The Startup CPG Podcast

Guru Hari
When I formulate with my clients, it's always straight off the bat. It's here's your formula, here are your ingredients, here's all your suppliers, and then here are all your costs at your co man and here's your packaging costs and here's your co main cost and here's your cost of goods. So, so right from the beginning, start to formulate with your cost of goods target, right? Because what you want to do depends on where you need to be in that price point. So I basically recommend and what I do with my clients is we work all three together. So by the time we have it, you can go to that coal man, you can scale it, you know, you'll be making money the whole time.

00:47
Adam Yee
Hey everyone, this is Adam Yee, food scientist and podcast host of Startup CPG’s R&D Radio where we interview food scientists and product developers in what they do and how they can help your CPG business. Today I'm interviewing Guru Hari Khalsa, an accomplished food and beverage product developer consultant with over 40 years of experience in consumer packaged goods innovation, food science and manufacturing Scale Up. Based in Eugene, Oregon, he specializes in functional natural and health forward formulations, bridging the gap between culinary creativity and technical engineering. This guy has an impressive resume working with amazing brands like Yogi Tea, Trader Joe's, Kraft IQ Bar and so many more. Guru Food Design provides expert product development and innovation consulting for the CPG industry, guiding brands from initial concept and culinary formulations through technical scale up to commercialization.

01:42
Adam Yee
They specialize in helping health and wellness companies bridge the gap between creative product vision and rigorous demand of manufacturing and food science. In this episode we get into the core of it by talking about some tips when approaching your brand and your product, such as topics like consumer research over passion, why building a platform is more important than just building a product and following the science for new and exciting trends. Guru Hari explains all of this in this episode and I really love his examples. From his tea concept, his granola concept, to some really cool insights on the microbiome. Enjoy this episode with Guru Hari. I'm sure you'll learn a lot foreign to start at CPG's R D radio. And today I have guest Guru Hari from Guru Food Design. Welcome to the show.

02:32
Guru Hari
Hi. Thanks for inviting me.

02:34
Adam Yee
Yeah, no problem. So I've seen your name around a lot of spaces. I would say one you do talk on Star CPG Slack channel and I know a lot of other consultants kind of whisper your name, but I guess now I mean the legend Himself. Guru Hari, I love to learn about you and how you got into product development.

02:53
Guru Hari
Good. Well, I started at the age of 22. So when I left college, I was supposed to become a doctor. I studied biology and all this stuff. And I really like cooking and food. So I went into the food business realm, which was totally new to me. I didn't know anything about it, and I like working with food. I'm also a chef, so I've been working in the culinary side of food first. And then I went into food production, which is another whole science. Like, how do you produce food? How do you package food? How do you make food stable over 6 or 12 months or 18? This is not easy. And that led me into food science. Right. So food science and technology and all that chemistry.

03:35
Guru Hari
And so I had this gradual path of discovering not just good food, but how to produce it. Like, remember that show? I don't know if you watched it. You might be. It was called How It's Made.

03:48
Adam Yee
Oh, yeah.

03:48
Guru Hari
And they used to take anything and go in there and factory, hey, here's a cornflake, or here's a plastic object. So I was fascinated by how things are made and going into factories and seeing how they're made. So that's how I got into food. It's basically a fascination, and it continues that way. So I've been doing it for like, 40, more than 40 years, but it's still. Each project has a certain unknown to it and has a curiosity. And it's got, wow, what is that? Okay, interesting. How are we going to do this? And it requires a lot of creativity. Right. It's not just us. It is math, it is science, it is chemistry, all that. It is all this production. However, the job of a food scientist is half artist, half scientist.

04:30
Guru Hari
So you got to understand food that we're eating because we're consumers and we're humans. We're trying to enjoy this experience. But you got to understand how it's made and how it's going to scale. Like, how can you do one in the kitchen? How can you do a million in the factory? And so it's fascinating. You know, there's no end to the discovery. So that's how I got into it. Just like curiosity, I would say. I could have gone into restaurant business or food service. No. And I went into food production on a large scale.

