Everything You Need to Know About Building Supply Chains

0:00No contracts, 140 farms. that's about 3 ,500 farm workers. And me and my team know almost every single one of those people by name. Hey, what's going on? I'm your host, Shuang Esther Shan, and welcome to Shopify Masters, your companion for starting and scaling a business. Being a successful entrepreneur is all about knowing when to take the leap of faith. So when Sana Javari-Kadri bought her one-way ticket to Mumbai, she knew it was a risk, but a worthy one. What started as a search for the truth behind the turmeric latte craze has grown into Diaspora Co., a company that's revolutionizing the$5 billion spice industry.

0:46By paying farmers six times the commodity price and championing heirloom varieties, Sana hasn't just built a multi-million dollar business, she's rewritten the 500-year-old system that once exploited the very communities she now empowers. Sana, welcome to the show. Thank you. I'm very excited to be here. I'm so happy that we're able to be in studio together. I love the brand so much, and I have been following the brand for such a long time. I know that this started when you were in your early 20s. You were fascinated by the topic of turmeric, and it kind of started as a research project. And then slowly you realized that to create the change you wanted to see, you had to start a business.

1:36So talk to us about the start of the company. I was 22 years old. I was an art major in college. I didn't have a business bone really in my body. I joke that my first business plan was a pie chart. And yeah, I think I say that it was an art project. For me, it was, okay, turmeric lattes are exploding. Who is growing the turmeric for these turmeric lattes? Is it good? Like, are the farmers being paid well? And then the art project part of it was, I wanted to tell the story of who that farmer was. I used to be a photographer. So I was like, okay, I'll go visit some farms and I'll take some really beautiful photographs of who these farmers are.

2:15And I'll help basically show where this ingredient comes from that people might not be familiar with. And I think the more I researched the industry and met farmers, the more it felt like, wait, nobody's doing this very well. And, you know, the spice trade has been unjust for hundreds of years. And 75 years after the British left India, the spice trade still sucks. So 22-year-old me was like, oh, I think we should start a business. it really was this example of like the art project was how do I make it equitable how do I make it beautiful how do I make it colorful how do I make it feel community-led and as a queer immigrant who lives in America how do I make it feel like a safe space for all of my communities that's a lot of things to try and fit into a for-profit spice company and I think it was really just like sheer idolism and like joy and excitement that led me through the process.

3:19And I think I've said this to you before that it being an art project meant that I was making it as creative and fun and like not following traditional business rules at all. And that really worked to our advantage. Now that I know all the traditional business rules, I'm so glad we didn't do it that way.

3:41yeah and I feel like it's a framework that is also comfortable to you and I think um it's also sometimes like what is comfortable and approachable for us to actually dive into it deeper versus following traditional business plans and things of that sort it started as a art research project but today diaspora has so much impact so talk to us about all the work that you're doing today Yeah, so I think first and foremost, we define ourselves as a progressive, idealistic spice company. So that means that we want to bring beautiful, fresh spices from regenerative farms across India and Sri Lanka. And we want to bring them to our consumers in the US and the UK as fast as possible.

4:24And the hope is that it's better for the land than the earth. It's better for the farmer because we're paying them better. It's way better for the home cook and the chef because they're getting things that are more delicious. Um, yeah. So that's how hope is to just be like a joyful food brand that is ultimately providing good jobs, good tasting products and like good for the world. I do believe like you took so much time and dedication to research and really set out the ground rules. Talk to us about that research journey and also getting yourself ready for the business as well. Oh, yeah. So starting the business took about seven months of research.

5:02I was visiting almost 40, 50 farms. And I had about$2 ,000 to my name. Like I was a 22-year-old who just graduated college and had one full-time job. I thought that$3 ,000, I thought I was rich. I was like, wow, tax refund. But I used that to then travel and visit all these farms and eventually find this really beautiful variety of turmeric that was growing in Andhra Pradesh. It's a variety called Pragati turmeric. And it was the most floral, bright variety I'd ever seen. So it was seven months to set up an export company, an import company, a really shitty not Shopify website. We moved to Shopify in 2019.

