ZeroCarb LYFE - Scaling Strategy: E-Com, Foodservice, and Retail Realities

Rose Hamilton (00:00)
ZeroCarb LYFE was selling through roughly 400 Sprout stores, and Omar Adia decided to pull the product. Not because it wasn't selling, but because the economics weren't good enough. I love that decision because founders are taught to celebrate more. More doors, more distribution, more revenue. But sometimes the harder and much more important question is whether that growth is actually making the business better. And Omar has an interesting lens on that.

He started his career in RD and moved into operations and commercialization, and eventually became the founder responsible for the entire system. I'm Rose Hamilton and this is the story of a brand. The show is presented by Compass Rose Ventures. We work with consumer brands and investors on the commercial decisions behind Amazing Growth, the choices that determine whether a business is simply getting bigger or actually becoming more valuable.

Omar, I want to welcome you to the show and I'm I'm so excited to have you here.

Omar (01:01)
I'm excited to be here, Ross.

Rose Hamilton (01:04)
Think a good spot to start would be actually before Zero Carb Life, before it was actually really a company. Muhammad Ali had created this incredible, unusual product for the listeners who might not be aware: a pizza crust that made primarily was made primarily from chicken. So when you encountered what Muhammad had created, what did you see that made you think there's a real business hiding inside this?

Omar (01:29)
Yeah, so Mohammed had had invent he's, you know, an accountant by profession and but just had a lot of creativity around food. you know, like a lot of people have their hobby, and that really is what turns into their what ends up being their life choice for career or for business. So he had this invention, which he had worked through through s a lot of iterations. And he did it out of need. You know, he loved pizza and he ended up finding out he was diabetic and he wanted to

make a change in his diet, but at the same time still enjoy something he loved. So he started playing with that on a kitchen top level. during that up to that period where he was doing that in in parallel with I had been, like I think we had talked previously, Rose, I had been at a Kraft Foods, Con Agri Foods, Dean Foods, sort of going through that journey in corporate America of learning and succeeding and growing in my career, which then resulted in

Thicker golden handcuffs, as we call them, where it's harder and harder to leave the role with corporate America,

Rose Hamilton (02:31)
Yes.

Omar (02:32)
but always wanted to be an entrepreneur. my my journey in entrepreneurship started with consulting, where I left corporate America and actually grew a consulting firm to two offices globally, and then realized I wanted to really get into startups and started scoping the right level of startup, especially with food was my focus. And so I had this understanding of the market that there's a lot of people who have ideas.

but they don't know how to commercialize, they don't know how to have a family of patents around them, and some of them don't even know how to take it to scale. Mohammed was one of those people. He was able to do something very unique on the kitchen top, but to take it to scale, he didn't have that experience, obviously, because he wasn't a food guy, you know, originally. So that's where I realized this could be a huge opportunity. I also saw something very specific in his in his product, which could end up being a a technology on the commercial scale that I I could help invent.

And then that could lead us to many product forms. Because previously in my previous life at Kraft, I learned and and discovered, and one of my patents is is in that, you know, is how to use time and temperature. It's owned by Kraft, but it's with my name. But it's how to use time and temperature to manipulate ingredients and give the same taste of full fat with one third, you know, up to one-third less fat. and that's actually what led to understanding that time and temperature can be used instead of

adding ingredients, adding things that are unnecessary to get a certain taste profile when you want to make something healthier. And that's kind of what Muhammad was doing when he said he was doing it on the kitchen top. I said, well, what are you using as a binder? He's like, there's no binder. I said he must not understand what a binder is because he's an accountant. So I started explaining it to him. So no, I understand what a binder is, there's no binder. So then I realized there is something there that leverages my experience in technology. And so I knew we could launch something. And then we launched you know, came up with zero carb life.

right after COVID we were launched and so was able to take three quarters of the consulting team and make them the startup team because the consulting company had basically halted all business because all the businesses that was serving halted all business. So

Rose Hamilton (04:34)
Yep.

Omar (04:34)
it was the a blessing in disguise to have it the year of COVID and and we kinda grew rapidly from there.

Rose Hamilton (04:41)
So what did Mohammed understand about the consumer problem? And what did your R and D and operations background tell you would have to actually become true before his solution could actually scale?

Omar (04:52)
Sure. So understood the concern of violence from his perspective and other diabetics that he knew that basically it's not fair and and candidly that's probably the best way to say it. It's not fair that foods that would we enjoy for people who have special dietary needs, they can't enjoy it. So that's kind of the birth of the idea. I then saw there's a lot more too because I'm very much I'm very passionate about fitness and about macros, protein to calorie ratio.

and realize there's there's more there. And that's number one in terms of consumer to consum meet consumer needs and the consumer segment that cares about it. You know, he was very focused on those that are trying to reduce carbs or are for special needs, or at the time keto was a was a big thing. but I realized that there's a huge trend in terms of macros in general. And then of course the commercialization piece. Like I knew there's thousands and thousands and thousands of ideas that people have.

And turning it into a business requires that you can scale it. And to scale it, you have to be able to make it on a on a a scalable level, which is commercial scale plant or manufacturing and whatever process you're using on the kitchen can't translate directly at all to a plant unless you can figure out the equipment, figure out how to manipul manipulate with that equipment and for it to not be cost prohibitive. Like it can't be equipment that we have to go to Germany and build from scratch and design with engineers when it's a startup. So that's where my knowledge and and experience came in.

