Episode 40: Karim Khalil • Yaza Foods

1 - > Brad Ebenhoeh: Welcome to the month end CPG community chat. 2 - > The month end will provide emerging CPG brands real life 3 - > knowledge into the accounting,finance and 4 - > operational worlds. Our guests will be key stakeholders from 5 - > those same brands as well as other key contributors in the 6 - > industry. 7 - > Welcome to episode 40 of The Month End Podcast today, we have 8 - > Karim Khalil of Yaza foods.

How you doing today Karim? 9 - > Karim Khalil: Great. How are you? Brad, thank you for having 10 - > me, 11 - > Brad Ebenhoeh: for sure.

Looking forward to having you. So Karim 12 - > is the founder and CEO of Yaza Foods. Brand name with Yaza and 13 - > they are an emerging CPG brand, been around a couple of years, 14 - > so we're excited to learn more about Yaza and what you all do. 15 - > So why don't you go ahead andgive us a background of of 16 - > Yaza, as well as a background of just kind of where you're at 17 - > before Yaza, just before you started your entrepreneurial 18 - > journey.

19 - > Karim Khalil: Yeah. So, so, Brad, thank you for having me. I 20 - > actually come from a background of CPG. My founded.

My father 21 - > founded a CPG company in Nigeria, which I joined back in 22 - > 2008 and not as a founder, but kind of as an employee. And 23 - > that's where I learned everything I know today. And 24 - > that was kind of my MBA. I spent seven years there.

I was lucky 25 - > to be part of the the sale of the company. So I learned all 26 - > that process as well. And I moved to Atlanta to found the 27 - > Yaza in 2020 the as I was found in 2022 it took me kind of a 28 - > year and a half during COVID to kind of figure out exactly what 29 - > I wanted to do, how I wanted to do it. And, you know, we started 30 - > Yaza January, 1 of 2022 I took an office.

It was just me on my 31 - > own, and they start building a team. There's there's five of us 32 - > now. We're looking to add the sixth person in the next couple 33 - > of months, and we've been growing really well. We we 34 - > launched in retail just over a year ago, and we've hit over 35 - > 1000 doors already so quickly.

36 - > And we think by the end of next year, we'll be at 2500 doors. 37 - > Brad Ebenhoeh: Congrats on the growth so far. So Yaza, you guys 38 - > create and sell authentic Labneh, is that right? 39 - > Karim Khalil: So we're proud.

So I'm originally from Lebanon, 40 - > where Labneh is from, I had the chance to have lived all around 41 - > the world. I was born in Switzerland, raised in France, 42 - > High School in Lebanon, I went to college in the UK, worked in 43 - > Nigeria, as I mentioned earlier, and worked a little bit in 44 - > Lebanon as well. So I had the chance to kind of live all 45 - > around the world. Food for me has always been a passion, and 46 - > Lebanon has always been part of my culture, always been part of 47 - > my passion.

That was kind of the way for me to feel, to feel home 48 - > wherever I went. And I always saw the opportunity in the US 49 - > they there's all what I call authentic Labneh. Is the Labneh 50 - > that my Grammy used to make back in her, you know, in her 51 - > kitchen. And I wanted to launch that authentic Labneh.

So we 52 - > launched Yaza and not only we wanted to launch authentic 53 - > Labneh, we also wanted to launch flavored Labneh. Because Labneh 54 - > is kind of an ingredient. It's a staple in our culture, in a 55 - > cuisine, but no one eats it as is. People always add things to 56 - > it, and because the consumer is not familiar and not used to it, 57 - > we kind of created different flavors, different authentic 58 - > flavors, and we kind of focus on that authentic flavors, because 59 - > it's very important to bring the real food, the food the way we 60 - > eat it, back home, to the consumer here, and that's kind 61 - > of of our success story.

62 - > Brad Ebenhoeh: That's awesome. 63 - > So as we kind of back up, even when you first dove into the CPG 64 - > kind of space, when you were seven, I believe, or years ago, 65 - > you said, What were you doing for your dad? I mean, all odds 66 - > and ends. Was there anything that like specifically that your 67 - > job or or process, or anything in relation to that company that 68 - > you really enjoyed or became, you know, helped you become very 69 - > passionate about the, you know, the food and drink CPG space.

70 - > Karim Khalil: So,excellent question. So, so that company 71 - > was not, it was a CPG, but it was not in foods. It was, there 72 - > was hair extension. We had our own plant.

We had 6000 73 - > employees. It was a very big operation. When I joined and my 74 - > father was running the business, my father got sick. He had to 75 - > leave.