5:46We've never looked back. And then it was really just one foot in front of the other. Like my launch packaging in September of 2017, so yeah, about seven months in, was terrible. And we've just like one step at a time made our packaging better and better and better. And I'd like to think that now seven and a half years later, we look really polished on the shelf. But it was not polished when we started. but we had enough like heart and quality and storytelling that people were willing to buy kind of a shitty bag of turmeric, of really good turmeric. So I think that's always been the thing is even just building our supply chain took me five years.

6:26So we now sell 30 spices, but it took me five years to find all those 140 farmers that we now source from. So it wasn't fast at all. I'm really an example I think in this very like quick DTC world where you expect to like be acquired in three years I think I'm an example of like slow and sustainable and you can do it scrappily and just keep getting better and it will really succeed and take off but just incrementally I think that's really what's different from us than a lot of other people yeah exactly it's at the heart of it it's the relationship you build with the farmers you've met since day one.

7:07And I think a lot of founders, when they're reaching out for partnership, they do have to go through a lot of no's and also finding their own way to establish those relationships. So yeah, what's your advice there when you're approaching people with a big idea, but they're probably used to a different way of doing business? Yeah. When I first met our turmeric farmer, Mr. Prabhu Kassarineni, who's incredible, I think he was just like, who is this young woman in an orange jumpsuit? Like, what does she want from me? Is she even legit? And I wasn't legit at the time, to be quite fair. The first few years, my approach was fake it till you make it.

7:46It's really the only approach often as, you know, a woman of color in an industry that's historically run by men, usually white men. And so it was you go in with confidence and you basically really make good on your actions. Right. So I paid him up front for the full 350 kilograms of turmeric I was buying from him, which nobody else I think had done for him. And to this day, we give all of our farm partners advances, which is just our way of saying your harvest not in, but here's some money because we don't want you to go into debt and we want you to trust us. And we will never, ever be late on a payment or stiff a payment.

8:21So we know that this is ultimately a relationship game.

8:31Like, these are incredible farmers who we don't have contracts with. They're working with us because they love us and we love them. And we believe in the quality they're providing and they believe in the same for us. Yeah, no contracts, 140 farms. That's about 3 ,500 farm workers. And me and my team know almost every single one of those people by name. So I think when people ask often about starting and building relationships, my thing has always been going with confidence, but also be honest and vulnerable. I was pretty upfront with our partners of like, I have not done this before, you know, and like you are taking a risk in working with me, but I will not let you down.

9:15And I will make it right however I need to make it right. and there have been you know in business there's good years and bad years and especially after the pandemic we did have some hard years but I feel like we've come out of in the past year and a half and it was really tough conversations with our farmers of being like you know I know I promised you that I'd buy double this year I cannot do that and I'm so sorry how can I make it better in other ways so I think when it comes to if folks are trying to find vendors and often getting no's or like recently we went to a new tin manufacturer. I don't think this tin manufacturer had ever had a woman come into their factory and buy from them before.

9:56These are like old school OG Indian factories, you know? Like they didn't even know what to do with me. They were just like, they were like, do we shake her hand? Do we just not touch? And my COO, Wynn, who is from the U.S., she was with me and she said, And she jokes that it took me three hours to break the ice with them. So it was really just perseverance and making all the different kinds of jokes to be like, what is going to land with these guys? Like, which of my jokes are they going to laugh at? And eventually at the three hour mark, they were like, oh, she actually understands cost of goods.

