John Shegerian: Welcome to another edition of Green Is Good. This is the Washington, D.C. Green Festival edition of Green Is Good, and we are so excited to have with us today, Sarah Chalos. She is the CEO and co-founder of i heart keenwah. Welcome to Green Is Good.
Sarah Chalos: Thank you very much.
John Shegerian: OK. So it’s really “i heart keenwah.” I want our listeners to be able to look it up. It’s www.iheartkeenwah.com. “I Love Quinoa” but it’s spelled www.iheartkeenwah.com. Sarah, before we get talking about your great company, which I am a big fan of – being a vegan – I would like you to share a little bit with our viewers and our listeners out there your story. Talk a little bit about your background. Was this a dream of yours? Was this something that came up along the way? Just share a little bit of your journey first.
Sarah Chalos: Sure. I’ve always been interested in entrepreneurship. I think there is something that’s just very exciting about starting your own company and just running the day-to-day yourself, so that was sort of a dream of mine. And I’ve worked at a few small companies, but after college I worked in sort of bigger companies and it just wasn’t very satisfying. So I went to business school and I met my partner there, and this was actually a class project that we worked on and just wrote our business plan and had some fun with it and thought maybe, “Hey, maybe this idea has some legs,” so we just started making some stuff in our kitchen and selling it at farmers’ markets, and that’s how we got started.
John Shegerian: Which business school were you going to?
Sarah Chalos: University of Chicago.
John Shegerian: And your partner was with you in Chicago.
Sarah Chalos: Yeah.
John Shegerian: Why quinoa, though? I mean, how did you even come up with that in your business class?
Sarah Chalos: This was like five years ago when people were like, “what’s quinoa?”
John Shegerian: Yeah.
Sarah Chalos: So he had just come back – actually – from a trip to Bolivia. Obviously, they make a lot of things with quinoa in Bolivia.
John Shegerian: Right.
Sarah Chalos: And he is very familiar with is because his wife is vegetarian, so she had been eating it for a long time, so he thought, “There are no ready-to-eat versions of quinoa in the United States so maybe there is something here, maybe there is an idea here,” and that’s how it got started. I mean, it’s just such an amazing seed.
John Shegerian: Had you come from an entrepreneurial background, or was this something new to your family?
Sarah Chalos: Not really, no. My dad is a professor, which I guess is sort of entrepreneurial because you’re on your own doing your own research.
John Shegerian: Right.
Sarah Chalos: So there is sort of that independence there, and I think I’ve always had that sort of independent streak from my family.
John Shegerian: Right.
Sarah Chalos: But not entrepreneurship per se.
John Shegerian: Interesting. And had your family been into sustainability or was anyone vegetarian or vegan?
Sarah Chalos: Not really. I think what really kind of got me thinking about it was Michael Pollan’s book “In Defense of Food.”
John Shegerian: Sure.
Sarah Chalos: I read that and that really changed the whole way I thought about what I eat.
John Shegerian: Really?
Sarah Chalos: Just a very simple message about, “Hey, let’s look at the ingredients and let’s eat real food.” That makes a lot of sense. It’s very intuitive. It’s very simple. And that changed the way I think about food.
John Shegerian: So you launched the business in what year?
Sarah Chalos: We founded in 2009, but we didn’t have product in a bag until three years later.
John Shegerian: OK, so three years.
Sarah Chalos: 2012.
John Shegerian: We’re sitting here in the middle of 2015. Here is your product line right here.
Sarah Chalos: Yeah.
John Shegerian: So explain a little bit about quinoa. This is a different type of spelling.
Sarah Chalos: Yup.
John Shegerian: It’s not a traditional. Quinoa is typically spelled q-u-i-n-o-a.
Sarah Chalos: Right.
John Shegerian: So why a different spelling? Let’s just start with that.
