Daniel Lubetzky

Check out this great article  in the Wall Street Journal’s “How I Built It” column about how Daniel’s healthy craving and hard work gave birth to KIND! 

by Adeena Schlussel

HOW I BUILT IT

DECEMBER 15, 2011

Healthy Craving Feeds ‘Kind’ Bars

By SARAH E. NEEDLEMAN

Daniel Lubetzky couldn’t find the kind of healthy, portable snack food he craved. So he developed one on his own, called it Kind, and began selling it to others, too.

The year was 2003 and health bars weren’t yet common.

To Mr. Lubetzky, it seemed as if the few brands of bars available at the time tasted like "cardboard" and were made of emulsions and pastes.

MCT/Landov

The 43-year-old father of three says he set out then to produce bars with only ingredients that consumers could "see and pronounce."

After a year of tinkering, KIND LLC, of New York, was born. Kind bars, which sell for about $2 apiece, first landed on store shelves in 2004.

He expects the business to generate more than $100 million in U.S. retail sales this year, roughly doubling 2010 sales.

In an interview, Mr. Lubetzky recently discussed some of the challenges he faced in building his business. Edited excerpts:

WSJ: What experience did you have in food manufacturing prior to launching Kind?

Mr. Lubetzky: Kind evolved out of my first company, PeaceWorks, [an importer and manufacturer of Mediterranean spreads] which I started in 1993. At that time, I had no training in the food industry whatsoever. I took my legal briefcase and filled it up with jars of my company’s spreads and I would go store by store. They would tell me ‘Get out! You have no idea what you’re doing.’ I would not leave until they would teach me what I was doing wrong.

WSJ: What makes Kind different from other health-snack purveyors?

Mr. Lubetzky: The way we win in the marketplace is by being authentic and transparent. It’s not just the transparent wrapper. It’s the process we use, the ingredients we use, the names of our products. We don’t come up with hokey names. We tell you exactly what the products are that you get.

Consumers can detect quality and if somebody is cutting corners.

WSJ: Kind recently became the subject of a trademark battle with Italy’s Ferrero SpA, a $10 billion candy giant, whose brands include Kinder. What happened and what did you learn from that?

Mr. Lubetzky: It was a minor incident and we worked it out. [As a result of an out-of-court agreement], we’re Kind in the U.S. and in non-English speaking countries, we’re Be Kind. If you have a brand that has global aspirations, you need to make sure you integrate international considerations into your thinking about brand choices.

WSJ: In 2008, you sold a minority share in Kind to private-equity firm VMG Partners. Why?

Mr. Lubetzky: I had my first son. I had no ability to have any savings until that point because I had put everything into the company. I needed to be able to sleep at night. When you’re growing a company and you’re not well financed, for an entrepreneur, it’s extraordinarily challenging. Even if the company is profitable, you’re paying taxes to the government, you’re buying more inventory.

For many years in the beginning my salary was just $24,000. I also felt that to take us to the next level, we could use a partner that could help us.

For example, before 2008, we had an $800 sampling budget. After 2008, we had an $800,000 sampling budget. Thanks to that investment we were able to reach out to so many more people.

WSJ: Why not just sell the company?

Mr. Lubetzky: We weren’t ready. We felt that if a big company acquired us, it would jeopardize key parts of the DNA of the brand.

We’ve been very lucky with VMG. They know the entrepreneur is the one who has to provide the vision for the brand but they can help us a lot operationally.

WSJ: Do you butt heads with VMG?

Mr. Lubetzky: We tend to have good healthy arguments. . . .When we were about 35 people, my investors felt we should probably hire a president to help me grow the company and manage the day to day. I thought, why do we need to become bureaucratic? We were a very flat organization. And fortunately we hired John Leahy [as president].

I would be miserable without him today and I don’t think we would’ve executed as well. I continue focusing on my vision, innovation, new product development and marketing but defer to John’s mentorship in managing budgets and staff and ensuring accountability from all of our team members.

WSJ: Kind is a for-profit company with a social mission to spread kindness. How does that work?

Mr. Lubetzky: We’re very proud to be capitalists but we’re also socially responsible. Your social mission and your business have to support each other. If you care about something, you can’t let that shackle or hijack the core drivers of your business. The social mission can never be a crutch. Your product has to be healthy and tasty. Once your value proposition has been met, then you create loyalty.

Write to Sarah E. Needleman at sarah.needleman@wsj.com