Cool to Be Kind: An Interview with Daniel Lubetzky
They seem ubiquitous now, those crunchy KIND bars in the clear wrapping, gleaming with nutritious whole nuts, fruits and seeds. But when Daniel Lubetzky first introduced the brand in 2004, they were rejected by health food retailers. That’s because KIND’s mission to produce “all-natural foods made from ingredients you can see and pronounce” led to products that look distinctly different from most nutrition bars, which have their ingredients turned into paste and then formed into slabs for manufacturing efficiency.
“Our insight was that people don’t want to eat astronaut food; they want to eat stuff that’s minimally processed, and that they can recognize,” says Lubetzky. Consumers connected with that proposition, and today KIND snack bars occupy the top 12 slots on the list of fastest-selling health bars. KIND Snacks’ sales doubled last year and the company’s revenue also doubled to $125 million in 2012.
Lubetzky, however, was looking to create more than revenue; he wanted to start a social movement. To that end, KIND Snacks has invested considerable resources into its “Do the KIND Thing” movement, which asks its growing community to go out once a month and perform a specific act of kindness.
Social entrepreneurship has been a career-long passion for Lubetzky, who has trademarked the phrase “not only for profit.” The son of a Holocaust survivor, he grew up in Mexico City and moved to the US as a teenager. In 1994, he founded PeaceWorks, which brings together neighbors on opposing sides of political conflicts to create healthy, profitable food products. In 2002, he created the PeaceWorks Foundation OneVoice Movement to in the Middle East. OneVoice uses grassroots political organizing (town halls, rallies, seminars) to unfreeze the peace process and work against extremism and toward non-violent solution to conflicts. In 2010, he co-founded Maiyet, a luxury fashion brand that builds partnerships with artisans around the world in places like Kenya, India, Colombia and Indonesia, where bringing economic stability and commerce can help reduce conflict.
Lubetzky is a busy guy. But he recently made time to meet with NYER Special Projects Editor Lee Lusardi Connor in the Midtown offices of KIND Snacks, to share the sources of his passion, the secrets of his success, and his advice for other entrepreneurs.
Lee Lusardi Connor: What gave you the inspiration for KIND snack bars?
Daniel Lubetzky: At the beginning of my career, I was a lawyer who was very passionate about using business as a force for bringing neighbors together to promote peace. About 10 years before I started KIND, I had by chance gotten into the food industry with PeaceWorks. We did a venture in Indonesia where Muslim, Christian, and Buddhist women were working together; we had Israelis, Palestinians, Jordanians, Egyptians, and Turks training one another. The concept was to use business to help people discover each other’s humanity, shatter cultural stereotypes and cement relations. And it just so happened that food was the channel through which I had tried to manifest this concept.
As I was traveling to all these far-away places, and across the United States to appointments and sales calls, I became very frustrated with the options I had for snacking. Every time I walked into a store in an airport I felt like I had to sacrifice either my taste buds or my health. So I tried to come up with a product that would fit with my goal of eating something that was delicious and also healthy. I had a small team then, about 7 or 8 people, and we worked very hard and eventually came up with KIND as a value proposition—to do the KIND thing for your body, for your taste buds, and for the world.
LLC: What made you think the world was ready for a KIND snack bar?
DL: In the very early days, I was taking a huge risk because I was running a completely different business. PeaceWorks was about getting neighbors in conflict regions to work together, and KIND was nothing like that. So we created a separate division, and at that point I queried some of my advisors about whether we should do this. And a lot of them said “No, it has nothing to do with your PeaceWorks initiative.”
It was risky from a business point of view, because we had another set of products. But I just felt in my gut that this product was really going to be big because it addressed a need people have.
LLC: In addition to this gut feeling, were you also reading demographic studies, or researching trends about health consciousness, obesity, or eating on the run?
DL: No, no. I’ve never guided my product decisions by studies or by data. I think that’s very dangerous because data tells you what’s happening today, not what’s going to happen tomorrow. I guide decisions by my gut feelings and by my intuition. I also think about our products as a consumer—what would I want? What am I looking for that doesn’t exist?
But I think what’s really important is to look inside and think about what your brand proposition is. What does your brand promise? What are you committing to create? And then making sure that whatever you do is consistent with that vision, or promise.