I was 21 years old when I took over the whole company. I 76 - > didn't know anything about the company. I didn't know anything 77 - > about CPG. Obviously, I went to very good school.

I had the 78 - > Masters in finance. I understood numbers, but I never I didn't 79 - > have that experience, and I was thrown out there, and I had to 80 - > do something about it. So I spent the first six months in 81 - > the factory working the line. I spent time in every step of the 82 - > supply chain, every step of the production line, and I think 83 - > that was the most important part of me succeeding in running the 84 - > company, because otherwise I wouldn't know anything.

And I 85 - > think it's very important for any entrepreneur to get their 86 - > hands dirty, to understand the business, to understand every 87 - > step of the way, to understand all the issues that may arise. I 88 - > think that was the most important part of my learning 89 - > and taking over like. Company. 90 - > So my role was, as, you know, managing director, CEO of the 91 - > company.

Eventually, I did everything so we didn't the 92 - > company didn't have was very successful, but I didn't have a 93 - > marketing department or sales department. They had two 94 - > customer service ladies who would take up the phone and take 95 - > pickup orders that that's it. By the time I left, we had 200 96 - > people in the sales and marketing department I kind of 97 - > focused on, I kind of, for me, that was very important focus on 98 - > that they used, and it was back in 2008 but still, they had one 99 - > laptop for the whole company, with a Yahoo email, no 100 - > spreadsheet.

Everything was pen and paper. Everything. By the 101 - > time I left, we were implementing Microsoft SAP, you 102 - > know, kind of take everything to the next level. Obviously, the 103 - > acquisition really helped me learn, because we got it 104 - > acquired by a multinational firm, and there was a transition 105 - > period of around two to three years with them, where I learned 106 - > a lot from them.

And I think all of everything I learned there 107 - > helped me be who I am, and helped me be able to run and 108 - > start Yaza. So Yaza is the first company I've ever started or 109 - > founded. But hadn't I been in Nigeria and went through that 110 - > whole tough, very tough experience, a lot of ups and 111 - > downs, a lot of different things I learned on every different 112 - > aspect of the business. I want to be able to launch Yaza the 113 - > way, the way we did.

So I'm glad I went through that. And I think 114 - > it's important that any entrepreneur goes through some 115 - > some kind of experience in some way. 116 - > Brad Ebenhoeh: Yeah, definitely a very good internship there, I 117 - > would say, for you, and it sounds like you excelled at it, 118 - > but I would agree with you. I mean, just running an accounting 119 - > firm, just doing the day to day and understanding and 120 - > empathizing over your team members of what they do, what 121 - > the client needs, and understanding that really helps 122 - > you become, I think, a better business owner, just across the 123 - > board, in terms of managing people, managing clients, 124 - > managing products, operations, once you kind of do it, you can 125 - > really see the the benefits of certain things you do, or even 126 - > the the downsides of your processes.

So fast forward now 127 - > to Yaza, I guess, as we kind of get into that process while we 128 - > were talking about the operations or inventory like, 129 - > what is your inventory and supply chain process that you 130 - > have at Yaza? 131 - > Karim Khalil: Yes. So so we still old school, still use 132 - > Excel, which I really like Excel. I am really good at 133 - > Excel.

I went through I used to work in in finance, and we use 134 - > Excel, the Excel tool, a lot. So Excel is really helpful, 135 - > initially abroad. So we launched in retail Exactly a year and a 136 - > month ago. And at the beginning, we used to produce on code date.

137 - > So we had a minimum order production. We just produce 138 - > every time the code, the code date is about to end. And for 139 - > packaging, we used to order minimum quantities, so we never 140 - > had to really worry about inventory. Is just whatever the 141 - > minimum we have to order.

We ordered, and we got to a point 142 - > where we got national distribution with Whole Foods. 143 - > Obviously, that really helped distribution a lot and get the 144 - > product out there. But we jumped. So some January till 145 - > July of this year, we sold in August, three times that number.

146 - > And we sold in September, twice August, and we were selling in 147 - > October. You know, October is not done yet, but we're we're on 148 - > track to two, one and a half to two times September. So the 149 - > growth has been incredible. It's really hard to predict the 150 - > future.

So what we do is we now have all our inventory in one 151 - > place. We track that on monthly basis, and I like to have twice 152 - > the amount and lead time that's needed for our projection. So we 153 - > have projections going forward, and because lead times and 154 - > things, you know, sometimes get delayed and very conservative 155 - > when it comes to to inventory. 156 - > So I always like to have extra, you know, three months, six 157 - > months, depending on what kind of item we're buying, 158 - > Brad Ebenhoeh: yeah, and I think that makes sense clearly, you 159 - > know, a big what I take from that is essentially keep your 160 - > process and workflow like mirror or reconcile to kind of the 161 - > needs and complexity of your business, right?

