Shazi Visram, CEO, Happy Family.

Shazi Visram, CEO, Happy Family.

Happy Family, the US organic baby food maker acquired by Danone in 2013, has enjoyed rapid growth. In 2006 the company reported turnover of US$115,000. This year it forecasts turnover of $130m. And its quest for further expansion has seen the firm move into adult snacking with the launch of Shine Organics pouches. Hannah Abdulla catches up with CEO and founder Shazi Visram to talk about how the company has evolved and how it has benefited from the tie-up with Danone.

j-f: How would you say the US baby food market has evolved over the last few years in terms of leaders and market share?

Shazi Visram: At the time of [the Danone] acquisition there were tremendous changes in the US baby-food market. The week before we announced, Ella’s Kitchen was acquired by Hain Celestial and the week after, Plum Organics was acquired by Campbell Soup Co. The way the market share has evolved too has been really interesting. Some of the brands have been consistently growing and others have been a bit in decline. We're really focused on early life nutrition and as a result of this focus we were up 26% year-on-year. We continue to vie for that number one organic baby brand title. We are not number one nationally because we don't have a tremendous amount of distribution in Wal-Mart unlike Campbell [with] Plum Organics. We are the number one brand in the natural channel which is really meaningful to us. But we are still the fourth largest player when it comes to the US babyfood market.

j-f: How has Happy Family developed since it began?

Visram: We've strengthened our resolve to stay true to our mission, which is to improve children's health. We have created a number of new innovations that support mum. Our vision for the future is to be there for mum whatever decision she makes. So if she wants to make homemade baby food, we have a recipe book and will highlight our favourite ingredients nature has to offer. By the same token, if parents don't have time to make homemade we want to be the brand mums are turning to. We are a brand that doesn't exist to put product in a package and sell it. We are here to promote an ideal healthy lifestyle and give parents the info they need to make the best decisions for their family.

j-f: How would you say consumer demand with regard to baby food has evolved?

Visram: If you look at when the business started, organic baby food was a little bit less than 4% of all food sold in the US. Now - and I truly believe it’s the result of the work our brand has done and work from others in our space to create this category - it is about 30% of the US market. I think consumers are changing in so many ways. Parents today, millennials - which are the driving force of change - are looking for authenticity, simplicity, transparency and health and wellness. In today's world, we now each have a smartphone that allows us to research anything before we put it in our bodies and certainly before we put it in our child's bodies. And that's how consumers are changing - we have access to so much info and recommendations and we are demanding products to meet our needs.

>For an audio excerpt of Visram's take on today's consumers, click here.

j-f: Why was Danone the right company to partner with?

Visram: Acquisitions are an interesting thing and I feel like I could write a book at this point on what I've learned. But I view our relationship with Danone as a partnership. I still retain ownership in the business that I started 12 years ago. I believe for any partnership to work you have to have true alignment of interests and goals. The Happy Family mission is 110% fully aligned with Danone's broader mission to bring health through food to as many people as possible and our mission is to improve the health of children. From the beginning, I was focused on retaining control of my business and even though I had to raise a tremendous amount of money over the years to fund the growth [to] bring us to where we were when we did the deal, I always remained very much in control. The money raised was always from individuals, never PE or venture capital. I didn't want investors who were only interested in the bottom line. Danone exists to have a dual mission: economic and social - so in a sense we are very well aligned.

j-f: Have there been any challenges post-integration?

Visram: There are challenges but they are the kind that require creative solutions and a really strong spirit. And from the end of June 2013 when we closed, to now, we've almost doubled in size. The growth has continued to be phenomenal. While we've managed to maintain and keep up this exciting growth trajectory we've also been spending time and resources to become a part of a larger entity and that required a lot of work and dedication from our team. In another sense we are the beneficiary of almost 100 years of food safety, quality standards and compliance and over 80 different brands around the world that focus on baby and we are able to really augment and perfect our QA and safety measures in a way that I don’t believe any of the other brands in the US have been able to benefit from.

j-f: How would you say you've innovated as a result of the Danone partnership?

