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During what I guess was a routine testing of your dough or your batter, you find a possible sign of contamination, a microbe, salmonella, and something like that can kill your business, right?
So, what happened? Our own test on ourselves came back with a positive microbe.
And Costco, major retailers, they do recall everything.
They don't want to take any risks, which is totally understandable.
So I'm calling these folks that I have spent years, you know, a decade of creating trust with and telling them that this product needs to be returned, and it's crushing.
And so we're just thinking, gosh, this could shut down things permanently.
I remember not wanting to go to sleep because you have to wake up the next day and go through it all again.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Raz, and on the show today how a family rescues itself from financial ruin by selling hand -rolled energy bars, which eventually wind up in every major grocery in the country.
I'm going to let you in on a little secret about this show.
Even though it's an audio program, I actually want you to experience it visually, almost like a movie in your head.
And oftentimes, the stories on this show are so implausible, so against -the -odds -crazy that indeed they sound like fiction.
Maybe you heard the episode a few years back with the McBride sisters, how the sisters only discovered the existence of each other after their father died, and then connected and started a wine brand.
That story was incredible and so is today's.
And make no mistake, you will learn business lessons in this one for sure.
In fact, you will hear how Bill and Lee Keith, brother and sister, turn their dads homemade energy snack into a big business, Perfect Bars, a business now owned by the multinational company Mondelez.
Bill and Lee grew up with ten brothers and sisters.
They were raised in the 1980s and 90s, traveling around the western United States, mostly in a school bus, which they also sometimes lived in.
Their dad, Bud Keith, was a small time health and fitness guru who was also a deeply committed Christian.
He was a complicated man who struggled financially.
And it's fair to say the kids grew up in conditions most people would describe as poverty.
But Bud also emphasized health and nutrition at home.
Before Bill and Lee came along, Bud ran a gym on Mission Beach in San Diego, and at one time worked with fitness pioneer Jack Lelaine.
So growing up, my father was larger than life.
You know, he was 250, 300 pounds.
Anytime he could go into a gym and pick up the 100 -pound dumbbells and, you know, just do a few reps with them just to show the young kids.
wow. Yeah, he was a big guy, super strong, full head of hair, curly blonde hair, just so charismatic, always given a thumbs up to people on the boardwalk, just saw life through the rosiest glasses and just absolutely such a positive person.
Maybe to a fault. So he had several different lives.
By the time you guys were born, Bill, you were born in 1982, and Leah I think you were on 85 your dad married your mom Barbara which was his fourth fourth wife this all right yes and you guys were raised basically kind of like this you were like an itinerant family you were on the road tell me about your life in the 80s and 90s what does that mean living on the road so we we were born kind of all over the place so our parents would go between living in a motorhome maybe signing a six -month lease somewhere maybe parking in someone's driveway and kind of living with them And then eventually as the kids
grew that became a school bus that we lived in not a converted Fancy thing by any means you're sleeping right in the bus benches Um, so it was just kind of a nomad lifestyle always so California, Utah, Texas, Arizona Primarily there, but we went all over the country and and I I'm looking at a photo of you guys in the early 90s.
Bill you must have been seven or eight or, and there's seven kids in this photo, your mom's holding a baby, so number seven.
So she's still gonna have several more kids.
Five more. And I'm trying to figure, so first of all, they had all of these kids, and your dad was trying to make a living by selling nutritional supplements.
Tell me about school, I'm assuming you never really went to a regular school because you were on the road all the time.
So early on, we were taught from my mom, just out of like a hundred lessons.
There was a book called, How to Learn to Read in a Hundred Easy Lessons.
And I remember that.
That's how Bill and I learned to read as little kids.
We learned at the same time, by the way.
It's to say the least a very unorthodox upbringing, right?
Very. And you talk about your dad quite fondly and your mom and imagine with 12, you know, with so many siblings, and Bill, you're the oldest. I mean, you probably had to take on some responsibilities with all those younger brothers and sisters.
How aware were you guys of your unusual circumstances?
Like, for example, did you have access to TV?
Did you watch cartoons?
Did you worry into like pokemon cards and other things other kids your age would have been into?
Like what was that part of your like your world?
Yeah so we um we really learned how to read at least for me out of the bible.
Just um taking the bible out um we would have little i would call them glimpses into what we'd call quote unquote the world.
We would have this little box grain white television that had the clicker broke off So you'd have to use pliers to turn the channels.
And you had one or two stations and you'd see some cartoons and it would just, you know, we were glued to it.
But then, you know, my father would say, all right, no more TV for a year.
We knew, to your question, we knew how small our world was.
You know, I'd say our dad, we were very mature to kind of look at him and reflect on why things were the way they were and probably why we would leave a lease and hit the road again.
I think Bill and I have like, as we've gotten older, maybe viewed, he always made it like it was his choice.
But I think you come to learn he probably was out of money and he needed to hit the road and take some of the pressure off and kind of go find another place to settle or opportunity.
I think like now we look back on it now being parents ourselves and we say there was a bit of a midlife crisis probably here and just wanting to take control of this chapter of his life and to forget the ties to any responsibility to the modern world.
He didn't wanna owe anybody anything.
He said, if you don't have anything, nobody can take anything from you.
I'll never forget him saying that sentence.
And I said, well, we sure don't have anything.
Yeah, I imagine given that the 12 of you are really all kind of together and traveling and moving every few months, that you didn't have other friends.
Your friends were your siblings.
That is correct, and you know, I would be typically the one watching the kids.
And so, yeah, you know, not only all of us getting together, sort of getting to know us.
But I feel like we built a lot of trust during that time, Lee, so that we've carried the rest of our that when it was time to do something big to take care of our family, I knew I could trust Lee.
Because you have this survivor instinct that goes back to when we were kids just trying to help each other out.
It's a bond like no other, that's for sure.
Yeah. Meantime, while you're sort of traveling around the country, your dad was also like visiting people to, I guess to advise them on their health and nutrition.
I mean, it sounds like–I mean, I use this word very carefully because it can be pejorative–but was almost like a guru to some people, right?
And I guess one of his messages was, like, in order to become healthy you need to follow the path of God, or Christ, or whatever, however he presented it.
Is that fair to say?
That was part of it.
Mind, body, spirit, definitely a religious element to his healing practice, but also really mind, body, and then food being the cure for everything.
That's right. And my dad was just, he was so excited about helping people, and this is again, a really positive aspect.
He had folks with different, you know, diseases, MS, Crohn's disease, and he would bring them into his house and do his absolute best to get results and he wouldn't charge people for this.
He would do mind, body, soul therapies through reflexology on the beach. He would use his organ, meat tablets and protein and essential fat supplements and just, you know, these are all things by the way, mixed up in barrels in our backyard. You know, these are not lab tested.
And we would see these folks go through a lot of transformation and it was incredible.
I mean, today, he would have been an influencer on Instagram and would be making hundreds of thousands of dollars and and but it sounds like he was motivated by by his faith like it may be basically a description doesn't say like he was he was making money off of this like you could imagine people coming to him and him saying listen I can work with you and consult with you it's gonna be you know one hundred bucks a week or something like he didn't do that usually no no you're exactly right he was motivated by his faith and results that's what he cared about yeah all Right.
So one of the things that he started to make was these like energy bars or whatever, just nutrition, just bars to feed you, I guess, and it was a like a combination of peanut butter and honey and fruits.
And tell me about these bars that he would make for you guys.
So the way the recipe was born as little kids, he wanted us to take those whole food supplement powders, and oils, and tablets that he had concocted and would sell.
