Walmart came to us and the buyer liked our product.
And you know, one of the most significant dangers is when a buyer loves you, because sometimes you're not ready and you couldn't say no to Walmart.
And we didn't have salespeople or systems to check if our product was selling through.
And one of the things that I learned in our industry is you can get reports and look at your sales per store.
What do you think it means, Guy, if you're selling zero per store?
It means it's not good.
No, no, that's what I thought.
If you're selling zero, it could be that it's really not good, but it could also mean that the product didn't even make it to the shelves.
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 Daniel Lubezki tried to bring peace to the Middle East and ended up building a 5 billion snack empire with kind bars.
Starting a business with a mission in mind is great.
I meet a lot of entrepreneurs who wanna solve a critical social problem with the product they sell.
Again, awesome.
Everyone loves a good cause.
The problem is when a founder tries to sell the cause as their product.
It may feel good and righteous, but most consumers don't shop to support a cause.
They buy things they like.
Girl Scout cookies are a great example.
There's a reason the Thin Mints and Samoas and Tagalongs sell out first.
They're good cookies.
And yeah, it's nice to support the Girl Scouts too.
But if they were only selling say, the Lemon Ups or the Tree Foils, do you really think as many people would buy Girl Scout cookies?
I doubt it.
My guest today, Daniel Lubetzky, learned that lesson the hard way.
In the 1990s, Daniel was trying to build a business around one of the most challenging, most intractable issues on the planet the Middle East conflict.
He started a company called PeaceWorks.
It was built around the idea that if people from different sides of a conflict could build a business together and succeed together, it might create a meaningful path towards peace.
So Daniel started producing gourmet foods with partners from Israel and neighboring Arab countries things like olive tapenade and sun-dried tomato spreads.
The story behind the products was compelling.
People loved hearing it, and they admired it.
Unfortunately, they just didn't buy a whole lot of it.
But while running PeaceWorks, Daniel came across a snack bar at a trade show.
And even though it had nothing to do with the business he thought he was building, he had the good sense to say yes when he got the chance to distribute it.
That bar became a badly needed source of revenue.
And then, when that revenue suddenly disappeared for reasons completely outside of his control, Daniel found himself at a crossroads.
Walk away or build something of his own.
And that something became Kind Bars.
And once Kind Bars hit, they really hit, but not without major challenges along the way.
Today, Kind Snacks is owned by Mars.
They bought the brand in a deal valuing it at around $5 billion in 2020.
And Daniel never really backed away from his original passion project, even though, he admits, peace seems as elusive as ever.
Daniel Lubetzky was born in Mexico to a family of Eastern European immigrants.
His mom was second generation, but his father arrived to Mexico as a Holocaust survivor after the war.
And Daniel says his dad's resilience and kindness were huge influences on him.
He was born in Riga, Latvia, raised in Lithuania.
And when he was nine years old, the World War II broke out.
He ended up in a concentration camp.
And after surviving, he was for six months in a refugee camp and then ended up in Mexico.
So he was in a concentration camp as a child, as a teenager?
Yeah.
Yeah, it was very rare guy because only 1% of kids his age survived.
And he was a tall kid.
So when he was registered in the Dachau concentration camp, he was 12 and a half years old.
But the documents say that he was 15 and a half, because my grandfather lied and convinced the guards to let him work, for it was a labor camp.
There's a lot of deaths, but it was designed to make the inmates build machines for the Nazi operation.
And my father ended up being with my grandfather in that camp for three years.
And so both of them survived?
Them and my uncle Larry, who was his older brother, was with them also.
Wow.
I have to imagine, I mean, did your dad talk about it?
Because there were many people who survived the camps that didn't talk.
Today, the remaining survivors do talk about it because they're encouraged to do so, but there are very few left.
When you were a boy, did he talk about it?
He did.
And Guy, you're correct.
There were a number of survivors in our community in Mexico City.
And there were predominantly two types.
One were the people that shut it out.
They could not talk about it because it's too consuming and painful.
And then there was the others who were so consumed that they were embittered and darkened.
And my dad was neither.
My dad was very rare in that he talked about it, and when he talked about it it consumed him.
But then he lived his life with kindness.
He didn't let that darkness of that chapter darken him.
Quite the opposite.
He saw his new life as an opportunity for him to bring light to the world, and he always...
Even today, if you come to San Antonio Texas, where we moved to after when I was 16 years old, people when they see my last name they're like oh, were you related to Mr Roman Lubezki?
I'm like, yeah.
It's like, oh my God, he was... And they'll tell you stories about how kind he was to them.
Like everywhere you go, people still talk about him.
And you look back and it really did... shape almost all of my decisions.
So your father comes to Mexico as a 17 16-year-old kid, probably by the time after a couple of years in Europe.
And presumably he doesn't speak Spanish.
And had no education for the previous seven years during the war, I'm assuming.
And what did he do?
What did he tell you he did when he got there?
The way he educates himself is by watching movies and reading the subtitles, and then by borrowing or being gifted used encyclopedias and devouring them, reading them.
Cover to cover volume A.
Volume B.
Volume C.
After working two and three shifts in a factory, he eventually garnered enough money with my grandfather to start a little jewelry shop, and that grew and grew and grew.
In Mexico City.
In Mexico City.
And then almost like a...
Like a bad Jewish joke.
Five Holocaust survivors joined forces to build a business on the border between Mexico and the United States where they sold duty-free wares.
For example, my dad was in charge of watches.
One of his partners was in charge of wine and liquors.
The other one was in charge of cosmetics.
The other one, electronics, was very big.
Okay.
You're born in 1968, and you spend the first 12, 13 years of your life, maybe longer, in Mexico.
And we'll get to you moving to the U.S., but what was life like for you?
What do you remember about being a kid in Mexico City in the 70s and early 80s?
I was raised in an immigrant community where there's like a little bit of a bubble of a lot of Jewish survivors and immigrants in Mexico.
And in my school, they taught you Yiddish and Spanish.
Wow.
Because Yiddish is not spoken by any very few people.
It's not anymore.
But back then, we were living a little bit of a bubble or a cocoon.
And we're very proud of being in Mexico and being Mexicans, but we're also very proud of our heritage and like all sorts of funny things.
Like my grandmother, would make you know how people make fun of the most disgusting thing in the world.