Sarah Chalos: Sure. So the whole idea and the whole concept is to take something that is so good for you and make it accessible for folks. So everything from the name to the way that it’s being eaten is just trying to make it easy for people because quinoa really is a super food, so let’s make it easy for them to say, easy for them to eat straight out of the bag, make it taste great, make it accessible.
John Shegerian: I got you. Talk a little bit about, we hear a lot about super foods. What is a super food, and why is quinoa a super food?
Sarah Chalos: Right. I think it’s used in a lot of terms.
John Shegerian: Yeah.
Sarah Chalos: Quinoa is a “super food” because it has all the amino acids that your body doesn’t produce itself. So it has the same quality of protein that you would find in meat or dairy, but it’s in a seed so that’s why it’s very special for vegetarians. To get that same quality of protein they’d have to eat rice and beans together or seek out other sources of protein to combine, but quinoa has it all just in the seed itself.
John Shegerian: Got it.
Sarah Chalos: That’s why it’s special.
John Shegerian: So how much protein does quinoa have as opposed to other types of grains or other things?
Sarah Chalos: It has a little bit more protein.
John Shegerian: OK.
Sarah Chalos: But it’s less about the number and more about the quality of protein. So because it has all the amino acids that your body doesn’t it’s the whole package rather than the quantity. I mean if you really are going for a high protein you’re going to eat something that’s more processed protein. So like isolates and stuff have more quantity.
John Shegerian: Right.
Sarah Chalos: This is a little bit more about the quality.
John Shegerian: Got you. And more accessible because of the quality. So then you start this company. You chose quinoa. Tell me why the products that we see here – how did you come up with these products to make it fun and accessible for potential consumers out there?
Sarah Chalos: Right. We started with this one – the quinoa cluster.
John Shegerian: Ah.
Sarah Chalos: So what we wanted to do here was just make it something that you kind of grab straight out of the bag and so we wanted these little squares and to do that we had to figure out how to make the quinoa – I mean quinoas are little seeds.
John Shegerian: Yeah.
Sarah Chalos: We had to figure out how to make it stick together.
John Shegerian: Yeah.
Sarah Chalos: So we just played with different sort of binders. We did it in our kitchen and then after that we worked with a food formulator a little bit in Chicago to kind of formulize the recipe, but a lot of it was just messing around the kitchen with different ingredients. “Does agave syrup hold the quinoa together?” We ended up with a brown rice syrup mostly holding it together and some raw sugar.
John Shegerian: Yeah.
Sarah Chalos: So that’s kind of how it started.
John Shegerian: So wait a second. Let’s talk about the ingredients. You just mentioned the ingredients here. So in this is just everything is quinoa, brown rice syrup. I mean this looks like everything that is good for you. I don’t see anything that is bad for you on this.
Sarah Chalos: That’s the point. I want people to read the ingredient list. I want them to feel good about what they are eating. I want it to be things that you recognize, fairly unprocessed, things that you can feel good about putting in your body.
John Shegerian: And this is gluten free?
Sarah Chalos: It’s gluten free, and everything in the clusters is organic except for the nuts.
John Shegerian: And it’s vegan?
Sarah Chalos: And it’s vegan.
John Shegerian: Wow. So I could try this?
Sarah Chalos: Yeah.
John Shegerian: We’re going to try this right here on the camera here.
Sarah Chalos: All right.
John Shegerian: We’re going to do the taste test right here. We’re opening the bag – if I can do that intelligently. And this is three-years-old?
Sarah Chalos: Yeah.
John Shegerian: I mean, this is the product.
Sarah Chalos: Right.
John Shegerian: OK.
Sarah Chalos: I mean it has kind of evolved over time, but basically you would eat it at any time that you eat a bar.
John Shegerian: Oh my gosh.
Sarah Chalos: But it’s better because it comes in little squares, so you don’t have to commit to eating a whole bar. You might not want 250 calories. Maybe you just want a few squares to sit in your car.
John Shegerian: Yeah.
Sarah Chalos: Instead of being attracted into going through a drive-thru. Or at your desk at work instead of going to the vending machine.