And then with that knowledge and experience we also looked at a ton of other product forms that were that were possible because of the commercialization process we put together.

Rose Hamilton (06:25)
So that that's so interesting. It's like it that commercialization piece was unique to your skill set. That was so complimentary. And I think what I wonder about is what was already right about the product and what was nowhere near ready to scale. And really what was the first thing you knew you had to approve?

Omar (06:43)
So the f the what was right about the product is the fact that it was just clean, four ingredients, no binder, no additives. That was definitely unique, even for kitchen scale. Cause most people would would know, would would feel that they it wouldn't hold together. But because he he had done so many trials, it held together on a kitchen top. but then when it was would go to scale, it would be hard to match what was being done. And so I knew there had to be a unique time and temperature application that is relevant to manufacturing.

that I was in experience that I experienced and and then how to put it together to where we could protect it with a patent. That was all something that I had to bring to the table. from an improvement standpoint, you know, he had tried to launch it as a restaurant concept for a year and then it didn't necessarily work as they had hoped. and then it sat on the shelf in his sort of in his mind and in his ownership as a concept for years. so the other thing that had to be improved is how do we look at this as a business?

And so many people have that by the way. Like that's especially for healthy food. There's so many people who have invented something, they don't know how to commercialize it. Timing has to be right. The messaging and and understanding is this just because it's a need that you're fulfilling for you or for a small group of friends, that doesn't mean it scales in terms of need. So how does it scale in terms of need? So really the business side I brought to the table, the commercialization side I brought to the table. And at the time we were helped that Beyond Meats and Impossible Burger had put it put together this concept that

You know, because it's a burger, it can be an ingredient for burger restaurants. And for us, because it's a it was the first product was a crust, even though the vision was to have a ton of other products, but that crust could be an ingredient for pizza restaurants. So that's really how we launched. We we sent it to pe you know, people would buy it and take it home and make their own pizza, but then we took it to restaurants and this was an amazing ad to their menu because now they had incremental customers and we continue to keep those restaurants that started with us. To this day, they've been growing with our product.

And now we we've validated that we have the highest protein to calorie ratio pizza and pizza crust in the world. So any restaurant that takes us that it's a big chain in a specific region, they can say they have the highest protein to calorie ratio pizza in that region. So so that's been huge for us as well.

Rose Hamilton (09:00)
Well, and I I I think I understand why the product is different now based on what you've described. I'm actually really interested in the moment that you realized different could become commercially valuable because there's something special in there. What did you see that was unique and said, you know, this is this is really gonna be commercially valuable?

Omar (09:22)
So two things. One is the fact that all competitors that were non traditional crusts for pizza or pizza crust or even tortillas number one didn't didn't deliver protein. Number two had almost just as much calories as their counterpart that had carbs. And number three did not at all have the mouthfeel or consistency of what a pizza crust was. So people that were trying cauliflower crust, you know, was delivering the toppings but not delivering at all on the taste of the crust of a pizza.

So I realized that that's very unique to be able to deliver a thin crust, pizza crunch and taste, profile and mouthfeel was not out there. So competitive wise, it was it was unique. And then the other thing unique is how clean the ingredients are. To have four

Rose Hamilton (10:06)
Yeah, clearly.

Omar (10:07)
ingredients that people know that a five year old knows how to pronounce and actually knows what they are when you tell him olive oil, chicken, salt, spices, that that was a huge win. And that's continued to be a win for us.

Rose Hamilton (10:19)
Well, and I will share with you, I my daughter and I have tested the product and we had to drive a little distance to a target, but we were willing to do it because we wanted it. We wanted to test it on a Friday.

Omar (10:28)
we appreciate that.

Rose Hamilton (10:30)
And we tried a couple versions of it. And it the taste that you mentioned, I will underscore for anybody listening to this, you have to test it to know to really understand it. Once you taste it, you notice the difference. And I would imagine that makes sampling easy for you once you hit and you get into the retail environment.

Omar (10:49)
Yeah, sampling has been a h huge for us. You know, so we're actually our sampling program at Target hasn't even launched, so we're doing very well velocity wise off the shelf. And we haven't even launched the sampling program. But when we did sampling at Sprouts when we were there, I mean it would just fly off the shelves because people they come to the sampling table and they look

Rose Hamilton (11:07)
So good.

Omar (11:07)
at it and they're like, Chicken and then they try they said, you know, and and you normally people are expecting a healthy product to to have some kind of deficit in terms of taste profile.

And so when they taste it they're like, my gosh, I there's no way this chicken, what else is in it? And it's like just olive oil and salt and then you look at the sodium and the sodium is one of the lowest of healthy products, even though it sa it has salt. So all of that just is ends up making the wind bigger.

Rose Hamilton (11:34)
Well, and you know, so many products get on shelf, and if they're not able to be sampled or tasted or tested, they fall to the side. And I think there's a really important lesson for everyone listening here. You talked about the importance of the value proposition and it being easy to understand. So you've got a consumer need, the highest protein to calorie pizza, and you've

Omar (11:57)
Mm-hmm.