I'm sorry not to offend people, but gefilte fish have you ever tried gefilte fish?
And it's cold and just horrible.
We had a mexicanized version of that called gefilte fish a la vera cruzana.
So we would meld this red warm sauce with a lot of spice and made the gefilte fish warm and taste good.
So we did a bunch of combinations between our mexican and jewish cultures And in the 70s I mean this was, I guess, a little bit of a I don't want to say unstable time in Mexico, but I mean there were, you know, in the 60s for sure there was a lot of upheaval.
There were student demonstrations and, I think, stories of students who were actually fired upon right in the 60s and maybe even early 70s.
I can't remember the exact timeframe, but...
Did Mexico City, as you remember it as a kid in the 70s, did it feel safe?
Did it feel like a pretty normal place to you?
It never crossed my mind that I was unsafe.
As a kid, I probably was a little bit naive, but it felt amazing.
And yes, there was a lot of horrible periods of instability, including the 1960s that you're describing about, when a lot of university students were slaughtered.
But when I grew up, I was not fully aware of that.
And around 1984, there was an earthquake.
I think it was 85, if I remember correctly, the big one.
Maybe it was an earthquake in 1985, but there was also one earlier, because I remember one building fell and they started blaming the Jews for the earthquake.
And my dad was like, I'm not taking a risk again.
We're going to move.
Huh.
What do you mean?
How did they say that?
The newspapers, people started saying that it was the Jews' fault.
You know, you can't really fully explain anti-Semitism or all these things.
So all I remember is that my father said my grandfather made a mistake to not take the warning signs.
I'm not going to take the risk.
And so...
Something that's very interesting, even with epigenetics, that there's a lot of studies about children of Holocaust survivors.
We see the world differently.
Like I, in my mind, 24-7, part of my brain that worries is hyperactive.
And I worry about democracy, about rule of law, about humanity, about how to fight injustice.
Like, it's just in my DNA.
And I think it has a lot to do with what my parents taught me, but also with what I inferred from learning from his experience.
Yeah.
All right.
So you guys moved to the United States in the mid 80s.
You're a teenager.
I'm assuming because your dad was part of this business, this sort of duty free business on the U.S.
Mexico border, he just continued to run that business.
Yeah well, he and his partners.
Their headquarters were in Laredo Texas, which was truly a border town.
My parents wanted to be a little bit more, you know, in the cradle of civilization.
So we moved to San Antonio, Texas.
Is he traveling to Laredo a lot?
Is he going back and forth?
He's traveling to Laredo a lot and he's traveling all over the world because it's like all of his clients are.
Predominantly in Switzerland, because he had the only duty-free representation in the world for these quality watches.
Wow.
So he had big-time watches.
I mean, today, I don't even think some of those brands sell to third parties.
They only have their own boutiques.
They play a fascinating game.
They control the inventories.
There's more demand than there is ever supply.
But yeah, it's a very coveted thing to have a license to sell those watches.
And I guess while you're in high school, you also get into the watch business.
Like you start selling a certain particular brand of watches.
Tell me about that.
So I had a bunch of jobs.
I had the right to be in the United States.
I was lawfully a resident, but I didn't have the right to work for somebody else.
So I had to create my own businesses.
So I would go to flea markets and sell not just watches, but also...
Singing cups, that you'd lift the mug and it would start singing, and Christmas lights and all the crazy things you can imagine.
And my dad helped me out.
He connected me to a couple of suppliers that would sell me some of these products, and then I would buy them.
But then I had to wake up at 5 am in the morning and set up the booth in the Eisenhower flea market and then finish at 6 pm.
And it was really fun.
And I had a car washing business with my cousin and we had a lawnmower business but we didn't have a lawnmower so we had to borrow the owner's lawnmower.
I didn't even realize until I told this years later that that was unacceptable.
You're supposed to have your own lawnmower.
When you, when it was time for you to go to college, you stayed local.
You went to Trinity University in San Antonio.
And did you I'm assuming you continued to sell watches, or I mean, was that sort of your main?
Did that become like your main source of income?
Yes, it was a very good business.
The most fun business was that I was a magician and I studied one year abroad and I helped pay for my studies by traveling and doing shows in the streets of Paris and the streets of all over Europe.
Like card tricks or what kind of tricks?
Mentalism, card tricks, sliding a sword through a woman's body, anything you could imagine.
How did you learn how to do that?
I started from my dad.
As a Holocaust survivor who was nine years old when the war started, he didn't have a childhood.
So he lived his childhood through our childhood.
He loved magic, so we would go to magic conventions.
But yes, when I was in college, I had a network of students that would sell watches.
We also had a couple booths in shopping malls.
It was fun but challenging.
Were you intending to be like your dad go into business and be an entrepreneur?
Or because this is the late 80s, when you go to university and there was a time where people didn't think about starting businesses, like they'd go to law school or medical school or be a consultant?
Like when you were an undergraduate, did you know that you were going to probably go to law school?
Was that your goal?
My hope was to become partners with my father.
I wanted to start a business with my dad.
And my dad wanted me to do something with my life, quote unquote.
For him who had been deprived of an education, and him and my mom.
They wanted me to get a graduate degree.
So I applied to Stanford Law School.
I got in.
And when I went to law school, besides starting a business, my passions were resolving the Arab-Israeli conflict.
I was very passionate about figure out ways to use economics to help Israelis and all of their Arab neighbors recognize each other's humanity, break stereotypes, cement relationships.
How did that?
I mean, obviously you grew up in a Jewish home.
Father's Holocaust survivor.
But how did you?
Even when you were in college, this was your sort of obsession.
Yes.
And I started learning more about this conflict.
And I started thinking, once I went to law school, I thought I was going to become a diplomat.
And then that idea of building bridges between people kept being around in the back of my mind.
And I ended up writing a legislative proposal in law school for how to turn my theory into practice.
I don't think you ever really practiced law, right?
You briefly worked for a law firm, but you... I practiced for a couple months.
I passed the bar.
I worked at Sullivan and Cromwell.
And that's when the Oslo process happened.
This is 1993.
This is when the famous Rose Garden, Bill Clinton, Yasser Arafat, Yitzhak Rabin, that handshake that was – it's hard to imagine today how much optimism there was in the world around resolving that conflict.