10:33She actually knows her way around a business plan and she's good. So, yeah, I think just keeping working at it and remembering that people are people. So like relationships always was what gets me everywhere. Yeah, yeah. That like connection has really been the heart of building Diaspora. And also you've come such a long way. There's close to$2 million paid to farmers. Two and a half million. Two and a half million paid to farmers. Incredible change that you're creating. And yeah, I want to highlight the fact that you do pay farmers six times the commodity price. And I think for founders, when they're thinking about social impact, they have a hard time kind of rectifying the profit and purpose.

11:16So yeah, how do you like build that into the model so that it's something that makes sense profit wise as well? Yeah, I think that a lot of folks when they're building a business plan are thinking, let me get it profitable or let me get as much top line revenue as possible. And then when I hit certain milestones, I'll make it more social impacty or I'll work with a better supplier who is more, you know, equity driven or has better factory ethics, those kinds of things. and I've seen time and time again is that that never happens. When it comes down to your P &L, if you've gotten used to a really cheap product or really cheap cost of goods, it's very hard to suddenly say, I'm actually going to shave off some of my profit margin to do the right thing.

12:04And so for me, it was very clear that we're going to build our P &L, our profit and loss statement, from the ground up with the equity baked in. So we're a small mid-millions company, right? We offer equity to every single team member. We pay our farm partners 4 to 10x the commodity price. We offer parental leave for six months or three months, depending on the country, India or America, to birthing and non-birthing parents. It's like we've been able to build that into our financial model. And I am not a finance person. So like this doesn't come easy to me. It's just been a constant thing of being like, OK, I know I want to work towards this.

12:41How do I either hire or ask questions of somebody much smarter than me to help me build this? It took us six years to have the scale to have our parental leave policy that we currently do at the company. It took us five and a half years to have a farm worker fund, which then means that, you know, we're paying our farmers really well, but what about their workers? And now we're able to have a fund where our farm workers are able to access either health care or pension plans, or in some cases, like access to better sanitation, education for their children. So I think the main thing is acknowledging build the equity angle in from the beginning.

13:20Do the right thing from the beginning. It will slow down your growth. And I think that segues into if you have private equity or VC money involved in your business, you will be pushed on top line revenue or profit margin. and so you know I think there if you're thinking about fundraising be really thoughtful about how you take money so for me we were bootstrapped for five and a half years before we took outside capital and that meant that and I was profitable for five and a half years before I took outside money because I had built this entire model to work in the most idealistic way first and then you know now we've had investors for about three years now and two and a half and now we're able to like see our profit margin grow because we have economies of scale and because we have you know people who are advising us on how to economize better those kinds of things but the amount we pay to our farmers that's never being touched yeah and that's built into actually we're a public benefit corporation so that's built into our operating agreement of that never goes anywhere Yeah.

14:29Because especially at the beginning, when you have your values set, like to your point, every single decision is made around that. Yeah. Like people working in operations, people who are working for the farmers, they are all being like thought about and like taken care of. Yeah. I mean, speaking to that fundraising point where just recent years you've decided to take outside funding, I guess like when founders are evaluating their options, what's your advice there to find the partners that are right for them and take the funding that suits their business model? I mean, it's just think about, well, two things.

15:07One, think about your end goal, right? So for me, why am I growing Diaspora? Because my farmers want to grow and scale. Why am I growing Diaspora? Because I want people to have better access to equitable, thoughtfully sourced fresh spices. if I were to take private equity or venture capital, which I have nothing against. I used to work in venture capital. It automatically means I have a five-year exit strategy, right? I have to see a certain, like, this is what my growth has to look like if that's the kind of money I'm taking on. Because they have to see an exit. That's what their business model is based on.

15:42I knew that that was not going to be possible. We were not going to be able to go from$5 million to$100 million in five years. We ultimately grow a product that grows in the ground. So I'm growing at the scale of agriculture. So that meant that if I needed to take outside capital, it had to be either from true slow money, impact investment, or angel investors who believed in what we were doing and saying, hey, I want to put my money into something that is going to grow, but it's also going to have tremendous social impact.