04:58
Adam Yee
Yeah, it's super cool. What do you think is the difference between this restaurant industry and culinary versus food production? What are some things that you kind of think about as someone approaches you with a food product idea, right?

05:11
Guru Hari
Well, the easiest way to create good food is in your own kitchen. You have all fresh ingredients. You can do what you want, you can cut, do whatever, and you can add things, you can time things, you can ship things. It's the easiest. Like being your own chef or being in a restaurant, cooking as a chef, even though, you know, that's complex because they got to be really skilled, but still food service, then you have to make these repeat meals, and that's a little difficult because you have to do at the same time, same, pretty much the same formula and flavor and textures the same time. A little tricky. And has to sit out there maybe, you know, for a couple hours or be produced every night and just crank it out. All right, that would be a scale up.

05:50
Guru Hari
But the food in a package that you sell direct to consumer, you sent through the mail or in the store, that has to be made, put in a package, and typically you're not going to taste it for 30 to 90 days. So it's aging in the package. And then typically a shelf life is a year, 18 months. So it's aging. So that is very difficult. How do you get all the freshness of flavor? How do you get all the aromas? How do you get the color? How do you get the textures? How do you get those so they don't age out? And then all the consumers want convenience, right? Convenience is the top thing. So how do you make that convenient and how do you package it? So the food production realm is really challenging.

06:28
Guru Hari
And it's hard for me to explain to people when they come to me, because most people who come to me have great ideas in their kitchen. Oh, you know, my mom made this, and I love this. And wow, how are we going to make this? It's like, my gosh, you know, you can do like five or 10 bags of those a day, but can you do 100 bags a minute?

06:45
Adam Yee
500 Or 5,000? Yeah.

06:47
Guru Hari
See? Huge difference. So that's the gap that I kind of feel like I know that realm and I know their kitchen. So I started their kitchen, and slowly I take them to. This is the realm, you know, and then we didn't talk about it. But also costs, like, where I'm going to get all these ingredients, what are the costs? Are they available? Are they in the right form? And who's the best supplier? Because there's hundreds of suppliers, and some have great ingredients, some have horrible ingredients. So sifting through all that, So a lot of details.

07:14
Adam Yee
So GH how many years have you been doing this?

07:16
Guru Hari
Well, 44. I've been doing it since 1982.

07:18
Adam Yee
Love it. So throughout those plus four decades, what is kind of the most common thing you've come across when talking to people who maybe have a kitchen idea or have a mother's recipe and want to scale to something bigger? Are there common things that you repeat when you kind of talk to people who want to start a food business?

07:37
Guru Hari
Yeah, there's some common stuff. I mean, everyone brings something different to it based on how much they knew about the food industry. Like some of the people I work with. I think the most difficult thing in the food thing is really marketing and sales. Really, marketing is really the key thing, right. And we're creating products that's got its own difficulty. But most of my consumers I notice, oh, they don't understand. My clients don't understand marketing. I can see this is not going to work because you can have a great idea, but who else cares? It doesn't matter what does your target consumer think? Or you can get a flavor that you really like, but you got to test it.

08:07
Guru Hari
And so I think that's the biggest thing that I've learned in that I try to train or share with my clients is that it's about consumer driven market research. Right? So in my career, I didn't work for food scientists, I didn't work for operation teams. I worked for marketing. The marketing brand managers brought me in and said, look at, we need this product. Sit on these focus groups, listen to our consumers and you have to deliver. I said, okay, great, let's do it. So most of the people doing products, especially now because you got everyone flooding in with these ideas, is the friends and family dangerous? Okay, start there, but dangerous. At some point you got to take it out to people who don't know you, right? And let them decide. Like world class method there is.