But that was a watershed moment.
You are at a college, at a law school –
And I was in Mexico watching the Rose Garden ceremony.
And I'm like, oh, my God, I need to do this.
And so I told Sullivan and Cromwell, I'm taking a leave of absence.
I'm going to try this out.
All right.
So, from what I understand, you are so inspired by this that you get a fellowship and move to Israel to work on your idea.
And basically the idea is that you believe that economic cooperation, like building businesses between Arabs and Israelis, could encourage peace.
Yes.
All right.
So you decide to start a business to try to prove this out.
And I guess it's called PeaceWorks.
So how did you start?
What did you do?
The way it works is I'm doing my research and I go to a supermarket and I see this obscure looking jar of sun-dried tomato spread.
And I don't know what is a sun-dried tomato.
I've never tried a sun-dried tomato.
I try the spread and it's delicious.
It's so good.
And I go back to the store to buy some more and there's no more.
And I talk to the distributor, to the store manager, where's this thing?
I want to buy some more.
It's really good.
And they're like sorry, the company went out of business and i can't get the idea of my joint ventures out of my head.
I can't get the idea of this delicious spread on my head and all of a sudden they merge and i'm like, oh my god, what if i can restart it?
So i asked for the name of the bankrupt guy And he connects me to Joel Benesh.
And Joel Benesh is this beautiful human being who had a number of Arab friends.
And I tell him the idea for Peace Works.
And the reason he went bankrupt is he was buying glass jars from Portugal and olive oil from Italy and sun-dried tomatoes.
He was buying all the stuff in Europe and it was very expensive.
So I start mapping up with Joel.
We could buy the glaciers in Egypt.
Through my research, I knew that we could buy the sundried tomatoes in Turkey and we could buy the olives from Palestinian farmers.
And I start showing him, why don't we do this together in the Middle East?
And he decides to give it a shot with me.
And this could be the beginning or the first product.
Because Pieceworks was going to be.
Was it going to be about consumer products, or was it just going to be any joint venture?
Back then, Guy, I thought I was going to have ventures in all sorts of industry.
I didn't know anything.
Okay, so now how do you identify the sourcing?
Like how do you find a Turkish sun-dried tomato producer and Egyptian glass jar makers?
Like how do you start that?
Because this is pre-internet.
I mean there's a little bit of internet, but it's – Exactly.
I was going to say it was not using Google.
Yeah.
So you have to go to trade shows.
You have to go to the governments.
You have to go through introductions.
You have to – it was so much harder.
Okay.
Now my question is when you started to approach some of these other suppliers and you said hey, we're based in Israel.
We want to start this business.
Company, we want to work with you.
Were they receptive to it?
I mean, were they hostile to it?
They were super receptive because this was, remember, the romantic time.
This was after...
1993, after the Oslo peace process.
And it's hard to appreciate and remember how magical that time was.
But you would go to Arab capitals and you would go to Arab towns and they wanted to do business with Israelis.
It was like the new Middle East.
It was Shimon Peres's New Middle East.
There were a lot of resentments, a lot of suspicions, but I can't recall right now a single incident when somebody said no, I don't want to deal with Israelis.
Got it.
OK, so you settled on making first, I guess, this sun-dried tomato spread.
But I think the idea is to create a line of spreads, right, that you could export, presumably.
You're not going to sell these in the Middle East, right?
Or were you?
Was the idea to sell them in the West, in the U.S.?
?
After a few months in Israel to your point I realized that I need to go to the US because we need to develop a market.
He can make the product.
We figure out the first part, right?
How to make it. but I need a client.
And so I go to, I moved to New York.
I go to Zabar's, I bring him this jar of this obscure looking product.
They look at it and they laugh and they're like, you got it all wrong.
Your pricing is wrong.
You didn't create enough margin for us.
You label all these regulatory problems.
The oil is leaking.
So Scott Golchan and Saul Zabar spent by the way, they were really tough on Groff the sweetest people.
A lot of what I learned was from them and other merchants who love the concept because, think about it, this is the mid-90s.
People are rooting for the Israelis and Arabs to figure this thing out.
So they would give me a ton of free time of advice.
So I go back to the drawing board.
I tell you all, we need to fix it, fix it.
I come back six months later.
They're like, what, you're still alive?
I show them the product improved.
They give me a shot.
And then multiple iterations till we started to figure out something that people wanted and were willing to buy.
The idea is to sell these at initially specialty stores like Zabar's.
It's like a farmer's market brand.
I mean, you're selling jars of like olive oil or olive spread and sun-dried tomato spread and like artichokes.
I'm just imagining what it could be.
We started with sun-dried tomato spread, basil pesto, and olive spread.
And the products are actually very high quality, but the packaging and the branding.
The brand is called Moshe Pupik and Ali Mishmumkin's World Famous Gourmet Foods.
I still don't know why it didn't work out.
Did the jar say what this was about?
Like, hey, this is about bringing people together.
When you buy this product, you're supporting efforts for peace in the Middle East.
Was that clear when you saw the product?
Yes and no.
At the top of the lid, there's something that says, cooperation never tasted so good.
Cooperation never tasted so good.
Okay.
So we were trying to talk about that.
And obviously the characters Moshe Pupik and Ali Mishmumkin.
You would buy the jar and there would be a little book and it had this fable about how, thousands of years ago, the impending armies in the Middle East were about to kill each other and the great chef, Moshe Pupik, called his magician friend Ali Mishmumkin, and they quickly concocted the sundry tomato spread, whose aroma was so magical that it spread across the horizon and it put the rival armies in a friendly trance and they were so re-energized that they used the strength of the sun to melt their weapons into spoons and use the spoons to partake the sun-dried tomatoes.
But what I discovered along the way is that if you're too mission forward, consumers will give you one shot, but then they think they're doing you a favor.
And what I discovered is you need to make sure that you're not trying to tell the consumer.
Do this because of the mission.
You want them to buy it because it's the most delicious product out there, because it's the right value proposition from them.
And that's Earlier on again.
One of my other mistakes is I started selling in the street fairs in New York City and everybody's.
I'm talking about the social mission.
I'm talking about the social mission.
They're listening to social mission and they think you're adorable and they keep walking.
