David Habib: Founder & CEO of Yo Mama’s Foods

Episode 609

On this episode of The Kara Goldin Show, Kara is joined by David Habib, Founder and CEO of Yo Mama’s Foods. David’s entrepreneurial journey is one of hustle, heart, and a deep love for healthy, real ingredients. After leaving a successful corporate career as a Deloitte Consultant, David jumped headfirst into the food industry with a mission to create delicious sauces and condiments that you’d actually want in your kitchen—free of preservatives, fillers, and the artificial stuff you’d never find in your mom’s pantry.
What started with just his savings and a vision has now become Yo Mama’s Foods, one of the fastest-growing pasta sauce brands in the U.S. (according to SPINS data), available in over 25,000 stores nationwide. From bootstrapping his business with no outside funding to becoming an Amazon bestseller, David’s story is all about determination, innovation, and staying true to his roots.
Tune in to hear how David built Yo Mama’s Foods from the ground up, the challenges he faced along the way, and his vision for the future of healthy, delicious food. Now on The Kara Goldin Show!

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Transcript

Kara Goldin 0:00
I am unwilling to give up that I will start over from scratch as many times as it takes to get where I want to be. I want to be you. Just want to make sure you will get knocked down. But just make sure you don’t get knocked out, knocked out. So your only choice should be go focus on what you can control. Control. Hi everyone, and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs and really, some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi everyone. Welcome back to the Kara Goldin show. Super, super excited to be joined by this incredible entrepreneur, David Habib, who is the founder and CEO of Yo Mama’s Foods. A very, very, very, very delicious sauce that I had, actually, I think, heard of it. I told David, before we started that I hadn’t heard of it. I had heard of it, but I hadn’t tried it. And boy, was I like, Where have I been? This is such good sauce, and I’m all about great sauce. If I don’t make my own, I’m definitely about the great sauce. So it was really, really excited to try his product, and after leaving his corporate job as a consultant at that little consulting agency Deloitte, years ago, David didn’t just dip his toes into the food industry. He jumped in head first, and inspired by his mother’s cooking, I can’t wait to hear more of the story, he decided to start Yo Mama’s Foods. And here’s thing, he didn’t just talk about it. He built it from the ground up. And everything that we always hear about entrepreneurship is people don’t have it all figured out when they’re first starting. They just have to get in there and get find that grit and definitely get moving. And David has definitely done that with yo mama’s food. So I’m so excited to get so inspired by hearing David how he not only launched this, but also scaled it. So very excited to have you here, David, thank

Speaker 2 2:17
you, Kara, and it’s a great honor to be here. So thank you for hosting, absolutely. So

Kara Goldin 2:22
let’s start with the actual products first, before we even get into the backstory, can you tell me what is Yo Mama’s Foods?

David Habib 2:31
Yes, Yo Mama’s Foods is a natural foods company focused in on creating items using only ingredients that mom has in her pantry. So we craft pasta sauces, pizza sauces, condiments, salad dressings, and have a few categories launching soon here in quarter four of 2024

Kara Goldin 2:51
that’s awesome. And the pasta sauce, I have to tell you, that we also used it to make pizzas, and it’s super, nice. So you did an excellent job. So now the back story. So tell me all about how your mom inspired this product.

