Weight loss challenge

Kareem Cook and Claude Tellis have built their business, Naturade, a Costco supplier, around a mission of offering healthy meal alternatives at an affordable price. Here’s a look at how they’ve grown the business, the products they’ve introduced and why healthier eating is an especially critical topic as we enter 2022.

The two executives behind natural foods company Naturade, Tellis and Cook know all too well the tragic toll of an unhealthy diet. Both come from large families, and both have stories of relatives suffering and dying from diabetes linked to obesity, the result of unhealthy eating habits. And those habits have been passed from generation to generation, creating what Tellis calls a “culture of poor eating.”

The mission of their company is to offer plant-based protein meal replacement shakes that can help people lose weight. Their target market is communities throughout the country where there’s not a high awareness of what’s in their food or of the clear connection between diet and certain diseases, and where affordable options aren’t available.

Sadly, it’s a massive market, as more than 34 million American adults have diabetes. On the positive side, data shows that changing their diet and losing weight, even a few pounds, can help people manage their diabetes and reduce the risk of developing other related problems, and even return blood sugars to normal levels for some people. But nudging people toward healthier eating habits is anything but easy, as foods high in fat, sugar and salt—and the huge marketing dollars behind them— are entrenched in our culture.

Shared family histories

Cook and Tellis met as students at Duke University in the early 1990s. Over discussions, they learned of their shared family histories of diabetes. Tellis had two uncles who died from complications related to diabetes, including one who recently passed away after contracting COVID-19. On Cook’s side, two cousins have passed away, as did an aunt recently from COVID, complicated by underlying diabetes. “All of my grandparents, all of my grandfathers’ siblings, from the time that I was born, all had diabetes. It was their generation,” Cook says. “Going to visit them as a child, I would see insulin in the refrigerators. It was so prevalent, you just thought that was what was natural.” Both recall wondering: Do we have to accept that as a way of life?

They went separate ways for graduate business school but ended up together in Los Angeles. And both were interested in nding a business opportunity in the healthy foods area. They had notions about Los Angeles—healthy people, the “com- plete Baywatch scene,” Cook recalls. “But we immediately saw all these overweight kids. And then we read about the fact that there was a 40% child obesity crisis out here. And that’s what sparked in our minds that we could do something about it.”

At the time, there was a grassroots push to get rid of junk food in Los Angeles schools. Jumping on board, they wrote a business plan, took out a $50,000 small-business loan and in 2002 launched a company, Healthy Body Products, that offered healthy alternatives to soda and candy in vending machines. Among the first clients were several local YMCAs, which eventually led to a contract to supply healthy options for vending machines in public middle and high schools in Los Angeles.

Growing the business was a day-by-day challenge. They cold-called companies for new contracts. For a period, Cook even lived out of the company’s modest offce in the back of a dance company, an early customer. One of their first purchases was an old U-Haul truck that they used to service the vending machines—with Cook using it as his personal vehicle after work. The bigger challenge was getting access to capital to grow as a fledgling, minority-owned business.

But they did grow the company, and their success in California drew attention on the federal level. President Bill Clinton and Governor Mike Huckabee invited them to discuss with Arkansas Alliance for a Healthier Generation, a child obesity prevention organization, what they had accomplished in California.

Growing Naturade

The entrepreneurs began looking for a business opportunity with more potential impact beyond California and vending machines, and learned about a company available for sale, Naturade. Based in Orange, California, Naturade was founded in 1926 and was a pioneer in plant-based shakes. As an established brand, it offered the pair a starting point for reaching a broader goal: creating a company that could address diabetes and diet-related illnesses on a national, even global level.

They bought Naturade in 2012 and completely revamped the brand with a lineup of plant-based meal replacements that are low in sugar and high in protein, vitamins and minerals. The goal behind the makeover was to make high-quality nutritional products for a wide audience— meaning making them both affordable and accessible. Their rst signature product was VeganSmart, which they began marketing at natural food exhibitions and other trade shows.

VeganSmart was successful in a niche market, but the challenge was to attract more mainstream consumers. That meant getting more people to know about plant-based foods as a weight loss strategy, while being assured that they tasted good. It also meant creating more buzz around the plant-based products industry, and making Naturade what Tellis calls “a disruptive brand.”

A huge coup came when they attracted professional basketball superstars Magic Johnson and Grant Hill as investors in the business. Both brought instant recognition to the brand, with Johnson in particular offering extensive business experience in bringing high-quality products into urban settings. In announcing the partnership, Johnson said, “I’ve followed Kareem and Claude’s journey for some time, and their mission aligns well with my own passion to live a healthy lifestyle. I strongly believe in exercise and being intentional about what I eat and drink. Therefore, joining Naturade was an easy decision. Together we are proving that if you offer people healthy products that taste good and can positively impact their well-being, they will make the changes necessary to improve their lives.”

A growing movement

As they enter their 10th year with Naturade, Cook and Tellis can see progress toward their goal of getting more people to know about diet and health, and also toward meeting their business objectives. The idea of eating a clean diet, including plant-based foods, and the impact that can have on weight-related illnesses, is becoming more mainstream. A lot of that stems from the popularity of documentaries such as Forks Over Knives, Cowspiracy, What the Health and They’re Trying to Kill Us, for which Cook and Tellis were inter- viewed. The message is also becoming more pervasive in urban communities, thanks to in uential hip-hop artists talking more about plant-based diets and adopting food-conscious lifestyles.

“There’s a number of people who are starting to learn about being plant-based [in their diets], many of whom would never take a plant-based product,” says Tellis. Cook adds, “There’s a movement that I feel as though we play a big part in, which is everyone coming to the middle.”

COVID has played an unfortunate role. As Cook and Tellis have personally experienced, people with preexisting health issues such as diabetes are at a higher risk of death if they get sick.

Changing can start with small steps, like replacing one meal a day with a healthy alternative. “Maybe that’s break- fast,” Cook offers. “We know that that’s the most important meal of the day, right? Replace that: Have a plant-based shake that’s clean, that’s low in sugar, as opposed to a fatty high-sugar, high-salt product or something in the morning.”

He adds, “We know that the majority of people will never become vegans. There’s only 4% or 5% of the population that plays in that space. But we knew that we could impact the other 95% if we could get them to understand that your diet is causing your diabetes, your illnesses. And there’s a way to mitigate that risk, by just changing some aspects of your diet.”

The entrepreneurs began looking for a business opportunity with more potential impact beyond California and vending machines, and learned about a company available for sale, Naturade. Based in Orange, California, Naturade was founded in 1926 and was a pioneer in plant-based shakes. As an established brand, it offered the pair a starting point for reaching a broader goal: creating a company that could address diabetes and diet-related illnesses on a national, even global level.

In setting out on their business journey, Cook and Tellis aspired to eventually run a company that does well by doing good, playing a positive role in the community while being economically successful. In other words, Naturade must benefit both its customers and its investors. “We hope that what we do is the first example of a company of our type in the consumer space that delivers both of those metrics,” says Tellis.

Adds Cook, “We just felt like we had to do something about it. [Naturade] has afforded us a way to actually fix the problem. Really, it starts with passion.”