And the supplements were, like, what – powdered, I don't know – vitamins?
They were whole -food powder concentrates.
So all, like, beef spleen powder, beef liver powder – all dehydrated concentrates pressed into a tablet.
And, as kids didn't know how to swallow those big tablets, and of course, they tasted really gross to chew.
and so he ground them into a powder and mixed them with his protein powder and his omega oil.
Mom had the stainless steel bowl kind of smashing it all with her hands and adding honey as a sweetener and we would roll them into balls and we'd eat them and you couldn't taste the tablet powder and they were sweet and peanut butter and honey and they were so delicious to us and we were allowed to have one of those little balls every day and that was getting our five tablets.
that we were supposed to have. So we've been eating this recipe for almost 40 years now." Dietrich - Chairman SupermanKal Boss and just the things that he would, he thought could make some money for the family.
You guys, I read in like 1995, Bill, you must have been 13 and Lee, you were nine or 10.
You guys helped him sell these door to door.
Correct. So we would have Ziploc bags and we'd have these labels over it that would say perfect foods bar plain.
You know, that would be our flavor name.
That was just peanut butter and honey.
and no official label or anything, and we would give these to friends, to folks at gyms, a way to get your protein in a really easily digestible way, with no sugar, just honey, and it was a great treat.
So we would sell a few hundred of these, and my father, if he ever had any big trips for us to go on, he'd make this, like for instance, we were going to Disneyland, and he put the goal that we needed, $600, And so we would mix these many bars up over the next year, all of our garage sales money and all these different ways to raise $600.
So that was part of the motivation, us getting up there and, you know, making these bars.
So, you were selling these bars and I guess around 17, 18, you guys moved up to Northern California to a town called Willow Creek, which I had to look up on a map, I live in Northern California, but this is like Oregon almost of California, it's like way up there.
It's way up there. It's a tiny, tiny town, probably a couple hours south of the Oregon border.
Willow Creek. Why did you guys move there?
What happened? So, he was really wanting to get into the woods, pretty isolated where he could be off the grid.
And we headed up there from San Diego, just, and I remember thinking, gosh, this is isolated, not seeing a house for hundreds of miles in the middle of the forest. And then you come across this little valley.
Dr. Jessica McBeth So we moved to the little town without a plan.
He started talking to the townsfolk and kind of figuring out where we could work, you know.
We would harvest someone's cherries and split it with them and sell the cherries to the local co -op and make a few dollars that way.
From, you know, harvesting crops to landscaping to kind of just odd end jobs, putting us kids to work.
And then we settled in a abandoned pizza restaurant behind the one gas station in the town.
And I was 14, Bill was 17, had no windows, still had the old pizzas moldy in the oven, and we cleaned that place up and slept in the booths where people used to dine and that was home for a year.
We had Christmas there.
A sister was born there, which keep in mind, the last three siblings, my sisters and I delivered without a doctor.
You were the midwife to your three of your siblings?
Yes. The first one the midwife couldn't make it.
And then it went well enough, I guess that we were hired.
And so there was no, no doctors after that.
Keep in mind, it was number 11 and 12.
So my mom was pretty experienced.
Yeah. But I, you know, it's things like that guy.
I look back and think, gosh, we're pretty lucky in a lot of ways and things could've gone a lot of different avenues.
And yeah, that pizza restaurant was where our youngest sister Faith was born.
It's amazing. This is not Little House on the Prairie era.
This is the 90s, right?
Or early 2000s, yeah.
Early 2000s, yeah. Just a remarkable upbringing.
We could do a whole episode on just your childhood.
But, meantime, I guess an inn or a bed and breakfast becomes available for sale, and your dad bought it.
How did he have the money to buy it?
So, he actually carried a note with the owner.
They were getting older, and we were able to carry a note and spend the next few years trying to pay aggressively.
And the thought process behind it is that if we could put the work in to fix the motel up we'd be able to raise the rental amounts because we're talking about 15, 20 dollars a night, very small margins, and so that was going to be our next business venture.
There was this little motel on the highway that was built in the 1870s, so it's 130 year old.
It was a stagecoach stop, an original stagecoach. and it was all overgrown and the folks that owned the place were elderly and really not able to take care of it.
And then we also really came to learn there wasn't really, you know, any kind of industry in the town so there wasn't necessarily people even needing to stay in a motel and it had a middle house and that that was probably felt like most home for us.
That was for me, 14 to 18 years old, was living there.
Wow. Meantime, your dad's getting sick.
Did he know what he had?
Did he know what was going on, or was he just not feeling?
Like, did he go to a doctor?
It was obvious he had skin cancer that was progressively getting worse on his head.
And so we saw this spot grow from a pimple.
It took 15 years to where it took over the side of his head.
it eventually took his ear off.
You know, it was really sad.
It was really sad. Was he getting any kind of like medical treatment at all?
No, none. And he actually wouldn't even take aspirin.
And so, Nothing. Nothing, and he never saw a doctor, and I think that the strain that also came with him being in so much physical pain was it became a very volatile home.
But we, you know, education wasn't around.
I remember asking my dad at 15 years old, there wasn't any textbooks around.
And I was the maid in this motel.
And so he said, well if it's meant to be, God will provide it.
And we were at a yard sale a few months later and there was a book with no cover on it that said GED.
It was for 25 cents.
And he said, well, there you have it.
And he bought that for me.
And through that, I had gotten my GED with that book.
And I'll never forget.
My dad was sitting in the living room and I knew that would really bother him.
He didn't want any of us to leave. I think his world was a little bit closing in on him and he also needed us to take care of his younger kids.
That's just plain and simple.
I knew that was a part of it.
And so I remember telling him, hey dad, remember that book?
I got my GED, I took the test when I went on a grocery run with mom.
Like I was nervous to tell him because he would probably be upset.
And I remember he muted the TV and he looked at me and he, huh, and then he unmuted the TV and that was the end of my high school graduation.
Didn't get a reaction that was better than a bad reaction and then I went on with my day and it's wild to think back now having my own kids how just unbelievable experience for me But it absolutely kind of shaped my character for sure.
Yeah, I'm always impressed with Lee's motivation because early on I started getting into basketball, and my dad had a little bit of a fondness coming from Indiana for basketball.
So that allowed me to sort of go out into the quote -unquote world.
And my dad met with the local principal at the high school in Hupa and said, hey, he needs to work, but he wants to play basketball here.
I was 16. And so they allowed me to come one day, every two weeks.
And Hoopa was a town about, what, 20 minutes north?
Yeah, it was about 15 minutes north.
So met with the coach out there and it was my first sort of look at the outside world.
So you end up playing basketball in high school, and then you actually went on to play basketball at the community college in, I guess, Eureka.
College of the Redwoods, yep.
So, you took a business class and one of your ideas, or you had to come up with a business idea, was to make your dad's bars, to create a business out of your dad's bars.
Correct. Was this a serious idea?
I mean, was it something that you had talked about with any of your siblings or was it just like, okay, I got to do this assignment and this is an idea?
It was just I had to do this assignment.
Making bars, for us, was a pretty tough chore.
It didn't come with good memories, for sure.
And so that was the last thing I wanted to do, funny enough.
But we had this assignment in business class, a class that I've used all throughout my career, quite honestly, that in accounting.
And the presentation was the Perfect Foods Bar, was this name that we were putting together.
And so I presented it, handed out samples.
and I'll never forget my teacher going, it's a delicious tasting product, but a refrigerated bar, that just doesn't make sense.
That's what he told me on the note.