David Habib 3:09
Yeah. So Kara, growing up, Mom had just such a unique ability to bring people around the table. And you know, I was always inspired by her, her passion for food and her passion for bringing people around the table, different cultures, different backgrounds. So that’s really how I grew up. Kara family dinner was, was a very important piece of my upbringing. And, you know, being able to gather around the table without technology, you know, just to debrief our days, to be able to share the language that is food was, was a really important piece of of all of that. So my mom is Egyptian, so a lot of Mediterranean cooking and a lot of Mediterranean diet. And, you know, I realized that everything always made me feel good. You know, not, not only did it taste good, but I never felt bad after eating, you know, one of my, my mom’s meals. And as soon as I was working in corporate America, you know, I was eating out a lot. When I wasn’t eating out, I was eating a lot of store bought sauce, and I was just getting really bad heartburn. Kara, and that was, that was the start, you know, I started to go down this journey into understanding what’s in packaged foods. And I was looking at labels and seeing the amount of sodium, the amount of sugar, the amount of weird acids like phosphoric acid and different things that is just in food. And I said, you know, my mom never cooked with with any of this. So that was really the idea, you know, how do we create healthier sauces, dressings, condiments, using only ingredients that mom has in her pantry. And I think moms all around the world have such a unique way of bringing people around the table. And when I was looking at at the whole set, that was the pasta sauce set at that time, you know, everything was just looked the same. And that was where. Or the brand name yo yo mama came out because, you know, no one makes better food than your own mama, right? So

Kara Goldin 5:06
I love it. So it’s one thing to have an idea, right for a product. It’s another thing to actually launch it and get it on the shelf. I always say that if I would have known all it was going to take. I probably wouldn’t have launched it right. It’s, it’s ignorance is bliss, for sure, for first time entrepreneurs and how different is it than what you thought it was going to be in terms of launching a product here, you had been at a large company, and, you know, learned a lot probably about, you know, other companies and other entrepreneurs, maybe other CEOs. But How different is it than what you thought it was going to be when you were launching Yo Mama’s Foods? So you

David Habib 5:57
you said it beautifully, and really it’s if we knew exactly what we were getting into, we would have never had the courage to ultimately do it. And I think that that’s a really important piece of this journey, is you want to know just enough to get you excited and to make sure that you you take the ultimate risk, but you don’t want to know too much, then you know you would never ultimately have that courage to ultimately do it. And fortunately, I didn’t know anything about packaged foods or about the consumer packaged goods world, and everything for me, was all just learning from from the ground up. But I think working in consulting was a really good training ground just on how to problem solve, how to really understand core business skills, but it was really the school of hard knocks. Kara, just like your experience of trial and error, and you know, I tell our team here, we’ve made a lot of expensive mistakes, but that’s that’s ultimately how we learn. So not having any experience in the packaged foods world, when I look back, was extremely challenging, but it also was a huge competitive advantage for us, because I was able to look at it from a different lens, and I didn’t have, you know, all of the red tape that a lot of larger companies have in order to formulate a product or in order to ultimately try to launch something that the marketplace didn’t have?

Kara Goldin 7:26
Yeah, definitely. So you launched in 2017 is that right? Mother’s Day is on Mother’s Day. And when you launched Yo Mama’s Foods, how many SKUs Did you launch with?

David Habib 7:40
Yeah, yeah. So we had three total SKUs. We had one pasta sauce and two salad dressings, and it was really focused in on fast moving consumables that that’s where I was most interested in. And when we were looking at at the actual launch, I was looking at items that I used a lot quickly and that other customers did as well. So, you know, when I use sauce, I typically use an entire jar when when I’m cooking. And that was really the main focus of how we were seeking how we were to ultimately launch. But it really went back to Grandma’s recipes. Of, you know, fresh tomatoes, fresh basil, fresh onion, fresh garlic. My grandma used wine to preserve her sauces. All the alcohol cooks off during the cooking process. It breaks down the acidity, and that was really it. So, you know, it was such a such a basic way of creating sauce. But finding a contractor or finding a manufacturer who, who would do that was, was a huge challenge.

Kara Goldin 8:44
So how did you figure that out? How did you find the CO packers?

