling is. You consider yourself like, I can see Yusuf like in the kitchen, like were you in the, I mean literally like in the laboratory kitchen, like coming up with these cheese puff formulations? Yeah. So that's a good question. I didn't actually start with the puff. Like the puff that you're seeing now is a culmination of a lot of different work. The first category that I worked in was actually with the leftover grains from brewing beer. So it's called spent grain.

13:51And so I used to live around the corner from a brewery. They had distribution, not throughout the entire state of Pennsylvania. It's kind of local. Every month they were putting out 10 ,000 pounds of spent grain. So multiply that by every microbrewery. Don't even account for the Bayboys, right? That's a whole different category. And then every microbrewery throughout the United States and just the broader kind of world, it becomes mind boggling how much of this stuff actually gets thrown out. And so when I started this whole path, I wanted to figure out, okay, like what am I actually dealing with here?

14:27Like, what does this ingredient look like? What does it smell like, taste like? How can I work with it? How can I get the health department to let me work with it? How do I then scale this? And so the cheese puff is kind of the epilogue of that journey, I actually started with a super premium line of baked goods. So if you think about breweries, like, I don't know if you're a beer drinker. When I drink beer, I love salty, savory snacks, right? Like I'll eat pizza at breweries. I'll eat pretzels. I'll eat, you know, crunchy chips. Yeah, boom. Exactly. Southern boy. That's kind of where my mind went originally.

15:02But the problem with that is spent grain. Most of the grains that are left over from brewing beer, 90 % of it is barley and barley, malted barley, especially works terribly in savory products. This is something that like Jewish deli owners have known for a really long time. The malted milkshake or malted milk bars are confections for a reason. Malt works exceptionally well in confectionary products. So it took me a while to figure this out because I tried doing like pizza, bagels, all sorts of stuff. And I was like, God, all this stuff is terrible. And then I started baking cookies, doing plays on Pop-Tarts.

15:38And that's when everything clicked where I was like, oh, instead of me trying to shoehorn this ingredient in a direction I wanted to take it, why not pay attention to the ingredient and formulate a product around that? And so, yeah, the first product category I worked on was high-end takes on Oreos and Pop-Tarts and Little Debbie's Oatmeal Cream Pies, which is totally different from brewing beer, but that's how we ended up there. Why do you think food waste hasn't been tackled more aggressively by legacy brands? This is the sad reality of just the way that kind of our food systems have developed.

16:12It's just not part of their business model. Let's take oat milk producers, right? If you take a company like Oatly that produces millions of gallons of oat milk on an annual basis, everything they do is around bringing oat milk to market. So all of their unit economics, all of their costing strategies, all their production is around that end product. It has nothing to do with the byproduct. That's actually cost to do in business. We have this thing that we produced out. We got to throw it away. That's just built into the bottom line. And there's not a lot of incentive to get those companies to reorient around, you know, we call it byproduct valorization.

16:51Like, what do you do with all these leftovers? And so while there is ample opportunity to create additional revenue streams, most businesses are just focused on whatever the end product is that they're making. And so trying to convince them, hey, you've got this byproduct. Why don't you invest more money to figure out what to do with the byproduct is just a really tough sell. Yeah. So you just went straight for the solution, I guess, of the byproduct and then part of your core business model, correct? Yep, exactly. How do you balance the whole sustainability with great taste, with upcycling? I mean, a lot of balls to juggle there.

17:32Yeah. It's an excellent question because it's something that I've wrestled with for years and continue to wrestle with. I always think I'm getting closer and closer to that answer. The fact of the matter is consumers, everybody is noble until they get to the cash register. and ultimately it's about flavor and convenience. That's just the sad reality of humanity. If you asked 100 people, nobody's going to say, screw the environment. But when you really get down to brass tacks, trying to change consumer behavior is not a good business strategy. So to your point about flavor and product, I started with let's make a really good product and let's fold sustainability into that really good product.

18:19So that way you don't have to ask a whole lot of the consumer, right? Like you snack, I snack, everybody snacks to some degree. Here's just another really good snack. Why don't you eat that snack? And oh, by the way, all this other sustainable stuff went to power that snack. It's not really, you know, it's kind of like if you think about sustainability, the whole goal is a set of outcomes, right? Like lowering carbon emissions or reducing plastic waste or whatever. It's a set of outcomes. Now, if you can achieve those same outcomes without having beat the consumer over the head with, hey, pay more for this because we've done all these things, haven't you accomplished the same goals?

19:01So the way that I view sustainability is just fold it into the business model, make a good product, create branding that resonates with people, and it takes care of itself. Yeah, smart. I think two people get a little too caught up in that. You're right. Consumer behavior is very difficult and more importantly, very expensive. Very expensive. Very expensive. It's a lot of people have failed in that, either running out of money or running out of the ability to change consumer behavior. And, you know, I'll ask this not being too presumptive, but you kind of answered it with how you balanced all of those three things with sustainability, with great product.