Visram: This September we will be launching our our pre-natal line - Happy Mama - and we've really been able to tap into the vast R&D resources of the early life nutrition group headquartered out of Amsterdam and Schiphol. And we've spent time at Utrecht - the hub of R&D for early life nutrition. There is this great legacy that we are able to tap into to develop this line of products. We have two pouches with a nice ginger flavour that also deliver choline and DHA which are really essential for maternal health and are proven to help babies brains in terms of development. And there is a line of gummies that also deliver choline and DHA because in the US women are just not getting the full amount they need. Then we have some gluten-free bars that provide mum with the fibre, protein and additional DHA and choline. Those products are a perfect example of how Danone's R&D can bring us more science and more of a backbone when we launch new products.

j-f: That line will be the second move away from baby food and products as you've just introduced an adult line - Shine Organics. What prompted that move?

Visram: Shine was a re-imagination of a product we already had - Happy Squeeze - a line of pouches meant to be an all-family snack. Consumers loved the kids' pouches and found them convenient to take on bike rides and to the gym. I kept hearing "it's such a clean source of energy through the day". But they were embarrassed to be seen eating baby food. The idea behind Happy Squeeze was to make something for those folks who don't need to feel embarrassed that they are eating baby food. But from a consumer perspective, people didn't get it - we were trying to make it everything for everybody. We needed to make it child friendly but we also wanted it to be adult friendly. The brand didn't work as a product for adults - there was a lot of cues to baby food. So Happy Squeeze has been refreshed to look more like a kids snack and is doing quite well. But we still had this lingering question that we have so much expertise with the pouch and formulating innovative mixes, why not see if we can create something to appeal to that market? And that's Shine Organics. It provides consumers with a real functional benefit. It looks adult, it looks sophisticated and the big thing is that the packaging doesn't cue baby. I'm really excited about it. It's a small test. It’s not a major effort, it won’t change our business dramatically. We are an entrepreneurial business, we like to innovate and try new things and if it doesn't work we like to fail fast. It's OK to fail. It's important for us to take calculated risks where we innovate and then fail fast. And that's a nice philosophy to have behind the business as it allows us to constantly push the envelope.

j-f: Who is the the product targeted at?

Visram: It's primarily geared to young women. Within early life nutrition we put a lot of focus on the first 1,000 days of life which starts the moment of conception but to truly impact the health of the baby you start earlier than the first 1,000 days. You start with mum's health and if we can in an indirect way support that woman with healthy snack alternatives that are organic and continue to provide a powerhouse of additional nutrition to her, in an indirect way we are improving baby's health.

j-f: Do you find as consumer demand for organic rises, sourcing ingredients becomes more of a challenge?

Visram: Sourcing multiple ingredients can be challenging and then adding the additional hurdle of making sure it is pure and clean and healthy is challenging. But for me it is the absolute bare minimum that we have to do to protect our families. A lot of consumers here want to know what is in their food. Sure we might miss a launch date because we couldn't source something on time but it's absolutely worth it. It's the reason we exist, it's worth the hassle, it's the platform for who we are and what we do and it's one of the challenges we willingly accept as a part of our business. We believe organics are the future and they need to be for protecting pre-natal and infancy. We take it very seriously. Non-organic is not an option for us.

j-f: Any plans to expand overseas?

Visram: Our focus is the US. There is so much potential here. We do have a number of export relationships that we have had for a number of years - our brand is available in over 30 countries around the world and its good to see it is well presented in Europe. Today, international expansion is not a primary focus in terms of execution. But one of my personal dreams is to have Happy as a global brand that represents the best for baby. But in order to one day be that, we really have to focus on winning and establishing ourselves in the US. We have a long day to go, we are a brand in its infancy, we launched Mother's Day 2006 and that year we did $115,000 in sales. It was only until 2010 that we did $13m in sales. So we've come a long way really fast but we have a long way to go before we have global aspirations.