John Shegerian: Oh my gosh, that’s delicious.
Sarah Chalos: Thank you.
John Shegerian: Chocolate sea-salt. How many flavors of this kind of thing do you have?
Sarah Chalos: We have five flavors of that and we have four flavors of the puffs.
John Shegerian: What kind of flavors? Explain the flavors to me.
Sarah Chalos: So chocolate sea-salt. Cranberry cashew, which I have also back here.
John Shegerian: Oh yeah. Let’s bring the cranberry cashew out. Wow.
Sarah Chalos: And almond. And peanut butter cacao. That one is really nice. It has the same sort of chocolate drizzle on this.
John Shegerian: Yeah.
Sarah Chalos: And it has raw cacao nibs so it has a really neat flavor. It’s kind of like a healthy version of a Reese’s Peanut Butter Cup.
John Shegerian: What’s the No. 1 seller?
Sarah Chalos: Chocolate sea-salt.
John Shegerian: Oh that is so good. So that was delicious. Talk a little bit about the quinoa puffs.
Sarah Chalos: Those aren’t vegan.
John Shegerian: OK.
Sarah Chalos: So have another one of those if you want to try those.
John Shegerian: Yeah, let’s try these.
Sarah Chalos: So the puffs. In the clusters, we use quinoa seeds, puffs and flakes, and in the puffs, we use quinoa flour and we bake it. Basically, we’re trying to make a healthy version of a Cheeto. It has got a great crunch to it. It’s got five grams of protein per serving.
John Shegerian: Wow.
Sarah Chalos: Again, very simple short list of ingredients.
John Shegerian: Very delicious, let’s just say that.
Sarah Chalos: Thank you.
John Shegerian: Wow.
Sarah Chalos: I mean, that you would eat next to your sandwich. Anytime you would want to pick up a bag of chips, that is a great alternative.
John Shegerian: Oh my gosh, this is great. OK, so the ingredients on all of your products are very important to you.
Sarah Chalos: Right.
John Shegerian: Explain to our listeners and our viewers overall why ingredients are so important nowadays more than ever before probably.
Sarah Chalos: Yeah, I mean, if you look at a lot of the food that’s in the store, a lot of it is just full of chemicals. It’s these things that have been made in a laboratory, and it just – to me – feels like our food is our fuel. It’s the thing that keeps us going every day. It’s very tied to our health, our longevity. So I think it intuitively feels much better – to me – to be eating real food and things that weren’t made in a laboratory because who knows what the effects of those things are.
John Shegerian: Who is carrying this right now? Where can our viewers and our listeners find these amazing and great products?
Sarah Chalos: Thanks.
John Shegerian: Yeah.
Sarah Chalos: So the clusters are in about 3,500 stores across the U.S. So Safeway started a great section near the produce with dried fruit and nuts and a lot of healthy snacks.
John Shegerian: Right.
Sarah Chalos: We’re in H.E.B. We’re in Wegman’s. We’re in ShopRite. We’re in four regions of Whole Foods. So we have got pretty good distribution.
John Shegerian: Talk a little bit about going from two co-students coming up with this great business idea at business school to getting in 3,500 locations. How many employees do you have now, where are your offices and how did you do this?
Sarah Chalos: We don’t sleep very much anymore.
John Shegerian: I can imagine.
Sarah Chalos: I’m sure you know how that feels.
John Shegerian: Yep.
Sarah Chalos: So it started out just walking store-to-store when we had our first product in a bag. First, we went to Whole Foods when we had product in a Tupperware. We just showed up at headquarters and we were like, “Hey, we have this great product and we think it’s going to be great for your store,” and they were like – they gave us a little pat on the head. They were actually really nice.
John Shegerian: Right.
Sarah Chalos: It was exciting that they were so nice to us because we didn’t know.
John Shegerian: I’m sure they’ve seen this before, right?
Sarah Chalos: Right. “Here comes another crazy food brand.”