Rose Hamilton (11:57)
got four ingredients that a child could pronounce and understand. And so that shows up in your packaging.

And when you look at that, it sells itself. Like you're able to sell it through what you're putting on the shelf in front of the consumer. And I think you are a great example for someone to look at and say, as you're thinking packaging for retail environment, especially in something consumable like this, what's gotta go in that pack to make it sell? And that's part of the commercialization strategy that I think people get confused about how important that.

Product having differentiation, but then how you convey it and communicate it is a big part of the strategy. And I think it gets

Omar (12:37)
Without a doubt.

Yes. And sometimes one of the things to point out and then to build on what you're saying. So number one, everything you said is absolutely the case that if you don't have if you don't first of all gain the understanding from the consumer's perspective, validate the need, validate what is the most simple version of how to state that need and how to state the solution, you're missing the mark. so that's number one. Number two, also be comfortable that whatever you come up with as the first idea.

based on a smaller sample set of people, may not necessarily be what you end up with. And you need to be open to that iterative process that you're you're a startup is really a learning project for a long time until you scale. And if you don't approach it that way as a CEO and especially as a founder and a creator, you're going to fail because what we have this my this is my baby, no, I invented it this way. These people know nothing.

You know, that may have worked for Steve Jobs, but it was after tens of years of him understanding the consumer. So he knew that all w that mattered is communicating well the solution and that people will get it. A lot of founders go into a startup with a small sample set of people understanding and then thinking that's my j I just need to keep grinding and pushing this thing that it's the market's clearly telling me something different. in addition, I just wanna say this. You know, you you for us the highest protein to calorie ratio

wasn't what we were saying in the beginning. We were talking about the low carb. As the market even though we knew it was high protein, even though it was new we knew it was low calories, but two things happened. One is we realized that the consumer was talking to us about the reason they're buying our product is actually how much protein is in it. And some other consumers were talking about the calorie count and how little it is. And then we did the competitive analysis with those things and realized how unique it was. The second thing is there was a competitor, not

I'm sorry, not a proximal competitor, but actually a product in the market that's complementary, Protein Bar. And the the inventors of Rx Bar exited with Kellogg and then they they brought in they they founded David Bar. David Bar is marketed specifically to people who care about high high protein, low calorie. And they have driven the sales of that company's product

Rose Hamilton (14:57)
Incredible.

Omar (14:57)
through the roof. And so and we learned that in four months ago and realized well, we're the highest protein calorie.

pizza and pizza crust in the world. And we haven't been talking about that. So now we're actually talking about that and and and we're seeing the response in our long term value and e-commerce and in how we're selling to retail and food service. They realize this is a big win. So you have to be listening to the market and let the market tell you what how to sell your brand. You're you're not the expert. You're the expert to translate the market data and the market signal. And of course be able to tell signal from noise, but

You have to be listening to the market and take that signal and take it seriously.

Rose Hamilton (15:38)
Yes, you know, and I find so many companies that are science backed have the science, but yet it's stuck in the back room and it's lost. And it's not until

Omar (15:48)
Yes. Yes, it's academic.

Rose Hamilton (15:50)
the consumer you create your VIP groups and start asking people why, why would they choose to leave the brand? Why are they even buying the brand? And until you engage the consumer and really listen as you're describing.

There's a lot that gets lost, and it's really very unfortunate. But those who recognize the importance of listening, I think, really have a shot. Now, there's something also very interesting for you. You've talked about entrepreneurship, and I loved how you defined it that you need it to be, it's almost like it's a science experiment in some ways in the early days. And you

Omar (16:20)
Yeah. Hypothesizing it.

Rose Hamilton (16:21)
have to have that entrepreneurial spirit to

Omar (16:25)
Yes.

Rose Hamilton (16:25)
iterate, to pivot and understand even production runs, and you might want to do something today, but

You might have to wait six months until the next packaging comes in. And so it's a lot of iterations on that roadmap. But you've also spent years thinking about commercialization from inside larger companies. Then you became an entrepreneur and you certainly had consulting in the middle. and suddenly there's no large company system around you. So what did that background prepare you for incredibly well?

And what did you discover you had to learn all over again as a founder that was different from being in the bigger environment?

Omar (17:01)
So that's a really, really great question, actually. You're the first host to ask me that question. I think it's at the core of this. So one is what what translated well and what became an a huge asset. number one, it's very rare for a founder who invents a a food to actually have R and D as an inventor and like you said, have the other side which is manufacturing and business. So having all three of those,

Rose Hamilton (17:26)
Yeah.

Omar (17:26)
because being in the consulting side after the corporate journey.

ended up giving me a lot of business experience, how business succeeds, how it fails, the strategy, the pivoting, all of that understanding regardless of product. And then and then I was in operations in the latter part of my journey with corporate America. So all three of those were extremely translatable to specifically our zero carb life launch. The things that were probably as well as organizing, you know, execution, you can have the most talented team in the world, but if you don't have some basic execution

operating system, the components in place, whether it's visibility of of key big deal objectives that are that need to be happening, holding accountability to them, the seamless way to communicate, transparency in communication, having the right drum beat of checking meetings without loading people with meetings. So there's key operating system components, especially that are that have to be catered to a startup that are very different than corporate.

