Nature’s Path: Arran and Ratana Stephens

Starting a business with your spouse can either bring you closer together or tear you apart. For Arran and Ratana Stephens, their business has lasted for nearly 40 years, and their marriage has thrived for much longer. As business partners, they seem perfectly matched: he’s the hard-charging visionary, she’s the practical, business-minded one who sometimes has to talk him out of a bad decision. But in 1985, Arran made a very smart move: seeing how organic food was starting to take off, he mixed up his first batch of Manna bread in a bathtub and started selling it, eventually expanding to national distribution. From there, he and Ratana pivoted to breakfast cereal, initially purchasing a factory that couldn’t make a single cornflake. Today, Nature’s Path sells organic cereals, tortilla chips and other snacks in more than 50 countries around the world. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

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• 1:32Guy Raz?

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• 2:14Guy Raz?

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• 3:40Guy Raz?

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• 4:23Guy Raz?

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• 5:07Guy Raz?

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• 6:17Speaker 01

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• 6:47Speaker 02

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• 7:20Speaker 03

  April 6, 1990. We had bankers and lawyers and VIPs. We had Minister of Agriculture was there and other bigwigs. And we could not get the equipment to produce a single cornflake.

• 7:36Guy Raz?

  You just spent $6 million. What do you mean you can't get it to produce cornflakes?

• 7:40Speaker 04

  Or any flakes.

• 7:41Speaker 03

  Or any flakes. It just...

• 7:42Guy Raz?

  You turn the machine on and it starts going, "zzzzzz." Does it actually do that at least?

• 7:46Speaker 03

  Yes, it would do that. But the product would seize up inside of the extruder barrel and it wouldn't come out. It could not.

• 7:53Guy Raz?

  Oh, my God.

• 7:55Speaker 03

  It did not work.

• 8:02Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 8:13Guy Raz?

  I'm Guy Raz, and on the show today, how Aaron and Rotten Estevens sprouted their first organic grains in a bathtub and grew that business into Nature's Path, a cereal and snack brand that's now sold in more than 50 countries around the world.

• 8:32Guy Raz?

  There are two companies in America that basically own the morning. One is called Kellogg's, the other, General Mills. The top 10 cereals in the US include Honey Nut Cheerios, Frosted Flakes, Cinnamon Toast Crunch, Fruit Loops, and so on. In other words, General Mills, Kellogg's, General Mills, Kellogg's, and on and on, with one important exception: Post. The other cereal giant in America is in there with honey bunches of oats. But when it comes to the organic cereal market, well, the names are a bit different. You've got your Cascadian Farms, Kashi Puffs, Barbara's Puffins,

• 9:17Guy Raz?

  you know, the names you might see at Whole Foods or a Natural Foods Co-op. These are the brands that dominate the organic space, which might sound like a breath of fresh air, you know, plucky little upstarts, until you discover one important thing. All of those brands are owned by Kellogg's, General Mills, and Post. Now, there's nothing wrong with that. Most of these brands were, at some point, independent, and they're still pretty good products. But over the past 20 years, big multinationals have bought up many of the organic brands you're probably familiar with, which makes today's story somewhat unusual in that Nature's Path is both a significant player

• 10:02Guy Raz?

  in the breakfast cereal market and still totally independent, totally owned by its founders, Aaron and Ratana Stephens. If you've walked into a Whole Foods, you've seen their stuff. The Corn Puffs with the baby gorillas, pandas, and koalas on the bag. The Heritage Flakes with its hippie font and unflashy logo of a field of grains on the bag. And yet, despite almost no marketing, Nature's Path owns about 3% to 5% of the organic cereal market. That's pretty significant for a company that started out by selling frozen sprouted wheat bread from the back of a vegetarian restaurant in Vancouver, Canada.

• 10:43Guy Raz?

  Aaron and Ratana didn't start Nature's Path until they were in their early 40s. And even then, it would take at least five more years before they started to get some traction with cereal. And along the way, the two of them built a company that now produces everything from waffles to tortilla chips. The two of them met, well, they basically had an arranged marriage. Aaron was a Canadian traveler and devotee of a spiritual guide in India. Ratana was Indian and also a student of the same spiritual leader. They barely knew each other when they got married. That was in 1969, and they're still happily married. Anyway, you'll hear all about it.

• 11:24Guy Raz?

  But first, Aaron Stephens grew up on an organic farm outside of Vancouver. But when he was in high school, his father moved the family to Los Angeles.

• 11:33Speaker 03

  I must say that we had a very loving family. But my mother, I think, went through a midlife crisis. My dad went through his midlife crisis, and they separated. And I went from a straight A student to a straight F student, except for art. And I decided to drop out of school and pursued art. I went down to Laguna Beach and ended up in Venice, California.

• 11:55Guy Raz?

  Yeah. Aaron, I gather, I mean, you really kind of came of age in the 60s, right? Teenage and early 20s. And that, I mean, you were, you know, I hate to use this word because I think it's overused, but you kind of made your way towards like hippie culture. Is that right? Is it fairly true?

• 12:14Speaker 03

  Well, I kind of predated hippie culture. It was then known as the Beat Generation.

• 12:19Guy Raz?

  Right.

• 12:20Speaker 03

  And I met a lot of the icons of the whole Beat Generation, some great jazz musicians and artists and poets. It was quite a wild time. But it was a time when I got sucked into some of the darker aspects of the counterculture, which was- You know, substance abuse and and then at the age of seventeen, I ended up in a monastery up in the Chatsworth Mountains. And there I had a very profound mystical experience that kind of altered my whole perception of life. And so I, from that point on, I became a seeker.

• 12:55Guy Raz?

  Right.

• 12:55Speaker 03

  I went to churches, I went to, I studied Vedanta and Gurdjieff and kind of a plethora of different spiritual traditions that I was very interested in. And somehow or other, I was put in contact with Saint Kirpal Singh through correspondence, but I really wanted to go to India to be with him. And I finally got my wish in nineteen sixty-seven, and I went and traveled with this great teacher who took me under his wing and treated me like a son. And I spent seven months with him there in India. And toward the end of that seven-month period, I thought that when I go back to Canada, I

• 13:39Speaker 03

  would like to start a vegetarian restaurant. Because me being a vegetarian, and there was no place for vegetarians to eat at that time.

• 13:47Guy Raz?

  I'm curious, Aaron, I mean, you're twenty-three years old. It's nineteen sixty-seven. India, I mean, was really becoming an important place for a particular kind of, let's say, spirit-seeking Western visitor. Obviously, the Beatles famously were among them. What was your impression of India? I mean, when you got there and you finally meet your spiritual sort of mentor, and you're in the old city in Delhi, which is a really cool place, was it everything you imagined? Was it what you had hoped it would be?

• 14:25Speaker 03

  Well, on January twentieth, nineteen sixty-seven, you know, the plane touched down in Delhi, and it was like a, it was like a different world. Different smells, different, you know, it was the warmth of the place, and there were cattle-drawn wagons and camels in the street, and it was very different from India today. Somehow, India felt like a mother in a way. It kind of received me, and I felt this incredible bond to India. I felt that You know, some kind of old memories seemed to be ignited as soon as the plane touched down there in Delhi.

• 15:05Speaker 03

  Because my grandmother was born in India of a British military family, and she married Dr. Harold Stephens, my grandfather. So I felt very much embraced and loved by India and its people. I learned the language, you know, I wore Indian clothes and it felt like my home. And I felt so out of place when I came back to Vancouver seven months later.

• 15:31Guy Raz?

  All right, so you come back to Vancouver after a seven-month trip in India, inspired by your time there to open up a restaurant. This was called Golden Lotus. What kind of restaurant was it? Was it Indian food or all kinds of food?

• 15:45Speaker 03

  Well, my concept for vegetarian dining was something, I wanted to show people how tasty it was, how nutritious and inexpensive it was to eat this way. And so I borrowed some of the best recipes from India, from Mexico, from China.

• 16:05Guy Raz?

  Vegetarian?

• 16:06Speaker 03

  Yeah, all vegetarian, and it became extremely popular. It was just the right thing at the right time.

• 16:12Guy Raz?

  How did you finance? I mean, you're 23 years old, how did you finance a restaurant?

• 16:16Speaker 03

  Well, I had $7 and a hope and a prayer.

• 16:20Guy Raz?

  But how did you, yeah, how did you do it? I mean, you had no experience in the industry, you didn't, maybe you were a decent cook, I don't know. How did you do it?

• 16:28Speaker 03

  Not really, but I borrowed $1,500 and I found the assets of a failed restaurant about 10 blocks away. I bought those assets for $500. I carted all the equipment on my back, because I didn't have a car, back to the restaurant, installed it. I had to hire a couple of people and by the time I'd run out of money, the doors opened. I made the food, I prepared it, I served it. Some days there were only maybe $25 in sales and then other days we're really busy. And eventually it caught on. There was an article in the paper that praised it to the heavens, and it was a tongue-in-cheek article.

• 17:09Speaker 03

  And from that time on, the place was busy. It was jammed.

• 17:13Guy Raz?

  Did you, Aaron, did you own the business outright or did you have partners at Golden Lotus?

• 17:18Speaker 03

  No, I owned it outright.

• 17:19Guy Raz?

  Right. That's, that's pretty impressive. And running a restaurant is a complex business. I mean, you've got to get, you know, the right amount of food and the right amount of supplies. And you don't want to buy too much and you got to figure out how to price it out. And you got to hire chefs and kitchen staff and wait staff. How did you manage all that? I mean, just the logistics of it. Do you remember ever feeling overwhelmed by it?

• 17:41Speaker 03

  Oh, yes, especially when, you know, having to work like 14, 15 hours a day. And there wasn't anything to show for it. Those are the times that when I would do my practice, I would meditate and, and I'd find that inner direction and the peace and calm and clarity of mind.