John Shegerian: Right.
Sarah Chalos: But once we had the product in a bag we just walked store-to-store in Chicago – because I live in Chicago and then my partner lives in New York – just selling and saying, “Hey, will you try our quinoa snacks out?” I think people really liked the product a lot. Just by looking at it it looks very appetizing so people were willing to give it a shot. And I think people also want to support the food entrepreneurs and any entrepreneur. I think people – especially in the United States – just love the story of the entrepreneur and it’s very exciting to them. So people along the way have been really nice in giving us a shot.
John Shegerian: So what was the first chain that carried this product?
Sarah Chalos: The first chain.
John Shegerian: What was your first big break?
Sarah Chalos: Wegman’s.
John Shegerian: Wegman’s.
Sarah Chalos: Yeah.
John Shegerian: Wow.
Sarah Chalos: Yeah, that was exciting. They brought in spinner racks, and they still carry it and they carry the puffs now too.
John Shegerian: So what has been your growth rate? What percentage of growth year over year?
Sarah Chalos: The last few years we have been doubling every year.
John Shegerian: Doubling every year.
Sarah Chalos: Yeah.
John Shegerian: Wow. Alright. So a typical day. Your offices are in Chicago?
Sarah Chalos: Yeah. That’s our headquarters.
John Shegerian: How many employees?
Sarah Chalos: It’s just been Ravi and myself until three weeks ago. We just hired our first employee. It was very exciting.
John Shegerian: Unbelievable. You’ve done this with two employees. You and your cofounder.
Sarah Chalos: Yeah.
John Shegerian: Incredible. And you’ve just hired your third.
Sarah Chalos: Yeah.
John Shegerian: I love your overhead.
Sarah Chalos: Right? Exactly. Very low overhead.
John Shegerian: This is great.
Sarah Chalos: We’re scrappy. I sleep on a lot of couches.
John Shegerian: Oh my gosh. This looks great. So give me a typical day.
Sarah Chalos: Yeah. That’s what I love about it is every day is so different.
John Shegerian: Yeah.
Sarah Chalos: I mean I’m thinking about strategy – what stores should we target to really grow, and where are we going to resonate with folks? I’m thinking about marketing events – where should we do demos, and how do we connect with our consumer? I’m thinking about a lot of operations. We have manufacturers that help us make the product – do they have the raw materials? So there are a lot of operations things to think about. Finance. Can’t forget about accounting. It’s very important. It’s very painful but it’s very important.
John Shegerian: And by the way, we have so many listeners and viewers around the world that want to be the next Sarah. How did you finance this when you launched it?
Sarah Chalos: We just bootstrapped. At the beginning – by the smallest amount – we were buying almonds in 25 pound cases. We found a packaging company that would run all of our flavors at the same time so we didn’t have to have such high minimums. So we kind of just found ways to do everything on a really, really small scale. And we’ve tried it out a lot to make sure it was a great idea. We tried it out in farmers’ markets – “which flavors work” – and we tried everything on a small scale so we could do it by ourselves. And really the first bag was profitable. We never sold it as a loss because we needed that money to keep funding the business.
John Shegerian: Do you sell this online as well?
Sarah Chalos: Yeah. We sell it on our website, on Amazon.
John Shegerian: And the website is www.iheartkeenwah.com. What would you do differently if today was 2012 again and you were starting over?
Sarah Chalos: We were very excited to get going. We wanted to start selling.
John Shegerian: Like all entrepreneurs are.
Sarah Chalos: Right. I think I probably would have spent a little bit more time on the R&D. I really love the product now, but it has gone through a lot of iterations, a lot of changes. So I think really investing the time upfront to make sure that you’re putting your best foot forward because every time somebody puts it in their mouth that’s what they remember. You don’t get another chance.
John Shegerian: That’s right.
Sarah Chalos: Now I feel really good about it. It’s a little better than it was three years ago.
John Shegerian: Right.