08:52
Guru Hari
When you think you got your product, you send it out to, let's say a hundred people in home use test. There's your product that's got some numbers on it and there's two others. They got some numbers on it. They taste it blindfold or they taste it and they have to score your product and say, this is the one that I prefer. And you need to have 80% of those people to prefer that product. Then you release the product for production. Now that is consumer marketing research. Now that's how I was trained. Now back to your question. Most of you I work with, they don't do any of that. Okay, it's expensive, but you can still do it creatively. You can gather 10 or 20 people, friends of friends that don't know, you know, and you can make it neutral.

09:27
Guru Hari
So you can still do it with low budget. But Adam, I would say most people, they're not. They're focusing on their idea and they get passionate about the idea. They get emotional with their idea, they fall in love with their idea. But the consumer, the target consumer, those are the guys you have to get to fall in love with your idea. See, now that's difficult. So that's the main thing that I see.

09:47
Adam Yee
Yeah, I agree with that. Right. Like, I work with a lot of founders, too. A lot of people just start. And thing I focus on is something called like an mvp, a minimum viable product that you can get to consumers and just test. Right. Because, you know, you need to have consumers or people, strangers, taste this product to get validation that this will work or else you're just going to burn a lot of money.

10:07
Guru Hari
Right, Exactly. Now, I'll preface this by saying there are some people that don't need consumers and go straight to market. And if you're really talented, you can do that. But I've only seen like really good chefs do that or really good food. Foodies. Right. Because they're like coming and they know what the good flavor is like. I don't need consumers to tell me. Right. I know what it is. And I'm going to set the bar. Right. And I'm going to say this is the product and you're going to come up to my bar and people buy it. But those are usually premium products.

10:34
Adam Yee
Yeah. And I would say those either have a following already or they validated through other means. Right?

10:39
Guru Hari
Yeah. But I would say that maybe you've got a real hot idea that's really good and you just know it. Okay. That's fine. Not speaking absolutes, but just general.

10:48
Adam Yee
So four decades of doing this, I trust you on the common threads over here. And there's always a kind of a normalized curve on, in terms of like how trends work and how people view food products. So I do think there's, you know, there's some common ground here, is that more people need to validate what they're kind of early consumers. Right?

11:07
Guru Hari
Yeah. You know, if you look at the large CPG companies like Procter and Gamble and Johnson, all these huge companies, they've got the marketing and the product development down to a science. And these are the. These are the practices. So it's not just me speaking. It's like, how do you ensure the highest rate, the lowest risk that your product's going to succeed. What's the current number is that 80, 90% of these things fail and typically fail because the brand was, you know, that's another aspect of this. I would say the second aspect would be your brand. And your story has to be really compelling. The product's going to match it. But, you know, I would say the second thing after consumer research is your brand story. It's got to resonate because there's so many products out there.

11:47
Adam Yee
But seeing your website, I see a lot of really great brands that you've worked with. Huge brands, Right. And I'd love to get more advice on what these big companies kind of do to kind of validate consumer insights. I know, you know, you do sensory tests and all that, but is there a core that might be useful for early brands or people with just an idea?

12:08
Guru Hari
Okay, let's talk about this without spending a half million dollars on market research to launch your product in a regional test. Okay? That's what these guys do. So we're not going to do that. So let's come back to. I've got a budget of 5 or $10,000 or whatever. So first of all, get your idea and it's a concept, so work it out. You know, so you got the basic product concept, so a prototype concept, you've got it. And then, you know, look at the cost, and then look at how it's going to be made. And then look at the costs of this. When I formulate with my clients, it's always straight off the bat.

12:39
Guru Hari
It's here's your formula, here are your ingredients, here's all your suppliers, and then here are all your costs at your co-man, and here's your packaging costs, and here's your cool man costs, and here's your cost of goods. So right from the beginning, start to formulate with your cost of goods target. Right? Because what you want to do depends on where you need to be in that price point. So if you're developing, let's say this, let's just say a ready to drink. And it's got to be on shelf for $6 and you got to wheel it back. Okay, I need to know, I need to have like this 50% gross margin, so my cost can't be higher than $3 a camp, period. And that's the starting point.