David Habib 8:48
You know, I would say that that was a solid two year process. Kara, just, you know, trial and then error. You know, I think a lot of people go to these contract manufacturers with these ideas or with their grandma’s recipes, and they don’t understand how the food business works. And I was certainly one of them. And I think a lot of these contract manufacturers can take advantage of young brands and young people and just really anyone, because they don’t understand how the food business works. And, you know, I think a lot of people, myself included, didn’t understand how even co packing worked, and that was a very challenging process. Was one, to find a trusted partner, and then two, to find a trusted partner that would manufacture our sauces without adding all of the preservatives, without adding the, you know, 800 milligrams of sodium per half cup, and all the added sugars. And, you know, really trial and then error, you know, working with multiple different partners and figuring out, you know, who was a long term partner for us and who wasn’t. And, you know, really steering the ship and reacting COVID. Quickly making sure that we were creating the best possible quality product was was a really important journey and a very, very big challenge for for me during the first couple of years. So

Kara Goldin 10:13
when we launched our product, hint, no one wanted to produce our product without preservatives. We were using real fruit, and no one wanted to do it, and I didn’t want to start a company that had a bunch of preservatives. I wasn’t there. There were some things that I wanted real fruit. I didn’t want preservatives. There were some key things that I was not going to move on. And finally, I had a lot of no’s. And finally, I found this CO packer, and I think what was so surprising to me is I felt like I was the customer, right? But the problem is, is that there’s a lot of demand for a lot of these co packers, and so if you want something, you want to change their specs, you’re hard, right? Like you’re you know, it’s not impossible. Nothing’s impossible, probably. But will they spend the time with you? And I think Exactly, yeah. And it’s in every category. It’s like doing things a little bit differently, and yet, if you don’t do things differently, I mean, that’s really what separates you. I mean, that’s what that’s your purpose for doing this

David Habib 11:20
absolutely right. And you can either become, you know, large enough to get the economies of scale to be able to create the best possible product at the best possible price, or you can turn into everyone else, as you said, and you know, start to take shortcuts and start to use items that are not what you originally intended to and that’s a really important, really important path that an entrepreneur has to choose very early on is, you know, are you going to be like everyone else, or are you going to set out to actually accomplish your mission and be different? And I think in our industry, Kara, it’s so, so hard to be different and to do things differently that you really have to stick to your guns and make sure that that you stick true to that mission. And that was exactly it. You know, I think every co Packer told me I should be adding this and adding that. And my simple answer was, Well, my mom didn’t cook like that, and the reason why we’re in business is to only use ingredients that mom has in her pantry. So if you’re not willing to do it, then I’ll find someone who is,

Kara Goldin 12:30
yeah, definitely. You’re now in over 25,000 stores with explosive growth. What do you think has been the key to the brand success?

David Habib 12:39
The key Kara really comes from the omni channel launch of our business, and we had launched online as the original start through Amazon, and that was when Amazon was far less saturated than it is today. But that really gave us the ability to set a strong foundation of shipping to customers and to zip codes that we would have never had the opportunity to. I look back at my days of door to door selling Kara, just like all of us did, and, you know, I realized, you know, we spent hours and hours selling to one store. We would invoice, you know, $140 and by the time you would pay for gas and pay for, you know, all of the the business expenses, it wasn’t a sustainable model to ultimately build and grow. So very early on, I pivoted to really launch the business online. And Amazon was key to that strategy, and that really set the foundation for us for COVID, and COVID really had a tremendous impact on our business, for the positive, because a lot of customers were cooking from home, and they were looking for better for you options so that online start gave us the ability to then go to retailers with tangible data and Give them actual zip codes and data of where customers were purchasing, and that omni channel piece really allowed us to grow at a much more rapid pace than doing just online or just retail.

Kara Goldin 14:12
That’s awesome. Do you when you launched? Did you launch with like ads? And because, of course, your brand was not known so the consumer wouldn’t know what to look for. Did you really kind of go heavy on building it out with some kind of marketing budget, I guess, for these ads? Absolutely.