And when I start talking about the features of the product, then people start trying it out and taking it more seriously.
And they try and it's actually good.
It stands on its own merit.
So the mission cannot, it can be an added reason to believe, but it cannot be what drives the sale.
Right.
OK, so you are you're in New York and you're pounding the pavement trying to get this into stores.
And it sounds like you had a great story.
And so that kind of gave you a foot in the door with like you would go from store to store and make the case and try to convince people to carry it on their shelves.
I start at 7 am in the morning on 122nd and Broadway and I walk down store by store, store by store, and I tell myself I shall not go to the next store till I get a purchase order from that store.
I think it's all about grit.
And I think about, I need to get this product in every store.
And in my mind that means that product belongs in Whole Foods, but it also belongs in the convenience store in the corner.
And it also belongs in Bloomingdale's and Macy's.
And so the best example I can tell you about This is, I go to a Korean grocery store.
There was Mr. Lee on 84th and Broadway.
And I tell him about my product and I tell him all the social mission.
And he says, I'm sorry, like, this is a bodega.
We only sell, you know...
Toilet paper, ketchup, just essentials.
We don't sell fancy sun-dried tomato spreads.
And I said, yeah, but you don't understand.
This is about peace in the Middle East, and you have a community that's going to appreciate it and try this.
And I opened the jar and I force-feed the poor gentleman with a piece of baguette and let him try the product.
After two hours, he gives up and he gives me a purchase or he offers to buy 12 jars for $33.
And I leave the store and I tell myself, Daniel, you're a winner because you didn't give up.
You're going to win.
But then the next week I go by that store and the shelves, he hasn't moved one jar.
And then a month goes by.
He hasn't moved one jar and the jars now are full of dust and they look bad, and they look bad for him and they look bad for me.
And that's when I started learning to think more long-term and to think about where should this product fit and only be there for them?
One of the things that you did is you – because this piece works was not just about the Israel-Arab and Israel-Palestinian conflict, you started to look – source products from other conflict zones.
I guess you did like – product from Indonesia or like or East Timor.
The idea here would be conflict zones around the world and people working across the conflict zones to build and sell products.
A hundred percent.
But what I was getting wrong then Guy, is I was so enamored with the social mission that I was my own worst enemy.
Because, instead of focusing on one product line and winning, I was starting ventures wherever I could.
So I was working like a horse.
Right.
And it's taking so much time to-
Figure out these partnerships instead of focusing on one and getting that one right.
So consequently, this whole PeaceWorks business, you know I was very proud, but the first year we sold, if memory serves me well, 33000.
Second year, $226,000.
Then I get to about a million and then it's just like plateaus.
And were you profitable at a million?
I was profitable every year in our journey, except one where we lost a tiny like a few thousand dollars.
I was profitable every year, but profitable because I wasn't paying myself a $24,000 salary.
And so to get to, let's just say, a million, I mean, you had to be in a lot of retailers, because this is not like toothpaste or shaving cream.
It's not moving off the shelf.
Did you eventually work with a distributor?
Yeah.
So the way you do it, at least during my time, is distributors are not going to open markets.
No.
They're going to continue your stuff.
So I opened New York City.
I developed New York City.
Once I have 50 accounts or 100 accounts and I find a distributor to continue supplying and distributing for them.
So then now I can go open Philadelphia.
Yeah.
Presumably you had a couple of employees, right?
Did you have at least people who were dealing with the warehousing and logistics and maybe even sales?
Like how many people did you have working for you?
Five team members.
Everybody paid $24,000 or something like that.
I call them victims.
Because the poor guys, like none of us know what we're doing.
Like most of them are kids that just graduated from college and they don't have a better option.
So, OK, so you are kind of humming along.
And I guess at a certain point you are, because you're going to trade shows and you find a product that is like a yogurt product apricot almond, like a granola bar, but coated in yogurt, I guess, and you like it and you asked if you could distribute it.
No no, what's the story?
So at the natural products expo, as I'm walking and looking at the products, I try this product, which is a apricot yogurt almond bar.
And it is delicious.
And I'm like, wow, this is really good.
And it was called the Bee Natural Bar?
The product was called Bee Natural, yeah.
And Peter Sudarma, who owns that company, asks me for advice.
And then like six months later or a year later, he says, Daniel, my product's really good.
Why don't you start...
And I'm like, Peter, I can't.
I have a piecework submission.
Your product's not made through pieceworks.
It doesn't matter, Daniel.
You come up with different company.
Distribute it for us.
Long story short, he convinces me to start a separate division of pieceworks.
But you had a business that was focused on building peace between.
So didn't this, I mean, in your mind, why would you do this?
Why would you sell this?
I mean, unless you could make money off of it, right?
To make money.
Yeah.
For a while, I'm eight years into this.
And you guys are not doing well.
We're barely making ends meet.
It's very, very hard.
And this product is a good product.
You start distributing it.
And did it do well in the US?
Everything is relative.
For us, it was nirvana.
At that point, we're selling half a million dollars of this product, $1 million of this product.
It's incredible.
It's very quickly become something.
And then something bad happens.
Peter tells me that there's a company that wants to buy the product.
The company decides that they still want to keep me as their distributor, but they start adding a number of ingredients that were not approved by Whole Foods.
Whole Foods at the time, and still, their list is like the Magna Carta for natural.
And they start adding two or three ingredients that are not approved in the Whole Foods list.
And we plead to them to not do so.
But they don't care because in australia they sell predominantly to convenience stores.
They don't have a highly developed natural marketplace.
We explained to them that in the united states it's going to kill our market.
They said sorry daniel, but but we have to do this.
So we lose all of ourselves from one day to the other.
So all of our hard work goes to nothing When we come back in just a moment how Daniel turns disaster into opportunity and gets back into Whole Foods in an even bigger way.
Stay with us.
I'm Guy Raz, and you're listening to How I Built This.
Hey, welcome back to How I Built This.
I'm Guy Raz.
So it's 2003 and Daniel's in trouble.
His cash cow.
An apricot almond yogurt bar that he's been distributing has been reformulated and kicked out of Whole Foods.
And that's a huge chunk of his revenue gone.
And it's not the only struggle he's facing.
This actually was one of the darkest periods of my life because along the way, my dad passes away.