But you learn the concept of operating system for excellent execution. And without execution, you can have the best product, you can have the best talent, and you can even have amazing sales initially. But without execution, you will not scale successfully. so you have to have execution, and that's what another thing that was brought from that journey. What had to be sorry, you thought you

Rose Hamilton (18:52)
no no no no please

Omar (18:53)
were gonna say something. What had to be accommodated, or I guess you could say pivoted in my from my experience.

Is the concept of going to a very lean team and having a very strict runway of capital to fit

Rose Hamilton (19:07)
Yes.

Omar (19:08)
in all the pivots and iterations until getting to a certain milestone. that learning is for a founder, that's probably the most important thing to be ready for. Be ready for you will fail and you will have to you will take punches that will take you down, like Muhammad Ali.

type punches, you Mike Tyson type punches. And you have to you have no time to lay and take three a count of three or a count of four. You better get up after one or two counts and and be ready to fight again because that's what it feels like when you're a founder. Whether it's you hitting a runway you know a runway use you know excuse me a runway c ending you know a runway basically

I'm thinking of the word, excuse me, I need a pause. I don't know when.

Rose Hamilton (20:01)
Pause.

You let me know when you're ready.

Omar (20:03)
Sure. Will you guys edit all that part? I'm trying to think of the word.

Rose Hamilton (20:06)
Always.

Omar (20:08)
Runway consumption. That's the word I'm using. Okay.

Rose Hamilton (20:12)
Three, two, one.

Omar (20:15)
So whether you're facing runway consumption issues or whether you're facing a hypothesis that failed and you have less time to help it succeed, whether you have people, personnel issues, you realize that you've scaled to where your talent really needs to be really needs to be elevated, and some people are are stepping up to it, and some people who whoever got you here may not get you there. So all those challenges

Rose Hamilton (20:38)
Mm. Still true.

Omar (20:39)
are on a founder, and while all that's being managed and capital raising,

And external relationships, you also still need to be heavily involved at some level in the initial phase of a startup to really all functions, even if you have a a good team. and it's only after scaling to a specific level where you can start to sort of remove yourself from some of that detail.

Rose Hamilton (21:01)
I cannot stress how many times we meet founders and they'll come to us and say, we think we have a marketing problem. At least twice a week we hear the story. But what it actually

Omar (21:13)
Mm.

Rose Hamilton (21:14)
is is something important you just described that I think many struggle with articulating, which is a commercial architecture, an operating system. It's the commercial architecture that's more than marketing.

And it's about the positioning, but it's about how the people and the process and the systems work to build enterprise value. And I think

Omar (21:38)
That's right.

Rose Hamilton (21:39)
that commercial lens is almost a pivot for people to think about, yeah, I've just been busy grinding it out. You know, we're in startup land. We can't think about those things. But actually, if you don't take that pause, evaluate the talent, figure out what got you here and what's not going to get you there.

Omar (21:57)
Yeah.

Rose Hamilton (21:57)
And build

that architecture, I think many wait too long. And so many people I talk to say, why didn't I know this like two years into the business? Like we had proven market fit, but we just kept taking on stores and doing all these things, but

Omar (22:10)
Mm-hmm.

Rose Hamilton (22:10)
we really weren't built with an architecture and a system to choose what not to do. And it sounds like that's a big part. Like you already had that ingrained from being an operator, which I think is so important. And then

Omar (22:23)
Mm-hmm.

Rose Hamilton (22:23)
you moved into this entrepreneurial world.

probably already an an entrepreneur in the form of an intrapreneur in bigger

Omar (22:29)
Right.

Rose Hamilton (22:30)
companies. So that made your pivot a little bit easier. So now here's the question. What did you have to unlearn as you moved into

Omar (22:39)
Sure.

Rose Hamilton (22:40)
the startup land?

Omar (22:42)
I had to unlearn a couple of things. One is you know, corporate America comes with a bit of bureaucracy. And

Rose Hamilton (22:48)
Mm-hmm.

Omar (22:50)
there's a level of of flexibility. And candidly I was happ very happy to quickly unlearn that because that was part of the the non entrepreneurial world that was not pleasant for me. When you're an entrepreneur, you like to have number one, more horizontal or a closer to horizontal organization movement.

when it comes to at least execution. And secondly, you you don't want to waste opportunities. You don't want to lose the right timing to strike when something can be a big deal for a big win. And so really have to unlearn some of that nature of of you know decision making hierarchy, decision making process, stage gating. We still have to have some of that as because you don't want to make mistakes that can be very costly. And you don't want to have

and and under an under auditing, you know, lower auditing than than needed on different parts of the company, especially when it comes to foods. At the same time, you really have to figure out how your operating system can help you move very fast and help people feel independent and so that they can operate independently as much as humanly possible. So basically

Rose Hamilton (24:02)
Yes.

Omar (24:03)
you need to look at it. Whereas in corporate America there's a lot of

Unintentionally, there's a lot of saving my job type of type of behavior and job preservation. So then people are sticking to specific processes even though they realize this is no longer the most efficient way. And with a startup, everyone has to understand the moment this is no longer the most efficient way to do something, and I've learned that or I've realized that, you've got to figure out the soonest possible time to cut it out.