David Habib 14:30
So we did a lot of data mining on Amazon and really tried to figure out how customers were finding us. And at that time, keto and paleo diets were very prominent, and a lot of low carb customers were looking for the no sugar added sauces, so we had started bidding on those types of keywords, and that’s how a lot of customers found us. But we were really intentional about not building our entire platform around the Keto and paleo diet, and. We really wanted to make sure that we were focused in on flavor first, and that we were a fresh brand focused on saving people time, and the Keto, the paleo, the low carb, the low sodium. Those are all great features of all of our products, but we were very intentional to not make that our main platform that’s

Kara Goldin 15:21
awesome. I’ll never forget. I think I was at a conference maybe 10 years ago, and it was the head of keto and paleo, and there was one other that was up there. They knew I was at the conference and and hint was available on with all those diets. And one of the founders, I think it was the Keto founder, he said, You know, I think the only thing we can agree on is hint water. And he said, because we’re just never going to agree on sort of what is the best way to do. Anyway, I thought that was funny. And I know your product very similar, so it’s anyway, I thought that was really, really funny when I think about building a company. I mean, look, everybody’s excited about entrepreneurs, whether you’re looking at, you know, the big tech entrepreneurs or the food entrepreneurs or, you know, it seems like it’s a glamorous job, but I actually know that, you know, no successful entrepreneur, no successful founder, is sitting back and letting other people do the job. There’s endless things that you have to roll up your sleeves to make sure to get done and try and put your head into something to really figure it out. I always call it, you know, the unsexy side of this business. I mentioned a little bit about trying to find a co Packer that would co pack our product without preservatives. The only time that this this bottle or would actually do a test run with us, was 11 o’clock at night, and I had four kids under the age of six. It was, you know, my husband’s like, you’re not going to a bottling plant. It’s at 11 o’clock at night. So he went with me and but, you know, it’s just so many crazy stories like that. Do you have any crazy stories in building out? You know, doesn’t have to be about manufacturing, but things that you know, you still laugh about like it wasn’t funny at the time, but, but now you look back on it and think, Wow, this is, you know, only, like you just can’t make it up.

David Habib 17:33
Yeah, absolutely. Kara, I have, I have a whole, whole book of those stories, but I think one of our first ones, we launched Mother’s Day 2017 and our first food show was the Fancy Food Show. So we went in July of 2017 and we get there, we have our four foot table. I had actually dropped our 12 pack cases of sauce on the escalator, so the escalator was broken. So for the entire show, you know, we were kind of known as the company that broke the escalator, so it wasn’t a really good, good start for us. But, you know, a lot of customers came to us, we’re asking for wholesale list and price list. And I was like, what is that? You know, I mean, we’re talking like I didn’t even know what a distributor was. That’s how little I knew about the packaged foods world, and at that show, we had the opportunity to meet with a home goods buyer, and she was our very first purchase order. It was for a national launch. She was really interested in our packaging, and she gave us two weeks to produce. I want to say it was 11,000 jars of sauce, which at the time of starting is a monumental task, and at that time, we didn’t even have the appropriate co Packer to be able to handle that type of volume. So in two weeks, literally, on the very last day that the purchase order was due, another one of your stories, Kara, were there until 2am at the plant. You know, I have four, four friends with me, you know, doing everything possible to make sure that this order ships out on time, and we got it done. You know, went to go get some some burgers after that. But I think there’s so many stories like that throughout the journey, and as challenging as they are, they’re very important because those are, those are the building blocks, and that’s part of the process. And something I’ve learned Kara is that a lot of people want to be part of the outcome, but they don’t want to be part of the process. In an entrepreneur, in the entrepreneur world, you have to go through that process that is very much you know, how you build and how you learn, and people who think that it’s it’s a cakewalk, and you can sit on the beach and run a business, that’s the absolute opposite of what it actually is. And you know, people think, Oh, you’re an entrepreneur. You you own your own time. You can do whatever you want. So. But as you know, Kara, the business really owns our time, right? And it’s, it’s the the forefront of our thoughts. It’s, it’s, it’s the number one thing of our, of our, you know, mental capacity, of our physical capacity of just about everything, and to really give it all and to really build something, you have to, you have to go through that process. You have to be able to withstand many, many storms.