And 100%, oh, absolutely.
And meantime, while this is going on, Leigh, you also left home, I guess, after you got your GED.
But I mean, you really left, like, you kind of like kind of ran away, right?
Yeah, I had turned 18 and was trying to talk to my dad about letting me move out, or maybe I could go to college or go to the College of the Redwoods with Bill, and my sisters and I wanting something more.
And that wasn't an option for our dad.
And I had ran away with my brother, our little brother, and my sister in the middle of the night.
And I came to Bill's house, and Bill was like, I'm living a fine life Lee, what are you doing, go back!
And I was like, I'm 18, there's no doing this on Dad's terms, and I have to make my way.
And so Bill let me and my sister move into one of his bedrooms with two twin mattresses on the ground.
And we started taking the bus and worked at Blockbuster Video.
So we had little, you know, small checks, and then we could mail some of that money back to mom.
You know, it's kind of remarkable, and I say this with admiration that neither of you seem to have resentment about this.
Maybe you did at some point.
Maybe you worked through it with therapists or on your own, but it seems like upon reflection you don't, you're not angry.
No, I think that I we I'd say yes we definitely had resentment, at least I'll speak for myself as we stepped into taking over financially for our family and having that responsibility of all the kids I think that was really hard and difficult but I think that harboring any kind of anger resentment and instead just have a lot of empathy for our father and we're able to really forgive a lot of those those things.
I think it took time for me speaking for myself because it was so unique in it felt like you were tied down in a sense that it did take some therapy.
I took years of just talking to folks working it out and you could be held hostage in a sense by your past or you can just say I can write my own story you know and that's where Lee and I really shared sort of the same vision for, that's not gonna hold us back, we're gonna do it in spite of.
And when we were faced with this really devastating point where our father had gotten severely sick, our outlook was very grim.
We had less than a thousand dollars, a $3 ,500 mortgage that we were behind two months on, And we needed a way to quickly raise some capital or we were gonna lose our place, lose everything we had.
Yeah. We then get that call that, you know, we're going to lose the motel.
And our mom saying, we'll have no place to live.
And there were nine little kids under the age of 18 at that time.
And so there was just a long road in front of our family.
When we come back in just a moment, how the family gets rescued by its own recipe for peanut butter bars, and how those bars eventually find their way into Whole Foods, Starbucks, and beyond.
Stay with us. I'm Guy Raz and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Guy Raz. So it's 2005 and the Keith family is in trouble.
But Keith, their dad, is getting sicker and sicker.
So the older siblings, Bill and Leigh, decide to head back to the little town of Willow Creek to help support the family.
I mean, that's a massive amount of responsibility to take on at such a young age.
You know that now, this is gonna fall on your shoulders, Bill, primarily yours, because you're the oldest kid.
How did you, I mean, were you kind of an autopilot?
Like I just have to do this.
I got to figure this out.
First of all, the love for my family, the love of all of us, and it definitely wasn't just me.
It was Lee, and Heather, and Monice.
And Amias and Charise.
If you were, at all, an adult, that's who was in that circle, standing there saying, what were we gonna do?
And so all of us huddling together and thinking all the best options and at that time a lot of my brothers and sisters started getting jobs to help support the family.
My job was to get this motel ready to sell because there was no way that we could run this place and try to get whatever equity we could out of it.
And then we found a buyer that would be willing to give us cash, and we had a hundred thousand in equity.
So that's pretty great.
And we'd never seen money like that in our bank account.
And that was a moment for our family was talking to our mom and we had had our dad move out uh and take care of himself and take some space from the family he moved out to like a apartment in willow creek a motor home Yeah, um, he he you know took to a motor home and kind of went to stay with some folks that he knew in southern california That wasn't his choice.
That was ours because he was so volatile.
Yes yeah, and You know, we thought it best for him to take space which he did and we turned around and said, okay, the idea that we had, the best idea, and Bill really led this charge, was we could try and control our own destiny by, if we could put our family recipe in a real candy wrapper, we could start selling it in stores.
The vision was if we could sell enough of these bars, we could support the family.
And make this peanut butter bar, turn that into a business?
Yes. All right. This is a crazy idea.
This is like Jack and the Beanstalk.
This is like, here are some beans for your goats.
I mean who's gonna take that hundred thousand dollars and say, let's...
let's take it all and invest it in a peanut butter bar.
I mean it's totally nuts.
Well think about mom, right, and she's gonna let her 21 -22 year old son take all the family finances and, you know, roll the dice on this bar.
And I still having kids now can't believe that she did it.
Um, but she, she always says she had so much faith in us.
Yeah, we, it's wild to look back, but we spent 65 ,000 cash on a candy wrapper machine off of eBay and it's arriving on a truck.
Bill signs a lease at a thousand square foot, little warehouse in Sacramento.
You decided in this this at this point you all moved to Sacramento, right the whole family most the family moves, Sacramento so the family actually moved down to San Diego to pee a little bit more closer to my father and stuff down there, um, even though he was separate Lee had gone down there and it was me and my brother in Sacramento.
It was you and your brother Which brother's name?
Amayas. You move to Sacramento.
You basically take $60 ,000 of the $100 ,000 and buy a machine that automatically wraps candy bars thinking once we get this machine, that's going to transform this product because you have these things you were selling in ziplocs just for a moment.
Was there a cheaper way to do this?
I mean, did you have to buy a candy bar wrapping machine to do this?
So I researched co -packers out and the co -packing minimums were so large because we're talking about 50 ,000 bar minimum, which back then, I mean, that would have been everything.
And not only that, they couldn't make the bar with the quality we wanted and expected.
Because for us in this company, it was always about if we can make a great tasting, highly nutritious this protein bar, folks are going to love it.
And every time we'd give it to our friends, folks would say this is the best snack that they've ever had.
I mean, there's so many reasons why I can see people saying, this is not a good idea, okay?
Like a refrigerated bar made out of peanut butter and honey and like, I mean, you're basing the potential success on this just from feedback from friends, which I know, having done almost 700 of these episodes, every entrepreneur, when they start and they hand out their cookies or their bars or their apparel to friends, their friends are like, these are awesome, I love these!
And friends aren't, they're not always the best control group here, right?
Like the best panel.
Oftentimes, they're not.
And keep in mind, in 2005, that was in the height of the Adkins era, So low carb zero fat was everything trending in food and we were high fat, calorically heavy from nut butter.
By no means were we on trend.
We also think about the category.
This was the same year KINDBAR founded.
So you know still the key prominent players were Power Bar, Cliff was still very much you know kind of on - LaraBAR had been around for a couple years.
Laura Barr was still new.
We did demos in the grocery store next to Laura herself and so many new brands that were coming into this space at that time.
Right, and let me just get a sense of how you were doing this, because first of all from what I understand, it's you and your brother, originally, in Sacramento and not only were you trying to sell them, you guys were physically making the bars?
Yeah. Tell me how you were doing that.
You had like a - little mixer.
And then we had just these trays where we would take it by 12 bars at a time, weigh it out after mixing, roll it into a firm tray, and then cut it by hand and put it through this packaging machine and box it up ourselves.
So, me and my brother could do about 1000 bars in about 10 hours.
Okay, that's pretty good.
Did they look janky?
I mean, using, like, a knife to cut through peanut butter bars, like, you're not going to get a perfect cut?
It's not going to look like machine cut.
Did they kind of look sorta like, you know, it was made by?
It was a hodgepodge of trying to get it right.
We tried to make sure we got the net weight correct, but a lot of times that would send us way over.