So through the 162 - > last three or four months that you're mentioning, you've had to 163 - > ramp it up, change your process proactively, source and then buy 164 - > inventory. Now that you have kind of a curve go bell curve 165 - > going up prior when you didn't have that, you know, just in 166 - > time, when the codes were kind of expiring, things like that. I 167 - > do see various, you know, brand owners or clients with inventory 168 - > that may over complicate it to begin with, and then all it does 169 - > is creates a drain of resources, time, energy, money, complexity 170 - > and it doesn't allow you to make the best decisions.

Where 171 - > sometimes an Excel sheet that you've created that can do it 172 - > can last you a long, long time, as long as you understand the 173 - > inputs, how it works, and have a good kind of consistent process 174 - > with that. 175 - > Karim Khalil: Let me just clarify, clarify something, Brad 176 - > here, so I want to separate two things, the raw materials, 177 - > inventory. Versus the finished goods. So the finished goods 178 - > inventory, we still produce to order.

We produce a weekly 179 - > basis. We get orders the week before whatever order we get, we 180 - > produce it the following week, because it takes, you know, we 181 - > need a week ahead of time to kind of buy the milk we have. We 182 - > use a co Packer. We're lucky to have one of, you know, really, 183 - > the relationship, relationship has been really, really good.

184 - > And when we produce once a week, they buy the milk for us. So 185 - > that's that's been really good when it comes to packaging and 186 - > other raw materials, you know, different flavors, different 187 - > spices that we use. That's where we didn't know how to buy. We 188 - > used to buy the minimum order quantities, but that's where now 189 - > we kind of have a better idea going forward, and now we're 190 - > starting to buy and building inventory.

Yes, it's a little 191 - > bit costly, but what's more, more costly is, you know, if I'm 192 - > out of the foil seal, whatever covers my my the cup, I can't 193 - > produce anything, and I close shop and I lose sales, and that 194 - > has a 12 weeks lead time, because it's coming from far 195 - > away. I may have to print it, etc. So I'd rather we have a bit 196 - > more and tie in some cash. We're lucky to have that opportunity, 197 - > and we make sure that we never run out of the market.

We try 198 - > and meet our demand as much as we can. 199 - > Brad Ebenhoeh: And you're selling into retail. Are you? 200 - > Have you ever sold direct to consumer?

Are you ever going to 201 - > I mean, I know you're probably, like, a refrigerator product, so 202 - > like, shipping or freight, you know, pretty expensive, but 203 - > like, is that kind of the reason why you're that's 204 - > Karim Khalil: talking about sales channels. We are in 205 - > retail. We we would love to be direct to consumer. It's really 206 - > expensive and really hard to be so that's not the channel that's 207 - > that works for for Yaza, for now, we are going into club very 208 - > soon next year.

So we got packaging arrived last week, and 209 - > we're launching club instead, and we are looking at food 210 - > service and C stores. We just recently launched our product 211 - > called Yaza on the go, which is a snack packed version of Yaza. 212 - > So Yaza on the bottom, pita chips on the top. And we're very 213 - > excited about that.

We've had some interest from universities, 214 - > different schools, different hospitals. Just try to get 215 - > things working for that. That's going to be a bit tough. And 216 - > then on talking about food service.

The only issue we have 217 - > with food services, Yaza is a premium product. We don't use 218 - > any thickeners, any preservatives, any powders. And 219 - > the issue we have food service when it comes to retail, 220 - > consumers, look, read the ingredients, have the 221 - > opportunity to know the brand and get become loyal to the 222 - > brand. When it gets to a restaurant.

The restaurants you 223 - > know, you don't really know what kind of brand they're using, 224 - > what kind of product they're using. So that's where it's more 225 - > complicated to to convince a consumer that you have to pay, 226 - > pay more for a plate of Lebanon a restaurant, because it's a 227 - > premium product. We've we have some restaurants, premium 228 - > restaurants, who are very interested in Yaza, and we're 229 - > just trying to get distribution sorted for that.

That's kind of 230 - > where the the bottleneck and the challenges we have when it comes 231 - > to food service. But Brad, you touch a very important point. 232 - > Retail is a very good sales channel, but one anyone has to 233 - > diversify those sales channels. 234 - > And retail is very expensive channel, so you have to pay to 235 - > play, whether it is slotting fees when you get in, or that 236 - > it's free sales, all the promos you have to do, all the certain 237 - > deductions that the big distributors take on you.