16:17and so we're unique in that we've raised entirely from operator angels which means our favorite ceos restauranteurs um if you guys know salt and straw ice cream like the founder of salt and straw is one of our investors um a lot of our favorite restauranteurs like in la there's juiced angelina and so shelly armistead who's the ceo of gelina came on as one of our investors. We've just gone to our like true community and said, we want you to have skin in the game. And they've been interested because our numbers are good. And then we worked with one family office who's actually London based only because their whole thing was, listen, we made tons of money growing Speedo and now we want our money to do good.

16:59So here, like blank check, do what you like with it. So that money is available. You just have to look much harder for it. I moved to America at 18, knowing like two and a half people, my like two aunts and my cousin. So initially, like for the first five years, if you asked me, oh, you know, do you want to go get some investment? I'd be like, from where? Like I know my college friends and I know some people from the internet, like from Instagram. So where am I supposed to find an investor? And frankly, it's been a lot of advisors and mentors that I've sought out over the years who've then opened doors, right?

17:35And been like, oh, I can introduce you to this guy. He's a great angel investor. So now, seven and a half years in, because of all these people who didn't gatekeep, I know who the angel investors are. We were talking about this before we started recording that like, you know, one of my angel investors. And yeah, so I think just if you want to scale your product and just blow up in four years and you think your product is suited to that, take that 20 million PE, take that 4 million PE and go. But if you know that you want to build community, it's values first, it's a slower growth model, you want to do it sustainably.

18:11I love my job. I have so much fun every day. I don't really think, you know, I'm like, yes, maybe I would sell, but then what would I do? Probably sell something else. Yeah. So I'd rather stay and do it. Yeah. And then I love that even for the investing side is all based on relationships, which I am like so amazed by because, you know, you have all those relationships with farmers, your investors, and also like there's artists that you collaborate with. Yeah. So how do you manage all those different tracks of relationships while being on top of everything as well? That's a good question. I think for a long time, a lot of the business just relied on me and like the Sana effect, which is like, I'm not trying to be, I don't know, whatever, but like I would have to come into a room and really be charming.

19:03And then that person would be like, oh, we love Sana. And then they would like, the business relationship relied on the connection to me. And that whilst initially effective is not scalable at all. So as we've grown the company, I really needed to hand things off to team members and be like, actually, you own this relationship. I don't anymore. Which means you're sending them a holiday card. You're sending them a birthday card. like your Pooja who's my director of sales like she has her own relationships now that she's in charge of managing and there's that book that was by the 11 Madison Park head it's like something to do with hospitality I can't remember and I was fantastic I made everybody on the team read it because I was like ultimately we're running a CPG spice business like a hospitality brand because it's about relationships and it's about making people feel taken care of and seen and valid.

20:03We always say that we're a community business, right? Like we are run by our community, we're invested in by our community and our farm partners are our community. So it's like all one circle of care. But I do think that as we scale, I have had to build really serious Venn diagrams for my team members. So for me and Wynne, who's our COO, Wynne came on board for us five years ago as our operations manager. Then she became our director of operations. Now she's our COO. We're both young women in leadership positions. So we built this Venn diagram where I said, okay, this is your half. This is my half.

20:39This is where we both oversee things. I don't touch your half. You don't touch my half. And it's been a game changer because the operations, the finance, and the fulfillment of the company, I don't look into. The sourcing, the marketing and the sales of the company she doesn't look into. And it's just freed us both up to just up level, you know? So that level of like giving people real ownership as a solo founder who lives between two continents and runs offices on two continents, that's been the most important thing. And I was the problem, to be completely fair. You know, as a founder, you tend to be like, well, I have to do it myself.

21:18And that's just not true. Yeah. Well, it's easier said than done, Right. Because I think even though, you know, logistically, it makes sense for you to offload and kind of give responsibility away. It's also a really hard mental shift because you were used to doing everything by yourself. So I guess, like, how did you prepare yourself for that where you have to, like, mentally go over that hurdle as well? I think I messed it up a lot and, like, made a lot of mistakes in, you know, delegation and managing. Like, sometimes I was delegating the absolute wrong thing that definitely needed me to do it.