Now, as we’ve grown, our team does look at a lot of data. But when it comes to new product development, I always urge the team to be not so clinical and to be more emotional.
LLC: What were your selling strategies for getting a new type of product on retailers’ shelves, whether for specialty markets or for major chains?
DL: Persistence. Perseverance. I had started selling PeaceWorks products when I was 25 years old, and the only thing I had at that time was perseverance.
If I didn’t get the product into, say, Zabar’s, I would make friends with the manager there and say, “Hey, why did you not approve this? Walk me through what I’m doing wrong.” And the manager would talk to me about things like the pricing structure, or the level of sodium. I took advice from all the buyers who rejected the product.
But I was friendly and warm. I’m a confused Mexican Jew and I happen to have that quirky enough personality that they would be patient with me. And I learned to be more patient myself, and to be more strategic.
It was also about being creative. In the early years, we would come up with 10 great jokes and fax them to store managers. I remember once I was trying to get into Stew Leonard’s and the buyer was not returning my phone calls. “I left him a voicemail saying, “I’m going to give you the car washing guarantee. If our products don’t do very well for you, I will wash your car on the weekend.” And he returned the call.
And so we would do whatever we could to get people’s attention. But that was in the early years. I used to be a lot more of an emotional seller and talk about the features, which has an important role, particularly when you’re launching.
LLC: How does selling evolve as the business grows?
DL: As you become more sophisticated, and certainly with KIND, the data does it all. I learn from my team so much more than I lead on that front. Data, fact-based selling, is something they taught me. Once you are an established product, it’s much more powerful for you to just show the evidence, and fact-based selling is where the industry is moving.
But I want to be clear: The most important factor in selling is getting the product right. Product is king.
It’s much more important to create the “pull” than the “push,” meaning it’s more important to make sure people pull the product off the shelves than for you to be able to put it there. You can put the product on the shelves once, but if the consumer picks it up, that can happen iteratively. Then your business is going to work itself out even if you’re not doing other things right.
LLC: What was the thinking behind the KIND bars packaging with the distinctive colors and transparent wrapping?
DL: Transparency was an important value for us as a company from the very beginning. We chose to build a brand on that, in contrast to what we saw in the market as a lot of gimmicky social propositions that consumers couldn’t trust. We felt it was very important for us to be authentic.
So transparency informs everything we do. First of all, of course, we have a beautiful product that looks artisanal, where we’re showcasing the integrity of every seed, every kernel, every nut. Transparent packaging seems like an obvious decision in retrospect, but at the time it was a very innovative thing.
Transparency also goes into the way we name our products. For example, this bar is called Pomegranate Blueberry Pistachio because it has pomegranates, blueberries, and pistachios. Another one is called Dark Chocolate Cherry Cashew because of its ingredients. It would be more fun to do as the majority of brands do and come up with cheesy names like “Cookie Cutter à la Mode” or “Blueberry Parfait,” but we feel we owe it to our customers to be very direct.
We’re also very scientific about our nutritional claims. And when we deal with our suppliers and partners, we are very emphatic about open communications, and we show data much more than probably would be common or acceptable.
Principle Behind Packaging
LLC: How does the value of transparency translate into managing a staff?
DL: We have a culture of open communications. It surprises me that there’s not more of this in the corporate world. Firing somebody should be reserved for when somebody has committed a horrible sin, burned the building, or committed a crime.
I don’t understand the general practice where you get fired, they take back your stuff, and you leave. Because the overwhelming majority of people are good people who are trying their best to do a good job. Instead of firing a person and making him go away, you should give him plenty of chances, let him know what he needs to improve.
Everything works better with open communication. For example, one of my assistants wanted to go to graduate school. But instead of telling me at the last minute and me scrambling to replace her, she told me some months in advance. Then she replaced herself, doing the interviewing and training. I was able to help her with letters of recommendation, and it was a very smooth transition.
In another case, a team member was dissatisfied with her position and wanted to change it, and told us this. We eventually found a position for her in another department, so we didn’t lose her. And she found and trained her own replacement.
LLC: How many employees does KIND have now?