13:18
Guru Hari
But formulate to that in the beginning because you could do all these wild, beautiful things, but you got to hit that cost. So you got to hit Nutrition, you got to hit formula, you got to hit the cost. And so you got to keep coming back. So I basically recommend and what I do with my clients is I. We work all three together. So by the time we have it, you can go to that CO man, you can scale it, you know, you'll be making money the whole time. So I think that's really wise. I think a lot of people just work formulas, work stuff and all. Right. But you got to work all the details, for sure.

13:46
Adam Yee
Do you have an example of like some of these products that you've worked on, whether big or small, that found to be that balance of cost, nutrition and taste?

13:57
Guru Hari
Well, everything I work on does that I wanted to share. One project I thought was pretty cool because we did all the right steps, but it was actually a yogi tea that we developed the perfect energy. And so we knew what the flavor profiles had to because we figured out how to make a great tasting yogi tea. But then we needed some functionality in there. So everyone was drinking these teas in the evening, herbal teas in the evening. And there was this whole morning space, the coffee space. How do we bring caffeine into this herbal tea, make it believable, make it taste great, and then how do we give some advantage that maybe coffee can't give? So that was the project and we came in and we figured out how to do it with green and black teas for the caffeine.

14:36
Guru Hari
We figured out the consumers liked nutritionally. They wanted about 80 milligrams of caffeine to get their day started in general. And then what people do is they go 80 or 160 or 240, whatever. People will dial up their caffeine from waking up till about noon, and then they've had their caffeine and then they're done. But everyone does that so they can use the beverage. So we got 80 milligrams so they can start dialing it like a coffee. Have one, two, three cups, and I feel the same. And then we added something else nutritionally to it. We added so you don't get the jitters like when you drink coffee, right? It gets a little bit wow, the jitters or you get the steep drop. So we got figured out how to do it with flavor, but we put in L theanine in.

15:16
Guru Hari
It calmed him down. So we gave him caffeine from the Naisa San black teas. We gave him herbs and things that were like, adaptogenic. Isn't that cool? And then we gave them a little L. Theanine. So they got the tea, but they also stayed calm. So now they had something that was perfect energy. It was, like, better than coffee. But we also had a taste really nice, you know, and these beautiful flavors that we could expand out over tangerine or vanilla or whatever, caramel. You know, we could do the platform. So that was a nice example of a project where you're developing, and that's a good thing for all the CPG people, that you want to develop a unique platform. Not a product, a platform.

15:52
Guru Hari
And then once you've got that, you can add flavors and functions, you can grow it out, but it's that unique product platform. See what I'm saying?

15:59
Adam Yee
Yeah. A base.

16:00
Guru Hari
So to say, yeah, we got the perfect energy line. Cool. Oh, this is what I need. But then we offer it in three or four flavors, and then every two years, you can refresh the flavors. That line's still going. I did the same thing with Trader Joe's. You know, Trader Joe's, you go there, you still see these four or five or six cereals that I created like 20 or 30 years ago. The vanilla cluster, the maple pecan cluster, the Raisin Bran. They're all these flaking cluster cereals. Well, what we developed for Trader Joe's, we started with granolas. That's one of my specialties, right? And they said, well, you know, we got 20 granolas. We can't sell any more granolas. Trader Joe's. So we said, well, okay, they said. They told us, create something new. So we created this really light, crispy granola, a cluster.

16:39
Guru Hari
And then we added flakes. We created this platform. The thing took off, and around it, we created really good flavors. And so as you walk a Trader Joe store today, 25 years later, they're still there. They're like icons in the store. You know, they're still top sellers. So back to the story. What the big companies do as well, get back to your question is they develop a product platform. So, see, it's something unique to you and your brand, and then that platform makes it easier to work. You just add flavors, move it, Add functions, move it. That's, I think, kind of what you focus on. I. When each client comes to me, I'm like, okay, what's your platform? And can we optimize your platform? How is it the texture? How's the flavor? How's the nutrition?

17:18
Guru Hari
Okay, I optimize your platform, and then we work flavor.