And I'm doing a lot of civic work in the Middle East.
And as you know, the second Intifada breaks out and there's a lot of violence and stuff.
And it's a very difficult time.
And so I'm exhausted.
I've been 10 years at this.
And I remember very well the meeting that happened, where we had about 60 members around the table and every one of us has to vote whether we give this another shot or we just give up.
And we unanimously say, let's give this one last shot.
A few months later we designed it and we launched what became Kind, and then the company just takes off.
So you decide that you're going to build, you're going to make your own bar.
And let's talk about this for a minute.
So tell me how you get the name Kind.
We knew we wanted to have three pillars for the product.
Kind to your body, meaning healthful ingredients.
Kind to your taste buds, has to be tasty.
And kind to your world, that the way you do things matters.
And my dad just passed away, so I think he's front of mind.
And I told you earlier about how, in spite of all of the darkness, he just was a very, very kind human being.
So we named... kind in honor of my dad.
And initially the motto was all natural, always because we were so freaked out by the incident that we had and we wanted to control our destiny.
This is a very, very important moment.
Up until that moment, I don't have control of the manufacturing ever.
I work with my manufacturing partners.
They have control of manufacturing.
After I get my ass kicked here, I said, all right, I have to control the manufacturing.
I control the formulas.
I control the recipes.
And I identify a manufacturing partner that can do it for us but where we control the rights and control our destiny.
Tell me about the concept, because the concept we know, field of kind bars it's basically nuts and fruit, depending on the bar, kind of stuck together.
Was that the concept from the beginning?
Yeah, I would just add a little bit more broader.
I am trying to solve a problem for my needs, which is a healthy snack on the go.
And so what are some of the implications of the design process?
It cannot melt too easily in your hands.
It has to be portable.
It has to be compact.
It has to be nutritionally dense.
I think initially it's just like almonds and different nuts bound together in a bar, right?
Maybe some fruit too.
That was the original bar.
And so let's talk about this for a sec, because this is gonna be a bar, right?
And it had to be cut, and it was gonna have whole nuts in it, and it had to be bound together.
And, you know, I think a lot of people listening might think, OK, what's the big deal?
But I think this is going to be a challenge to actually produce.
It's really, really hard because in our industry most bars I think 95 of bars are what's called an emulsion or a paste.
And it flows really easy to the manufacturing line.
If you take a product, you macerate it and make a mix, it flows very well through the line.
It's very easy to cut.
It's very easy to load.
When you're not doing that, when you're trying to preserve the wholeness of the almond, because the almonds are better preserved if they're not.
If you cut them, they can oxidize, they can go rancid, they lose some of their integrity.
So you want to try to preserve the whole almond.
And it's very hard to do that and do that at scale and do that through a manufacturing line.
So it took us a very long time to develop the... technology to protect nature.
And who was going to manufacture these for you initially?
So initially we tried to find somebody to do it in the United States and nobody wants to.
And so we went with relationships with Peter that were willing to do it for us in Australia.
Initially Australia.
I imagine that creates some challenges because you've got to export them to the US.
And then how did you finance even the early production in Australia?
How did you pay for that?
Remember, we didn't have that big a sales.
One of the most interesting challenges for a consumer-focused entrepreneur is that the more you succeed, the harder it is for your cash flow.
But ironically, when you're starting, you don't have that much sales.
So you don't need like if you're selling 10 or 20000 a month, you just need those 20000 for your working capital.
Once you're selling a million dollars a month, then you need a million dollars in working capital.
So the problem starts getting harder as you grow.
But the first year, I can pull it off from what I've saved over those last 10 years.
Right.
And did you also work through the branding and the look of the packaging or would that come later?
I mean, it's evolved somewhat, but it really – the essence was worked out from the day one.
Like, it was –
They thought of the four blocks and they were kind and the lock up and the colors.
And also very importantly, we wanted a very, very clean design.
We didn't, because everybody out there used a lot of photography and allegorical stuff and designs to obfuscate.
And for us, the hero was a product.
We had a transparent window, which we introduced, which was very, very revolutionary.
From the beginning, you had the transparent packaging?
The transparent wrapper.
It was very hard to achieve because about I don't know 50 of the product is just.
You're seeing the product itself.
And so it's very hard.
How do you communicate everything you need to communicate in only 50 of the space, or maybe 40 of the space?
Because the transparent part of the wrapper, you were not going to print anything on it.
Exactly.
We wanted people to look at the product themselves and know, oh, this is real.
This is not like everything else.
This is clearly high quality.
I'm seeing the whole nuts and fruits.
That was a big insight.
But the challenge is how do you then...
Explain the brand kind and your value proposition in the real estate that you have left.
So there was a lot of work that went into it.
And with the Peace Rocks years I cut so many corners to save myself some dollars and it ended up costing me more.
With kind, we really work hard on the design to get it right.
And this is also a challenge, because a clear wrapper like one of the reasons why so many products are in opaque packaging is because it preserves the product for longer.
And a clear packaging, a clear wrapper is different.
That's harder to do.
There's proprietary knowledge that goes into designing a packaging that's both transparent and Okay.
So, in sort of the year before you launched Kind, you're kind of in a crisis.
PeaceWorks is kind of in a crisis because you're still trying to sell spreads and other products.
It's not enough revenue to sustain your team.
Your team decides let's go all in on this new bar, but you're not going to be able to launch it, I think, until 2004.
So, first of all, were you able to get it into a lot of Whole Foods, or did they give you like one region initially?
At the beginning, it started slow, but it very quickly ramped up.
How?
How did you sample it?
Did you guys market it?
How did you do it?
The product, the product was just the right product at the right time.
There was nothing else like it.
But it was on a shelf with like 50 other energy bars.
Oh, oh, oh, oh, that's great.
You just reminded me of something. they didn't know where to merchandise a product.
Whole Foods didn't.
Because they had what they called a nutritional bar set.
And the nutritional bar set.
I remember being at a Whole Foods and they're like Daniel.
The problem is we don't know where to put it.
And I'm like, what do you mean, put it in the nutritional bar set?
No, because nutritional bars look like this.
But so what happened is that they gave us a chance to put POP displays.
So what was a really big problem turned into a huge opportunity, because we had racks of on the checkout counters in a lot of the stores, because they didn't know where else to put it.