DL: More than 130, spread around the country in field marketing, sales, and manufacturing. We also have something called KIND Brand Ambassadors, and their role is to do the KIND thing, giving out products and getting people excited. We have a very high conversion rate—about 98 percent of people, by one study, who try a KIND bar will become a fan and will become repeat customers. So the key for us is to just let more people try KIND bars.
As KIND Ambassadors give away products, they also try to make this a kinder world. We have a couple different twists on how we do it. One of them is we have these KIND cards that say, “We’ve KINDed you, now pass it on.” So now you hopefully open the door for somebody else, or maybe you pay the toll for the person behind you, or you buy someone a drink, and then keep passing on the card.
Acts of KINDness
LLC: The company also has a following of customers who are committed to kind acts.
DL: That’s our community of KINDaholics, which I think are about a quarter million people now, and we invite them to participate with us in making this world a little bit kinder. We give you a small kind act that we ask you to do—perhaps to write a note of thanks for a woman who has made a difference in your life, or to give a cold beverage to a construction worker during a summer month. And if enough people in the community report that they did their KIND mission, it triggers a Big KIND Act from us. We might provide shoes for homeless kids one month, or clean up a beach another month.
LLC: How much do those Big KIND Acts cost the company every year?
DL: I really don’t know the answer because we don’t think about it that way. They’re so integrated into our entire way of working that it’s hard to give you a precise number—it depends on how you calculate it. If you include not only the donations but the KIND Ambassadors and the website, and the infrastructure, it’s probably hundreds of thousands, or millions.
But it also benefits our business. What’s cool about KIND is that the social mission is truly integrated and reinforces the business. And so doing good and doing well go in tandem. When you’re KINDing somebody and inspiring them to do the same for others, and you’re giving them a product that’s delicious, it builds loyalty from the consumers. Our ambition is to be seen not just as a product line, but as a community they belong to, as a state of mind that they have.
LLC: You’ve obviously had a passion to make a difference in the world, but how did you know that there would be a big market for pairing a product and kind acts?
DL: It wasn’t a business plan we came up with to sell more bars. Early on, my team and I were looking for a brand that would have human attributes as well as the attributes of the product proposition. And that’s how we came up with a KIND brand that’s kind to your body, to your taste buds, and to the world. It was purely about what was in our hearts, what was meaningful to us. Promoting kindness felt right to us.
For me personally, my father was a big inspiration. His memory really resonates with me. Whether he was talking to the president of the bank or the bank teller, he’d treat them both with equal warmth and make them laugh. My mom, too, would make friends with the taxi driver, with anybody. I always saw them able to move outside that zone of comfort. In Mexico, it was easier to do. In the United States, we live in a society where you don’t want to invade somebody’s space.
So I think our challenge in society is to rediscover the humanity of all of us and connect with that stranger. To truly have no agenda but to just make people smile and make their lives a little bit better is something that is so fulfilling, and that is what KIND tries to do.
My original inspiration came from my parents, but the way our brand has evolved, the way we’ve executed the concept from a kernel of an idea, is the result of great ideas from our team all across the different departments. KIND is a product of extraordinary people. You should see the passion with which the team develops products and marketing. Everybody here is an owner. Everybody has stock options. And we’re all giving everything we’ve got to try to take it to the next level.
More KIND on the Horizon
LLC: KIND now has four different types of bars and recently introduced KIND Healthy Grains Clusters, a whole-grain granola. How do you see the brand expanding?
DL: Probably the bulk of the time I spend is on developing new concepts and new products in different categories, as well as expanding in our current categories. For the foreseeable future, our core is to be the leaders in healthy snacking and in healthy eating, and I think we still have a lot of time to grow in that space. But there’s nothing that says that KIND couldn’t be a brand that operates in industries outside of food one day.
I will say that soon you will see innovation in our current categories, and line extensions. You’re also going to see innovation in a new category that we haven’t entered yet, and it’s going to be disruptive and very, very exciting.
Any time we launch anything, it has to be at least as good as the current products are, if not better. Sometimes you want to go faster and you want to cut this corner, but don’t do it. Never sacrifice quality for speed, because consumers are trusting you. If a new product doesn’t meet your promise, they are going to lose trust in you, not just with that SKU, but as a brand overall.
LLC: Can you give us a hint as to when the new product will launch?
DL: We will do it as soon as we can do it excellently.