It's a 238 - > very expensive place to be at, and it's not sustainable to only 239 - > be selling through retail in the long term. 240 - > Brad Ebenhoeh: Yeah, it's, it's tough being a small guy in the 241 - > space that you're in, and so it's, it takes a lot of cash. It 242 - > takes a lot of, you know, management of the business in 243 - > general to kind of execute, when How do you manage, you know, 244 - > speaking of cash, like, how do you manage cash on your end? You 245 - > know, what is your kind of accounting finance like, 246 - > workflow for for Yaza, 247 - > Karim Khalil: so, so we have an accounting firm.

We use third 248 - > party and they, they could, they do our books every month, and 249 - > that's really helpful. But what we like to do, what we started 250 - > doing, so I have a person named Grant. He just joined the 251 - > company in July. What we started doing is bi weekly cash flow, 252 - > because that's kind of where it's important, kind of deciding 253 - > who to pay, when to pay, how to make sure we don't run out of 254 - > cash.

Because when things are tight, the value of cash is also 255 - > very expensive. So you want to make sure that to make sure that 256 - > you make the best of it. So we do bi weekly cash flows. We're 257 - > planning to do next year, a full year of cash flow.

It's it's 258 - > going to be hard, but that's kind of where we plan to be on 259 - > when it comes to Financials. And when I did the business plan, it 260 - > was more, I would call it a road map, versus a business plan 261 - > where a lot of people say, oh, let's do five year financials. 262 - > There's so many numbers unknowns you don't know. You know, if you 263 - > ask me three months ago where I'm going to be today, I really 264 - > don't know.

So the thing that was, that's a waste of time, in 265 - > my opinion. So what they focused on is rather a budget. So what 266 - > are the things we want to do? 267 - > How much will it?

Would that cost us? And kind of a budget? 268 - > For every step to make sure that we try and not go over budget. 269 - > And you know, a lot of times we have we had to go over budget 270 - > because there's so many things we don't know and so many things 271 - > that happen, so many challenge challenges we went through.

But 272 - > now I think we're at the point where we're working we have 2025 273 - > 26, 27 financials, three-year projection, we can do it, and 274 - > all we have to change is a few assumptions along the way. You 275 - > know, let's say we get a big retailer, we get into big 276 - > distribution, then we can just add one or two numbers and we're 277 - > covered there. But I think it's important at the beginning to 278 - > focus more on budget and how much money is going to take you 279 - > to kind of sustain the business.

280 - > And then next step is kind of do projections, and we're kind of 281 - > looking at when is the break even point? How many years will 282 - > that take us kind of make sure we get to a point where we stop 283 - > bleeding, because this is when things get interesting and fun. 284 - > Brad Ebenhoeh: Yeah, so many different, you know, terms that 285 - > you use there. I think, number one, you're 100% right.

When 286 - > people start with a brand new business and doing three year 287 - > five year forecast, it's like, it's just like a waste of time, 288 - > energy. I mean, it's nice to kind of see how, where to go, or 289 - > possibility, but don't waste a ton of time, energy on it. Focus 290 - > on, you know, the next 90 days and the next 12 months. That's 291 - > kind of what I'm always like, rolling 90, rolling 20, you 292 - > know, 12, right?

So you can kind of manage cash on the short term 293 - > and then continually change your your assumptions on the 12 294 - > month, but also to your point, like, reconcile that to a budget 295 - > and expected outflows of money. 296 - > You know, it's hard when you're playing in the the distribution 297 - > space and paying to play and things like that. Sometimes it's 298 - > hard to have exact timeliness of understanding, number one, when 299 - > you're going to get paid from the big big guys, especially as 300 - > you start the relationship, and number two, how much you're 301 - > actually going to get paid from the big guys once you start the 302 - > relationship, after you're involved with them.

Over time, 303 - > it kind of becomes more like refined and defined. But 304 - > initially it's really, it's kind of unfair, as we've discussed 305 - > that, but I mean, it sounds like you're in a good working 306 - > relationship with them at that point, and you understand the 307 - > cash and the deductions and all that type of stuff. 308 - > Karim Khalil: Yeah, so I've, I've heard a lot of bad stuff, 309 - > and obviously I've watched a lot of your podcasts, and different 310 - > podcasts, spoken to many people in the industry.

Yes, I've heard 311 - > a lot of bad stuff. We've not had, we've not have been hit bad 312 - > yet. And I hope that that, you know, touch what that will stay. 313 - > We have a good relationship with both UNFI and KeHe.