• 17:58Guy Raz?

  Let me turn to you, Ratana, for a second. You were, you were also born in the 1940s in what is now, I believe, Pakistan.

• 18:07Speaker 04

  Yes.

• 18:08Guy Raz?

  But when you were still pretty young, your, your family had to flee the country. It was during the partition in, in the late 1940s. It was a very chaotic and violent time.

• 18:20Guy Raz?

  And you eventually resettled in, in India. But despite all of that, I read that you actually had a pretty happy childhood.

• 18:27Speaker 04

  Yes. The childhood was beautiful. I was adopted by my grandmother. She never had a daughter. So she said to my, my mother and my father that you guys can have more children. But I'm a widow and I would like to adopt your child, your daughter.

• 18:50Speaker 04

  She gave me tremendous amount of love and care. She was not educated, but she knew the value of independence.

• 18:59Speaker 04

  She felt she's a daughter and she need to go to university. Somehow, my father and my uncle objected to this. They said to her, so you want her to be a lawyer or a doctor? She should be married off. And she said, you mind your own business. She is my daughter and she's going to be what she wants to be. She knew the value of education.

• 19:26Guy Raz?

  Wow. I wanna, I wanna jump ahead a little bit and understand, Erin, how you and Ratana met? You, you took, from what I understand, you take a trip. This is your second trip to India, nineteen sixty-nine, presumably again to meet your sort of spiritual mentor.

• 19:44Speaker 03

  Sixty-eight.

• 19:45Guy Raz?

  It was sixty-eight, not sixty-nine?

• 19:46Speaker 03

  No, and sixty-nine.

• 19:48Guy Raz?

  Okay.

• 19:48Speaker 03

  I was there for six months.

• 19:50Guy Raz?

  For six months, okay.

• 19:50Speaker 03

  I left the restaurant for six months.

• 19:52Guy Raz?

  Wow, you just left the restaurant in the, presumably in the hands of competent people who kept running it.

• 19:59Speaker 03

  Yes.

• 20:00Guy Raz?

  How did you, tell me how you met Ratana? Where did you, where and how?

• 20:04Speaker 03

  Well, both Ratana and I were students of Sant Karpal Singh. So we had this common spiritual connection. And at the birthday of our mentor, I think it was February six, nineteen sixty-nine, the next day after the celebration, there were probably ten, fifteen thousand people that had come there. And a friend of mine came up to me and he said, Mr. Arunji, would you like to marry an Indian girl? And I said, I don't know. If, if there's some compatibility, I don't know. And anyway, that evening, I was introduced to Ratana at a dinner table, where she sat

• 20:49Speaker 03

  at one end of the dinner table and I at the other. And we were both kind of embarrassed, I guess, looking at our plates. And after some time, I kind of looked up from my plate to see what she looked like. And she looked up from her plate at the same time and we, our eyes locked there for a moment.

• 21:08Speaker 03

  But I felt something there. It was a few days after that meeting that I said, this is the one I'm meant to marry.

• 21:16Speaker 04

  But before that, I just, because you are neither Hindu nor Indian nor Punjabi, I just said, the person who introduced us, no way, I'm not marrying.

• 21:31Speaker 03

  Indian girls did not marry, they did not marry foreigners. That was just out of the question.

• 21:37Guy Raz?

  But at least, Radha, was, at least, was he handsome?

• 21:42Speaker 03

  Or she can answer that.

• 21:46Speaker 04

  He was dressed in simple Indian clothes. And I said, he's handsome, but the way he's dressed doesn't seem very good.

• 21:58Guy Raz?

  You're thinking, I'm not gonna throw away my future with this guy.

• 22:04Guy Raz?

  Right? I mean, but, but, but, but it, obviously, you did get married. And, and so what, I mean, because essentially, it was kind of like an arranged marriage, in a sense, right?

• 22:13Speaker 04

  Yes.

• 22:14Speaker 03

  Yeah, we, we actually ended up getting married without dating, without living together. But it felt perfectly fine. It felt, this was the way it really was meant to be. We got married and fell in love, in that order.

• 22:31Guy Raz?

  It's, it's remarkable, because, of course, arranged marriages are, are still very common in many countries around the world, and, and, and work, right? And, and often, oftentimes, they, they work better than marriages in Western countries that are not arranged. But I've never, I don't think I've ever heard of an instance of an arranged marriage with somebody completely from the outside, you know, somebody coming from the West to India. Is, was that unusual at the time?

• 22:54Speaker 03

  It was quite unusual.

• 22:56Speaker 04

  Very.

• 22:57Speaker 03

  My mother and father didn't quite understand it at the time. But they gave her their love, you know?

• 23:03Guy Raz?

  Yeah. So, all right, so Radha, you, you agreed to marry Aaron. And he was a Canadian. And, and, I mean, it's crazy, because obviously, you're still married, so it's worked, right? We know the ending of this. But, but let's go back to 1969, where, because if I was, if I was there, I'd be like, Radha, I don't know, man, this is a little, this is a little risky here. You know, this guy, you don't barely know him, he's in Canada, you don't have to leave. But, but clearly, you were like, let's do it. And, and you agreed to move to Canada with Aaron.

• 23:37Speaker 04

  I had an urgent faith in our teacher. And many people talked many good things about Aaron. So when I was talking with the guy who introduced us, and he said, "Listen, daughter, if your teacher is not against it, why should you worry?"

• 24:00Guy Raz?

  Wow.

• 24:00Speaker 04

  I said, "Are you telling me that our teacher is for this marriage?" He said, "Otherwise, I would not have been bringing this proposal to you."

• 24:13Guy Raz?

  Yeah.

• 24:13Speaker 04

  I said, "Fine."

• 24:15Guy Raz?

  Wow.

• 24:15Speaker 04

  When you trust and you have faith.

• 24:19Guy Raz?

  Yeah.

• 24:19Speaker 04

  Every doubt dispels.

• 24:22Guy Raz?

  Wow.

• 24:22Speaker 03

  And we also loved each other very much.

• 24:25Speaker 04

  Love came afterwards. But starting, there was faith.

• 24:30Guy Raz?

  You believed in the guidance of your teacher, but you did fall in love, and that took some time.

• 24:37Speaker 04

  Very much.

• 24:38Speaker 03

  We were still in love.

• 24:40Guy Raz?

  That's good, that's good. I'm glad to hear it. Good. And Ratana, how was your, at the time, were you already fluent in English and sort of that was no problem?

• 24:51Speaker 04

  My English was not very good as far as speech is concerned. I used to just laugh it off. I said, "Okay, come on. Tell me how to pronounce a girl." And you won't believe it, it took me a month how to pronounce girl. I used to say "girl."

• 25:10Guy Raz?

  Right.

• 25:11Speaker 04

  So my pronunciation and sometimes my sentence structure was not very good.

• 25:17Guy Raz?

  I'm sure Aaron's Hindi was much, much, much worse.

• 25:22Speaker 03

  It was worse.

• 25:25Guy Raz?

  Yeah. But, all right, so you get to Canada, and Aaron, you get, you have this restaurant, Golden Lotus, it's 1969. So I'm assuming the both of you go right back to work at the restaurant.

• 25:36Speaker 03

  Right back to work, yeah.

• 25:37Guy Raz?

  And Ratana, had you ever been involved in a food business at all? Did you have any experience with food?

• 25:44Speaker 04

  No, before 1969, I was never involved in food business. I didn't even cook. My father did have a food business. You know, this is sugar coating, almonds, sugar coating.

• 25:58Guy Raz?

  Oh, yeah.

• 25:58Speaker 04

  Pistachio. But that was not my area of study. I didn't care. I mean, that's my father's work.

• 26:06Guy Raz?

  And what did you do at the restaurant? What did, I mean, how did, what was your job there? Do you remember?

• 26:11Speaker 04

  I cooked.

• 26:12Guy Raz?

  You cooked?

• 26:13Speaker 04

  There was a very nice woman, was called Mrs. Nagra. She taught me how to cook. And I was a fast learner.

• 26:21Speaker 03

  You know, she was making 75 cents an hour. I was making a dollar. And then she went up to a dollar and I went up to a dollar and a quarter.

• 26:29Speaker 03

  You know, one thing I wanted to say about Ratana, she, she brought her, she brought her blessings to it in a way. She, we have a very dear friend, he's now passed away just recently, Sid Kaiser. He used to say about Ratana, he said, Ratana can make a nickel scream.

• 26:47Speaker 04

  Not now.

• 26:49Speaker 03

  She knew how to save money. She knew, she was very, very frugal. We were both very frugal. And the workers in the restaurant decided that they wanted to turn it into a cooperative. So I decided, okay, you can have the restaurant for $2,500. So I sold the restaurant for $2,500 because I wanted to be free from it. I didn't want to have multiple partners. Because a cooperative would mean one person, one share, one, one vote and all that.

• 27:20Guy Raz?

  Right.

• 27:20Speaker 03

  And all of a sudden, you had a lot of chiefs, so. I decided to go off and eventually started a little

• 27:28Guy Raz?

  Store.

• 27:29Speaker 03

  A store.

• 27:30Guy Raz?

  Yeah.

• 27:30Speaker 03

  Called Jody Importers, where I imported Indian goods. And meanwhile, Ratana was pregnant with our first child.

• 27:37Guy Raz?

  And this was in Vancouver, in the city of Vancouver?

• 27:39Speaker 03

  Yeah. And so Ratana was making muffins, which we sold in the store. And she had all these burn marks on her arms because she would she kind of burned her arms so many times when she's pulling the muffins out of the out of the oven.

• 27:52Guy Raz?

  Are you also selling Indian food as well at the store? No.

• 27:55Speaker 03

  No.

• 27:56Guy Raz?

  No.