And folks would get bars that, You know, we're basically a bar and a half and one and so wildly inconsistent.
And we had a label, it was - We made it on Microsoft Word?
Yep, on Microsoft Word and the nutrition facts.
We didn't, we looked up how to make a supplement fact panel, how to display the ingredients, all of that.
You know, we didn't have any advisors or anything.
Where were you trying to sell it?
I mean, you're in Sacramento Traditionally, with these kinds of stories we've done on the show, a food product, there's concentric circles.
Like you're in Sacramento, you start with a couple of stores in Sacramento, then maybe you get into a local chain in Sacramento, and then you may be into Whole Foods in Sacramento.
That was not how you guys were doing this.
No, so we were trying to get an audience with Whole Foods, with some of these bigger retailers, but just not breaking through the clutter, quite honestly.
And so we would sell them in gyms and we would sell them in like co -ops, actually festivals as well.
How were you making all these bars and then going out and trying to pitch it to co -ops and like, tell me about your day to day up there in Sacramento?
Oh, it was we would spend our mornings prospecting, going door to door.
and then we would spend our time doing demos if we were lucky enough to get a gym here or there we actually had a chain of four different gyms in Sacramento that we were in at night time after we were done pitching we would make the product and we did almost every day and we put a big old goal I'll never forget in my office is a small office and then next to it was the warehouse and it was 10 ,000 bars a month if we can get that was our break even point and I the first month would be $2 ,500 the next month would be $2 ,700 I mean it was taking too long and you start going three or four months five
months into it not hitting your hurdles starting to get in bigger and bigger debt, well we found ourselves in a point where we had a month's worth of cash left and this was going to be it all of the credit cards I was over $100 ,000 in debt and I was reaching the breaking point.
So you've really got to do something to generate more sales here, right?
And I guess one idea that you had was to start going to, like, music festivals, rock festivals in Northern California to hand out samples there, right?
Yeah. So we looked at these festivals, went into a local sort of a hippie festival up in Sonoma a harmony festival, they would come and you know, listen to music and everybody was feeling great.
And let me just tell you, they had the munchies for peanut butter and honey stacks, you know, and so we did very well.
And one of the folks that attended our booth worked at Berkeley Whole Foods, a grocery team leader, and she tried the product and she loved it.
And she said, oh my gosh, I'm gonna put this in my store and me knowing that you had to get corporate approval, I called her afterwards, and I ended up getting a meeting at the local corporate office in Livermore.
After going through all the details, we were fortunate enough to get a one -store test for 30 days, and that's when I called up my sister Lee, and Lee remembers the desperation of my voice And I go, Lee, please, I need help.
We have a chance. Remember, I mean, that's all it was.
It was just, we have a chance.
Meanwhile, Lee, you are in San Diego.
And is it you and another one of your siblings that we're trying to also kind of market and get this product in front of into stores in San Diego?
One of my roles was to demo at the accounts that we did have in San Diego.
so we had a few gyms that would sell our product and also working at a real estate office and helping my mom with the kids.
So we got in our car, Charisse and I, and I think drove North within a day.
And these brothers of ours, Guy, they needed a kick in the butt.
Their apartment was pretty dirty.
They weren't eating well.
And so we did a big reset in that apartment and started bossing them around.
And we started making bars and, uh, we took advantage of that 30 -day test. And, Bill, you were driving back and forth, Sacramento Berkeley, every day or every other day, to get fresh bars in to stock the store?
Yes. Wow. They allowed us to demo SunUp to Sundown, I think just to kind of prove that that that team leader had a good idea.
Um, but Bill, gosh, there was, I think you moved thirty thousand dollars?
$30 ,000 worth of sales in those 30 days.
Well, you were demoing it every day?
Every day. But after those 30 days, I ended up calling the buyer and he got right back to me, which never happens, you know...
Because you sold $30 ,000 worth of this in a month.
Well, and I slow -played it too.
I said, hey, how's our store in Berkeley doing?
Like acting like we were all big.
He called me back quickly and he said, my gosh, that was gangbusters.
That was a really, really great sales.
He said, tell you what, we'll put you in 10 more stores.
This seems like a hit.
But still, mainly what you're selling is a peanut butter bar.
I think you have maybe two or three other flavors.
Maybe you added, you had like a carob chip bar, right?
What, what are the flavors did you have in the beginning?
We had a mixed nut, fruit and seed, carob chip, and peanut butter.
And, did people buy the carob chip, because carob, to me, is more controversial than, I don't know what, then any controversial issue.
Like to me, Carib is the third rail of American politics.
I love it. In the natural channel, you know, if you couldn't find a chocolate option of a perfect bar, I think people settled on having a Carib if that's kind of where their cravings led them.
It definitely is no chocolate chip, and that came later.
And just to clarify, I mean, again, like if you go to Whole Foods today, it was different in 2006 but if you go to Whole Foods today, there's half an aisle that's just energy bars, right?
Then at the time there was probably like a quarter of an aisle, maybe less, but nothing in the refrigerated section.
You're going, but because you're demoing in the store, you could direct people to where to get them.
Well that was the key, demos have always been our key because to your point, whenever we would try to do recommendations or ads, they would always go to the dry bar set.
no one would ever consider going to the refrigeration set.
And so we were first put next to the orange juices, Kombucha was just coming on board at that time, we'd get put next to the kombucha's.
And so it was really a hodgepodge of whoever had, you know, six to 12 inches of shelf space.
Why did it have to be refrigerated?
I mean, it's peanut butter and honey, and protein powders.
I mean peanut butter doesn't have to be refrigerated.
Yeah, so what it really is, it's from a stability aspect.
So the cold just, it kept it firm.
If you don't put something structurally in there, a lot of folks will use an emulsifier or some type of binding agent to bind the proteins and the oils together.
What happens is it just spreads apart.
Right, like salad dressing.
Correct, and if you've ever had anything peanut butter out of the freezer, it just tastes better.
It's delivered better that way.
It sort of calms down the peanut butter taste a little bit that can be overwhelming.
And the refrigeration seems to me to be like...
There were some disadvantages, because people aren't looking for an energy bar, they're going to the energy bar shelves, but the other side of that coin is, if you see something like that next to orange juice or yogurt or salsa, you're like, wait, that's interesting.
That's different. Which stands out too.
That created curiosity.
And so we'd always say if we can make the product good enough with the best quality, when they bite into it, they're going to tell their friends about it.
Yeah. Okay. So now you're going to go to 10 Whole Foods.
That's right. What does that mean?
We needed more demo people.
We needed more demonstrators.
How did you, how did you, did you, did you bring more siblings on or hire people?
What'd you do? We all did those demos ourselves.
Um, you know, that was our weekends.
We're standing behind tables and you could make sure you sold through the product on the demo table, and then you could leave them fully stocked when you left. And so we could sell $400 in a three hour demo and then leave behind a couple hundred dollars.
So you're generating $600 to make that store stop, and you're doing that weekly.
It was really cobbled together.
So you guys were doing that and you're in 10 Whole Foods, but were you getting anybody coming to you to just help you and give you some mentorship?
You are all really young and I would be super excited to see what you guys were doing as a family, but was there anybody who was like, hey, I've got some experience here, let me some advice or not quite yet.
There was actually a gentleman that loved the product.
And he said, tell you what, I would buy half of this company for $50 ,000.
And I'll help you make it.
I'm a professional business person.
And we were close to closing that deal 50 grand for half the business because we had we were running out of options.
We had no money. Yeah.
He actually backed out deal.
He backed out of it saying, I usually get 51%.