So, instead of being next to all the energy bars, or with candy, or with nuts or dried fruit, They were by themselves.
By the register.
By the registers, yes.
Wow.
It was a huge...
Huge, huge advantage.
So people could see him as, and that's a massive, I mean, that's like five-hour energy in Slim Jims.
Like, that's where you want to be.
And we designed a display that was not occupying too much real estate.
The boxes were small.
The product was compact.
Because retailers, what they sell really is real estate.
So the more you can turn product into less space, the more they like you.
And our product was a $2 bar.
You could put in a little rack, you know, $500, turn it around quickly.
So it was a really, really good deal for the retailer.
They liked it.
And then they started just growing.
I read that in the first year you sold about a million dollars worth of bars, which is great because that's what you were selling with the previous bar.
But now it's your own brand.
And do you remember having I mean, you probably had no budget to spend on marketing at all.
Do you remember anything you did in that first year to get the word out about this this product?
It was worse than that.
I had trained myself over 10 years to not waste money because I didn't have money to waste.
But I had made the mistake to then turn the culture of my company into a scarcity mentality rather than a resourceful mentality.
So you don't want a glutinous, wasteful mentality.
But if you have a scarcity mentality, then you're not investing.
So the first few years we're lucky that the product had the success of our packaging, our product and those displays.
But that was basically it.
We didn't even have a sampling budget because really we saw sampling as a cost center rather than as an opportunity for people to score a product.
Our budget as late as 2008 for sampling was $800.
And that was $800, including samples to the retailers.
Because you also didn't want to be unprofitable.
You wanted to have a profit at the end of the year.
I think, after 10 years of barely surviving, I was very good at driving the bottom line up to the point that I was actually shooting myself in the foot by not investing in my future.
Like we doubled for 10 years in a row, but the first few years certainly 2004 to 2008 I mean we did creative promotional things, but it was really the product that was just selling itself.
I guess in 2007, so three years in, you get an opportunity to sell at Walmart.
But that didn't work out.
What happened?
I mean, Walmart, amazing opportunity.
You get into Walmart, and then I guess you get dropped.
What's the story?
Walmart came to us, and the buyer liked our product.
And you know, one of the most significant dangers is when a buyer loves you, because sometimes you're not ready and you couldn't say no to Walmart and we didn't have salespeople or systems to check if our product was selling through.
And one of the things that I learned in our industry is you can get reports and look at your sales per store.
What do you think it means, Guy, if you're selling zero per store?
It means it's not good.
No, no, that's what I thought.
If you're selling zero...
It could be that it's really not good, but it could also mean that the product didn't even make it to the shelves.
So the system, at least back when I was starting at Walmart, was so complex that the distributor would drop off the product in the back of the store and nobody had thought to put it in the front of the store.
And so it was my job to identify that, but I didn't know that.
And so, after we failed miserably at Walmart because we didn't know what we were doing, we licked our wounds.
And a year and a half later, John Leahy, who's got the great heart to prove it, and the experience comes in as our president and as my partner.
And then he taught us how to do it right and how to get to Walmart.
I'm like, John, let's get back into Walmart.
He's like, slow down, buddy.
Slow down.
We need to be ready.
Up until this point you're still I mean up until 2008, I think you had not taken on any outside investors at all.
It was entirely funded by you?
I had three friends two friends and a friend of a friend who had, in the P-Strokes years, invested 100000 in PeaceWorks.
But when I started Kind it starts within PeaceWorks, because I wanted to find a way to thank them and my investor and my board for that.
So eventually...
In 2008, we started getting a lot of interest.
You were getting investors coming to you saying, hey, we're interested in it.
2008, it's very interesting how the industry works.
Nobody wants to touch you until everybody wants to touch you.
It's fascinating.
We were like persona non grata in the investment community.
We didn't even try anymore because we couldn't raise a cent.
Which turned out to be really good for me because then I didn't dilute myself.
But then all of a sudden, 2008, people are seeing the data and the company is big enough.
We're reaching now like all these private equity companies.
They're looking for performance.
It needs to have more than $10 million in revenues.
This, this, this.
And they see it.
And all of a sudden, everybody's calling us.
And now we're ignoring them because we're cash flow positive and profitable.
So we don't.
We don't need the money.
But then we wanted to have a partner that could be a partner to help us.
So in 2009, we allowed an investor to come in and They wanted to spin out the PeaceWorks business because they didn't care about the PeaceWorks business.
So we separated PeaceWorks from Kind and then they both lived separate lives.
Got it.
So – and this is VMG, the private equity firm I believe that bought a share.
I mean at that point in 2009, they valued it at $45 million, the business.
And –
Does PeaceWorks then die?
Do you continue?
Like, were you selling tomato spread and olive oil tapenade?
Like, or was that done?
So I didn't want to give up on the PeaceWorks dream.
Kind was growing like crazy, but I didn't want to give up on PeaceWorks mission.
So my friend Joshua Schertz, who's an amazing entrepreneur. agreed to take it on.
And he had his other lines that he was selling.
And then he started selling Peaceworks.
Peaceworks lived for 25 years.
So from 93 till 2018, I think, when we decided to close it.
I wonder, I mean you're, you know kind is doing really well, obviously a really successful product, but it's completely different from what you originally intended to do.
Right.
Which was like source the nuts from here and the sun dried tomatoes from there and bring people together.
And was any part of you like, you know, I just I don't know what to think.
First of all, Kind was such an amazing journey and it brought so much happiness to so many people that it never was.
Am I doing the wrong thing?
I was always delighted about the kind journeys.
I'm so grateful for it.
But yes, there was a piece of me that misses the opportunity to get PeaceWorks right.
Now, along the ways, I helped build something with an Israeli-Arab co-founder, Mohammad Daraoush, called the One Voice Movement.
And we recruited close to a million Israelis and Palestinians to stand up against extremism and hate and terrorism on all sides.
And that gave me a lot of meaning and helped fulfill my need for purpose.
Kind also has its own purpose, but obviously not as deep as Peace Works or One Voice.
But the One Voice mission kept me very busy.
And between 2003 and 2007, I was spending more time on One Voice than I was on Kind.
And it was interesting that Kind did so well when I was distracted also building the one voice movement.
