Food Companies See (Big) Growth in the Inner City
On the day of its birth, HappyFamily Brands—then Happy Baby Foods—was comprised of three full-time employees crammed into a 10x10-foot room at the foot of the Manhattan Bridge in Brooklyn. The company had $500,000 to its name, cash that would, for quite a while, go out faster than it came in. Founder and CEO Shazi Visram remembers that first day, which fell near Mother’s Day in 2006.
“Shoestring budget sounds way too flashy to describe it,” Visram tells TakePart. “And that was more than two years after I first started working on the business plan.”
Fast-forward to Tuesday night, when Visram stood in front of a packed ballroom at Boston’s ritzy Park Plaza Hotel & Towers and was named America’s fastest-growing inner-city company by FORTUNE Magazine and the nonprofit Initiative for a Competitive Inner City (ICIC). In 2011, just five years after it was founded, HappyFamily Brands, now headquartered in lower Manhattan, netted an incredible $34.8 million, expanding by an average of 205 percent over the last five years. Visram now has 53 full-time employees on payroll, and more than 70 part-time workers too. In May, the company announced that nutrition company Groupe Danone had aquired a 92 percent stake in HappyBrands—a deal reportedly worth hundreds of millions of dollars.
What a difference a few years makes.
Visram attributes her company’s rapid growth to a suite of healthy, natural food products that consumers had wanted for years. The products are what Visram herself feeds to her young son.
“We are able to not only service but delight consumers who have an insatiable demand for the very best foods for their children,” she says. “People relate to us and see us as proud mothers and parents who are creating foods we are proud to give our own children.”
Oakland-based Revolution Foods—another company that largely serves children—grew almost as fast as Happy in recent years, taking the number two spot in the IC100. The company, which provides over 200,000 healthy, affordable meals per day to school districts across the United States, enjoyed $28.1 million in revenues in 2011, amounting to a five-year annual growth rate of 173 percent. Last year, as we reported, the company took over as food service provider at the 114 San Francisco public schools, and more recently served its 50 millionth meal.
The clean sweep of the top two spots in the Inner City 100 by sustainable food companies that serve mostly babies and children was no accident, Visram says, adding that she believes we are in a food entrepreneurship renaissance.
“Sustainability is our future and so are our children,” she says. “I believe both us and Revolution have a similar mission and service our country's greatest asset. There will always be a need to give the best to our children, and everybody has got to eat!”
Increasingly, companies like HappyBrands and Revolution Foods are important to inner cities. Earlier this year, the Initiative for a Competitive Inner City published a short paper—“Growing Healthy Economies: Leveraging America’s Urban Food Cluster”—highlighting a number of cities where food companies flourish and challenging more urban activity in that area. The food industry accounts for 11 percent of the U.S. economy, and roughly 60 percent of its 17 million employees have a high school diploma or less. Inner cities, because they are home to residents from all walks of life but also a disproportionate number of universities, sports stadiums and cultural venues needing food, are ideal places for food companies to set up shop, the paper asserts.
“The sudden interest in food has the potential to bring more than high-quality meals and, perhaps, better health: It could also be the catalyst to create impressive employment growth in our cities, including our most distressed neighborhoods,” author Mary Kay Leonard writes in the paper’s introduction.
And while the nonprofit and public sectors are doing important work to address nutrition-related problems like food insecurity, obesity, and heart disease, Visram believes the role of conscientious for-profit companies like HappyFamily and Revolution Foods in solving problems is often underestimated.
“I think powerful brands can make a great impact,” she says. “They touch lives on a daily and sometimes more frequent basis; they exist in our homes, and can serve as small billboards for education around nutrition and a healthy lifestyle.”