Powerhouse Snacks

When a local pretzel manufacturer went bankrupt, Tom Condon, a Clara City farmer and entrepreneur who owned the plant’s building, worried about the town of 1500 losing critical manufacturing jobs. Tom was a client of local businessman, Massoud Kazemzadeh, and sought his help in saving the plant, knowing Massoud had product-development expertise and business savvy. Massoud took over the facility and started Clara Foods, Inc. which produces Kay’s Naturals™, a healthy snack food enterprise begun by his first wife, Linda and later carried on by his second wife, Ann, after Linda passed away.

As the driving force behind Kay’s Naturals, Ann is bringing her nutritious snacks to health-food stores and fitness centers nationwide. The tasty organic protein chips are small, cracker-like and loaded with flavor, from the lively Tex-Mex-style “nacho chili cheese” to the subtly-spiced “crispy Parmesan” and “soya-Caesar.” The most distinctive varieties are the popular, zesty-flavored “lemon-garlic potato” and “gluten-free lemon herb.” The patented low-fat chips are made from soy protein and whole grains. A serving provides 8 to 9 grams of protein, 1 to 3 grams of fiber, 100 percent of the daily value of folic acid and vitamin B-12, and 30 to 40 percent daily value of calcium. You can pick up a six-ounce bag for $2.79 at health-food stores, upscale groceries and Bally Fitness Centers.

“We’re at a point where our growth could be explosive,” Ann says, “but we’re being careful not to move so fast that we can’t keep up with it financially.”

Keeping it Close to Home

Massoud says, “It was Tom Condon’s original vision to keep manufacturing in Clara City and keep a workforce growing here.” With his industry contacts and food processing expertise, Massoud says he also could see “great possibilities for a successful manufacturing business.” After spending a “significant sum of money to upgrade the facility” to pass federal inspections, Massoud began operating Clara Foods, Inc. Along with Kay’s Naturals chips, Clara Foods produces pretzels, cereals and other grain-based products under private label for food companies.

The plant can produce about 7 million lbs. of pretzels per year and 6 million lbs. of cereals and snack chips, which will increase to 17 to 18 million lbs. per year if expansion plans are completed. The rural setting has not caused a problem with distribution, Massoud says. “We’re right on a rail line and major trucking lines on Highway 23 and 7. This is a real salt of the earth kind of place. The community is stable and supportive with a strong labor force that takes ownership in the manufacturing facility.”

All of this activity started only a year and a half ago for Ann. A lawyer, she never considered managing a food business until she married Massoud. Soon after, she agreed to take over the company started in 1997 by Massoud’s late wife, Linda. The snack foods were Linda’s idea. “She wrote the business plan and brought the people together,” Massoud says. As a diabetic, she “was always looking for products that were healthy.” Massoud, who holds a doctorate in food science, designed products for her. As an extrusion expert for Buhler Manufacturing in Minneapolis, he had spent years helping major food companies create high-value snack foods. When Massoud left Buhler five years ago, the company “was kind enough” to give him pilot plant equipment in exchange for consulting work.

Infinite Possibilities

Ann has led the marketing efforts, keeping a focus on natural, organic and sports nutrition markets and listening closely to sales staff feedback. “If we hear a trend, we respond.” Ann has discovered she has a knack for sales but insists there is a caveat: “Marketing savvy could just about kill you,”because the possibilities are infinite. Nancy Larson, an Agricultural Utilization Research Institute (AURI) program specialist, says AURI is assisting with packaging and advertising design and providing technical assistance in product development.

The company is continuing to design new products including high-protein salad and pizza toppings, stick cookies, cereal and pillow-like snacks filled with creamy flavorings. Tom Nelson, a company manager, says they are also considering the vending machine markets, “but we don’t know if we’re premature. … A consumer is prepared to pay more for organics in the grocery store, but are they ready to do the same at the vending machine?”

From Manufacturing to Marketing

Ann is cautiously optimistic about the company’s success: “We have been fortunate in that we have had excellent advice from bright people who have protected us from making serious mistakes,” including “people who hold no stake in the company.” Ann also credits “a terrific board… and a very talented set of investors” from around the country who bring experience in business start-ups, financial strategies and nutrition. “You just have to find the right people so you get the best advice … Nobody can do this alone.” “There’s always a struggle, but we’ve learned so much — from manufacturing to marketing.”

Although Ann’s time is consumed by her start-up company right now, she hasn’t given up on her law career. In fact, she’ll be wiser when she returns to her practice representing small and medium-size companies, she says. “I will know what they are facing on the other side.”