Sarah Chalos: So I would have probably spent a little more time on the R&D formulation.
John Shegerian: How do you market it once it’s in a store, Sarah? How do you get people to try it and buy it? And are you leveraging social media? Or what are you leveraging?
Sarah Chalos: Yeah, I mean a lot of it about getting in people’s mouths because it tastes great, so we do a lot of park demonstrations and we do events like the Green Fest where I can meet thousands of people and get them to try it and tell them the story. So a lot of it is just really about sampling and tasting.
John Shegerian: That’s interesting. And have the stores been very helpful? They’ve been supportive as well, the stores that sell your product?
Sarah Chalos: Yeah. Like I said, people want to give us a shot. They know we’re small, so they’ll give you a bit of a break sometimes on the requirements to get into a store.
John Shegerian: You know, Sarah, you’re obviously highly educated and you know there are two different things out there. There are the headlines and the trend lines. The trend lines – I believe – sound like they’re in your favor. More people are reading ingredients. More people are eating healthier. Vegetarianism and veganism is becoming more mainstream than it was 10 years ago, 20 years ago.
Sarah Chalos: Yeah.
John Shegerian: Gluten free.
Sarah Chalos: Right.
John Shegerian: How do you now evolve your product and your product line and your brand to take advantage of the trend lines that are out there?
Sarah Chalos: I think there is a lot of runway with our current products, and I think there is a lot of runway with quinoa as a seed. It’s so versatile and that’s really the core of what we are is quinoa and I think we envision that it could be something that is in everybody’s pantry just like rice. Just something that you cook with all the time and something that is even healthier than a lot of things you eat on a day-to-day basis. And so I think we have a long way to go before we reach that potential where quinoa is just sort of a household item. And we want to be the quinoa brand.
John Shegerian: Are there sales happening for you right now in Canada?
Sarah Chalos: Yeah, we have two distributors in Canada.
John Shegerian: You do?
Sarah Chalos: Yeah.
John Shegerian: How about other than Canada? Is this a product that can go international to Asia and to Europe?
Sarah Chalos: Yeah. And particularly the puffs because they have a year shelf life. These are a nine-month shelf life, so it’s a little bit tough with export.
John Shegerian: Right.
Sarah Chalos: But the puffs are already going to the Middle East, and we have some interest from some South American countries. Hong Kong – we just placed our first order. So we are doing some export as well.
John Shegerian: No kidding. Who are your biggest clients? Is it men? Women? Younger? Older? Little kids? Who is eating your “i heart keenwah” products more than anybody else?
Sarah Chalos: I think when people taste it, it resonates with a lot of people, but the people that are most likely to pick it up are women who are health aspirational. They’ve heard quinoa, they know that it’s good for them, but they might not know how to cook it. And they want to eat something that’s better for them, they want to make good choices but they might not necessarily know exactly what to choose. So those are the people that it resonates the most with.
John Shegerian: We are here at the Green Festival today in Washington. Why are you taking your band to the Green Festival to showcase it here today? Why was this an important place for you to showcase “i heart keenwah?”
Sarah Chalos: Because these are people that care about the way they live their life. They care. These are the kind of people that do read ingredients and they care about the sustainability of quinoa which is something that we care about as well. They care about the ingredients that they’re choosing so this is really where I think people will kind of fall in love with our product.
John Shegerian: Have you done Green Festival before? Is this your first one?
Sarah Chalos: This is our first one.
John Shegerian: First one.
Sarah Chalos: Yeah.
John Shegerian: Well, I wish you luck today.
Sarah Chalos: Thank you so much.
John Shegerian: This can be a great day. I’m sure you are going to be very well received and, Sarah, I really appreciate you coming on the show. This is delicious. “I heart keenwah” is a delicious product. I just tried it here right on camera, and it is really yummy. For our listeners out there that want to learn more about Sarah’s great company, it’s www.iheartkeenwah.com. Sarah Chalos, you are making the world a better place and are truly living proof that Green Is Good.