This is what he said.
So, um, thank God that deal didn't come through.
Talk about, uh, you know, divine intervention.
Absolutely. Because I'm sure the time was super disappointing.
You're like, Oh, we lost this chance to get 50 grand.
Right. Right. Well, we thought, you know, that was during the times where you're still not sure you're gonna make it.
Yeah. So, you know, by 2007, and you're in, you know, 10 Whole Foods a year.
Just out of curiosity, it did anybody at Whole Foods say, you know, you really might have more of a shot at scaling this, if you can make it shelf stable?
Yep, we definitely had folks telling us, Hey, this would be great if you can just, you know, tweak your recipe.
And, and we had, you know, we had tried to do that, I remember taking it to a manufacturer, and saying, hey, can you what could we do, but it just changed the taste of the product, and then also when you bind the oils and protein in the bar, kind of leave like a rock in your stomach, and you think like it's hard to digest proteins that are bound with the fats, and so it really, it changed the product, and it changed the way you felt consuming the product, and so it was back to no, we need to just continue using kind of our more fragile product.
And still hand rolling it, hand making it?
hand making it with rolling pins in Sacramento in that warehouse.
So in 2008, we had kind of built up a little bit of revenue, a little bit of business that we moved the kitchen.
We also like our family did need us closer like we offered a lot of stability for our siblings.
And so we moved down to San Diego and signed a lease for a little warehouse there.
And, you know, started continuing to roll the bars with rolling pens.
And just do it yourself, basically not working with the co -manufacturer, co -packer.
Just as an aside, Bill, I mean you are ostensibly the CEO and you're the oldest sibling and you're kind of the leader of the tribe here.
How did that work with your siblings?
I mean, based on the two of you, I think probably you're all pretty nice people and have good values.
but, you know, still, like, you've got to tell them what to do, and they've got to listen to you.
And you're the boss," and so how was that going?
It had its challenges, because I think there was a lot of personal development that my brothers and sisters were going through, because of sort of the big life change that we had had, going from one thing in one direction of our father to being sort of independent, And so, we felt like we did the best that we could at the time.
And sometimes, that meant splitting a part for a little bit, but we always sort of gravitated back together with the goal in the early days of just survival.
That was always the rallying cry across the family.
And I think right around this time, this is still in 2008, you guys hit a decent milestone, a million dollars in revenue, right?
And meanwhile, Bill, I think, you move out to Denver for a while to expand the products into some more stores out there?
I moved to Denver for a year.
I had just gotten married to this lady that was a sister of a demonstrator we had in Northern in California, and she moved with me to Denver.
Lee was running the show back home and I was in Colorado going store to store pitching, trying to get traction out there.
Wow, that market was that important that you moved there.
We still needed sales.
You have this fear in your head that something bad is gonna happen because you're not official at every touch point.
You know what I mean?
What was the bad thing that would happen?
Like what was keeping you up at night?
And maybe the food processor folks would come in and shut us down, or the FDA, you have all these fears in your head of not having everything buttoned up the way you want it to be.
You desperately want that, you just can't afford it.
And so you're running in a race to try to get to that point.
While Bill was gone, we were continuing to grow, in a grassroots kind of way, where we were sold.
And it was time to take a big leap.
You know, we had to become official and so I toured this space that was 6500 square feet.
It was beautiful, it was zoned to be a commercial kitchen, it was just an empty warehouse.
And to think about what it takes even just out of the material or the know -how to build out a kitchen, we had no idea.
We called up the health department and said, what kind of floor can we use?
What kind of ceiling?
What kind of walls?
What's a drop sink mean?
And we just started putting one foot in front of the other but we signed a lease in 2009.
on a kitchen on Eastgate Mall in San Diego, and went to work with our own money, still totally bootstrapped, to cobble together a certified kitchen.
How much was the kitchen, by the way?
What are you paying for it?
It was into the half a million dollar range, which back then is, it was enormous.
And that was being cheap.
That was taking a lot of shortcuts.
And you're living in Denver at this time.
I'm living in Denver.
Well, I had got the message from Lee.
we came back home after about a year.
We needed to build this kitchen together.
We needed build help.
We're going to build this kitchen.
And during that time, we needed some sales.
We ended up getting a National Fresh Market account, and so we jumped in a van, and we took off across the country, me and my buddy from San Diego to Miami, up to Washington, D .C., and back, selling bars, pitching accounts, to really try to promote a national launch. After that, we came back and we had spent $10 ,000 on this trip and Leigh looked at me and she's like, $10 ,000.
I said, Bill, you could have done this for seven.
I know it. Where did the 10 ,000 go?
I mean, you weren't staying at like the Ritz.
I know, well. It was food.
I saw some Six Flags magic mountain tickets in there.
Yeah, there was a few amusement parks were part of the deal.
To amusement parks?
You're supposed to be selling bars.
What are you doing?
Go to amusement parks.
You need to have a little motivation in there.
My buddy, that's all he asked for was that if we'd go to amusement parks on our way through.
He'd go with you. And Bill and I were always the yin to each other's yang guy.
I think when over the years people ask how did it work?
I think I could over analyze and hesitate and be too, like maybe thoughtful, critical, and you really do have to just go.
And I think to Bill complimenting that he's just, He goes, Lee, I just want to sort of pause for a moment because at this point, I mean, again, you grew up with, like, just enormous disadvantages compared to a lot of people that you knew.
Here you are, just like four years after you get a GED, and you're talking about margins and you're talking about P &Ls and you're doing all the accounting, like, I mean, it's, did you ever stop and think I freaking like, taught myself this stuff?
We were so hungry to not be those homeless kids in the motor home without an education.
It really lit a fire in us, and we wanted to give a different life to our brothers and sisters.
And I really value those parts of my upbringing.
We used those hard times, I think, to our benefit, but self -taught in QuickBooks, self -taught manufacturing, I mean, we just, you know, how do you eat an elephant one bite at a time?
That was our mantra.
Yeah, so in 2009, I guess you guys get a really big break, right?
Because this is just three and a half years after you launched the business, you get a meeting with Costco, which is huge, or the potential is huge.
And I guess it was like a broker there had reached out to you.
Correct, I was able to get a presentation with Costco.
Very janky. If you look at our old packaging, it's wild that they even met with us, but the buyer liked the product.
He tasted it, and it was great.
Well, they started obviously going back and forth on price.
Yeah, because Costco is, again, we've done this on the show.
It's risky because in many cases, you're essentially subsidizing the consumer for a while.
It can be that, the case where you have to price the bars or the product at a certain price point where you're essentially losing money for a while.
Right. So we, we didn't want to do that.
So we made sure that it, it was going to be one of our best accounts from a margin perspective.
And on the third time we dropped the bar by one cent, that was the cause the buyer literally told us if, if we don't do a deal, we're not going to come back here.
And we dropped the product by one cent that was enough to sort of close the deal.
We had favorable terms and we started road showing.
And by the way, just 10 Costco's in Southern California?
It was five in Southern California.
And so keep in mind, we had done these demos standing in the traffic of a Whole Foods.
And you could sell $400 to $600 in product, where a Costco, you could walk in and we would commit to a four day road show Thursday through Sunday.
And you'd set up your 10 by 10 booth And we could move anywhere from a really slow moving Costco, $12 ,000 in revenue in those four days to $35 -40 ,000 in four days off of that 10 by 10 table.
And it also was really quality interactions where we were able to point to the refrigerator, they could see what the product looked like, they could hear why.
And we talked to thousands and thousands and tens of thousands of people.