Obviously, 314 - > UNFI, we have distribution almost everywhere with with 315 - > Whole Foods and KeHe, we have distribution in half of their 316 - > warehouses. The relationship has been good. And what I think is 317 - > important, Brad, so these deductions will happen, that's 318 - > that's part. That's how they make money, right?

And one of 319 - > the things that's very important for everyone, for every 320 - > entrepreneur, every CPG founder, to do is to get a financial 321 - > expert, or whether it is, you know, an accounting expert who's 322 - > familiar with CPG, or maybe someone industry who understands 323 - > those deductions, and you take those into account, and you can 324 - > never, let me just be clear, you can never take into account 325 - > because they are very creative at deduction. But at least if 326 - > you have some kind of budget for that, you know where you're 327 - > going, then that really helps.

328 - > Whereas you have a lot of people who like, okay, cost me $2 to 329 - > produce. Let me set it at three, and then they forget that 330 - > distributors need to take their margins, their cost, plus the 331 - > freights, and then all the deductions, all the promos, but 332 - > then the retailers needs to get margins, etc, etc. So one of the 333 - > most important things to do is to understand your fob cost, the 334 - > cost that the product will cost you at the warehouse before it 335 - > gets shipped out, and what does that translate into retail 336 - > price?

That's the most important part, I think, to start any 337 - > business to see if it's feasible. A lot of people will 338 - > be like, Oh, that seems very you know, people are selling 339 - > whatever the Labneh at $7 a Whole Foods. Oh, it cost me two 340 - > or three, or whatever, dollars to make it, that's how much 341 - > profit the company is making. 342 - > That's not the case, and that's very important to understand, 343 - > especially when it's rated, especially when it's a 344 - > competitive asset.

When retail margins go up to 60% they expect 345 - > you to do at least four promotions a year. They charge 346 - > you for promotions, other than to start all the free fields and 347 - > the slotting fees that you have to incur, all the promo fees, 348 - > all the different deductions, and then unifying ke will deduct 349 - > here and there, all the trade shows you have to attend, etc, 350 - > etc, etc. The list goes on. 351 - > Brad Ebenhoeh: Yeah, no, I You're 100% right.

I think 352 - > number two things I take away from that, number one is 353 - > understand what's going on at a high level, right? Like hire 354 - > people that can help you talk to people in the space. There's so 355 - > many different CPG communities that exist out here that 356 - > somebody will help you to walk through and understand at a high 357 - > level what it means and and just make sure that you're going into 358 - > the situation. Your as best knowledge as possible.

And then, 359 - > number two, it's just consistently tracking and 360 - > monitoring it and adjusting things as needed, and following 361 - > up and understanding it, right? 362 - > It's just not like I said it, and forget it. It's a consistent 363 - > situation with your business and anybody's business as we kind of 364 - > move forward to kind of people, right? So how many people do you 365 - > have on the team that you're kind of in house, plus, like, 366 - > what is your day to day like, and how did you did you decide 367 - > to which people to hire for your different roles?

368 - > Karim Khalil: I think that's a very nice question. I can. I 369 - > want to kind of walk back how I started. So in January 1, 2020 I 370 - > took an office, had my laptop, and started researching.

I 371 - > didn't know anything about Labneh as a consumer. I knew 372 - > everything about it. I visited some factories back in Lebanon 373 - > before I moved in, but I didn't know anything about how to make 374 - > Labbeh here in the US, etc. So I was looking for a, you know, 375 - > Labneh is made out of at home, you can make it out of Greek 376 - > yogurt.

So I was looking for a Greek yogurt factory in Atlanta. 377 - > I wanted to buy one, because initially, from in my head, 378 - > someone coming from production background, let's buy a factory, 379 - > and then we'll figure it out how to do it. So I wanted to buy 380 - > one. There's a factory that had some issues.

I contacted the 381 - > person planning to buy it, and the guy's like, you know, I 382 - > already sold it. I closed down. 383 - > And I, you know, I don't think Labneh is a good idea. I don't 384 - > think you should get into it.

385 - > Forget about it. And I'm like, What are you doing these days? 386 - > And he's like, I'm just a consultant. And I'm like, why 387 - > don't you come?

Let's kind of do Labneh together. And he's like, 388 - > I don't think it's a good idea. 389 - > You're crazy. I'm like, let's do it.

So I employ Ron as a 390 - > consultant initially, April of 2022, and he remained a 391 - > consultant for a year, kind of paid by the hour to help me 392 - > develop the product. He went through it. So he used to sell 393 - > his own yogurts, Whole Foods in different stores. So he had some 394 - > connections, some network, he's done it, and he went through a 395 - > lot of different challenges.