17:21
Adam Yee
Yeah, for sure. This makes total sense, right? Like, I think we'll just give an example, like a protein bar, a protein shake. Generally those have like a protein platform. Right. There's a certain protein in there and then they flavor it with whatever. Yeah. You do see a lot of companies, when you thread the needle, do have these awesome platforms. I do think the more successful companies have a focused platform that they can, you know, take things out, put things in. Right?

17:42
Guru Hari
Yeah. But you know, if you're doing CPG and there's a lot of brands out there, one thing to think about. Let's say you want to do a protein bar. I do a lot of those and a lot of them are the same platform.

17:50
Adam Yee
It doesn't.

17:51
Guru Hari
Yeah, because they're using the same ingredients, same platform. And that platform is, you know, the way protein concentrates or whatever and it bought boils it down to the same generic bar and you can change the flavor, but everyone's got the same basic bar. So I would say sometimes innovate around your platform. Try to do something new that the other people aren't doing. Okay. For example, mousse. Everyone loves mousse. Beautiful French mousse. It's made with eggs and dairy. And so I created a platform where we duplicated it with vegan plant based nuts, rice. Right. Nut milks. And we did it, we created a whole new platform. So that's another way to look about products I think is interesting. But you have to innovate. So we talked about what we talked about going to this consumer driven market research. Great.

18:36
Guru Hari
Number two, focus on your brand story. Number three, focus on your platform. Where's your platform? Is it unique? Is it compelling? Is it motivated? Very nice. Because your product's gonna sell. But the platform is unique. People are always looking for something new. Right. Novel, either new flavor or new sensations. And that's the platform. So I kind of help people work on that as well. Something a little bit unique that no one else has differentiates you in the marketplace. There's too many products out there right now.

19:04
Adam Yee
Yeah, for sure.

19:05
Guru Hari
Too many, I would say.

19:07
Adam Yee
Yeah. I mean, well, anyone can make a food product now. Right. So. But yeah, I think with StarCPG, we do have a lot of founders who are making food products. So, you know, you're talking about platforms. What are some platforms or innovations that you've seen currently in the market that you're pretty excited about or that you see as kind of unique?

19:25
Guru Hari
You know, I think the unique platform that's really going to take off is the microbiome products. For the microbiome, the first phase of this was everyone eating Probiotics and then prebiotics and postbiotics and everyone was running around the circles and taking capsules. And then there's the kombucha phase and drinking, you know, all right, that's all that was all early stage. But the gut microbiome and any product platform that can hit the gut microbiome in a full food, real food sense I think is really cool. So if you look at the research, the thing that the gut biome wants is exactly what fast food isn't. It wants a lot of different things, very little of each of them. Right.

20:10
Guru Hari
Because we're a human body, we're like these mammals and we've been evolving over millions of years and you know, we're not used to these small ingredient statement processed foods. That's why everyone's guts getting screwed up. It's like that's not what we're supposed to be. We're supposed to have like five nuts, five seeds, five fruits, five botanicals, five grains all in one. So the interesting platforms that I'm working on that I'm kind of encouraging also my clients to work on, is this gut microbiome platform not going to go away. The science is really proving it out. It has been for a couple of decades. I've been watching it. So I know the science is going to go there and the medical science will go there too. So I think it's a really cool space to get into. But also look at the consumers. Clean label.

20:53
Guru Hari
Right. Real foods, regeneration farming, where all that stuff, it all goes into this and that's where it's going to go. Well, I think the next five or ten years I tend to see further out than marketing, so usually I have to come back. Okay, that's great. Five years out, but let's just look at one or two years here.

21:09
Adam Yee
Where do you read more about that?

21:11
Guru Hari
Yeah, just do your research online. There's a lot there. There's an interesting company in the UK called Zoe Z oe. They've done all the research already with doctors and science. They've already got it going. So they did all the clinical research already and there's a lot out there. Most of the universities are doing this type of stuff. NIH does a lot of this research too, maybe less now, but they've done a lot of research on all this too.

21:33
Adam Yee
So.

