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Business Observer Thursday, Mar. 3, 2022 3 months ago

Sauce is the secret for young entrepreneur with an 'old soul'

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Starting out with just a dream in his parents' kitchen, David Habib's star has risen like a rocket in the food industry.
by: Brian Hartz Tampa Bay Editor

Forbes 30 Under 30. GrowFL company to watch. A top-selling product on Amazon.com.

At just 29 years old, David Habib has racked up a slew of accomplishments for himself and his Clearwater business, Yo Mama’s Foods, which makes pasta, pizza and barbecue sauces, as well as salad dressings. He launched the company not even five years ago, on Mother’s Day 2017, in his parents' garage, using his mom's recipes for his products.

“The dining room table was our first official headquarters,” Habib says. “I grew up with a wonderful mother who always gathered people around the table, people from different backgrounds, different cultures. The idea of community, of bringing people together through food, that was the inspiration behind the brand.”

Habib, a Washington, D.C.-based consultant at Deloitte prior to launching Yo Mama’s Foods, was also motivated by what he saw as a gap in the condiments marketplace.

“I wouldn’t say it was a revolutionary thing,” he says, “but I couldn’t find something that was clean, fresh and ultimately tasted good — something without a bunch of added sodium and sugars.”

Apart from a brief internship in 2014 with industry giant Mondelez International, Habid had little in the way of formal training in the food and beverage sector. He did have a master's degree in international business from the University of Florida and a supportive family — but it takes a lot more than that to break through in a market dominated by huge multinational companies with the marketing muscle to gobble up precious shelf space at Publix and Winn-Dixie.

“Corporate America was a good training ground for me,” he says, “but I always knew that I wanted to start a business — I didn’t know in what [industry], though.”

DO YOUR HOMEWORK

Slinging food, whether you’re a sole proprietor with a food truck or a massive global conglomerate, can be a tough, fickle business, subject to changing tastes and trends. But Habib has succeeded where many others have failed, so how did he do it, and at such a young age? It all started with a mindset, he says, citing a “quest for adventure and variety and being constantly challenged.”

His next step was to zero in on a subsector of the food industry that suited his strengths as well his level of risk tolerance.

“I didn’t want to go into the restaurant business,” he says. “I wanted to do something that was scalable, something you could package and ultimately ship throughout the whole world.”

'We were challenged with people not taking the brand seriously, not taking me seriously. Being a young, new kid on the block getting into the food business, certain suppliers and manufacturers would take advantage of that, and you don’t know any better because you don’t have any experience.' David Habib, founder and owner of Yo Mama's Foods

One of Habib’s smartest strategic moves was to focus on what are known in the grocery world as fast-moving consumables — quickly used items that tend to be purchased repeatedly.

“I wasn’t interested in marshmallows,” he says. “Nothing against marshmallows, but I didn’t want [to make] something that would sit in a pantry or fridge for three to six months. From personal experience, when I use pizza sauce, pasta sauce, barbecue sauce or dressings, I use the whole bottle pretty quickly.”

That food category also happens to be one that’s popular for in-store demos and tastings, and that’s how Habib met Vicki Meyer, who’s now Yo Mama’s Foods’ sales manager. Meyer says she demonstrated the company’s products at Whole Foods stores and trade shows, giving her familiarity with Habib and the culture and mission of Yo Mama’s Foods. That knowledge gave her the confidence to take a risk and join the firm full time in 2018, when it was still a fledgling business.  

“I was steering my own ship,” Meyer says of her pre-Yo Mama’s career. “It was only me for so long.”

She found a sense of family, belonging and purpose at Yo Mama’s, despite early struggles with product marketing and awareness. Citing “tenacity and persistence” as key traits, Meyer eventually found success in getting facetime with grocers and food brokers and distributors.

“Just give us that vendor meeting,” she says. “If we get in front of you, you’re going to love Yo Mama’s. But the biggest challenge, like everyone has, is reaching out to people and getting replies. Not that people aren’t interested, but they have a lot of email before review times come due, so you really have to be persistent.”  

Today, Yo Mama’s Foods products can be found in 330 Whole Foods and 1,100 Walmart stores nationwide. They’re also available at specialty grocers such as Sprouts Farmers Market and Nature’s Food Patch in Clearwater, as well as select Publix supermarkets.

“The first big retailer that took a chance on us, on a national basis, was Whole Foods,” Habib says, “and that took about two and a half years.”

In the meantime, Habib made sure Yo Mama’s Foods had a strong e-commerce presence, striking deals with Amazon.com, SamsClub.com and Walmart.com.

“In October 2017,” he says, “we launched on Amazon, and by January 2018 we were their No. 1 best-selling pasta sauce, a title we still hold today. That helped set us up with the right infrastructure to be able to handle increased demand from online purchasing. No one really saw COVID-19 happening, but we were well positioned on the online channel to ride that wave.”

He adds, “At one point, you know, in March 2020, people were ordering 99 jars of pasta sauce, we were shipping it everywhere and we're like, ‘What are you doing with that pasta sauce? Are you showering in it? Are you hoarding it?’”

Sales used to be split 50-50 between brick-and-mortar retail and online, but today, with more than 10,000 retailers nationwide and abroad (the company exports to Mexico, Canada, the United Kingdom, Australia and South Korea) carrying the products, the ratio is closer to 70% brick-and-mortar retail and 30% online, and Habib says his focus in 2022 will be to win deals with more big-box retailers such as B.J.’s Wholesale Club and Costco.

“That’s where we’re putting a lot of our efforts,” he says, “along with international growth, too.”

‘OLD SOUL’

Habib has accomplished much in a short amount of time, and he’s done it with just 13 full-time local employees (Yo Mama’s products are made by a co-packer network on the east coast and then distributed from the firm’s warehouse in Clearwater.) While declining to disclose specific revenue figures, he says sales tripled from 2019 to 2020, doubled from 2020 to 2021 and are projected to double again from 2021 to 2022.

Even with that growth, Habib says cash and working capital are “always a challenge,” adding, “most retailers have payment terms from net 30 to net 60 days, so there’s always a very tight cash period where you have the orders coming in, but you’re still working on next month’s production.”

Habib says he’s learned not to be afraid to make “expensive mistakes,” citing “the school of hard knocks” as an invaluable teacher. “You make those mistakes and it either kills you or makes you stronger.”

Hard knocks weren’t uncommon in the early stages of Yo Mama’s Foods, Habib says: “We were challenged with people not taking the brand seriously, not taking me seriously. Being a young, new kid on the block getting into the food business, certain suppliers and manufacturers would take advantage of that, and you don’t know any better because you don’t have any experience.”

To help navigate those difficult early days, Habib sought out the advice of mentors, specifically Leeward Bean, the late owner of Clearwater-based Big Frog Custom T-shirts. “He was a great mentor of mine in the early days,” says Habib, who wrote a tribute to Bean after his death in July 2020.

Meyer says Habib has proven to be wise beyond his years as a leader, calling him an “old soul” who listens well and possesses a high degree of emotional intelligence.

“There’s nothing boastful about David,” she says, “and when you’re that humble and believe that ‘This isn’t just about me,’ that creates teamwork, and he’s always approachable. Where he gets all of that from, at a young age, I don’t know, and I commend him on the fact that as this company has grown, he hasn’t lost any of what he had at the very beginning. He stays true to himself, and that shines through.”

(This story has been updated to clarify that David Habib earned a master's degree in business from the University of Florida, not the University of South Florida.)

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