So it was really good to get all 396 - > the experience from him. So Ron joined a year later, full time, 397 - > and now he's, he's the guy behind our production. He's our 398 - > chef, he's our product development. He's actually 399 - > working on new new products as we go forward now.

And he's 400 - > always been at the production facility in upstate New York 401 - > every time we produce. So he joined full time April 2023 and 402 - > until then, I was doing everything myself, right? I was 403 - > doing every single role, whether it is even HR, and kind of 404 - > understanding how that works, and payroll, etc, in June of 405 - > 2023, and he's still on part time basis. We employed a guy 406 - > called Steven.

He used to be the head of Whole Foods in the 407 - > southeast. So he's very well knowledgeable on how Whole 408 - > Foods, for me, was always my target, my dream. He's always 409 - > he's very knowledgeable on that. 410 - > He has a lot of connections in the industry, because he worked 411 - > in different with different retailers.

He knows a lot of 412 - > people, but he knows also how things work, and he's the guy 413 - > behind this is how much you're going to pay at every step of 414 - > the way, kind of understanding the numbers. And he helped us. 415 - > He helped us there. And I also employed the same time political 416 - > Kelsey, straight out of college for marketing, and for me, I 417 - > wanted someone young who understands social media, 418 - > understands consumers, doesn't need to have the experience with 419 - > someone who has the energy for that.

So she joined at similar 420 - > time, in June, July, just after she finished school, and she 421 - > joined as a full time, full time, and she's still with us 422 - > now. She does marketing, but she also does sales. She does HR, 423 - > and she does all of that, and she takes care of all our 424 - > events, etc. She has a lot on her plate, and it's this year, 425 - > in July, we Grant joined us, also straight out of college 426 - > financial background.

I wanted someone that can help us with 427 - > all tracking, like you said, deductions. But also from step 428 - > one, from the POS all the way, but also on the purchasing and 429 - > the inventory side, all of that, and kind of the relationship 430 - > with the accountants, because I have less time on my plate. So 431 - > initially I had, I would get one email every three, four days, 432 - > and I kind of celebrate getting an email. Now I get an email.

433 - > Maybe every minute was really fun. I enjoy every part of the 434 - > job. I work seven days a week, but I love it, and that's why I 435 - > think I'm able to enjoy it, because every minute and 436 - > everything I do, I enjoy 437 - > Brad Ebenhoeh: love it. So sales, marketing, operations, 438 - > sales, finance, logistics.

You got kind of demos? 439 - > Karim Khalil: Demos I do trade shows. That was last week I was 440 - > at trade show. I try and do as many demos as possible, because 441 - > that's where you get the feedback directly from the 442 - > consumer.

That's the guy that's consumers paying for it. The 443 - > easiest way is to give someone something for free to someone, 444 - > and he's going to say, it's really good. No one's going to 445 - > say anything else. He's not going to give you feedback, 446 - > because it's free the second they have to pay for it.

Even at 447 - > the demo, he would try it, he says it's good. If he doesn't 448 - > buy it, then you know he didn't like it. Or you have an idea, if 449 - > he doesn't take a coupon that you're trying to offer him that 450 - > gets a discount, you know, he's never going to buy it, or he's 451 - > not interested. And you kind of try to understand why.

I also 452 - > like to hang out so. Initially, I used to hang do that a lot. I 453 - > have less time. Now, I used to go to grocery stores, especially 454 - > the whole food aisle, and stop people and kind of understand 455 - > the purchasing habits and kind of ask them questions.

I've had 456 - > weird people giving me weird faces, and I've had people kind 457 - > of interacting, kind of explain to them why I'm doing it. 458 - > Listen, I'm here. I want to understand what why you're 459 - > looking at the aisle what you're looking for? And I care more 460 - > about people who take their time looking, versus people who know 461 - > exactly what they want.

They take it and they leave, because 462 - > those people are harder to convince. But the people who 463 - > take their time are those who I kind of care to understand how 464 - > they think. What are they looking for? Is it the 465 - > ingredient panel?

Is it the Nutritionals? Is it the item 466 - > that they're looking for, something new or, you know, 467 - > because there's so many options we are, yes, I sold in the same 468 - > category as hummus. And there is 12 different flavors. There's 469 - > seven eight different companies in every retail store.

So it's 470 - > really hard buying hummus these days. So it's kind of good to 471 - > understand, why is this person choosing that brand over that 472 - > brand, or that flavor, or that flavor? Is it the box size, or 473 - > is it ingredients, or is it whatever criteria they're using? 474 - > Brad Ebenhoeh: Need to go where the customers are.