21:33
Guru Hari
But let's draw this back to the key thing here that I see is the consumers are going to get it because doesn't matter, science gets it, but the consumers are going to start understanding this you'll see. So you want to be ready with your product to kind of capture that wave of consumer coming in, because the consumers are pretty smart. You know, with AI and everything else, we're starting to learn really quickly. The whole thing's speeding up. So you can ask your questions and get your answers. You know, I would ask AI on it, and it'll give you all the reports.

22:00
Guru Hari
Just put a scientific question in the AI, like, you know, what's the current science based on nutrition and clinical studies on the gut microbiome and beneficial foods, and what would be the top 10 or 20 types of foods that you should eat every day? And it'll give you a full report because it's going to go out to all those studies and it's come back and say, well, here they are. So there's one company in the UK, which I also go to Europe, and I see a lot to see trends coming before they hit here. But they're doing. It's called Z oe and they're doing a great product. Check that out. I did that with one of my clients, too.

22:31
Guru Hari
We did it with nut allergens because, you know, a couple years, 10 years ago, 20 years ago, food allergens were avoid peanuts and avoid tree nuts and all that. And now the whole thing switched because of some studies that were done in the UK about 40, 30 years ago saying, no, introduce tree allergens to people early on, young children early on, infants early on, and they won't get. So the whole science changed. So you gotta follow the science. See also that's what I encourage. You follow the science. That's where I find my trends. A lot of it's, where's the science? And sooner or later the consumers will catch on.

23:04
Adam Yee
Yeah. And I think we've seen this with several trends. Right. Generally, the science is early out and then the consumers catch once they. I think it's kind of a strike of lightning, but I'd love to hear your opinion on it. But it does seem like there's always a scientific backing when it comes to a new trend.

23:21
Guru Hari
I agree. Yeah, totally. There's no way you can educate consumers. So a lot of my clients have this great idea. They want to educate their computer consumer. No way.

23:30
Adam Yee
Yeah. I tell them it's really expensive to educate.

23:32
Guru Hari
Yeah, you can't do that, you know, so that's the point. I wanted to make a simple point for CPG. You got to know it already. They got to get it. Okay, then go with it. And that's why everyone's running after things because consumers. Oh, let's go after it because they get it. But yeah, you can't. I think a lot of my clients try to, but you cannot educate your consumer. So, you know, back to my microbiome idea. It's probably a little early right now, but it'll come on because consumers will get educated.

23:55
Adam Yee
So you watch something to put a pin at for sure. G, we're going to wrap up here and yeah, I'd love to just hear where we can find you and how we can contact you and just kind of a one last kind of call to action about why we should work with you.

24:11
Guru Hari
Well, not select cpg. I'm usually there so you can just put it in ops channels, usually where I am or just message me there. Then I have my website guru, food design.com, just go there and you can contact me. That's the easiest way. And okay, what I am, I'm culinary first. I know what good food, good beverage should taste like. That's really important because it's all about flavor. Flavor. Flavor function or flavor. What you got to have something that's going to taste good so they buy it again. So I start there, then I know the food science great. But the other thing I really add for my clients, I can work and customize with them, but I can innovate with them. Right. How to invent and innovate a little bit.

24:47
Guru Hari
Let's get creative here and let's do something that's compelling and motivated and that's really what I help my clients with. That's my call out.

24:55
Adam Yee
Well, thanks so much for being on R and D radio.

24:58
Guru Hari
Yeah, this is great. It's great work that you guys are doing.

25:01
Adam Yee
No, thank you. It's. It's pretty fun. Thank you for listening to startup CBG's R&D radio. I hope you guys enjoyed this conversation. We've now arrived together at the end of another episode of the Startup CPG podcast. I'm proud to be part of the team that's part of the top globally ranked podcast in cpg. As you may know, we're not just a podcast, we're a community of brands and experts and you should join. You can sign up @startupcpg.com and you'll then get invited to our online Slack community and be informed on great guests and amazing networking opportunities to get you in front of buyers, investors, brands and more. Thank you for listening and have a great day.