Part of the way I explain it is that I am a very creative guy but sometimes I can drown my team with creativity and I kind of divided myself between what I was doing with one voice and I was doing with kind, where we managed to stay focused and kind and do a good job.
That's the explanation I give myself.
But I'm in the process of ideating additional things to do in the context of Israeli-Arab and Israeli-Palestinian relationships to try to help develop a better future for the people of that region.
When we come back in just a moment, why Daniel goes on a years-long quest to get kind associated with a very specific brand.
Stay with us.
I'm Guy Raz, and you're listening to How I Built This. you Hey, welcome back to How I Built This.
I'm Guy Raz.
So it's 2008 2009-ish, and Daniel has taken a private equity investment and separated pieceworks from kind.
He's now focused entirely on kind and on the verge of realizing a personal obsession.
One of the things that is interesting to me is you were, from what I read, like just obsessed with getting these in Starbucks, which makes sense because Starbucks has not that many products available to buy.
But they're right there as you're at the register.
What was it about Starbucks?
I think you worked on this for like decades, three or four years to try and get the kind bar into Starbucks.
Tell me about about that obsession.
Why did you think that that was going to be a breakthrough?
For me, the insight was this is an incredible, iconic chain.
Back then, you had, I think, 11,000 stores.
And they didn't, at that time, sell any healthy snacks.
They didn't have a single healthy snack.
And I'm like, this makes so much sense for you to carry a kind bar on the go.
And unbeknownst to me, they liked us too much.
They were trying to make their own versions.
And fortunately, that did not pan out for them.
And after years and years of developing relationships, things aligned and they gave us a shot.
You got into Starbucks in 2009, I think, and you landed a deal with them.
And was that – did it prove to be?
– I mean, I imagine it did prove out to be just massive because, I mean at that point 2009, probably not everybody in America knew what a Kind Bar was.
A lot of people discovered us – well, they discovered us through words, right?
Word of mouth, they saw a front door.
At Starbucks or through our sampling, because our sampling went from 800 in 2008 to 800000 in 2009.
And within a couple of years, we were sampling $20 million.
It's like maybe 40 million bars or 30 million bars.
Just giving them away giving, because what we found that guy is that anytime somebody tried a kind bar, nine out of ten would fall in love with the brand, would tell others about it and within a month it would pay for itself because they would start buying the product.
It was a great roi, so sampling was our biggest thing.
Getting in checkout counters at Starbucks and other places was another really, really important one.
And those things were probably the reason why we accelerated our growth.
You mentioned this guy, was it John Leahy?
Yeah.
Who joined in 2008, I think, right?
John joined either 2009 or 2010.
And he became the president of the company?
John became the president of Kind.
And you remained a CEO, but tell me a little bit about, I mean...
This brand is just growing and growing.
And so I imagine you are also hiring more people, and then there's also people coming to you or you to sort of really – as you're scaling, you want to bring in people with like deep experience.
How are you – sort of thinking about the team that you were building as you could see this thing scaling?
Well, it's an amazing question.
John Leahy, without any doubt, was one of the most pivotal forces to help kind become what he became.
So John had a lot of experience.
He had worked at Playtex.
He had worked at a nutritional company that sold vitamins.
But he didn't have snack food.
He didn't have snack experience, but he had experience in huge CPG companies.
And the rest is history.
Like John was one of my best friends, partners, very different from me.
Ying Yang.
Like his personality and my personality are complementary, but we knew we had each other's back.
Like completely different temperaments and personalities.
He's very operational.
I was very creative and marketing, whatever.
And together...
We created the magic.
So did you have a COO as well, or basically was John as president the COO?
He was the CEO and president.
And also to be fair, these titles are silly.
Like he was a co-CEO.
He was a co-president.
Like we were running the show together.
Yeah.
One of the things that I learned is that all of us are deeply insecure.
And it certainly happened to me along the way in my early years where, where I wanted to find somebody that was like me and that was not better than me,
Subconsciously I don't think I consciously said that but when you win is when you find people that are different from you and they're better than you.
Somebody that was better than me at sales.
Somebody that was better than me at finance.
Somebody that was better than me at new product development and marketing.
You're bringing super smart people and they're teaching you how to do better and you're growing your brain and you're creating a culture where You know every single team member had a stake from the beginning.
If you were in the company six months or longer, you got stock options.
Everybody was an owner.
How are you like coming up with different innovations and different products?
Because I mean, eventually you'd have chocolate dipped bars and then oat bars and all kinds of different bars.
But how are you developing those ideas?
Because you can't just have one product and hope that that's going to, you know, build a business.
I think one of the things that made us succeed the most is to initially stay focused and disciplined.
Because what happened in my PeaceWorks years is I was taught that you just grow by extending your shelf presence.
And so I have three spreads, then six spreads and nine spreads and 15 spreads.
And eventually some of our products really did not live up to the quality of the original products.
And that hurt the brand.
And I learned- a hard lesson that if you disappoint the consumer once, they're not just gonna not try that 15th product, they'll stop buying your brand altogether.
So I was very protective of our brand and I was very focused.
And I remember when we have, I think, eight flavors at the beginning Everybody was telling us look at the success.
You need to launch more.
You need to launch more lines.
And I was like, no, we're going to stay focused with these eight flavors.
So I think for several years, we just executed the hell out of what we had.
Now, eventually, you're right.
Eventually, you want to innovate.
And the way we did it.
We developed a set of guardrails to understand what does our brand stand for and what our brand is not.
Brand is a promise and a great brand is a promise well kept.
A brand is just a shorthand for knowing what you're gonna get.
And if you're giving people different promises each day, then they don't know what to get.
Then the brand is worthless.
So we really need to understand what we are and what we're not.
Healthful, tasty, socially impactful.
And also guardrails that behind the scenes were like.
A product should not contain more than this ratio of sugar.
And then within those guardrails, we were just playing and thinking.
And if memory serves me well, our second line were the kind healthy grain squares.
And then we created the granola kind healthy grain clusters.
And then we created the kind breakfast bars.
And also many times Guy, having the humility to not launch something that doesn't exceed expectations.
Like we spent two or three years designing a product where we were gonna have yogurt with granola on top.
And when we tried it in the marketplace, it did fine. but it didn't do great.
And that's, by the way, the hardest thing.