• 27:56Speaker 03

  It was called, quote, then, health food, you know?

• 27:59Guy Raz?

  So how did you, how did you decide to start? I mean, because this was a store that was selling textiles and things like that. How did you decide to start selling food at the, in the shop?

• 28:08Speaker 03

  I always loved food. I love, I love the whole concept behind organic food and whole food where in, in those days, you could only get whole wheat bread in one store in Vancouver. And then we started selling whole wheat bread. And there was a doctor in Vancouver who was writing prescriptions for whole wheat bread. Everything in the supermarkets was white bread, white flour, white rice. And so in 1971, we opened Canada's first large natural food food supermarket on the corner of Fourth and Burrard. And we had a lot of trouble in those days filling the shelves because, because there were not that many products available. But we were the first store to carry tofu.

• 28:51Guy Raz?

  Wow.

• 28:52Speaker 03

  You know, soy-based products were the first ones.

• 28:54Guy Raz?

  Where were you sourcing it from? And, and is it hard to get that in 1970 in the store?

• 28:59Speaker 03

  I'd go down to Chinatown in what, with my VW van and load it up with buckets and buckets of tofu and bring it back to the store. So you could tell that the market was just becoming ripe for natural and organic foods.

• 29:13Guy Raz?

  And clearly there was a, people were coming in, you were a market for it. So I guess around 71. You decide to open a bigger store to sell more, more products. It's called LifeStream. Do you remember how, I mean, today, right, the barrier to do that in a place like Vancouver would be enormous, right? Just, just getting the, the space and the lease and the real estate and, and you have to put so much money up and there'd be lawyers and real estate agents. Was it just easier to do it in 1971?

• 29:42Speaker 03

  Yeah, it was, it was a lot easier. There was very little red tape and, and rents were cheap and, believe it or not, that store was filled with customers and, and most of them were hippies and young, young people and little old ladies with flowers in their hats. You know, I mean, outside, there was this, this notice board for people who wanted to go down to Mexico or California or whatever. It says Aquarius wants to meet a Capricorn to travel with. It was, it was pretty far out. I mean, it was a happening place and that business, it doubled every year for several years in a row.

• 30:20Guy Raz?

  So it was, and how big was that store?

• 30:24Speaker 03

  Well, it seemed huge at the time. It was about 4,000 square feet and we, we built all of our furnishings or what do you call fixtures? We built them all out of wood. So it was a very organic, natural feel to it.

• 30:37Guy Raz?

  Okay, wow. So, but, but that's not, it's, yeah, it's pretty good. And, you know, I remember, I interviewed John Mackey, the founder of Whole Foods on the show a couple of years ago. We talked about his first location in Austin and, you know, back in the, in the late 60s, there weren't, I mean, there was no Haince Celestial or, you know, these massive organic food brands, Nature's Path, there's nothing like that.

• 30:57Speaker 03

  No, there were a lot of mom and pop.

• 30:59Guy Raz?

  Right, a lot of mom and pop stores. So how did you, tell me a little bit about how you filled a 4,000 square foot store with natural products. Where, where were you, I mean, were these mostly American companies? Were they mostly Canadian brands?

• 31:14Speaker 03

  Well, I imported directly a macrobiotic line from Japan.

• 31:18Guy Raz?

  Ah, okay.

• 31:19Speaker 03

  One of our biggest suppliers was Arrowhead Mills out of

• 31:21Guy Raz?

  Oh, yeah.

• 31:22Speaker 03

  Deaf Smith County, Texas.

• 31:23Guy Raz?

  And that's like flour, it's like

• 31:25Speaker 03

  Yeah, all different types of grains and stuff.

• 31:28Guy Raz?

  Yep.

• 31:29Speaker 03

  So we got, we were importing products from Arran, bottled oils and, and sauces and what have you and When I saw things that were selling quite well, I decided to start bottling them ourselves so that we could offer the products at a better price to our consumers. So we had a warehouse on Sixth Avenue not too far away, where we bottled things, we bottled oils, juices, sauces. We made nut butters and jams and jellies and all kinds of stuff.

• 32:02Guy Raz?

  Right.

• 32:03Speaker 04

  And at the back of the store was a small restaurant that was owned by me and Erin.

• 32:10Guy Raz?

  And the restaurant was like a takeout restaurant in the back?

• 32:13Speaker 04

  No, there was about 15 seats.

• 32:16Speaker 03

  But very profitable, because my wife was running it.

• 32:20Guy Raz?

  Nice. And so you've got this store and the restaurant. And the store, was it profitable pretty quickly or right away?

• 32:31Speaker 03

  It was profitable, but we didn't know how much because we didn't really have a proper accounting system.

• 32:36Guy Raz?

  Yeah.

• 32:37Speaker 03

  You know, in the first year, my accounting system consisted of a couple of apple boxes into which the receipts would go. And then I'd hire a bookkeeper at the end of the month to sort it all out. So it was really hard to know exactly how much profit, but we were making profit, but everything got plowed back into the business. And how much profit it made, I really don't know.

• 32:59Guy Raz?

  And from what I understand, like Erin, you focused on the store and Ratana, you focused on the restaurant in the back. Is that right?

• 33:07Speaker 04

  That's true. Restaurant and the family. The kids were very young.

• 33:12Guy Raz?

  Yeah.

• 33:13Speaker 04

  I needed to give them attention.

• 33:14Guy Raz?

  How did you guys manage that? You had, I think, your first child. You have four kids. You had your first child shortly after you arrived in 1970.

• 33:23Speaker 04

  Yes.

• 33:24Guy Raz?

  You know, back in India, you would have had family to help you, you'd have had relatives. So how did you manage? Tell me about it. Because I, you know.

• 33:31Speaker 03

  Ratana is a, she's kind of a superwoman, you know?

• 33:35Guy Raz?

  Yeah.

• 33:35Speaker 04

  You know, Guy, I'm surprised myself. I just wonder how did I do it?

• 33:41Guy Raz?

  Yeah.

• 33:43Guy Raz?

  And so, from what I gather, you had two retail stores in Vancouver by 1980. You had a warehouse that was making things like peanut butter and yogurt. I think like 20 to 25% of the things you were selling at Livestream were your own products and brands. You had $7, $8 million of annual sales. So, were you-

• 34:07Speaker 03

  No, it was about 12 million. It was about 12 million.

• 34:10Guy Raz?

  12 million, that means a better. I mean, did you feel, I mean, 12 million in annual sales? Now, it depends. Of course, there are expenses and there's rent and there's employees. But did you feel financially secure at that point? Or do I have that totally wrong?

• 34:23Speaker 03

  Well, yes and no. The continual growth of the business required more cash than what the profits would be.

• 34:31Guy Raz?

  Hmm.

• 34:32Speaker 03

  Okay, so there was a point where I brought in a couple of partners.

• 34:37Guy Raz?

  To get some financing help?

• 34:39Speaker 03

  Yeah, to get some financing and also their talents as well.

• 34:42Guy Raz?

  These were other people who had experience in the natural foods world?

• 34:45Speaker 03

  No, they were just friends.

• 34:47Speaker 04

  Yes, friends who did not have any experience in business.

• 34:51Guy Raz?

  But then, if they had no experience in business, why'd you bring them on?

• 34:55Speaker 04

  Yeah, you asked him.

• 34:56Speaker 03

  I don't know. I wasn't very practical, you know?

• 34:58Guy Raz?

  Wait, yeah, tell me the story. There was a friend of yours and this friend wanted to join. And tell me what you thought. You were thinking what?

• 35:05Speaker 03

  Well, I thought we were really aligned, you know, in every possible way. And I said, well, why not share the business, you know?

• 35:11Guy Raz?

  Yeah. And Brian was laughing. I know where this is going, but I want to hear the story. I'm just trying to understand. Did you feel like you needed a partner because you were, I don't know, you wanted just that extra confidence that there was somebody else in the foxhole with you?

• 35:24Speaker 03

  Yeah, and somebody would also, he had a good job outside and he was putting some of his salary into the business.

• 35:30Guy Raz?

  Okay.

• 35:31Speaker 04

  For $33,000, Aaron gave away one-third of the business.

• 35:38Guy Raz?

  Wow.

• 35:39Speaker 03

  Yeah.

• 35:40Speaker 04

  And I kept on saying, Aaron, please. So, we did have some discussions upstairs in our bedroom.

• 35:49Guy Raz?

  So, you gave away a third of the business to a partner?

• 35:52Speaker 03

  Mm-hmm.

• 35:53Guy Raz?

  And this was somebody who was a friend? And how did it go? Did it, what, did it work out okay?

• 35:57Speaker 03

  No, it didn't go well.

• 35:58Guy Raz?

  It didn't?

• 35:59Speaker 03

  By 1981-

• 36:03Speaker 03

  It became almost unworkable. I was the first one there in the morning and the last one to leave.

• 36:09Guy Raz?

  Yeah.

• 36:09Speaker 03

  I was the one that had all the heavy responsibilities.

• 36:13Guy Raz?

  Yeah.

• 36:13Speaker 03

  My other partners did not have any house mortgaged and we had our place mortgaged.

• 36:19Guy Raz?

  So you had more than one partner?

• 36:21Speaker 03

  I had two partners.

• 36:22Guy Raz?

  Okay.

• 36:24Speaker 03

  You call them frickin' frac. Anyway, they all felt that I shouldn't get more salary than them. Everybody should be equal.

• 36:32Guy Raz?

  Right.

• 36:33Speaker 03

  There were a number of things and it came time where we needed money from the bank because of our growth. Our growth trajectory was like thirty, forty percent growth a year.

• 36:43Guy Raz?

  Wow. You needed to money from the bank to finance that growth?

• 36:47Speaker 03

  We had to get money from the bank at that point.

• 36:50Speaker 04

  If I can give you my perspective, Guy.