Rose Hamilton (24:30)
So when did you learn that having an opportunity and actually being ready for an opportunity are two very different things? Was there an example of that or something that happened in the journey?

Omar (24:42)
I think Sprouts, the one you mentioned at the beginning is probably a perfect example. You know, we but obviously we learned it the harder way because we went into Sprouts because it was a great opportunity to go in. It was a great match from product market fit with that market. and we probably underestimated how important the unit economics would have to be for us. You know, we wanted the top line revenue, but the concept of getting the top line revenue at the expense of

the best value propos proposition for the customer and from a pricing standpoint and the ideal margin level for our company was was not was a good a great learning that hey that wasn't the best because we didn't know how capital intensive selling and retail would be year one. And we didn't have enough enough guidance from the brokers in the picture, you know, the experts in the picture. It just really didn't show up as strongly as it should.

Now when I mentor anybody in the business, I say, your first year, you're gonna be you have to have way more capital than you think in order to make this thing successful and get velocity. and the value proposition better be to where customers don't just buy it once. It fits that what they're willing to pay for that for that value they're getting. For us, it was a smaller pizza, seven and a half inches, that was priced higher than our current bigger pizza. So it just was was upside down.

but because we we've made significant strides, have more volume, acquired manufacturing and did vertical integration. So we're now we have it to where we have better margins with a bigger pizza and lower pricing to the consumer, even though everybody else has gone up in price because of inflation. So we have a much more winning formula now. But having learned that don't go to a thousand retailers with something, you know, don't go bigger than you're ready for because you haven't validated.

Now we did that, even though we ha we know that's validated, that f value proposition, we still did one step at a time by going to Target only, making sure we'll we're validating

Rose Hamilton (26:43)
Stuff marked.

Omar (26:45)
getting velocity there. And now we're gonna open the floodgates of selling to you know a ton of retailers. So really that was a hard learning. And if I go go if I could go back, I would undo it and do it the way we're doing it with Target right now. Cause I I and I advise brands to do it like that all the time because it's really, really tempting to have that opportunity of many retailers saying,

We want to bring you in. We'll make this a success. But then retailers have their requirements. It's a it's a very hard business

Rose Hamilton (27:11)
Sure do.

Omar (27:11)
to be in Foobs. You know, they have their margin, they have their free fills, they their slotting fees, they have their promotional spend you have to do. Distribution take their piece. You you're making a product, and if you have a contract manufacturer and not your own manufacturing, like we kind of do, we have a cost plus relationship, then they take their piece. So in the end as a pr branded company, you're left with a very, very strict capital requirement to succeed. And if you don't,

You're you're off the shelf and that's the worst look you can have as a branded food company.

Rose Hamilton (27:38)
You're not getting back on.

Omar (27:39)
That's right. And and you're going to be questioned by other retailers. Well, if you were there and you got bet off, why, you know, why did that happen? So it's really important to learn not every opportunity that seems great is a great opportunity when you're in a learning mode. Try to learn everything you can from others that have been through it to make sure it's the right opportunity for you at that right time at that time.

Rose Hamilton (28:02)
that's a really good point. And you know, we just in our last podcast episode had Alice Lee from who's the the founder of First Day, which has now become number one vitamins for teenagers and children at Target. And you two are like parallel pathing. Yeah,

Omar (28:17)
my and it's awesome it's amazing. Well I have seen First Day actually. Yeah, yeah, yeah.

Rose Hamilton (28:22)
you'll definitely wanna check that one out because there's some very

Omar (28:25)
No.

Rose Hamilton (28:25)
interesting parallels about waiting because she had the opportunity, but just

Too much capital, too expensive, and wanted to do it right. And now, because of the focus in her category of going small with target, it's just growing and growing. And so she's, yeah, very similar story. So I also

Omar (28:43)
What's amazing?

Rose Hamilton (28:43)
have a question on something important that you brought up, which is consumer behavior. And I want to talk about GLP1 and territories around it here for a second. But first of all, what's the consumer behavior you're seeing now?

That makes you believe this protein to category calorie, protein to calorie conversation isn't just some passing fancy. It's not just a trend, but it's actually durable. What do

Omar (29:03)
Yeah. Yeah.

Rose Hamilton (29:07)
you see in consumer behavior that leads you down that path?

Omar (29:11)
That's a great question. And before, by the way, I go on, I want to mention, because we've been talking about the pizza a lot, we also have the lowest calorie protein chips on the market. And we just launched our LavaCrisps, which are actually the alternative for takis for young young people. So and they they have every single person has tasted it. We haven't had one person that tasted it that said this isn't amazing. So we're very, very excited about LavaCrisp. But to answer your question, protein the calorie.

At the core of it is the fact that whether GLP1 or not, the older you get, the more likely you are to for your food to transform into fat than muscle, unless you're very, very actively doing two things. One is some level of resistance, training or fitness at whatever, of course, magnitude of muscle you want to maintain or add. And the second is that your food.