Kara Goldin 20:26
Yeah, no, it’s, it’s so, so true. I always tell people I, you know, the the question that I get from entrepreneurs, especially the ones that have been at it four or five years, they’re just, you know, they’re tired, right? They’re, you know, it’s, it’s exhausting, and they’re like, at what point, you know, is it not really going to be like this? And I’m like, it’s kind of never, I mean, you know, because you just keep building on it, you innovate, you know, you keep changing things up and and this is if you’re successful, right? Like this is, if you continue, I mean, you just keep it, it just never stops. And I hear this from so many entrepreneurs in all different industries. It’s, you know, it’s really, it’s one thing to have a great team in place, but, but I think that an entrepreneur, a founders, the soul of the company, and how do we continue to create that pizzazz that goes along with that, and that interest with the consumer is just, it’s just always there and and I think that that’s so key. So you have such a you have a small, dedicated team. How big is your team now?

David Habib 21:44
Yeah, we have 22 at headquarters here in Clearwater, Florida, a small team, but never taken outside funding either, Kara. So everything. Yeah, I

Kara Goldin 21:55
was gonna, I was gonna talk about that too. Wait, I wanna so the team. So when you think about, I mean, you’re still pretty small, which is really nice. I always tell people, like, I’ve worked in a couple different companies prior to founding and running. Hint, I was actually in the tech industry. And, you know, I’ve seen companies like over 25 seems to be like a key kind of point where things start to sort of change. And over 50, over 100 like, it’s, it’s, it’s interesting. But how do you how do you like build the team, especially, I guess you guys are what like seven years into this. How do you build the right team and then also maintain that strong team culture as you grow

David Habib 22:47
absolutely Well, I think it’s really important as an entrepreneur to understand what you’re good at and what you’re not good at, and that’s a really important piece. I think, in the early days, you wear all of that, and you quickly understand, you know, where your skill set is more advanced and where you ultimately need to outsource. So I think that’s a really important self reflection for all entrepreneurs, is to understand that you know, where do you want to focus in on the business? Yes, you have to oversee all of it, but you also, you also have to understand what your strengths and then weaknesses are, so that that was really the first lesson when, when I’m looking to build a team, you know, cultural fit is, is everything. And I always say as entrepreneurs, you know, we are the drivers of the ship. But part of being a good captain is you have to choose the right crew. And the other piece of being a captain is you have to choose when to remove the crew, when, when it’s not the right fit, because the anchors will certainly sink the boat. And I think everyone has experienced that, but that that’s again, that is a rite of passage, of being an entrepreneur. No one, no one teaches that to you, and even if you read that, you have to go through those experiences to actually understand them. So today, you know that old, the old motto of hire, slowly and fire quickly, is really important. You know, it’s so important as an entrepreneur to really focus in on your team, making sure that you’re building the right culture and that you’re giving the right autonomy to to your team. I’m not a micromanager. I’ve worked for micromanagers, and I always said that if I started my own business, that I would not become that. But in order to not become a micromanager, you have to have very clear expectations, processes, systems in place to make sure that your team is successful. So, you know, I would say that that’s been the number one focus Kara since, since the early days, and I’ve made a ton of mistakes throughout the years. I still learn every day. But you know, really creating what the organizational design is? What are the departments? What is the the department head? Look like, what are those core skills? And then what is the, you know, hierarchy under those, those departments? I think it’s something that I’m I invest a lot of my time in today, and you know that that team is really what, what drives our ship forward.

Kara Goldin 25:14
I love it. So funding, you mentioned that so you have not raised any capital, obviously, you have great margins on your product, so you’ve been able to do that. What thought thoughts would you give to entrepreneurs, sort of knowing what you know about that whole segment of your business?