I like it. 475 - > Final couple questions here, as we kind of move forward. Number 476 - > one is like, what are your kind of your KPIs, or key performance 477 - > indicators that you kind of look at consistently, whether it's on 478 - > the financial side, sales side, marketing side, operation side, 479 - > just kind of, what's a couple of them that that you like to look 480 - > at. 481 - > Karim Khalil: So the most important one I've learned from 482 - > the industry here is velocity.

483 - > So it's, it's, in a way, I'm not going to say easy. It's hard to 484 - > get into retail, but it's easy, and if you can pay for it, and 485 - > if you have the right product, etc, as easy as you get into 486 - > retail, they're going to give you a chance. The hard part is 487 - > to stay on shelf, and velocity is the key word, is the speed of 488 - > which the product stays on shelf. Because at the end of the 489 - > day, these retail stores are real estate for them, that's 490 - > that they're renting you out real estate, and need to make 491 - > money.

The more they turn the more they sell per SKU or per 492 - > shelf space, the more money they make. So velocity is a number we 493 - > track, and we have access to data either something that we 494 - > purchase, but we also have access to data from different 495 - > grocery stores and different distributors share with that 496 - > with us, and that's something we track very religiously, to make 497 - > sure that the velocity keeps going up in every store, and we 498 - > make sure that we've said no to retailers where we feel the area 499 - > is saturated for Labneh yet, kind of make sure that.

So we 500 - > launched on the west coast with Erewhon and Pavilions, kind of 501 - > the premium banners. We did that same thing in the East Coast. 502 - > Same thing in Texas Central Market and HEB. Kind of Whole 503 - > Foods everywhere it's more natural space, premium stores, 504 - > and now we're starting to get into conventional as Labneh 505 - > becomes more trendy at Whole Foods chose our flavor as a top 506 - > 10 trend for 2025 so that shows you how, how much levy has gone 507 - > through in the last year.

So velocity is the key. That's the 508 - > number one. The other one we look at is a promo uplift. So we 509 - > kind of compare.

So we do a promotion. Let's say we give, 510 - > you know, buy one, get one free, or we do a 25% discount. We want 511 - > to kind of see the velocity or the promo uplift during the 512 - > promotion, but also after, do we gain customers? Do we not gain 513 - > new customers?

It's very important to do that, and that's 514 - > also applicable when we do demos. So we've, we've just 515 - > done, we've been doing demos for the last two months in Atlanta, 516 - > where where our headquarters located, and that's the 517 - > strongest city. Now, by far, it kind of beats every everyone 518 - > else. When we bought data, and initially on Labneh, it was the 519 - > worst region.

It was the lowest region. Now, yes, has stopped 520 - > performing cities Atlanta just because of the number of demos 521 - > we've been doing. It's kind of, you know, following that up as 522 - > well. And obviously when it comes to financials, not the 523 - > financial statements themselves, but more of the cash flow.

So we 524 - > predicted that the next two weeks we need X dollars. 525 - > Obviously, some checks been delayed the mail, and all the 526 - > hurricanes and different things that affected that kind of did 527 - > we plan correctly or not? And how can we adjust going forward 528 - > to make sure that, because the more you grow, the more cash 529 - > flow you need, or the more working capital you need to to 530 - > finance the business. So we need to make sure that we don't run 531 - > out of working capital going forward.

And as we're adding 532 - > more doors and more sales, we need to have more cash. And any 533 - > mistake can affect that. 534 - > Brad Ebenhoeh: Love it. So cash flow velocity and then promo 535 - > uplift, great kind of KPIs and great definitions and 536 - > backgrounds of those.

I love it, alright. So as we kind of head 537 - > into wrapping this up, we always like, as a experienced 538 - > entrepreneur on the CPG space that we can kind of share some 539 - > insights to the to the audience, which you've already done, but 540 - > just from a kind of a CPG retail business owner, can you provide 541 - > one do and one don't to fellow CPG brand owners? 542 - > Karim Khalil: So yes, so that, that obviously will depend on 543 - > the category, the kind of item, etc.

So it's I'm going to talk 544 - > about Yaza, my experience, what I've seen, I talked about the 545 - > Co-Packer. Please go. Co-Packer don't produce on your own, at 546 - > least at the beginning, because that's an extra layer that you 547 - > don't want to get into. That's an extra stress you don't want 548 - > to get into it.