Protein to calorie ratio has to be right. Because when your calories are too high above your metabolic rate, then you're adding on fat. When your calories are too low, then you're losing protein. you're losing muscle, excuse me. so it's very rare that when you get have a deficit, you just lose fat only. You lose fat and muscle. And usually muscle is more than fat. The only way to sort of

manage that and control it is that you have to have the sufficient protein for your body weight to maintain the muscle you have as you're reducing or maintaining a specific fat level or reducing it to a specific fat level because you have to have a deficit or you have to make sure you're not at a at a you know at a at an increase at a a surplus of of calories. So that means understanding your protein to calorie ratio at least at a at a surface level. For some like myself, now that we have AI,

I take a picture of everything I eat and I track my calories for the day and I track my protein for the day. I'm not saying everybody should be that obsessed. But I don't think that's, you know, maybe maybe being that obsessed with it is not going to be here to stay because, you know, you don't want to once you do it enough, you kind of get a sense of what you can eat and what you can't. But I think definitely the concept of maintaining strength for longevity, maintaining strength for quality of life, and

being able to, you know, keep just the right amount of fat for your body so you're it's heart healthy, it's joint supportive, all these things, our body starts aging from the day we're born. You know, we're shedding skin and shedding hair. And even though even though kids look like they're growing h healthier, they are, but w they're also we start we start basically deteriorating, decaying as a human body from day one. And so and that accelerates as we get older.

The way to sort of challenge that is by managing the macros and managing what the macros translate into in our bodies. I don't think that's leaving our world because we're becoming more and more aware of it. It's becoming easier to understand the food we eat. It's becoming easier to track what we're doing. And it's gonna be it's gonna get easier and easier still. So what that means is what we put into our bodies will be very easy to know what's this doing to me, short term and long term. And then I don't think people will stop paying attention to that.

And this concept of the macros isn't a trend. Like keto is more of, hey, this is like the unnatural way of your body to process food, and you're putting it into that unnatural way to kind of get a head start on fat reduction. But protein to calorie and how it translates into muscle versus fat and how that protects your body and from a longevity and from a health perspective, that's always been the case and it will always be the case. So that's why I don't think.

And consumers understanding that is why I see with consumers that's not going away. Then you have DLP ones, this new invention that has made it very easy to lose weight, but it overwhelmingly attacks muscle in terms of because you're basically not putting in calories. And like I said, if you're at a deficit, you lose more muscle than fat. So in order to support that, a low calorie food with high protein gets that much more mitigated.

And and we're at a rate of twenty eight percent of of Americans have used or are using GLP ones now and it accelerates daily. So I don't think this is the only way.

Rose Hamilton (33:44)
Well, and I think it accelerates GLP one, what it's doing is it's accelerating people's quest for knowledge around understanding how to live a better, longer life. So I concur with you, I don't think this is going anywhere. And I think there's always a tension when the opportunity gets bigger, which it is right now, if you look at household penetration, and a product can serve a lot of people without the brand being able to speak to all of them at once.

And I think that's the interesting balance for you. So with all that said, there's a lot of benefits to your products. And of course, we all love the taste. What is the one consumer need you ultimately want zero carb life to own and dominate and be top of the charts on?

Omar (34:27)
So we we our mission is to transform health through food. And candidly, that's our genuine what I would like us to dominate in. And what I mean by that is we our thesis is that transforming health through food doesn't just mean offering healthy food. It has to be cravable healthy food. It has to be healthy food that people are reaching for, not because it's healthy, but because it is tasty and they enjoy it. Until that's the norm for healthy food, we won't transform health through food.

Rose Hamilton (34:57)
Yeah, that's true.

Omar (34:57)
So we want to be at the forefront of that.

Rose Hamilton (34:59)
Yep. And it's like consumer behavior becomes so, so critical, you know. And when you think about go ahead.

Omar (35:05)
Yeah. I mean we leverage we I'm sorry, we

already have a ton of the population addicted to chips. Right? whether at night when you're watching T V, whether as part of a snack when you're eating a sandwich. So let's lever

Rose Hamilton (35:19)
Cravings.

Omar (35:20)
cravings, you know, for crunch and and so there's either sweet cravings or sweet or salt or savory cravings for crunch. So why don't we leverage those cravings that people have naturally? You know, when we have dopamine that releases because of it, etcetera.

Let's figure out how to make that healthy instead of telling people the only way to be healthy is to unnaturally not enjoy those things or pretend like you don't need them anymore. Of course, yes, the body can be weaned off of that little by little, but we all still remember that feeling. And so even though we're weaned off of it, you know, in the weak moments we'll slip back to it. And then once you slip back to it, that's why a lot of people sort of quote unquote fall off the wagon. Well, let's not have to make it a wagon. Let's make it much easier to consume healthy food.

Rose Hamilton (36:03)
So true. And when you look at expansion into new categories, I'm so you so glad you brought that up, and even when you look at the Sprouts decision going back that far, what were the numbers telling you that the revenue line wasn't? And you don't have to give any give me anything confidential. We're not looking for that, but what economically wasn't working well enough to deserve more capital? And I think the question at the heart of that is was the harder part

Recognizing the economics weren't good enough, or actually walking away once you knew, because those were two different things.

Omar (36:40)
definitely walking away once we knew was the harder part. Because then it's about as a gross startup going backwards in top line revenue. of course, it was understood by sophisticated invest investors that hey, this is not a walk away away from revenue, this is a walk towards bottom line being healthier. However, for

Rose Hamilton (36:59)
What's it? Mm-hmm.