And you get great feedback directly from the customers to Lee's point about the product And you bring that, because there was no middle management or any, you know, we would be the ones making the product, we would make the adjustments, little quality adjustments, based on customer feedback in real time.
I, people who listen to this show regularly know that I'm a big fan of Costco.
I think it's a great equalizer.
I think everybody would just love, I just think most people love it.
And so, but I wonder, like, I don't ever do the samples of Costco.
Because I, I just, I don't, there're very likely, like, a lot of things that just choose not to eat.
but I might I want to go my kids they just go and just sample everything so part of me is like yeah you know people are just sampling and sampling but but I guess only the tiny percentage by it still works out in your favor right because they have to buy a large quantity of the product absolutely from the exposure Costco sampling was one of the most effective ways to get product in mouth for a consumer and that was our job because we felt our competitive advantage was our taste.
But we were concerned with getting into Costco, cannibalize our existing business.
And in fact, it only built awareness for us.
You'd cut up 10 ,000 samples in those four days and they'd go away and they could find the product in the Natural Channel.
We had built up Whole Foods Market in these regions, Sprouts Market, and we started seeing, you know, more traction without having to stand as much in those natural channels because you were sampling tens of thousands of people with your brand.
By the way, all of our policies and procedures were just Googled out and researched.
And when they came in, did an audit cause Costco does an audit.
Oh, they came to your manufacturing facility?
Yes, they were really surprised how small it was.
Sure, I mean, you were hand rolling this stuff.
Exactly. We manufactured produced product for two eight hour shifts and then the sanitation shift ran through the night and so the lights never turned off in the kitchen.
And we scaled from you know 20 team members in the kitchen to 65.
Still using rolling pins guy and so that that was a tipping point for us.
And we had pursued that coman opportunity again still came up dry.
You couldn't find a co -manufacturer that could deal with your the viscosity of the dough or the?
And we weren't, we still didn't have anybody, like now we understand you don't have any financing behind you, you don't have good credit as a business.
You certainly are done in Bradstreet number wasn't anything you'd wanna measure.
But Costco was really turning well for us and they wanted to expand to more regions.
And I took to YouTube and we were able to find these kind of semi automated machines from a company out of Santa Barbara.
So on YouTube, I saw that these machines it was pressing a rice Krispies treat into the tray in a pneumatic way and making it even.
And lo and behold, that equipment bill, we won't forget that moment that it pressed 45 bars into one of those sheet pans.
And we were able to go from the last year we made product with rolling pins, we produced 7 million bars, and we were then able to convert to these small pieces of equipment and we were able to scale that little 5 ,000 square foot kitchen to produce 20 million bars the last year we were producing in that kitchen.
So this is happening.
And I want to back up in the timeline for a little bit because we jumped ahead a little bit, but there was so much momentum because you're in Costco and you're growing and then you're still hand -rolling it at, you know, while you're selling this at Costco, 24 -hour shifts, but your dad, who is getting progressively sicker, he passes away in 2009.
I know that he was increasingly volatile as he was getting sicker and sicker, but he was able to start to see that his children were having some success with this business.
What did he think about that?
It was wild. I'll never forget one of the last things he said to me as I was loading these small coolers up to go take them to a retailer, he said, Bill, that looks like a lot of expense.
I doubt those pencil out is what he said.
And I said, no dad, you know what, they actually are making money.
Do you think your dad derived some comfort from knowing?
Because I think probably a lot of his stress came from the fear that he couldn't provide for these children, that he would die and they would be on their own, but seeing kind of that maybe actually they would be okay, did you get a sense that it provided him some psychological comfort?
I think it did. He had spent some time kind of on his own, and then to our mother's credit, just leading in her life with unconditional love.
He spent the final years of his life under the same roof with our mother and our brothers and sisters.
And I think he had come to terms with his illness.
And I think that we had the family in a nice home and the kids were going to school and food was on the table and he saw his kids working together and selling a recipe that he was very passionate about.
It's kind of again I'm not, I hope I'm not sounding like I'm psychoanalyzing your dad, but he strikes me as somebody who really truly was the definition of a visionary without the discipline of a entrepreneur.
Perfectly said. That's well said.
It would require his children and their discipline to do it.
Yeah, absolutely. We always talked about that.
Like we were not going to hop to the next idea.
because that's what we saw our whole lives, we are just going to dig our heels in and stick with it.
When we come back in just a moment, Lee and Bill get their first chance at private investment and their first taste of disaster with a possible outbreak of salmonella.
Stay with us. I'm Guy Raz and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Guy Raz. So, it's 2014, and Perfect Bars are at about 4 ,000 stores with roughly $15 million in annual revenue.
And Bill and Lee decide the packaging needs a new look.
So they hire a branding agency to design it.
And now, now the label changes to what it looks more or less what it looks like now with a giant sort of peanut shape and on the front, and so you see the peanut and just the protein content, and it's changed even more now, where it's sort of, it's translucent, you can see the bar underneath it.
But it, but it more or less looks the same, the peanut bar, It's a really nice looking packaging.
And who, I mean, did that cost you a fortune to get that rebranded?
So we had to take a note with them.
It was $85 ,000 for, which now seems like a really good deal honestly, but that was for a website and SKUs and all of the branding.
And for the first time we got to really focus on the brand and what we were about, we were about this family full of caregivers and bullet points on our packaging.
Instead of having 15 claims, we've focused on protein.
We've focused on, you know - Super foods.
Macros, basically what people call macros now - Protein, super foods.
When you changed the packaging and the branding, what did it do for sales?
40%. Oh, at least a 40 % lift. 40 % lift, just right.
It's amazing. And you guys were in Starbucks, which I think was kind of a pioneer in in that in the refrigerator section.
How did you get into Starbucks?
Did they come to you or...
So Starbucks you know, interesting, it was just a personal connection that we had met at an event.
We just we didn't know who they were.
And my sister and I were chatting with this awesome lady and just sharing our story and what kind of products we sold.
And so never forget, she handed me her card, had the Starbucks logo on it.
And, you know, it was right during the Me Too movement.
And there had been just some things that happened with my sister and kind of the manufacturing space, unfortunately, you know, it's a very male dominated sector and we were just sharing stories.
And so we just, a credit to kind of who they are as a company, that woman just put her arm around us and gave us her card and said, you know, let's talk about your product.
And so just having no idea who she was and having that kind of human connection, We were then able to send samples.
They gave us a couple hundred store tests and just imagine how thrilling that was to see your little family recipe now with that new brand on the shelves in Starbucks.
That was a huge awareness driver for us.
All right, so you guys are growing, growing, growing, and I imagine, so I wanna talk to you by bringing in Outside Investors because you brought in Outside Investors and 2015 VMG Partners.
Did you have people coming to you or were you still under the radar enough where you had to go find it yourself?
Yeah, so we actually met VMG Wayne Wu, one of the partners at VMG.
And at the time we were only doing, three to 5 million and we weren't there yet but he was gonna keep an eye on us.
So when we reached after the rebrand, we decided that we wanted to take a next step with this brand to give it all that it could be.
I would say though, Bill, we had hesitated a little bit of what tipped us over the edge.
Think we had gone from 3 million to 7 million to 15 million.
Keep in mind, you know, Target, Kroger, Walmart, we're all starting to knock on our door.
Hey, you're, you're really selling well in Whole Foods.
You know, we were posting amazing numbers at Costco, rolling the dice every single day, And it's hard to build a business and scale from seven million to 20 million like very quickly without anything in the bank.
And we really didn't have a fallback.