• 36:52Guy Raz?

  Please.

• 36:54Speaker 04

  When the time to give assurances to the bank, I was not willing to do that. I said, "Sorry, Aaron, this is not right and, you know, despite what I said to you, you gave the shares for a very little amount and I'm not going to give the guarantee."

• 37:16Speaker 03

  Yeah. So I refused to sign a guarantee, a personal guarantee, to the bank and Retina was behind me saying, "I'll go personal guarantee over my dead body." Anyway, I said, "Unless you agree to sell your shares to me."

• 37:34Guy Raz?

  Wait, you said this to your business partners? You said, "Look, I'm not going to apply for a personal guarantee unless you guys sell your shares back to me."

• 37:42Speaker 03

  I had said at that point, "Sell your shares to me or you buy my shares." We had a shotgun agreement, you know, a shotgun clause, but nobody signed it. All right? So it had no value.

• 37:55Guy Raz?

  Hmm.

• 37:55Speaker 03

  So what, we ended up selling the business to a completely outside party.

• 38:02Guy Raz?

  All right. So you sell, so you, you basically, you and the partners decide, all right, to resolve this, you're just going to have to sell this business. You've been doing twelve million Canadian dollars in revenue a year. So I'm thinking, you know, take that and at a multiple of five, that's a sixty million dollar business, should be a pretty, pretty good outcome. Is that, is that about right?

• 38:24Speaker 03

  No, no, we sold it for less than two million.

• 38:28Guy Raz?

  Wow.

• 38:29Speaker 03

  Yeah.

• 38:30Guy Raz?

  How is that possible?

• 38:31Speaker 03

  Well, that's the question. The purchasers said, "We want you to be remain as president," right?

• 38:39Guy Raz?

  Right.

• 38:40Speaker 03

  "And we will give you 10% of the business back."

• 38:43Guy Raz?

  Oh.

• 38:44Speaker 03

  Okay, so it felt like not a bad deal.

• 38:47Guy Raz?

  Right.

• 38:48Speaker 03

  However, when it came down to it, I said, "Well, what do I have 10% off? Do I have 10% of the retail stores?" They said, "No, we decided to separate that off." I said, "What about the real estate that we had?" And they said, "No, that's in a separate business." And I said, "Well, what do I have 10% of?" They said, "Well, you have 10% of the wholesale part of the business." And I said, "Well, that's hardly even making a profit. These other things are making profit." He said, "Well, that's up to you to make it profitable." Anyway, I resigned. I left it and

• 39:23Guy Raz?

  Wow.

• 39:23Speaker 03

  With quite, it was some bitterness there.

• 39:27Guy Raz?

  I'm sure. Do you remember, what do you remember about that time? Do you remember feeling like it was a defeat?

• 39:32Speaker 04

  Aaron is an innovator. He's driven. When he falls down, he gets up, shakes all the dust, and keeps on running again. So, we could have done much better. But that inspired me to find out what is profit? What is loss? What is book value? What is cash flow? So, I took a securities course.

• 39:58Guy Raz?

  Wow. So, that whole experience, I mean, which was a tough experience.

• 40:04Speaker 04

  Yes.

• 40:05Guy Raz?

  You basically said, "Okay, I need to understand what happened here and to prevent that from happening again." So, you basically dove into learning about finance and accounting?

• 40:17Speaker 04

  Yes. Aaron is a creator, not a wholesaler. I knew it was not going to last. So, knowing what we know now, we did make a mistake.

• 40:35Guy Raz?

  When we come back in just a moment, how Ratana and Arran figure out how to start a new business without partners, and how they cope with a brand-new cornflake factory that cannot make cornflakes. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 41:07Guy Raz?

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• 41:50Guy Raz?

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• 43:36Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's the early 1980s and because of a bad business partnership, Aaron and Ratna have just sold their health food store, Livestream. But they're still running the restaurant in the back of the store. And business there is doing so well, they decide to open a second location and they call it Woodlands.

• 44:00Speaker 03

  It was a big restaurant, 120 seats.

• 44:02Guy Raz?

  Oh, wow.

• 44:03Speaker 03

  Yeah. And basically it served a couple million meals out of there. It was, it became a very popular restaurant.

• 44:09Guy Raz?

  What do you think made it so popular?

• 44:11Speaker 03

  Ratana. Ratana made it. Ratana.

• 44:14Speaker 04

  Food and people.

• 44:15Guy Raz?

  Yeah. Tell me what, tell me what I would eat there if I got there in 1981. Would I get like a lentil soup or a tofu stir fry or like a chickpea curry?

• 44:26Speaker 04

  Ossana cupita, lasagna, moussaka.

• 44:30Guy Raz?

  Oh, yeah. Nice.

• 44:31Speaker 03

  Tofu Spanish pie, chana.

• 44:33Guy Raz?

  That sounds good.

• 44:33Speaker 03

  A huge salad bar, a great selection of fresh baked pastries.

• 44:38Guy Raz?

  Oh, nice.

• 44:39Speaker 03

  I mean, this place was jammed for lunches and for dinners and always making money. And it was being really well run by Ratana. And it was making a good 25% profit margin on it. In the meantime, I got kind of bored of being in the restaurant business. And so I started manufacturing our first product, which was in 1985, was born out of the back of the Woodlands Restaurant. It was called Manna Bread. It was a sprouted organic loaf.

• 45:08Guy Raz?

  Like a Ezekiel bread?

• 45:09Speaker 03

  Uh, no, no, quite different from that. It, this one has no yeast, no sugar, no salt.

• 45:15Speaker 04

  No oil.

• 45:15Speaker 03

  No oil.

• 45:16Guy Raz?

  Got it. You get bored of the restaurant business and you're thinking, I want to get back in, because you had, you'd been making your own products. You, you had a company that made peanut butter and yogurt and other products. So, so did you start to think, you know, I think I want to go back and, and start something new? Around food, making food?

• 45:35Speaker 03

  Well, the concept there was, look, if, if, if a company selling sugared flavored water, which is bad for you and the environment, can become a multi-billion dollar brand, why can't we make something that's healthy? And take the lessons from, from these big companies? Make a really big company out of something that's good for people and planet.

• 45:59Guy Raz?

  And you started, you started to have this conversation in, in the early eighties?

• 46:02Speaker 03

  In the early eighties, probably in 1984. And so in 1985, Nature's Path was launched out of the back of the restaurant and it quickly outgrew the large kitchen that we had in the restaurant.

• 46:16Guy Raz?

  But just let me ask you, what was Nature's Path going to make? The idea from the beginning was inspired by PepsiCo and Coca-Cola? Like was?

• 46:25Speaker 03

  In, in a way, it, it was inspired by their business model, not by their product.

• 46:31Speaker 04

  It started with Manna Bread?

• 46:34Speaker 03

  Yeah. And the main ingredient was sprouted organic grain. Uh, when you sprout grain, you convert the starch in the grain into maltose and other complex sugars.

• 46:46Guy Raz?

  Right, right.

• 46:47Speaker 03

  And therefore it becomes sweet without adding any sweetener. And it's really delicious, kind of like cake.

• 46:54Speaker 04

  But Manna Bread has a limited shelf life and limited appeal. It's very good for people who are purist and healthy.

• 47:03Guy Raz?

  So that bread has a short shelf life. So I'm assuming in order to sell it, you had, I guess you had to sell it frozen, right?

• 47:11Speaker 03

  Correct.

• 47:12Speaker 04

  Yes.

• 47:12Guy Raz?

  Okay. Where were you selling it? At the restaurant?

• 47:16Speaker 03

  No, no, we sold it through a network of distributors.

• 47:19Guy Raz?

  Oh, I see.

• 47:20Speaker 03

  And stores in the United States.

• 47:22Guy Raz?

  Wow.

• 47:23Speaker 04

  And Canada.

• 47:24Speaker 03

  And Canada.

• 47:25Guy Raz?

  And, and the brand was called Nature's Path?

• 47:27Speaker 03

  Nature's Path Manna Bread.

• 47:29Speaker 04

  Right.

• 47:30Guy Raz?

  Sold in the freezer section of, I mean, Whole Foods is already around. There was Mrs. Gooch's, there was Bread and Circus in the US.

• 47:37Speaker 03

  We were in all of them and it sold very, very well. So it became a several million dollar a year business.

• 47:45Guy Raz?

  Just the Manna Bread?

• 47:47Speaker 03

  Just the Manna Bread.

• 47:48Guy Raz?

  And, and by the way, by 1985, were there trade shows already for natural foods?

• 47:53Speaker 03

  There was the Natural Food Expo in Anaheim.

• 47:55Guy Raz?

  In Anaheim. So you, were you going down there and, and setting up a booth with Manna Bread?

• 48:00Speaker 03

  I went down there in, in 1985. We couldn't afford a whole booth.

• 48:05Speaker 04

  You shared the booth.

• 48:06Speaker 03

  So we shared a booth with another company from Vancouver, an eight foot booth. They had four feet and I, I had four feet. And at the trade show, I was there with my daughter, Gadeep, our daughter, Gadeep. And one day, as customers would walk by, they wouldn't even notice the booth. So I went out there. I was kind of like, like one of those hucksters, you know, I had to say,

• 48:28Guy Raz?

  Yeah.

• 48:29Speaker 03

  Come and try our Manna Bread.

• 48:30Guy Raz?

  Come try my Manna Bread. Yeah.

• 48:32Speaker 03

  Come and taste it. And it was great. And I wrote up orders from probably a hundred different accounts. And then I took it to the distributor down there and I said, look, I've got all these orders here. I would like you to carry Manna Bread.

• 48:46Guy Raz?

  Wow.

• 48:46Speaker 03

  So based on the orders that I was able to get at the show, we got wholesale distribution across the United States for Manna Bread.