If the product sucks, it's easy to kill it.
And if it does great, then of course you launch it.
But what if it's a six out of 10?
Do you have the discipline to say that's not good enough?
Kind Bars, by 2012 already, it was doing $120 million in sales, and it was just growing.
And eventually you attracted interest from Mars, who purchased a minority stake in 2017.
Eventually would buy it out for billions of dollars in 2020.
Well, they bought a controlling stake in 2020 and then they bought the rest of it in December 2024.
2024, okay.
And, you know, it's just an amazing outcome.
And I can't imagine that you even hesitated, right?
Because...
I imagine, from your perspective, the things you could do with billions of dollars were, you know, much bigger than what you could do without it.
Yeah, but I hesitated a ton till the very last minute.
What drove us to start on this journey was the fear that we were going to lose control of our brand internationally.
We were at a trade show at the Natural Products Expo in Anaheim and a Chinese gentleman came and said I'd like to buy your product.
And we told the gentleman, thank you, sir, but we're not ready to go into China.
Into the Chinese market, right?
We're not ready to start selling in China.
He said, well, I already sell your product in China.
I said, okay.
I assume he buys a few suitcases worth of product, takes it and sells it.
I was like, thank you, sir.
He was like, no, no, no.
Let me explain it to you.
And he...
Apparently there's something called cross-docking, where Costco would sell to this guy container loads of Kind Bars and he would take them to China and he would sell them in China.
And he was selling millions of dollars of Kind Bars and we had no control over it.
And at the same time, every large brand was trying to recreate what Kind did in the United States in other countries.
And we were afraid that if we didn't move fast enough we were gonna lose control of the brand globally and somebody else would be the first comer.
We felt that we need a partner to help us globally.
And our goal was to sell them the rights to sell internationally, not in the United States.
And unfortunately, none of these big companies want to do that.
They want to help you build internationally if you're willing to sell them the whole enchilada eventually.
And to this day, I mean to your point thanks to the resources, we're doing a lot of good things in the world and I'm very grateful.
But I do.
Sometimes it's very hard for an entrepreneur that imbues their personality and their character and their story in a brand, like we did with Kind.
And it's very hard to give up your baby.
But obviously it's not my baby anymore and you need to acknowledge that.
And it's very hard.
You are, I mean, you're completely out of the company, right?
I mean, maybe even divested from, entirely divested from.
I sold 100% of my financial stake as of December 2024.
And the relationship is predominantly very informal.
I think I consult with them three times a year.
But I'm emotionally, I'm really, really incentivized for them to win because it's my reputation too.
Yeah.
Yeah.
I want to just kind of shift for a moment, because kind is certainly what you will be known for, right.
That's going to be on your – maybe not on your gravestone, but I mean one day we all die.
When you die, that's probably going to be in the first paragraph, kind bars.
But your passion, your personal passion.
Passion is this idea of Middle East peace, and it started with PeaceWorks.
And here we are today, in 2026, and it seems things are worse than ever.
I mean, I don't think it seems.
I think they are.
I think most people would agree.
I mean, this is a long conversation we could have, but I wonder—
What you think?
I mean, you've poured decades and millions of dollars into trying to build bridges.
And yet this is where the world is today.
First of all, everything you said is to some degree correct.
It's also the case that out of the greatest darkness comes light.
And it's not just a poetic thing.
It's a reality, right?
When there's so much hate and despair, people realize that that's not going to lead us anywhere.
That's when people get mobilized and activated to find a different way.
And of course, I want to be clear.
I'm not an optimist.
I'm also not a pessimist.
I'm a I worry all the time, but then I catalyze my worries into action, what I call an actionist.
You may recall, you and I met many years ago and I talked to you about the one voice movement and how it was moderates against extremists.
And it was a very incomplete way of seeing the world, because the better framework is builders versus destroyers.
An extremist that wakes up in the morning think, how can I deny somebody else's humanity?
How can I divide, demolish and diminish?
That's a destroyer.
A person that wakes up in the morning say, how can I build?
How can I unite?
That's a builder.
And the overwhelming majority of us want to be builders, want to put positive things to make this a better world for our children.
We're not doing it for somebody else's sake, for our own sake.
I mean, here you are now, right?
You are probably getting close to 60, I think, right?
57, yeah. which means you've got a lot of life ahead of you.
And I know you're on Shark Tank now and you invest and you're doing other things, but how much of the rest of your life do you imagine you're gonna try and commit to Paul Matzkoff Jr?
:
You said earlier that if I die, the story of kind would be at the top of my paragraph or whatever.
I hope that what I build with builders globally will be my primary contribution.
This is what you're working on now.
What I'm working on now, which is not just in the Middle East, but globally, in the US.
It's a big, big mission.
So it is going to take years, but we're making headway.
And I'm very confident that it will be a greater contribution than kind.
Daniel, before I let you go, how much of the success of Kind do you attribute to the work and the grind you put in?
And how much do you think had to do with just luck and timing, like the right product, the right time, the right place?
What do you think?
It's both.
It's very hard to separate them, but there's no question.
That lock played a gigantic role because if I were wrong, if it was predominantly me, that was a genius and all the other entrepreneurs that you interview, you'd have many more entrepreneurs that have built many multi-billion dollar companies.
The fact is that you can count them with your hand.
The vast majority of us get blessed if we do that once.
It's very hard to replicate that.
So that means that, yes, you also need to be worker hard and be witty and greedy and everything.
But without an element of fortune and luck.
I don't think there's that many people that can do that more than once.
That's Daniel Lubetzky, founder of Kind.
By the way, in 2024, Daniel joined Shark Tank as the first new regular investor added to the series in 10 years.
In his time on the show, he's invested in everything from hand-woven hammocks to fitness equipment made out of fire hoses to a wearable hummingbird feeder or on Substack.
This episode was produced by Alex Chung with music composed by Ramtin Ereblui.
It was edited by Andrea Bruce with research help from Noor Gill.
Our engineers were Maggie Luthar and Robert Rodriguez.
Our production staff also includes Casey Herman, Chris Massini, John Isabella, Sam Paulson, Carrie Thompson, Catherine Seifer, Ramel Wood, Neva Grant and Elaine Coates.
I'm Guy Raz, and you've been listening to How I Built This.