Yeah, and you're really close to getting this deal, but then something really bad happens, which is during what I guess was a routine kind of testing of your dough or your batter, you find a possible sign of contamination, a microbe, salmonella, and something like that.
I mean, we've talked to other founders who have dealt with this kind of thing.
I mean, something like that can kill your business, right?
So what happened? Yeah, Christmas week, 2014, we had built our processes so quickly and being a little bit reckless in how fast we were shipping our product.
And our own test on ourselves came back with a positive microbe, and that product was not in the walk -in.
You had shipped it out already.
It had shipped the same day.
Was it a false positive?
It didn't matter, right?
We don't know. Still to this day we don't know.
So what happens? Ah, I never forget that Christmas week, some of the toughest, toughest days in the history of our company.
You have to recall everything from the shelves.
Everything, right? So we have the specific lots that are affected, but, Costco, major retailers they do recall everything.
They don't want to take any risks.
They don't want to take any risks which is totally understandable, So I'm calling these folks that I have spent years, you know a decade of creating trust with and telling them that this product needs To be returned and it's crushing and we call the FDA I remember like just that feeling that that just sick to your stomach Call the FDA on yourself.
So then within a day they show up to our kitchen and they have guns by the way at least those did and and badges and they said we're shutting this kitchen down like this is it this is FDA inspectors?
I didn't know they were armed wow well so it's actually yeah it's the food processors they deal with a lot of like agriculture like farmland and stuff and so they do carry guns and um wow and it's wild yeah so they come in guns blazing oh boy and and they're going to do 500 tests on our factory in finished goods and they're going to find the root of this issue.
And all the shelves across the country are empty and we're not filling any orders because we're not producing products.
How much money has this cost you so far?
Hundreds of thousands of dollars you know but but it's depleting our inventory and our cash reserves so there is no fallback and and the inspector comes in and says hey this might not be an Operation that can make product like yours this cold press product and so we're just thinking gosh this could shut down things permanently and really having I Remember going to not wanting to go to sleep because you have to wake up the next day and go through it all again And after two weeks We're just waited, you know waiting to see the results and they didn't find one issue And so it very well could have been
a false positive or an ingredient issue And and I feel like at that point we had gained a relationship with this one woman in particular from the FDA and and I think that she felt so sorry for us Like you guys if you just had that for those finished goods on hand.
We could attest to confirm and so the energy Shifted from we're gonna catch you.
We're taking this place down and I mean good on them I want food safety across the country.
I commend people in that in that line of work and And, you know, we made a call that obviously VMG during that time.
You're new investors.
Yeah. You know, and said, we have a little issue going on.
And they did not to their credit, they did not penalize their offer at all.
They said it's a wrinkle in the rug that needed to slow us down and, and pay attention and be open to taking on investment.
And we like to see that, you know, with the attitude that things happen for a reason.
And we still do this day believe things happen for a reason and all of that.
Okay, I want to ask you about bringing on investors because now 10 years, a little over 10 years, you guys have brought this business up to $15 million in sales all by yourselves, bootstrapped it.
You've learned a lot along the way.
You've got the scars to prove it.
You are experienced operators.
Now you've got professional investors coming in and they brought in some executives to to join you guys, I think.
Did that cause any tension?
I mean, I'm sure now that you've got more of a quote -unquote, professional group of people joining you, they have ideas of what it means to professionalize.
And was that smooth sailing, or was it a bit rocky?
Oh gosh, talk about feeling like impostors, like in my mind, in our minds, we were still those home school kids.
Like, guy, we grew up showering in public bathrooms. I brushed my teeth in the Home Depot bathroom and wash my little sister's hair in the public bathroom.
Like there's no being, um, having any ego after that.
And so they had taken a minority position, so Bill and I controlled the board and so we kind of always felt like kind of the, you know, ownership still in our business very much, but very open.
Like we have learned everything we have through our lifetime from just being a sponge and putting ourselves.
You know, we're smart enough to know what we don't know and putting ourselves in the room with people that are smarter than us.
And so our first meeting with them I'll never forget was in their offices in San Francisco in the Presidio, it overlook the Golden Gate, beautiful office, you know, amazing team.
Everyone's Ivy League.
Like it's just, who are we, you know, and we walk in there, the huge binder with everything, you know, just starting to articulate our business in a way we never knew how.
Dividing it into four departments.
We're gonna need four department heads, finance, we're gonna house HR under there, operations, sales, marketing.
Now we're gonna need a director of analytics.
You're gonna need, and you just start seeing somebody that's done it before, map it out for you.
It was just some really exciting time.
I'm curious about, when you got this investment, how much money did they put in?
So they invested $15 million and we put $5 million in the bank and took $10 million off the table.
That must have been massively life -changing.
I mean, it was $10 million to distribute among the family and the, you know, equity holders in the business.
It was life -changing.
I bought a house. I think Lee did too.
I bought Mom a house, you know and having a little buffer.
That was the biggest thing is not just being on a knife's edge.
Yeah. But Bill stayed on as CEO, you were still the CEO. Yes.
In the business. I remained the CEO. Yeah.
And one of the things I guess there, so the people that came and joined you suggested was, hey, ditch the carob and use chocolate.
And this was, like, kind of controversial among the family, right, to use chocolate.
So, early on, growing up, we did not eat chocolate.
Everything was carob in our households, and And so carob chip was a flavor that we enjoyed, but it just wasn't translated on the shelf.
Yeah, I thought carob kind of faded away with the end of like 70's co -ops, but it didn't.
Not in the Keith house, you know.
Not in the Keith house, yup.
Carob that my mom, when I was a kid, used to say was chocolate.
She'd say, here's chocolate.
We eat carob, and it was not chocolate.
You couldn't fool me.
It was just, it wasn't good.
It was not delicious.
We never had chocolate or refined sugar growing up in our house, so carob, chips, you know?
What's chocolate to us?
It's amazing because when VMG invested, I'm assuming that they expected a certain metric to hit certain metrics and growth.
And from what I gather initially, you were not, and that created some pressure, which I guess was the reason why or one of the reasons why you guys introduced the chocolate chip bar.
Because it was sort of a hail Mary.
Like we need to, we need to hit these metrics.
Right. And so that was the big theme around these board meetings is how are we gonna get, are we just gonna be a natural in some club business brand?
Are we gonna be able to make that jump?
Which is not guaranteed with a lot of brands that they can make the jump to conventional, make the jump to mass Target, Walmart.
And Wayne Wu, he had a board meeting that says, Bill, if you ever considered a chocolate with peanut butter.
We were like, never Wayne.
all of our customers would leave us.
Everybody would write in and abandon our brand.
Nope, they wouldn't care.
They wouldn't care, he's saying, and they didn't.
In fact, introducing a chocolate chip peanut bar, like that was a game changer.
It became the number one seller in the country.
Wow. And it still is.
Wow. But sometimes you're too close to things, you know, and we just thought that was outside of our guard rails, and, you know, I remember, you know, the patience it must've taken for the VMG team to sit there.
And I was sitting next to Mike Mosier at a board dinner and I reached for the chocolate dessert and he's like, so you eat chocolate.
And I think about like, how sweet they had to be to sit and talk us through how maybe that was your dad's food values but where is your food values?
And what a credit to who they are as humans to really take us along in that and get us to get on board. Alright, you guys now are with the injection of cash and partners.
You hit $70 million in sales by 2018 and that's – I mean once you hit $50 million, that's really where you start to kind of think about acquisition or a bigger investment, $100 million now I think in CPG – in food is more common. But that year, you guys started to search for potential acquirers.