• 48:55Guy Raz?

  Needless to say, you don't make Manna Bread anymore.

• 48:58Speaker 03

  No.

• 48:58Guy Raz?

  But, but this was really, this was the beginning. This was the first product, but already in 1985, you, you knew that, that you were gonna develop a line of different products. Is that true?

• 49:11Speaker 03

  Yes.

• 49:11Guy Raz?

  Yes. And making Manna Bread probably, were you making it in a, in like a, did you rent space in a kitchen? Did you just use a, a third party manufacturer and give them the recipe to make it for you?

• 49:21Speaker 03

  Well, the restaurant space we had was quite large. It was about 6,000 square feet.

• 49:27Guy Raz?

  Okay.

• 49:27Speaker 03

  And we had a large.

• 49:28Guy Raz?

  So you could have hired people to make it?

• 49:30Speaker 03

  Yeah, we had a bakery in the back.

• 49:32Guy Raz?

  Right.

• 49:32Speaker 03

  And because they worked very well and they're inexpensive, I used a couple of bathtubs.

• 49:39Speaker 03

  To do the sprouting of the grains. Of course, when we moved the manna bread operation out of the restaurant because we outgrew it very quickly.

• 49:47Guy Raz?

  Yeah.

• 49:47Speaker 03

  We had to rent a space and I had special stainless steel containers made for the sprout operation. And then I started adding some other things, other products to that mix. Because as Ratana said earlier, we were facing a limited amount of business with the frozen product because it was frozen.

• 50:08Guy Raz?

  Yeah.

• 50:09Speaker 03

  Okay. So I started to think about what kind of product could we make that has a good shelf life on it? And we're not dependent on freezers. And I thought, well, why not organic breakfast cereal? That's something that has a shelf life of, you know, 10, 11 months. So I found a co-packer outside of LA that made the product for us. I said, it has to be organic. And they said, oh, yes, yes, it's going to be organic. But the only thing organic about this company was its name.

• 50:41Guy Raz?

  So the word organic had no meaning behind it, really?

• 50:45Speaker 03

  It had no meaning. It had no teeth, it had no rules or regulations. And then I went to the owner of the company that was making them and I said, you know, I've been asking for an organic certificate, at least, you know, an affidavit that all the grains and all the ingredients in the cereal are certified organic.

• 51:02Guy Raz?

  Yeah.

• 51:03Speaker 03

  And he said, organic schmorganic. He said, he pointed to the table. He said, if there's carbon in this table, it's organic. And I, and I just, from that moment on, I said, I'm going to make my own cereal. I don't want to be dependent on people like this who have no ethics.

• 51:19Guy Raz?

  There was no, like, certification at the time?

• 51:22Speaker 03

  There was no certification at the time.

• 51:24Guy Raz?

  No Oregon Tilith or whatever it's called, anything like that?

• 51:27Speaker 03

  No, Oregon Tilith wasn't around yet. It was about to come, though.

• 51:30Speaker 04

  But you are the one who helped create those and implement those rules, Aaron?

• 51:36Speaker 03

  Yes, I've been a champion for organics right from the very beginning. And I said, look, because people are abusing this term, organic, we need something that has laws behind it, has teeth behind it, so that if anybody breaks these rules or these laws, they'll pay a fine and they'll go to jail.

• 51:55Guy Raz?

  Yes. Let's put them in jail.

• 51:56Speaker 03

  Yeah. The third-party organic certification was born...

• 52:02Speaker 03

  In the late 80s, and one of the first was Oregon Tilth.

• 52:07Guy Raz?

  Yeah, I don't think USDA came around until the 90s.

• 52:10Speaker 03

  No, I was involved in the development of the USDA organic rule when I served on the Organic Trade Association.

• 52:17Guy Raz?

  So you came to the realization that cereal, there was an opportunity in cereal. And I want to, I want to ask you about that first to you, Aaron, because I know right now you wouldn't fully come into the business for a couple more years, but you were still obviously involved. What was the first kind of cereal you started to make?

• 52:36Speaker 03

  It was called manna, multi-grain flakes, manna, millet, rice.

• 52:40Guy Raz?

  I got you, okay.

• 52:40Speaker 03

  Yeah.

• 52:41Guy Raz?

  Right. And so it was basically these kind of flakes made from millet.

• 52:45Speaker 03

  Mm-hmm. Millet and whole grains, different whole grains, yes.

• 52:49Guy Raz?

  And of course, you, I'm assuming you couldn't make it yourself, so you were working with an outside sort of manufacturer to make this. And how did the cereals do? I mean, were they selling okay?

• 53:02Speaker 03

  Yes, they sold extremely well. We were actually selling truckloads of cereal before long.

• 53:10Guy Raz?

  Wow.

• 53:10Speaker 03

  And we knew we had a tiger by the tail there, or the tail had us.

• 53:14Guy Raz?

  So you came to the conclusion that you wanted to make your own cereal for a number of reasons. First, you could do quality control, but also, over time, it would be more economical. But building a factory was very, would have been very expensive. From what I gather, even, I mean, even in like, by 1987, your combined revenue for the, for Nature's Path and the restaurant was about $3 million, which isn't bad, but it's not, I mean, to build a factory would have been hard. It ultimately cost about $6 million to do. So how did you do? Did you go to, did you have to start to go to banks to see if you could get loans?

• 53:56Speaker 03

  Yes, first of all, I went to the Economic, Western Economic Development Corporation, which was a federal organization that loaned money to businesses.

• 54:05Guy Raz?

  Maybe like the Small Business Administration in the US, something like that.

• 54:08Speaker 03

  Yes, and we went to the Royal Bank, for example, the largest bank in Canada, and they said, "You guys are going to get killed by Kellogg's and General Mills. How do you think you're going to survive?"

• 54:17Guy Raz?

  Yeah, of course, and they didn't want to give you a loan for that reason.

• 54:20Speaker 03

  Nobody would touch us. And finally, we found a smaller bank that actually decided to back us.

• 54:26Speaker 04

  Canadian Western.

• 54:28Speaker 03

  Canadian Western Bank.

• 54:29Guy Raz?

  You said, "We're going to make organic cereal in our own..." And I guess we should explain this, because a cereal factory is actually very complex, because you're basically making a mush, right, of all these whole grains, and then putting it through like an extruder, which is like something that you make sausage out of, and it just pushes it through, and then you've got to shape it, and then bake it, and dry it, and toast it. There's a lot that goes on just to make a cornflake.

• 54:56Speaker 03

  That's right.

• 54:57Guy Raz?

  So tell me a little bit about how you... I mean, 1989, you decide to start building a factory. Where do you even begin? I mean, you get the loan, but then where do you get the equipment? And where do you get the production lines and all those things?

• 55:13Speaker 03

  Well, we found a supplier that offered to build us a turnkey cereal factory.

• 55:20Guy Raz?

  So basically, something that you just walk in, it's all there, you open it up, you hit the "go" button, and then, done.

• 55:27Speaker 03

  It was using a very large extruder. They had never built an extruder this large for breakfast cereal. They had built smaller ones. This was a 138-millimeter-sized screw barrel. But they had only made 72-millimeter extruder barrels before that time.

• 55:43Guy Raz?

  And just out of curiosity, how much cereal could that make a day? What they were building you, how many bags of cereal, do you remember?

• 55:50Speaker 03

  Well, it would be about 2,000 pounds an hour.

• 55:52Guy Raz?

  Wow, that's a lot of cereal. Okay, so you are on fire here, you're ready to go, and they build this for you. By the way, you are in now, like, you guys are kind of underwater, right? Because you took out this big loan.

• 56:05Speaker 03

  Yep.

• 56:06Guy Raz?

  To do this. Were you nervous at all about taking on so much debt?

• 56:11Speaker 03

  Uh, we were pretty jazzed. We were pretty pumped up.

• 56:14Guy Raz?

  No.

• 56:15Speaker 03

  We, we felt that, I felt anyway, I felt that we could overcome the obstacles.

• 56:20Guy Raz?

  Yeah.

• 56:21Speaker 03

  I've always been a very strong optimist. Yeah, of course, there was some nervousness and I can tell you that on the day of our opening of the factory, which was April 6th, it was my father's birthday, that's why I remember the date, April 6th, 1990. The opening date came and we had bankers and lawyers and VIPs, we had Minister of Agriculture was there and, and other bigwigs. And we could not get the equipment to produce a single cornflake.

• 56:51Speaker 04

  Or any flakes.

• 56:53Speaker 03

  Or any flakes.

• 56:54Guy Raz?

  You just spent $6 million. What do you mean you can't get it to produce cornflakes?

• 56:57Speaker 03

  It could not, it did not work.

• 57:00Speaker 04

  Because the turnkey operation.

• 57:02Guy Raz?

  You turned the key.

• 57:03Speaker 03

  This company had never produced a large extruder.

• 57:07Speaker 04

  Proven.

• 57:08Speaker 03

  And proven it on, on cereal. So when you scale up.

• 57:12Guy Raz?

  I'm just saying, you, you turn the machine on and it starts going, does it actually do that at least?

• 57:17Speaker 03

  Uh, yes, it would do that, but the product would seize up inside of the extruder barrel and it wouldn't come out. So, so what, what we did, that on that opening day, we did not turn the factory on. We invited everybody there and we went out and bought the big giant competitors' cornflakes and we sprinkled them on the conveyor belt.

• 57:38Speaker 04

  And then people asked her, how come the machine is not making a noise?

• 57:43Speaker 03

  We had to come up with an answer pretty quick. We said, well, it would be too noisy to start all the equipment up and we wouldn't be able to hear each other.

• 57:50Guy Raz?

  So you basically put another brand's cornflakes on the conveyor belt to make it look like your factory was working.

• 57:59Speaker 03

  That's right.