Omar (37:02)
the general population, that's like, what's going on? So that was harder. However, your question was what about

What about the market signal made us know it wasn't right?

Rose Hamilton (37:14)
Yeah, what what economically wasn't working well enough to say we should

Omar (37:18)
Okay.

Rose Hamilton (37:18)
give more capital to this?

Omar (37:20)
Sure. So number one, we learned after launch how much promotional spend is required to achieve velocity. And going into retail, everyone needs to understand this very, very well. So if you can put it on repeat four times when you guys edit, going onto retail shelves, getting a big contract from a retailer is not the win. The win is that once you're on the shelf, you get the velocity.

Because when you get the velocity, then you can go to other retailers, you stay on the shelf with that retailer and you go up in volume, which helps your economics. So to get the velocity, it's not just being a great product, because people have to know about the product. So you have to pay for sampling, you have to pay for advertisement, either by giving promotions, you know, money off that you're paying half of or more, or by, you know, spending digital ads and and

You know, and physical ads to to let people know about the product. So all of that takes capital. And the level of capital that it requires, especially in the first year, is if you don't have the runway for it, along with the rest of your business, you won't get the velocity. And so then you have to make a decision, or the retailer sometimes makes the decision for you. is this a winning formula for us? For us, the velocity was a small part of it, but the bigger part was even if we get the velocity up.

Right now, the economics are customers are telling us this is expensive, but some of we're buying it anyway because we want it. But this is too small. When they open the package, this is a small pizza for the price I paid. So even the people who loved us are seeing those comments. We're seeing the impact in our results. And

Rose Hamilton (39:04)
Sure.

Omar (39:04)
so, because our margin wasn't high, even though it was a seven and a half price that that so we knew we needed to work on the cost of goods sold.

So that we can go back to the market with a larger product that was more in line with traditional pizza size and have it be a lower cost point for customers. We never imagined we'd be so successful with that that we actually are have go get a lower cost for a hot larger pizza. So we weren't intending that. We were just intending to make it a larger pizza for the same price, but we were actually able to lower the price for a bigger pizza, which which became a huge one.

Rose Hamilton (39:37)
Amazing. You know, this is one of those distinctions that I really wish more consumer companies made earlier. Revenue tells you something's sold, and we all feel good when we see revenue going up. It doesn't automatically, though, tell you that the growth deserves more capital or more inventory. I think about TikTok on that front, more management attention, or even more doors. And so I think the consideration and the setup on that and what you're monitoring and

Making sure you've got your commercial architecture set to know when it's going to be right for you to even contemplate those conversations so that the brand can lead it versus retailers knocking on your door and being wooed away by it. And, you know, we all know what happens if you don't have that architecture set to know how you make decisions. It's really hard. Super

Omar (40:23)
That's right. It's a perfect rare to say.

Rose Hamilton (40:24)
hard. So here's what I find interesting. On one side of the company, you're willing to simplify.

But on the supply side, you make the opposite choice. You take on more complexity. So most emerging food founders are told to stay asset-light. Why wasn't that the right answer for zero carb life?

Omar (40:43)
So we solved it in a creative way where we're still asset light on zero card life because we had a separate entity with separate investors, with the only common shareholder being myself to acquire the factory. And it was our contract manufacturer. But doing that allowed with those the investors on the factory side knowing full well that was how it was going to work, it became a cost plus factory for zero card life.

Which allows two things to happen. We have control over the cost of goods sold where we can decrease it significantly, and we have control over scaling without having to be beholden to a manufacturer saying, Well, we have more customers on this side, so we can only scale you this much. That gave us so much liberation as zero carbon life, and offered these investors that are in a factory a little lower risk of an investment because but it's also capped in terms of profit and in terms of, you know, exit value.

But that's still healthy for them. And they're a different type of investor, but you know, it it was supporting that entity to then be supportive of zero card life. So that's how we got around that, that stayed true to be asset like, because I still believe startup brands should be asset like. At the same time, someone like me, if there's a founder like me who has the experience in manufacturing and knows how to direct the manufacturing entity to reduce cost of goods sold.

And to have the incentive to do that, then that allows them to look at the creative way to get much more involved in the manufacturing side and not just be beholden to a contract manufacturer.

Rose Hamilton (42:21)
I think that's so smart. It really is. Pause.

Omar (42:23)
I I need a pause because I think the connection's

really poor.

Can you hear me, Rose?

Rose Hamilton (42:28)
I can hear you now.

Omar (42:29)
Okay. I don't know if that's my side or yours, but I don't know if what was the last thing you heard. We probably should do a pause so that we can edit.

Rose Hamilton (42:36)
Yeah, and I'll call you back in. I think let's start. you were saying something about having the experience to direct the the manufacturer. Okay.

Omar (42:47)
yeah. So

So I suggest if there's a founder like myself that has the experience with manufacturing operations and supply chain to get more involved to be able to s support the brand with lower cost on the supply side and to be able to direct that how can we scale quickly when we get big clients. At the same time, I would only recommend it if you have the experience and if you could figure out a creative way to have that control. You won't always have it because it requires

Number one, a contract manufacturer is willing to work with you and seize the the you know the outcome being positive. So maybe you get a contract manufacturer who you can convince to be to take some stake or some equity in the business, or you get a contract manufacturer who you can actually acquire, like I said, with separate partners. It's not that straightforward, but it's it's a huge win when you can

Rose Hamilton (43:35)
It can be done.

