Nobody puts baby food in a corner

  @FortuneMagazine May 22, 2013: 8:58 AM ET
happy family inner city 2013
NEW YORK (Fortune)

As a health nut and foodie, 36-year-old Shazi Visram had a problem with processed baby food. Namely, it was gross, and people felt bad about feeding it to their kids.

But most parents are pressed for time and don't have alternatives to mushed meals in glass jars. So, after attending business school at Columbia University in New York, Visram drafted a business plan and ultimately launched her own baby food company on Mother's Day in 2006. She called the company Happy Baby, and it sold organic, nutrient-enhanced baby food in pouches, not glass.

Now called Happy Family, Visram's company has grown remarkably since its birth. In 2011, it pulled in $34 million worth of revenue and nearly doubled that by 2012, earning about $60 million.

Happy Family has performed so well, in fact, that it caught the eye of France-based multinational food giant Danone. On Mother's Day this year, Danone announced that it had agreed to purchase Happy Family for an amount that neither company would disclose.

This year, Happy Family also made the No. 1 spot on the annual Inner City 100 list, a ranking of the fastest-growing businesses in urban America.

This is far from the first time Visram has been singled out for her ingenuity. In 2011, she won an American Express competition to represent small businesses in a commercial. The exposure was extremely helpful, Visram has said, and she continued to work with American Express after the initial spot. Also in 2011, Visram won Ernst & Young's Entrepreneur of the Year for New York. And she earned a spot on Crain's New York's "40 Under 40" list in 2012. Earlier this March, the World Economic Forum selected her to be a member of the Young Global Leader class of 2013.

She was trying to catch a breath of fresh air when she spoke with Fortune from her vacation in the Bahamas, without much luck. "I didn't expect it to culminate in signing this past weekend," she said of the Danone deal. "All of a sudden, the pressure was on, and they really wanted to put a release on the wire Monday morning, Paris time. I found myself in the hotel room when we got here and I didn't sleep for 48 hours."

Still, Visram says she's pumped. "I don't really anticipate anything that could be negative about it," she says, and while big acquisitions can spook small companies, "they want me to continue to run the show, they love our spirit and they are not proposing any management changes."

Though Danone sells yogurt brand Activia and Evian water in the United States, it doesn't have a huge presence in the infant nutrition market here. Visram thinks her company can help change that. Already, Happy Family has 4% market share of the U.S. baby food industry.

So move over Gerber. When Happy Family launched, Visram says,"Gerber in the U.S. owned 80% of the market. For them, why take the time to change that up and disrupt a category that they already dominated?" Danone's resources should help the company continue to gain market share in the U.S.

And of course, the partnership should extend the company's global reach, especially in China. The Chinese middle class is growing, Visram said during an interview at Ernst & Young's 2011 Strategic Growth Forum: "They're looking for American-made baby food and they're looking for the very best for their baby. [We've] just had tremendous interest in the Chinese market, and it is a phenomenal market that can't be overlooked."

Lucky for her, 40% of Danone's baby nutrition business comes from the Asia-Pacific, with China as the largest market. Danone continues to expand in the country -- on May 20, it signed a new deal with China Mengniu Dairy.

If all goes as planned, the acquisition of Visram's company should create one more even bigger happy family. To top of page



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