• 58:00Guy Raz?

  It's like a Potemkin village.

• 58:02Speaker 03

  That's right. Take it till you make it.

• 58:04Guy Raz?

  Yeah. Wow. Did anybody know?

• 58:07Speaker 03

  Nobody knew.

• 58:08Guy Raz?

  Anybody there know?

• 58:09Speaker 03

  Nope.

• 58:10Guy Raz?

  Nobody knew. They did not know you were faking this.

• 58:12Speaker 04

  Our people knew though.

• 58:13Speaker 03

  Our people knew. Nobody else.

• 58:15Guy Raz?

  Wow. I mean, you had, right, because you had to figure out what to do.

• 58:17Speaker 03

  Yes.

• 58:18Guy Raz?

  And, and but it would have been so embarrassing, like there was press there.

• 58:21Speaker 04

  That's true.

• 58:22Guy Raz?

  So they just saw these beautiful golden cornflakes in the conveyor belt and snapped pictures and. And that was it?

• 58:31Speaker 03

  Yeah.

• 58:31Guy Raz?

  But this is, you're still, everyone leaves the factory. The machine is still not working. You've just paid $6 million for equipment that doesn't work. So what did you do?

• 58:41Speaker 03

  We struggled over the next few months. We struggled like anything to try to get this equipment to work.

• 58:48Speaker 04

  We started producing it in August.

• 58:50Guy Raz?

  Of 1990?

• 58:51Speaker 04

  Yep. Thousands of pounds.

• 58:53Speaker 03

  Truckloads, truckloads, truckloads of product as hog feed.

• 58:56Guy Raz?

  Wait, sorry, you were making thousands of pounds of product that you would send for hog feed?

• 59:02Speaker 04

  Yep.

• 59:02Speaker 03

  Yep.

• 59:02Speaker 04

  Yep.

• 59:03Guy Raz?

  What, why wasn't it good enough? Was it the flavor? Was it the texture?

• 59:07Speaker 03

  If it wasn't up to our high expectations, we would not sell it. We couldn't really sell it for more than a penny or two a pound. And we'd rather give it away than sell something that is less than optimum quality.

• 59:21Speaker 04

  But when the machines were not running, we kept on working, improving, finding help from the manufacturers, different manufacturers. And finally, it took over three months to produce the flakes.

• 59:37Guy Raz?

  But three months is a long time to waste so much food.

• 59:41Speaker 03

  Yes, waste a lot of money.

• 59:42Guy Raz?

  Very few businesses could survive that, right? I mean, that's just, I would be losing my mind. I would be shouting at the guy who put in the equipment. Say, what are you doing? You, this is defective.

• 59:54Speaker 03

  Well, actually, we threatened to sue him. And rather than face a lawsuit, he came up and settled out of court and reimbursed us the entire cost of the equipment.

• 1:00:06Guy Raz?

  Wow, okay. So, but, but now you've got bad equipment. I guess that's not bad. You got more or less free. But how did you fix it?

• 1:00:14Speaker 03

  Well, we found a consultant that used to work for that person. And he said, well, let's try something here. Let's try adding a little bit of water here to the, to the mixer and the conditioner.

• 1:00:25Speaker 04

  And oil.

• 1:00:25Speaker 03

  And a little bit of oil, vegetable oil. And remarkably, everything started to flow and work. It's just a simple, simple, simple solution.

• 1:00:35Speaker 04

  But those were very difficult times, Guy. You know, many people from restaurant I sent to the factory to work because they needed people. And more than half, they left because they said this company is going to go bankrupt.

• 1:00:51Guy Raz?

  Wow.

• 1:00:52Speaker 04

  Because we are throwing away so much cereals. They used to come and talk to me.

• 1:00:56Guy Raz?

  Wow.

• 1:00:58Speaker 04

  Yes.

• 1:00:59Guy Raz?

  So you were maybe headed towards bankruptcy, maybe not towards bankruptcy, but you were not-- there was a downturn in your business after this factory opened, right?

• 1:01:08Speaker 04

  No, definitely. We were headed towards bankruptcy. I remember at times the factory could not afford the payroll. So luckily, I had some money. And I said to Erin, I'm going to loan you this money.

• 1:01:25Guy Raz?

  You had money from the restaurant?

• 1:01:27Speaker 04

  Yes.

• 1:01:28Guy Raz?

  And so you said, let me loan this business some money.

• 1:01:31Speaker 04

  Yes.

• 1:01:32Guy Raz?

  But meantime, I guess Erin kind of recruited you to come work in the factory, right? That basically said, look, I need you here.

• 1:01:42Speaker 03

  I certainly did ask her. I had to, almost on my knees, I had to ask. I said, please, come and help me.

• 1:01:47Guy Raz?

  And you formally, sort of in quotes, formally joined, I guess, in 1992, Ratana. Is that about right?

• 1:01:54Speaker 04

  Yes. But I have some condition before I joined.

• 1:01:58Guy Raz?

  What was your condition?

• 1:01:59Speaker 04

  That he will not have another partner. It will be family business. We will be the partners. And he will not interfere what I will be doing.

• 1:02:09Speaker 03

  You know, Ratana has this tremendous strength in finance. And she has a great understanding of it and of people. My strengths were in creativity, in creating products that became very successful, and in marketing and sales. But operationally and financially, those were my weak points.

• 1:02:31Guy Raz?

  But see, this is an important point, right? Because you have enough self-awareness, Erin, to understand that that is a weak point, right? That you have that weak point. And so in order to fill that gap, you had to find the person. And the person happened to be your wife. So you were very lucky that your life partner was also just perfectly placed to be your business partner.

• 1:02:52Speaker 03

  Who would have thought, you know, when we got married in 1969, that this shy, demure, pretty girl, you know, had such a power behind her?

• 1:03:04Guy Raz?

  When we come back in just a moment, how Erin and Ratana start to get nature's path into the major grocery chains, and why, when some very big companies offer to acquire them, they say no. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 1:03:33Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1995 and Aaron and Ratana have sold off their restaurant business and are fully focused on getting Nature's Path cereals into more stores. And they're aiming for all kinds of stores, by the way, not just the little mom and pop organic markets.

• 1:03:54Speaker 03

  Right from the very beginning, I had the philosophy of that we will sell to anybody that wants our products. We will sell in supermarkets, we will sell in co-ops, we'll sell in natural food stores. I didn't feel that our product should be confined to any one group of people. So right from the get-go, we were selling to Safeway and to...

• 1:04:15Guy Raz?

  And this was Safeway Canada or Safeway in the US?

• 1:04:18Speaker 03

  Yeah, Safeway Canada. And then we parlayed that into the Safeway USA as well.

• 1:04:22Guy Raz?

  Was it hard to get on the shelves at Safeway? I mean, that's a massive, huge supermarket.

• 1:04:29Speaker 03

  We pled poverty. We pled poverty. We said, "Look, you know, we can't afford to pay all the listing fees, but..."

• 1:04:34Guy Raz?

  Right, because this is the thing people don't understand. You have to pay the supermarket, right?

• 1:04:38Speaker 03

  You have to pay a lot of money.

• 1:04:39Guy Raz?

  To place your product.

• 1:04:40Speaker 03

  Millions of dollars.

• 1:04:41Guy Raz?

  It's like being in the App Store. You've got to pay them a cut of your app. If you want your stuff in a supermarket, you've got to pay them for the right shelf space and, right?

• 1:04:49Speaker 03

  In the beginning, they took pity on us. And so we would get away with just a free fill of product. It's not that way anymore. It's changed. Yeah, it's changed so much.

• 1:05:00Guy Raz?

  But let's just, back then, to get, I mean, how did you get into Safeway? Was it, I mean, and even when you did get into Safeway, I'm assuming it was just a tiny little bit of shelf space, not much.

• 1:05:11Speaker 03

  We had a former Safeway and Woodward's manager. He was our VP of Sales. And he had a lot of connections at Safeway. So he would go in there and he said, "Look, we're going to stack them high and we're going to watch them fly." And so we would get end aisles and we'd blow out hundreds of cases a day out of certain stores.

• 1:05:31Guy Raz?

  Wow. And what was the value proposition? What was the value proposition on the bag? Because, again, we have to remember, 1995, the average consumer was not as educated about organic and natural as they are today, right?

• 1:05:43Speaker 03

  That was our job. Our job was to educate. We tried to educate our consumers with every purchase about the value of organic farming, you know, the importance of avoiding GMOs and all these other things. So... We even got into deep trouble with the grocery trade over our, some of our packaging materials. When we said, "contains no GMOs," we were approached by the Grocery Council of Canada and said, "We're going to boycott you unless you take this off your, off your bags."

• 1:06:12Guy Raz?

  Yeah.

• 1:06:13Speaker 03

  And that became a big issue in the press. But the press tended to take our side because they say, "Why is Goliath picking on this little tiny company?"

• 1:06:22Guy Raz?

  But, so here's, here's my question, right? If you were a grocery store in 1995 and you had an option between Kellogg's Cornflakes and Nature's Path Cornflakes, which were, I have to assume, significantly more expensive because you're, the, what you were selling was a, was a different quality, organic, natural, it was going to be more expensive. If the consumer didn't fully understand what they were getting, how, how are you making the case to them that they should go for yours?

• 1:06:52Speaker 03

  I think there was a kind of an awakening happening in North America where people began to become concerned about preservatives in packaging, the preservatives in the product. They were concerned about the cancerous effects of pesticides. And so, you know, our products were grown without any of these chemicals. I was interviewed by CBC way back in 1971 in our store and, and the guy asked me, "Where do you think this organic movement is going?" I said, "It's going to be like a tidal wave. It's going to wash over everything." And it has happened. Organics has now become mainstream and it's not so unique anymore, but in those days it was unique and people were willing to try something unique, as long as it tasted good.