David Habib 25:37
Yes. So Kara not raising capital is an extremely challenging path to go down. I mean, we’ve, we’ve managed to do it successfully for the past seven years, but it’s not something I would recommend for for everyone. You know, I personally saved everything that I had in corporate America and dumped it into my first run of pasta sauce. And then seeing your life savings into your first production run is a very humbling moment, for sure. But again, you know, I think I wouldn’t regret how we built the business at all. Would I go down that path again? I would probably say no, it was extremely emotionally, physically, mentally exhausting, and worrying about the dollars and worrying about how we’re going to pay for suppliers or pay for, you know, certain launch activities. I mean, the whole rite of passage into a retailer is to, you know, get free fill and slotting fees and, you know, all things that I wasn’t aware about, but without a substantial amount of funding in place, it’s very hard to be able to launch and to grow a business. So is it impossible? No, I’m. I’m living proof that that you can do it. Would I recommend it to any other entrepreneur? I would say, No. I think having having the ability to secure financing and to build a team early on, and to pay the team well and to make sure that you have the the financial structure in place is a really important piece of building any any business. And again, that’s not something that that I did, but I don’t, I don’t regret it, but it’s certainly the first years were very challenging. Have

Kara Goldin 27:29
you done, like, receivables financing and things like that? As you’ve continued to

David Habib 27:33
grow, we have a line of credit with our bank and and yeah. I mean, we just, we just operate with, with the cash flow from our business. That’s

Kara Goldin 27:42
great. That’s awesome. So I it’s it’s definitely challenging. But again, if you’ve got the right if you’ve got the right margins, too, I think that’s another piece of business that people really have to look seriously at when they’re launching something that if you don’t have great margins, and you can’t imagine that the margins are going to get that much better, even with scale, then it probably isn’t going to be the right product to actually launch absolutely right

David Habib 28:13
Kara, and I think that that is such an important piece of the journey, is understanding your unit economics. Our first run of pasta sauce Kara, it cost $5.23 a jar, so by the time it made it to the retail shelf, it was 1899 so it doesn’t matter how good the product is, no one’s going to buy sauce for $19 so going back to the school, school of hard knocks, you know, that was very important lesson that I learned very early on, and going back to what we were talking about earlier at that point, I said, Okay, I can either figure out scale and figure out unit economics and figure out how we can ultimately produce this in in a cost effective way that will allow us to have the right margins. Or Option B is I can start to take shortcuts and start to not use the right quality ingredients, to start to become like everyone else, right? And that was, again, that really important path in those early days, where you have to be very intentional about how you’re building. And we do something called toll packing, where we actually source everything, and that’s how we built very early on. So we we own our supply chain, and that’s really been, been key to our growth and our success, is to really understand where every single penny and where every single micro penny goes in our finished goods.

Kara Goldin 29:35
That’s so interesting so and it’s also allowed you to get your price point down too. So that’s that’s terrific. Well, David, thank you so much for coming on and sharing your story and the incredible journey behind Yo Mama’s Foods. Everybody needs to try Yo Mama’s Foods, and I certainly am such a big fan. So thank you. So much for turning me on to it, and it’s, it’s really, really terrific. We didn’t even talk about the salad dressings and some of the other stuff that you’re doing, which is great, but so, so good. So thank you, and best of luck with everything. We’ll have all the info in the show notes as well. But thank you and thank you everyone for listening.

David Habib 30:20
Thank you, Kara.

Kara Goldin 30:21
Thanks again for listening to the Kara Goldin show. If you would please give us a review and feel free to share this podcast with others who would benefit and of course, feel free to subscribe so you don’t miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Goldin, I would love to hear from you too. So feel free to DM me, and if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my Wall Street Journal, best selling book, undaunted, where I share more about my journey, including founding and building. Hint we are here every Monday, Wednesday and Friday. Thanks for listening, and goodbye for now. Bye.

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