I think I kind of touched and explained why do 549 - > get someone an expert. Do get expertise, especially when it 550 - > comes to understanding pricing and costing, whether it's it's 551 - > an accountant that's experienced in CPG, or someone in the 552 - > industry, and do market research. So we, one of the 553 - > things we did early, very early on, we did the focus groups 554 - > where we kind of understood the consumer, how they see Labneh, 555 - > what's it? What it is for them.

556 - > Make sure that you understand who your consumer is. You buy 557 - > data if you have to to understand the space, to make 558 - > sure that you're launching. 559 - > You're adding value to the category. If you're not adding 560 - > value.

There's so many brands, so many smart people with so 561 - > many good ideas. You know you need to to be different. And to 562 - > be different, you need to understand who you're selling 563 - > to. Those are the big do's.

For me, the big don'ts. It's don't 564 - > launch until you're ready. And I've met a lot of different CPGs 565 - > firms that are very excited and in the rush to launch, and we 566 - > delayed our launch by three, four months because we had 567 - > production issues. It was just no, you know, when you scale up, 568 - > it was just not working out.

And we kind of debated and 569 - > internally, do we just launch it? Because it's not that bad, 570 - > and I'm like, No, until it's 100% perfect. We made huge 571 - > losses on production. We just had to throw it away until it's 572 - > 100% there's no rush.

It's not, you know, it's a marathon. It's 573 - > not a race. Take your time and make sure that you have the what 574 - > you think is the best product, the product you're comfortable 575 - > with, that you think is going to do really well, because it's 576 - > more costly and it's harder to fix the problem later on. So 577 - > that's, that's that's kind of a, don't, um, understand the 578 - > financial so don't launch if you don't have the finance to 579 - > sustain the business.

And I've seen, and I've read a lot of 580 - > case studies where so many great ideas, and they get to a point 581 - > where they just can't afford you, they have to close shop. 582 - > And that's kind of, really, you know, it's heartbreaking, 583 - > because either they have to go to VCs are early on investors 584 - > and and sell their company for so cheap, and nothing remains 585 - > for them. It's not even worth the work, or they just close 586 - > shop. And I think that's that's another thing that's important.

587 - > Maybe the last don't is, don't be a, you know, don't shy away 588 - > from your mission, whatever mission you have in mind. And 589 - > you know, for us, is bringing authentic Lebanese Labneh 590 - > finding product, finding flavors. Our all our competitors 591 - > use, use powders or thickeners. 592 - > It's cheaper they make they have more margins and make more 593 - > money.

We don't. Don't shy away from your mission. Our mission 594 - > is to have the authentic way we make it, the way my grandma 595 - > makes it. Think that's the best way, even on flavors.

So we 596 - > launched the tar and olive oil. 597 - > People don't know what the tar is. We're kind of worried about, 598 - > do we call it the tar? What do we do with that?

And one, it's 599 - > our best selling item flavor. 600 - > It's it got the Nexty award at Expo West. I don't know if 601 - > you're familiar with Expo West. 602 - > I got next year award for People's Choice Awards The 603 - > people voted for it.

And three, it got the top 10 trends for 604 - > Whole Foods Market for 2025 as a flavor itself, as a Yaza Labneh 605 - > Zatar and olive oil flavor. So it tells you that, you know, 606 - > when you stick to your mission, that's that's the unique 607 - > proposition we offer to the market, authentic Labneh, 608 - > authentic flavors, and that's what that's the recipe behind 609 - > our success. 610 - > Brad Ebenhoeh: Awesome, great info, several do's and several 611 - > don'ts.

Do you think would think one question popped up? Do you 612 - > think you'd be here today if you didn't take over, you know, your 613 - > father's business, or were involved in kind of the space 614 - > several I don't 615 - > Karim Khalil: think so. Brad, and I think I learned a lot from 616 - > him, from the team he had, and from the experience I went 617 - > through. And I think that it's very, very important to go 618 - > through ups and downs, because you're going to have ups and 619 - > downs, and you're going to have to deal with things, and just 620 - > learning how to deal with things.

It's not a particular 621 - > experience of just copy pasting what you what you did. It's just 622 - > learning how to think and how to react and what to do when and 623 - > CPG world is full of challenges, and it's a lot of work. You have 624 - > to understand. Anyone who wants to launch a company needs to 625 - > understand that from the beginning, it's a life 626 - > commitment versus a typical nine to five job or typical career.

627 - > Brad Ebenhoeh: Yup, yeah. It seems like, just from our chat 628 - > here, you've definitely taken a very kind of wise and mature and 629 - > proactive approach to the to the business. And it seems like you 630 - > know the growth and the success kind of to date, and especially.