• 1:07:37Guy Raz?

  All right. So you start to really kind of make inroads into, into the supermarkets. And meantime, by the late 90s, I guess, you are, in a sense, kind of positioned, and we've, we've had conversations with other natural brands, you know, natural products like Seventh Generation, the cleaning products. They were in a similar place in the late 90s where they started to ride the Whole Foods wave because Whole Foods just went on a tear, started kind of, you know, buying up Mrs. Gucci's and Bread and Circus and, and really expanding across the US. And it just, the whole category of, of the natural, organic food just exploded. Was, was Whole Foods?

• 1:08:21Guy Raz?

  It must have been really significant to your, to your growth.

• 1:08:25Speaker 03

  Yes, Whole Foods has always been one of our best clients, our best customers. But we also sell to Costco and Kroger and all the rest of them. Sometimes the natural food stores say, well, why don't you just sell to us? Why do you sell to the supermarkets? And I said, because we want our product to get everywhere.

• 1:08:41Guy Raz?

  And presumably, clearly, you didn't want to just be for like, you know, crunchy granola eating people. You also want to appeal to families and kids, which is, which is, helps explain why you have Gorilla Munch and Koala Crisps and the, you know, the other kids sort of focused brands. You do use cane sugar and, and I'm not saying it's bad. I'm just saying that nowadays, people are kind of looking at cane sugar. And there's, you know, some people are moving towards coconut sugar or, or agave.

• 1:09:14Speaker 03

  We make cereals like of that, too. We, we also make cereals for every particular category that you have out there. People have, want no sugar at all, or they want to have monk fruit, or they want to have coconut sugar or agave.

• 1:09:28Speaker 04

  Or fruit juice.

• 1:09:29Speaker 03

  Or fruit juice.

• 1:09:30Guy Raz?

  Yeah.

• 1:09:30Speaker 03

  And now the, the move has gone to where people say, I don't want any sugar in my cereal. And we did, we did reduce one of our most popular cereals. We reduced the sugar level and the sales dropped right off.

• 1:09:42Guy Raz?

  What was that?

• 1:09:43Speaker 04

  That was Optimum.

• 1:09:44Speaker 03

  That was called Optimum.

• 1:09:45Speaker 04

  Optimum.

• 1:09:46Guy Raz?

  Oh, and so the sales dropped off when you reduced the sugar? Wow.

• 1:09:48Speaker 04

  Yes.

• 1:09:49Guy Raz?

  So what'd you do? You had to restore it, the level, sugar?

• 1:09:52Speaker 03

  Well, we had to restore it a bit, but not, not to the, the previous level. And the sales did bounce back a little bit, but you have to be careful. You know, if you take a product that people are used to and love it, and you suddenly drastically change it, you take all the sugar out of it, and it suddenly doesn't taste anymore. And then people say, well, this is what I want, but, but their actions speak differently. So one has to be very cautious in making too radical a change in a product. So we decided to launch separate category of cereals that are either low sugar or no sugar. So that we didn't change the, the old popular ones.

• 1:10:31Guy Raz?

  So here's what I'm wondering. I mean, as you, you were not the only natural cereal brand out there, you know? By the late 90s.

• 1:10:39Speaker 03

  Unfortunately, yes.

• 1:10:40Guy Raz?

  Right? And I mean, that's, that's the way the world is. There are always going to be competitors and you're clearly doing well. And there's people who like Gorilla Munch and, you know, these different. Brands and flakes, but there are other brands that come out.

• 1:10:53Speaker 03

  Yeah.

• 1:10:53Guy Raz?

  You know, Cascadian Farms and Muir Glen and others. And but I'm not asking you to critique their product or say, tell me why yours is better. What I'm trying to understand is what, how were you able to compete? How were you able to get the word out when you didn't presumably have a huge marketing budget? How did you manage to get people to know and to buy your products? Was it just word of mouth? Was it, or was it a more sort of deliberate, intentional strategy?

• 1:11:21Speaker 03

  It was, we always engage in guerrilla marketing. I think it was mostly word of mouth and we used our packaging to get our message out as well.

• 1:11:30Guy Raz?

  Yes. Your packaging is really, I mean, I can remember, you know, I don't remember exactly when, but for as long as I can remember, seeing that big panda face or gorilla face on the box or the koala. It jumps out at you, the gorilla in the jungle. And you're like, oh, I want to eat that cereal. There's a gorilla, he's eating the cereal. I want to eat the cereal the gorilla's eating.

• 1:11:53Guy Raz?

  Right?

• 1:11:53Speaker 04

  We have rhinos too, rhino cereal.

• 1:11:56Guy Raz?

  Yeah. How important was packaging and product design, do you think, to your success?

• 1:12:01Speaker 03

  I think, I think whether it's us or it's a startup, the packaging is very, very critical. It's your, maybe your only means of getting attention on a very crowded supermarket shelf.

• 1:12:15Speaker 04

  It's the best real estate on a shelf.

• 1:12:17Guy Raz?

  Yeah.

• 1:12:18Speaker 03

  Yeah.

• 1:12:18Speaker 04

  With packaging.

• 1:12:18Speaker 03

  It's the most expensive real estate in the world. That's the, that's a supermarket shelf.

• 1:12:23Guy Raz?

  But part of your packaging certainly around was just the window, just a clear window that allowed you to see the product inside.

• 1:12:30Speaker 03

  It can be that and or it, like with our Eco Pack, it's a transparent bag. But we also, we also sell in boxes too. So, but what we did with our boxes, we reduced the size. We took a huge gamble on reducing our billboard by shrinking the box, but not shrinking the ingredients inside.

• 1:12:49Guy Raz?

  So the amount of cereal was the same, but the size of the box was different?

• 1:12:52Speaker 04

  That's right.

• 1:12:53Speaker 03

  That's right.

• 1:12:54Guy Raz?

  Why did you do that?

• 1:12:55Speaker 03

  We did it because we felt

• 1:12:56Speaker 04

  Sustainability.

• 1:12:57Speaker 03

  Sustainability, we, for so many reasons. And, and we took a big gamble because everybody else was using big boxes, big faces with a lot of empty bag inside.

• 1:13:10Guy Raz?

  You get a small little bag of cereal in your giant box.

• 1:13:12Speaker 03

  In a huge box, yeah.

• 1:13:13Guy Raz?

  Right. So you are in this crowded marketplace. A breakfast cereal is, it is kind of insane, right? How crowded that market is.

• 1:13:24Speaker 03

  It must be the most competitive category out there, period.

• 1:13:27Guy Raz?

  It must be. And also, over time, you had to expand beyond cereals, right? I mean, today, you're doing pastry, like toaster pastries, like, you know, so like organic pop tarts and frozen waffles and you had tortilla chips and, and, I mean, how important was it to, when did you start to understand that you really had to expand your product line? Because you've got 150 plus different products today. You know, when did it, when was it clear to you that in order to thrive, you had to do that?

• 1:13:59Speaker 03

  It's a lot more fun to grow than to shrink.

• 1:14:02Guy Raz?

  Yeah, sure.

• 1:14:03Speaker 03

  And either you grow in the market or you start to die. There's no in-between. There's no static in the marketplace.

• 1:14:11Guy Raz?

  What's a product that you, you guys got really excited about and went in full on and it turned out to just be a flop and you lost money on it?

• 1:14:19Speaker 03

  Oh, there's a whole bunch of those.

• 1:14:22Guy Raz?

  Tell me, let's start. Tell me, tell me one.

• 1:14:24Speaker 03

  We made a beautiful breakfast biscuit and it was in the shape of our logo.

• 1:14:28Guy Raz?

  It was supposed to be like a grab and go breakfast in a cookie form.

• 1:14:31Speaker 04

  Yes, yes.

• 1:14:33Guy Raz?

  Right. Some companies make those, like Belvita and some of these brands right there.

• 1:14:37Speaker 03

  It was like an organic Belvita. It was, tasted good.

• 1:14:40Speaker 04

  Excellent.

• 1:14:40Speaker 03

  But we could not make it inexpensive enough for the market to take hold of it.

• 1:14:44Guy Raz?

  Yeah.

• 1:14:45Speaker 03

  The price was so much higher, our cost was so much higher than Belvita, that people said, well, the heck with it. I'm just gonna go buy the cheaper one. So that was, that was a flop. But you, you gotta throw things at the wall. Not everything's going to stick.

• 1:14:59Guy Raz?

  Yeah. But you also, the, the bigger you grow, the more cushion you have to fail, which is great.

• 1:15:05Speaker 03

  And the bigger you are, the more costly are your failures. But it doesn't mean you should ever stop. We have a big R and D team and they're always coming up with new ideas and concepts. However, I must say that during COVID, the buyers out there are not quite so interested in new products. They they they just want to get stock of the products that you that you have been delivering to them over the past.

• 1:15:30Guy Raz?

  In terms of leadership, right? How did you? I mean, Radha, clearly you came in with a plan to kind of create systems and organization and to clean up the books and to professionalize this operation. And so would you sort of describe yourself at the time in the 90s and even beyond as like the chief operating officer? And Erin, you were the chief executive officer or or not? Is that not quite right?

• 1:16:01Speaker 03

  That I think that's a pretty accurate summation. However, about three years ago, I decided to step down as the CEO and Ratana stepped up as the CEO.

• 1:16:11Speaker 04

  You see, for me, the titles were not important and are not important.

• 1:16:17Guy Raz?

  Yeah.

• 1:16:18Speaker 04

  For me, what is what was important and is important. The company grows, survives and be a force, not only in business, but also in sustainability and social responsibility.

• 1:16:32Guy Raz?

  I mean, and with all due respect, Erin, because you are you have a vision here. But Radha really is the brains of this operation. I'm just I know I'm supposed to be objective here, but you know, right?