Omar (43:36)
do that, but only at the right moment. Don't do that too early in the business because you have to sh make sure you have product market fit.

And that you have signal from the market that scale is what's about to happen.

Rose Hamilton (43:49)
Got it, got it. You know, there's one thing I heard you say, and I know we're getting close to end of time here, but I really want to make sure we touch on this. You said something very clearly when we spoke, you know, as we were getting prepared for this interview, that you you haven't asked every channel to do the same job. And this is an area I see a lot of confusion. So DTC taught you something, food service proves something else.

And retail creates a different kind of scale. So, what is each channel actually for in this business?

Omar (44:25)
Beautiful. So e commerce has pros and con each one of them has pros and cons, I think is the best way for me to put it. So e-commerce has the pro of quick cash cycle. You sell today, you get the money tomorrow. There's nothing better than that in sales. it also has the pro that you are learning insanely well with your consumers directly. You can do tests, you can do pricing you know, variation, you can do surveys with your consumers, you can

reach your local consumers and have them tell you what's making them buy so that you can then validate and scale that. So that's what you have with e-commerce. The downside is it's very costly to acquire customers. And the downside for a frozen food business like ours is it's extremely costly to fulfill e-commerce because we have to send it with all the frozen dry ice and and packaging and then, you know, f fulfiller fulfillment centers that are built for frozen are very few in the country.

So the cost is high. That's on e-commerce. On re on food service, the amazing part of that is margins are great because you're going to a, you know, a restaurant, there is a distributor in the middle, but they, you know, you're giving them an opportunity to have incremental pricing on their pr final product and they see the value. So, you know, your margins are good and you're adding a huge win for them. Awareness is not something you have to generate. They're putting it on their menu.

So they're gonna raise awareness and it's much easier for them. So your cost and your promotional spend is much slower. That's what keeps your margins high, even in year one. But their cycle time to close is very slow. The bigger the operator, the slower the close. You can go to four restaurants and close that pretty quick with the owner. But then when you get to an 800 restaurant chain, that's not a slow a fast cycle at all. that's the downside of of food service. And then retail, I think we talked about that at length, but

The downside is the s significant spend in year one. And it's, you know, the fact that it it doesn't leave as much margin, especially in year one. and if you don't get the velocity, you've got a really, really bad, you know, story to tell that you need to figure out how to tell. And it's harder to walk away from opportunities in retail. So all those are sort of downsides. But the upside is it's huge growth with

Rose Hamilton (46:48)
It is.

Omar (46:49)
per client.

Right. So you have a target that's huge growth per client. You go to a sprouts, that's huge growth. You go to a high V, you go to a Kroger. All of those give you multiple doors, many, many doors for for most cases in the US. And that allows you to grow with and big step changes, not just incremental.

Rose Hamilton (47:07)
Yeah. And you know, overall, as you describe all of that, and I reflect on all of your questions, you've described a company that has learned a lot about how it wants to grow. And I think that's a really important distinction that ladders right back to commercial architecture, how you want to do it. So I'm deliberately not going to ask you what's next. I think that's a boring question. I'm actually more interested in what does carved life still have to?

Omar (47:34)
Pass.

Rose Hamilton (47:36)
Pause.

Omar (47:37)
Sorry. So two quick things. One is you said carb life. If you don't mind saying zero carb life instead. That's okay.

Rose Hamilton (47:43)
my gosh, yes. Thank you for calling that up.

Omar (47:45)
No, that's okay. And then the second thing is I have an investor meeting in four minutes. So I just wanted to

Rose Hamilton (47:49)
okay.

Omar (47:50)
tell you that that's a hard stop. I should have said that at the beginning, so I apologize for that. But we can no no, I can still answer this question and then whatever you want to do to conclude. So if you

Rose Hamilton (47:52)
no no that's okay. So you know what? Let's do this. Yep. Okay. Okay.

Omar (48:00)
can ask it again, zero carb life.

Rose Hamilton (48:02)
Okay, three, two, one. What does zero carb life still have to prove?

Omar (48:10)
I think what we have to prove is number one, we actually are transforming health through food. There's no doubt about that. The second one is we need to prove that what's been validated with the smaller chain restaurants with pizza does translate it to the bigger chain. and then we need to prove that these lava crisps, when we get them in the hands of kids, they're gonna drop their takis and they're gonna start eating these lava crisps instead and get healthier. So I think all three of these are are sort of immediate

outlook because we've really exceeded our expectations with a lot of other things that we have set are our milestones for this year. I think if we can achieve those milestones over the next eighteen months, I think the sky's the limit for, you know, going towards the exit.

Rose Hamilton (48:52)
Amazing. Well, it has been such a pleasure to have you on. And I just know our listeners are going to appreciate the intelligence, the thoughtfulness. And really, you are an example of such a successful company and the blend of your career that got you here and where it's taking you. So it's going to be such a joy to watch your journey continue to unfold. And we look forward to having you back on the story of a brand real soon. Thank you.

Omar (49:17)
I really

appreciate it, Ross. Thank you.