21:51But I was just trying to get things off my plate. And then sometimes I was like holding on to things that I had no business still holding on to. That has been a tough lesson. I think that's where it's so hard, but like finding people who feel like they own it and they have skin in the game has been crucial. And letting people go who don't feel like they have skin in the game. And frankly, like about a year and a half ago, I had to let quite a few people on our team go. And as a young founder who like has come up with these people, we're all young. It was very devastating. And it really felt like a failure of leadership.

22:30But it was also this like growing up of the company, of the people who get you somewhere can't get you to the next stage necessarily. And all of those folks still have significant equity in the company. And I'm so grateful to everything they did for us. But the same way they needed to spread their wings and go elsewhere, we needed very different types of people in those roles.

22:58Like a role that I've had the hardest time hiring for and then delegating to was marketing. Because I have run marketing for years. That's my thing. I know I'm good at it. So then giving that over to somebody who I think doesn't do it as well as me, I can just be like the worst manager in the world when it comes to marketing. And it's taken like seven and a half years to find the right fit and the right person who can now lead the team. And like I check in with her a couple times a week, but beyond that, she runs it. So it's also like, you know, this mix of growing into the right person that you deserve and being the manager that they deserve.

23:35And that takes time and making a lot of mistakes. I think in hospitality, I used to be a line cook and we used to always say, like, you're going to mess up every day. Just communicate and like be kind with each other about it. And so across the team, communicating with each other that like, we're going to mess stuff up today. And that's going to be absolutely fine. I don't think we talk about that enough. You know, as managers, there's this assumption that you like wake up and you read one business book and now you're a manager. And that's just not how it works. Yeah, it's a lot of problem solving together.

24:07Yeah. Well, now that you've mentioned marketing, we have to talk about just branding and also all the initiatives you do, because I think there's so many stories that diaspora needs to tell. And there's just so many aspects of the business. But it all feels distilled succinctly to the end customer. So how did you kind of even began to tackle the marketing side to make it make sense on the site, in social? Good question. Yeah. So early on, I just felt like if you look at the spice aisle in the grocery store, it's all pretty dull looking. You know, like the packaging doesn't jump out at you. And you're usually walking through this aisle being like, OK, what do I need?

24:50I guess I need some cardamom. And so my first thing was I wanted the packaging to be fun and bright and accessible. And the other thing is a lot of people tend to buy spices and they have no idea what to do with them. And they just languish in your spice cabinet. Right. Like most people have spices for five to seven years. And so our whole thing was how do we make these spices accessible and highly cookable? So how do we give you constant inspiration for how to use your turmeric, for how to use your smoked chilies, for how to use your chai masala? So thing number one, make the packaging bright, fun, accessible.

25:25Thing number two, continuously inspire people to cook. And then thing number three, give them the root of where this comes from. So often when you think of pepper, you more think of French cuisine than you do South India. But pepper is indigenous to Kerala and the hills and the forests of Kerala. So my whole thing was, how do I make sure that when people think of pepper, they're starting to think about like Kerala cuisine, right? What does that look like? And that means telling them the story of who grows it, where does it come from, how does it grow? Did you know that pepper is a vine and that it's actually like a little berry that you like fully ripen and pick when it's purple?

26:08So I think those were the three pillars. It's like rooted in origin and storytelling, really eye-catching packaging, and then highly cookable. So then from our website to our social, it's just how do we continue to drive home those three pillars? I said this earlier but like we were on a different platform until 2019 for our website and even then though it was just constantly saying how can I tell a complex story in as accessible and visual a way as possible and even before I had an operations manager we had a freelance graphic designer and illustrator that we were working with because I knew that the easiest way to make things digestible is you draw it.