So you guys made a decision that, hey, maybe now we should, we've done this, we've built this up coming into 15 years of doing this.
Let's see if we can get some money for what we've done.
Yes, and we wanted to make sure that this story remained a beautiful story and that the family dynamics.
You hear about multi -generational business where it might have worked with the brothers and sisters, but the kids didn't get along as well.
And something that was beautiful turned into something else.
I think we all want to be peanut butter bar makers growing up when we were little kids.
In fact, we hated making those perfect bars a lot of times.
And I think we all kind of wondered, a lot of our brothers and sisters, seven of us at one time working in the business, sister Heather and our sister Monice running the road show program, traveling across the country.
Just hard work over those years, Zane out in retail demos, Charisse running operations with Steve, and kind of all going where we were needed in the business.
I think there was a little curiosity of what it would feel like as brothers and sisters to just be brothers and sisters.
We had never just had that between us.
it was always money and a level of business and responsibility that we carried between each other.
So it was the right move for our family.
It allowed our siblings to kind of set out into the world and what do you wanna be when you grow up?
But here you are 15 years in and if we could find a right partner that would leave our business independent, it would be, that might be the right choice for our family.
You did eventually find and acquire, well somebody who was interested in buying a majority share and that was Mondelez which also owns Clif Bar and - Oreo and Nestle, mm -hmm.
Nestle, yeah. And I mean, they put in a lot of money to acquire a majority share.
I mean, this is a very sensitive question but when money gets involved, it can really tear families apart, it can really damage, uh, family dynamics.
So I have to imagine, with 12, you know, 13 siblings, and now you're talking about serious money, I mean, did it create some challenges in terms of how it was going to be distributed among the siblings?
Thankfully, we had it pretty spelled out.
And we put together a trust. So the challenges came from, I would say, some of us knew how to handle finances and some of us just weren't taught, didn't have the illiteracy.
So there were some challenges there.
But overall, it's been such a positive benefit across everybody and it ended up being the right decision.
I know for me, my health was another thing.
Yeah, I mean, I think around this time, we're about to come into serious money which is gonna be just unbelievable, especially given how you guys grew up.
You yourself are very quite unhealthy, and it's not, I don't wanna say ironic because you run a healthy company, but you're on the road, you're under stress, you're probably not eating well.
Tell me what health issues you were dealing with, because you again you were a young guy, you were in your 40s, right?
Late 30s, 37, okay.
And you had high prostate PSA levels or what?
Yeah, so I'm not able to pee, you know, without getting too much details.
And I'm literally a week after seeing the number in your checking account.
Just it doesn't make sense.
You're mine, you know, and then you literally a week later think, wow, I would have traded all that to just be healthy and be able to go to the restroom.
And it was that the stress was pretty severe, you know, that the year of selling a business, you're doing two full -time jobs, you're, you're running the biggest business that you've ever ran and then at the same time, you're on the road constantly and it caused me to get way behind in my health to a point to where I did a reading that said I had a high likelihood of cancer and and so I had to basically really take a step back and start researching what I could do to fight this.
So one of the ideas that I then I had was my father used to make this oil mixture, this Omega Oil mixture that he'd give to folks that had prostate issues.
And thankfully after six months I started seeing some really good results.
My readings were going down and happy to say it's been five years and I'm in a really good place with no cancer.
But that was a very critical time that had me take pause and work on my health and I 50 pounds and really went through a transformation.
This is while you were sort of transitioning?
I know Lee, you and your brother served as co -CEOs for a time, but eventually, I assume, imagine, Bill, at least for you, as you started to focus on your health, you were already thinking, I'm going to eventually transition out.
Yes, at that time exactly.
We had a few years that we could help transition the company, what they call an earn out.
And then three and a half years after that earn out, and what was that then?
Q1 of 2023, they purchased the rest of the business and Bill had exited out, and I've continued on with the business for the last two years.
You're the chief of brand.
Chief of brand, we brought in a CEO, which to Mondelez's credit, they gave Bill and I that responsibility and discretion to find the right next leader for our baby business.
And so it's just been really fun to see it continue to make, you know, healthy transitions, because for any founder out there, you start a brand, it's like, it's always going to be yours forever.
And now you can focus on the fun stuff like branding and being an ambassador rather than dealing with the kind of things that isn't always fun like...
Like cariffs or inflation.
Yes, right, right. Your story is so remarkable and unlikely like the two of you, based on all the things that you had to overcome.
All the hurdles, all the things in your way.
should not be multimillionaires, should not have created a very successful CPG branch, had no background, you didn't come from elite schools, you didn't have a formal education growing up, you grew up in buses with this very unstable upbringing and yet the kids in this family stepped up and made this happen.
How much of this do you attribute to the work you put in, the grind and how much you think had to do with fortune, faith, luck, whatever, God, college, I don't know what you want to call it.
Lee, what do you think?
I would have to say it's a combination of both.
Right? I mean, I reflect back in our childhood, how lucky are we built to have been born in the United States of America and to have the opportunity to take the background that we had and to create the American dream.
I think that's lucky.
You know, I think I'm lucky to have been introduced to the natural products industry through my dad, however eccentric that it was.
I'm lucky to work alongside my amazing brothers and sisters, especially this brother right here.
So I think you pair that with hard work and determination.
Just really amazing things have happened.
Bill. Yeah, how do you follow that up?
No, I think it's very cliche, but success comes where preparation meets opportunity, right?
So we reached a point in this natural industry to where the timing was right to accept this kind of product.
If we had launched 15, 20 years before this, we saw what happened.
It wasn't ready. So when you have the timing is right, when you have determination behind you from all the folks involved, you sort of create a lot of your own luck, and you have some grace from the heavens above and that's when magic happens.
Yeah, I mean it is amazing to think.
Your mom who is sort of, you know, we didn't talk about her that much in this episode, but kind of an unsung hero here.
I mean, she had, I think, probably a difficult life for much of her life, and now probably has provided for, right, has some comfort.
Right. She is an amazing person and oftentimes when she met my father on the beach that day, she took a right instead of a left. And I go, how many times do you wish you went left?
She says, no way. I wouldn't have all of you.
She's the heart behind our family.
And mom kept things in the background together with that heartbeat, and I'm thankful for that.
And she's still a young woman.
She's only in her early 60s.
Yes. And mom has now how many?
A dozen or 13 grandkids from us so far.
I have three beautiful daughters, but I think I've worked through so much with my mom, becoming a mom myself and realizing, you know, the situation that she navigated in her life and ultimately the unconditional love that she gave to her kids, very much the unsung hero.
So I appreciate you asking because it's very worthy.
That's Leigh and Bill Keith, cofounders of Perfect Snacks.
By the way, since leaving the brand, Bill has started a new business called Green Fat, which sells nutritional supplements.
As for the other siblings, many of them have gone on to pursue higher education and start their own careers.
Right now, one is in Belize, rebuilding a school.
Another is the president of an environmental non profit.
And remember Faith, the youngest sister who was born in the pizza restaurant?
She just graduated from college.
Hey, thanks so much for listening to the show this week.
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This episode was researched and produced by Chris Messini with music composed by Ramtin Ariblui.
It was edited by Neva Grant.
Our engineers were Quasi Le and Ko Takasugi Chernovan.
Our production staff also includes Alex Chung, Jaycee Howard, Casey Herman, Carla Estevez, Sam Paulson, Carey Thompson, John Isabella, and Elaine Coates.
I'm Guy Raz and you've been listening to How I Built This.
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