• 1:16:44Speaker 03

  You know, going over the details of our past, I had forgotten how many mistakes I had made in business. And and I am humbled by the failures and the successes, both.

• 1:16:58Guy Raz?

  Yeah.

• 1:16:59Speaker 04

  Erin is a visionary, definitely, and we are very grateful. Because of him, nature's path exists.

• 1:17:08Speaker 03

  And because of her, nature's path exists. She's the yin to my yang, you know, she is. She's always there, although we we argue and we don't always see eye to eye. We have this vision for the business and for the family and we have love for each other.

• 1:17:25Guy Raz?

  How did the two of you, here you are, and we're having this great conversation, and you're both so nice and lovely, and I love your relationship. It's such a model. But let's be honest, there's no such thing as a perfect relationship. And some of us are lucky, we've got great partners, and we've got, but we fight and we argue, we have tension, conflict. I mean, what was an example where you did not see eye to eye on how to operate this company?

• 1:17:53Speaker 03

  Ratana, you've got a better memory for these things.

• 1:17:55Speaker 04

  No, I can tell you in the beginning, when I was sitting on the production floor, the way people are behaving and working, people who really don't want to work. I just said, Aaron, what did you do? That's the worst job you have given me, but I will do it.

• 1:18:13Guy Raz?

  So does that mean you had to fire people?

• 1:18:16Speaker 03

  If she wants somebody to go, she gets me to do it.

• 1:18:19Speaker 04

  I used to get him to do it, because it's very hard.

• 1:18:24Speaker 03

  But she won't come to work that day.

• 1:18:26Guy Raz?

  But it sounds like in general, you more or less each had your areas that you focused on, and that you didn't really have too many drag-down fights.

• 1:18:38Speaker 04

  No.

• 1:18:39Guy Raz?

  Is that fair to say?

• 1:18:40Speaker 03

  No, no, no, we didn't. As long as we had our separate offices, you know, and I would focus on sales, marketing, and growing the business, and she'd be focusing on the back end, working with the people. She was, Ratana is very empathetic, she's extremely good with people. People love her. They call her the soul of the company, they call her Mama Ratana. And, you know, I was a little bit like Don Quixote, you know, tilting at windmills.

• 1:19:07Speaker 04

  And at that time, I have to rein him in.

• 1:19:10Speaker 03

  Yeah, sometimes she had to rein me in. Because I sometimes I forget that advice, you know, only expand to the extent you can personally control it. And sometimes I get carried away, and I need to get reeled back in.

• 1:19:23Speaker 04

  I can tell you, I used to threaten him by saying, I'm not going to sign any check. You go ahead and do what you want to do.

• 1:19:31Guy Raz?

  So, Rana, you controlled the purse strings? Like, if he wanted to make a purchase, you had to sign, you were the finance person?

• 1:19:38Speaker 04

  He has to justify it, why? Because it was not going to be like live stream.

• 1:19:43Speaker 03

  And almost every time, she would say, no. Even though she later on say, well, I think that's a good idea. You should go ahead and do it.

• 1:19:50Guy Raz?

  Yeah.

• 1:19:51Speaker 03

  But at the beginning, she'd always say no. And some things she said no were all the way through and they never, they never happened.

• 1:19:58Guy Raz?

  I want to ask you about something that, you know, naturally would start to happen in the organic foods business, which is some of these brands became huge, almost like multinationals. And then some of the giant brands, General Mills and Kellogg's and Kraft, they understood that there was a lot of money to be made in natural and organic and continue to do so. And they're buying up and have bought up a lot of these smaller brands because it's good for their brand. I have to imagine you started to get approached as you, you know, you grew to a pretty big company, 100, by 2010, 100 employees, you know, your revenue is, you know, in the hundreds of millions of dollars. Did you start to get approached by some of the big companies to sell?

• 1:20:43Speaker 03

  We were getting an average of one a week.

• 1:20:46Guy Raz?

  One a week? And this is like, what, big companies, but also like private equity and venture firms?

• 1:20:51Speaker 03

  That's right.

• 1:20:53Guy Raz?

  And did anybody ever put money on the table or make an offer with real money and say like, we'll give you X dollars, X number of dollars, did you sell to us? Did anybody ever say that to you?

• 1:21:05Speaker 04

  Not directly, but we were invited at Kraft's headquarters, offered a delicious vegetarian meal.

• 1:21:12Guy Raz?

  Was it mac and cheese? Kraft mac and cheese?

• 1:21:15Speaker 04

  No, it was made by chef.

• 1:21:19Guy Raz?

  Oh, they pulled out the stops, okay.

• 1:21:20Speaker 03

  They would have wined and dined us if we would have drank their booze or eaten their whatever, but we didn't. We talked with the Kraft people and they would have given us an offer that would have made our heads spin and

• 1:21:34Speaker 04

  At that time.

• 1:21:35Speaker 03

  At that time.

• 1:21:36Speaker 04

  And then when one of the large company, I won't mention it, we were at P W C offices. They were so persistent, they wanted to talk to us, they knew many things about us, they even knew ourselves.

• 1:21:53Speaker 04

  And when we were taking the elevator, I said to Aaron, I said, Aaron, we will have quite a few million dollars, but what are we going to leave to our children? A bunch of money to spoil them? Why don't we leave them a mission and a business with a mission? At that time, we both agreed and we cut our conversation and our communication with that company.

• 1:22:20Guy Raz?

  So here's the thing. So it's totally admirable. We've had companies on the show that have the same position, right? That do not want to sell. And we've had companies that have sold, including two Kellogg's and General Mills. And many of those brands continue to operate as they did before. They're just, you know, and the argument that the founders have made is, look, if Kellogg's is going to scale our brand and bring it to an even bigger audience, we're fine with that. I mean, it is true, you could probably walk away with hundreds of millions of dollars, maybe more, if you sold Nature's Path. But at the same time, it sounds like what you're saying is, we're just not, as long as we're

• 1:23:01Guy Raz?

  alive, Aaron and Ratana, we will not entertain that. We rule that out.

• 1:23:07Speaker 03

  Our kids also feel the same way.

• 1:23:09Speaker 04

  But if they feel differently, it's their.

• 1:23:13Guy Raz?

  It's their call.

• 1:23:13Speaker 03

  You say that things don't change much when a company changes, but I know, I know personally, some of the people who have sold out and they really regretted it because they felt that after.

• 1:23:25Guy Raz?

  Right, sure.

• 1:23:26Speaker 03

  After they sold out, they felt that the soul was gutted out of the company.

• 1:23:30Guy Raz?

  Yeah. And it's not just about money. I mean, you've got, I think you've got, you've got a close to a thousand employees now between your, all your, right? Your different factories? And is that about right?

• 1:23:39Speaker 03

  A little under that.

• 1:23:41Speaker 04

  Over 800.

• 1:23:42Speaker 03

  Yeah.

• 1:23:42Guy Raz?

  800. There's a lot of people.

• 1:23:44Speaker 04

  Direct employee.

• 1:23:45Guy Raz?

  And that's a lot of people that you know, and you know their kids, and you know their, you know, you've been part of their lives. So it's not just about selling and making money. It's like you're giving up all of that, too. And that's worth, that's worth a lot.

• 1:24:00Speaker 03

  Yep.

• 1:24:01Guy Raz?

  I think most of your kids, maybe all of your kids are involved in the company?

• 1:24:05Speaker 03

  Two of them are directly, one is indirectly. And up to now, we've had four of our grandchildren have also come in as interns to work in the company.

• 1:24:15Guy Raz?

  And presumably, eventually, one of your kids, if they want, will take over?

• 1:24:22Speaker 04

  Yes.

• 1:24:23Speaker 03

  Yes.

• 1:24:24Guy Raz?

  That's a plan?

• 1:24:24Speaker 03

  That plan is crystallizing as we speak.

• 1:24:28Guy Raz?

  So, when you think about the journey you took, Aaron, you didn't finish high school, and you didn't necessarily have a clear path, but you clearly found a calling and, of course, built an incredibly successful business. Ratana, you had no idea when you were 18, 19 years old that your future would be in Canada. I mean, your life was in India, but this is the way your life kind of turned out. When you think about all that you have built together, how much do you think that has to do with how hard you worked and your skills, and how much do you think has to do with just luck and fate?

• 1:25:08Speaker 03

  Well, there's an old saying, "The harder I work, the luckier I get." That's true to a certain extent, but I would say fate and luck also play their part. But effort cannot be underrated.

• 1:25:21Speaker 04

  We are very grateful that we were focused and single-minded, whatever we did, and especially individually, what I did. I was determined. I have to go early in the morning. If it was 6 o'clock shift, I should be there 5:30. If I'm needed till 8:30, so be it. It's hard work. It's a combination of all these things. It's not only one single formula. Effort, common sense, faith, and I will also add grace.

• 1:25:59Speaker 03

  Yeah.

• 1:26:02Guy Raz?

  That's Ratana and Aaron Stephens, co-founders of Nature's Path. By the way, when their son Arjun got married back in 2010, it actually inspired a whole new flavor of cereal. The wedding couple made a special granola loaded with berries and coconut and chocolate and gave it out to their guests as kind of a party favor. And people loved it so much that they decided to turn it into a product, and they called it Love Crunch.

• 1:26:30Guy Raz?

  Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is [email protected]. If you want to follow us on Twitter, our account is @howibuiltthis, and mine is @guyraz. And on Instagram, I'm @guy.raz. This episode was produced by J.C. Howard with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Claire Murashima. Our production staff also includes Elaine Coats, John Isabella, Liz Metzger, Kerry Thompson, Catherine Seifer, Alex Chung, Chris Messini, Sam Paulson, Carla Estevez, and Josh Lash. I'm Guy Raz, and you've been listening to How I Built This.