Even if you don’t have a baby to feed, you’ve likely heard of Shazi Visram and her company HAPPYBABY. Visram and the organic baby food firm she co-founded in 2003 are the subject of a nationwide commercial for the American Express Open Gold Card. The spot, which began airing last November, tells the story of HAPPYBABY’s rapid growth (the company generates $8 million in annual sales) and of the company’s dedication to quality.
“Seven years ago, I had this idea to make baby food the way moms would—HAPPYBABY strives to make the best organic baby food,” Visram says in the commercial, as she plays with her baby and peruses the colorful vegetables at a farmers market with her husband and tot in tow.
“In a business like ours, personal connections are so important,” Visram continues. “We use our American Express Open Gold Card to further those connections. Last year, we took dozens of trips using membership awards points to meet with the farmers who grow our sweet potatoes and the merchants that sell our product. We’ve gone from being in five stores to 7,500.”
American Express hired an Oscar-winning director and spent half a million dollars producing the spot. Another $40 million to $50 million is slotted to pay for media spend. The commercial, which aired during the Super Bowl pre-game show this year and is often played during prime time, conveys an aura of authenticity and transparency that appears to be connecting with consumers. It also communicates the value of organic for babies.
“The ad shows that we are real people behind this business who care about the quality of our products,” Visram says. “The emotion really comes across and demonstrates that we are a small business with a big vision and a big heart.”
By all measures, Visram is becoming somewhat of a celebrity within the natural, organic and healthy products industry, thanks to her AMEX and other mainstream media exposure. But the entrepreneur and mother of one still had time to sit down recently with NewHope360.com to talk about the American Express ad, why she has worked hard to stay away from private-equity and venture capital money, why HAPPYBABY will always be organic, and why the company continues to make the journey each March to Natural Products Expo West.
An Oprah moment every day
NewHope360: Congratulations on the American Express commercial. How did this opportunity come about for you and HAPPYBABY?
Shazi Visram: Thank you. It’s been incredible to be a part of this. In fact, it feels like we hit the jack pot. In 2009, we were in a competition called “Shine A Light” hosted by NBC and American Express. The contest was held to highlight business that are doing well based on their dedication to innovation, customer service and community. We signed up for that contest at the very last minute, and two weeks later we were selected as a finalist out of 4,700 entries. That happened right before [Natural Product] Expo East 2009. As a result of being a finalist, we were the basis of a TV campaign for Shine A Light.
We got a lot of air play out of that, and I thought that was the biggest thing that would ever happen to us. But last year, we got a call from American Express for their Business is Booming contest, which was held among 7 million Open card holders. Seven businesses that are doing well in these economic times were chosen as finalists. We were selected as one of those seven. We were highlighted twice, and I’m told those two competitions were not related. In first commercial, I am pregnant with my baby; in the second, I am holding him. It was a really fun experience. Now a radio campaign has started, and they are extending the TV commercial into a print campaign.
NewHope360: What impact have you seen from this exposure?
SV: It’s been hard to measure the impact. It has definitely created additional mass brand awareness around what once was a hardcore natural brand. The latest commercial showcases our pouch packaging and other innovations and shows that we are an authentic mom-run company. This has been really powerful, because we have a lot of competition in this space from the 800-pound gorillas that have dominated the baby food market, as well as from private-equity backed brands. We are different. We are a mom-owned brand, and these spots celebrate us for that.
NewHope360: What kind of sales uptick did you see from the spots?
SV:In terms of sales, we couldn’t handle the increased demand on our online store, so we had to shut it down for now. On the retail side, our products have been flying off the shelf. It’s like having an Oprah moment happen every day for a quarter.
Funding growth without private equity or venture capital
NewHope360: In the spot, you talk about growing from 5 to 7,500 stores. How were you able to achieve this distribution expansion?
SV: We have a phenomenally dedicated team. We pioneered the premium baby food category and have always believed that there should be huge demand within the market for our products. Before we entered the market, there had not been any real innovation in baby food since the 1930s, and yet the new mother is the most important demographic for any retailer based on her lifetime value as a customer. We knew moms were looking for innovative food products for their babies and children. When we started, I never imagined that we would get this $50 million exposure from American Express, but we have been preparing for success all along.
We believe every baby should be a happy baby. We started in the natural channel and are now sold in so many small independents. That is really the core of who we are. But we believe every baby should be a happy baby, so we have been happy to grow into mass accounts and spread out into the Safeways and Targets of world.
NewHope360: What is your ownership structure at HAPPYBABY?
SV: We are still independently owned. We haven’t taken a dime of private-equity backing. There are a lot of great brands out there that can only grow so far without private backing and have to go and accept a venture capital or private equity partner. But in so doing, a lot of entrepreneurs and their missions get derailed. Fortunately, we have been really blessed to have strong networks that have helped us get additional exposure and that have led to investors who are less than traditional.
We have been able to do a lot of networking as a result of the commercial, and one of our newest investors is Sara Blakely, founder of Spanx. She is a phenomenal woman who started a company with $5,000 and prototype and built it into a multi-million-dollar empire. Another of our celebrity investors is Madonna’s business manager. Seth Goldman from Honest Tea has been a supporter from the beginning.
NewHope360: Will HAPPYBABY be at Expo West this year?
SV: Absolutely. I have been attending the show for eight years and got our first booth five years ago. The shows are tremendous. They provide an opportunity to sell a new product to a lot of new customers, and this saves time on the road. We’ve also been able to generate a lot of media coverage at the shows and build marketing partnerships with other brands that are talking to the same moms. You also get ideas for product innovation, operations and sourcing. If you use your time wisely at the show, you can leave the event with three to 4 months of real follow up that can take your business to the next level.
Organic still where it is at for baby
NewHope360:Do you have new products you will be showcasing at this year’s Expo West?
SV: We are launching our HappyMunchies, which are our wholegrain toddler snacks. The products also contain choline, which is important for memory and brain development. This year my baby will be on site, as will my partner’s baby.
NewHope360: Are all of your products still organic?
SV: Of course. Organic nutrition is best for baby, and we will always be organic. That is part of our promise to consumers.
NewHope360: What trends are you seeing in the organic and premium baby food market?
SV: There has been a lot of innovation in packaging. We have really pioneered the use of the pouch and strayed away from jars, which take more energy to process and to ship—both empty and full. As a brand, we also strive to make every calorie count when it comes to nutrition. We created the first ever cereal that incorporates probiotics and DHA. That is now being emulated by competitors in our immediate space and by Gerber, which now has a cereal with probiotics and DHA.
NewHope360: Each year, a lot of new natural, organic and healthy product companies debut their products at Expo West. Do you have any advice for these entrepreneurs?
SV: Surround yourself with great advisers and great people on your team who are best in breed and really passionate about what you’re doing. Nothing is more helpful for building momentum than that. Seth Goldman from Honest Tea was my first adviser and instrumental in our growth. The shows provide great opportunities to network with people. Most people, like Seth, are very accessible at shows and like to help other like-minded entrepreneurs. You just have to be willing to ask for help.