19:42But a lot of purpose driven brands kind of fizzle out. And so how do you sort of scale differently and or knowing that? I mean, really, you can almost remove a lot of a lot of businesses or brands fail, period. Right. But it just seems like the purpose-driven ones seem to maybe sizzle a little fast or sizzle at first and kind of, ooh. What are you doing to sort of avoid that? It's a great question. Because at the end of the day, the least sustainable company is one that's not profitable. So like you can be as mission driven as you want, but if you can't actually figure out a business model that scales based on just product or service, like what are you actually solving for?

20:34Like, what are you doing? And so for me, I wanted to lead with flavor and cravability and sustainability is just like baked into the process. Right. It's not the headline. DC politicians want to enact harmful credit card mandates that could take away your cash back and rewards points. Perks that stretch your budget and make life a little easier. Losing these benefits means less money for your family's everyday essentials like gas and groceries. The perks you rely on could disappear, leaving you with higher costs and fewer options. Tell Congress to guard your card and oppose the Durbin Marshall credit card mandates.

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21:40Make a product that people want. And all the change you can, you know, if you figured out how to make that product and you backed into how to scale it sustainably from an economic perspective, then you've solved for all of the quote unquote like green outcomes that you were looking for in the first place. 100 percent. I love that perspective, too, because you can't save the world if you go out of business. Exactly. Exactly. So you got to build a business first. So who's our target for these? Because my mind was sitting here going as I was eating, I was like, okay, well, I have four boys. I'm thinking like moms, moms to put them in like kids lunches, a healthier snack.

22:13Or is it the fit people on the go that want to indulge, but also be like, who's the target? Yeah, so this is also an excellent question. Basically, so the upfront answer, like the moment that I think B-Sides is built for is kind of the 3 p.m. post-lunch slump. And you're sitting in an office. How about it's 11.45? Hey, listen, man, to each their own, right? Like to each their own. I eat them all the time. So we can be time agnostic. To your point about like who I'm really trying to target here, yes, there are plenty of moms who are looking for better for you snacks. There are plenty of kind of fitness people who are doing the same.

22:58There are plenty of people who are just trying to make kind of better eating decisions throughout their lives. Here's the thing. the CPG space, consumer packaged goods and snacks particularly, they are so overcrowded with people saying, no, I'm a better for you option. No, I'm the better for you option. Or I have a cleaner ingredient label. No, my ingredient label is cleaner or shorter. So I think consumers today, A, they're exhausted by this, right? Like it's just like ping pong and back and forth. No, it should be grain free. No, we should do a blend of grains. People at the end of the day, they just want a snack that's good.

23:35They're going to be able to feel good about. And that just like scratches the itch of wanting to eat a Cheeto or a Dorito without actually doing that. And so, you know, for me, the target, the 3 p.m. office slump, a lot of people, they go to their office pantry and you basically have skinny pop or you've got like a cliff protein bar or you have nuts, right? Like, and how many bags of nuts do you want to eat when really what people start to crave, like they, they want the bag of Cheetos, but they just feel like they can't have it. And the reason I'm going to the like the office space and kind of higher end corporate pantries and hotel mini bars and angles like that are the trying to go for the like Cheetos and Frito-Lay's core consumer they've got like 80 % household penetration so they can compete on price right like they'll they can charge 40 cents a bag I'll go out of business if I try to charge 40 cents a bag so I got to go for people who have a little more flex in what they can pay for.

24:31And the people who just want a good snack without feeling like they've broken the nutritional bank, that's the target consumer. They're typically wealthier. They're typically, you know, they're not so overbent on reading every single ingredient on the ingredient label, even though we've checked all those boxes. They just want a good snack. Ironically, it could be in the back room of those recording studios. Exactly. We're looking for sponsors. So, you know, right about now is on the target list. And, hey, I'll tell you what, I own a co-work space. That's where it's called Social House. We're a co-work lounge.

25:07And that was the first thing I thought actually was these need to be in Social House, you know, like as our people are working. But also it's the bar hangout crowd because we have a bar, kind of a sports bar meets a co-work space. And, hey, perfect. That's a great place. Yes, I know. You kind of nailed this. It's like the rise of like functional snacks. I mean, is protein still pack a punch or consumers evolving past macros? Yeah, you know, so protein is such an interesting thing because I think it depends on who you talk to. For example, I talked to a bunch of friends who they're gym rats. They are like jacked.

25:47They love going to the gym. And I asked them in like a snack, what is the minimum amount of protein that snack has to have for you to like buy it? And they'll say like, it has to have like 30 grams of protein. I'm like, dude, that is, that's like a rotisserie chicken. Like that is not a snack. And so, you know, I've got five grams of protein per serving, right? That bag that you're eating right there has 10 grams of protein. That's 20 % of protein. Boom. Yeah, yeah, exactly. Right. And so it's kind of like, I'm not going for the Jimbras. They want the David protein bars. Having said that, like what you'll start to see as you eat more and more of these is like, they become quite fulfilling.