“12 months ago, what we thought were the worst things ever–we do before lunch now,” says Dheeraj Patri of Food Essentials, a local startup built on assembling food label information into one large database. “When you have payroll tomorrow, you have $35 in your account, and you’re wondering how you’re going to pay all your employees–that’s very difficult. You feel like you can’t breathe, and you can only tell four people, the people in the room. And then you all have to figure out what to do about it … I think those are the kinds of things that a lot of startups go through.” Today, he appears alongside the company’s three other partners: brothers Anton and Dagan Xavier, and Ronak Sheth. Anton joins the group through a conference call, phoning in from France–his work visa has recently come through, and he’s planning to move to the U.S. in October. His voice rattles through the rickety speakers, seven hours ahead.
“There are times when it’s awesome to just be brothers, and go watch football or soccer, or–you know what I mean? Have a beer, and things like that. Just as I’m sure it’s also nice for Anton and Dheeraj to just be mates,” says Dagan, who is eight years younger than Anton. The brothers grew up together with Dheeraj in Hong Kong when it was still a British colony, which explains the English inflection in their voices. Very early in their lives, Anton and Dheeraj became best friends. “You’ve known Anton since you were five, right?” Dagan says to Dheeraj, who nods. They never could have foreseen running a business together in the U.S., years later.
In 2010, with three employees, they won a five-year multi-million dollar contract with the U.S. Food and Drug Administration (FDA), the company’s biggest client to date. Now, they have 17 full-time employees and 30 part-timers who work with a large list of food manufacturers, companies, retailers, and brands. Their online database lists food label data for thousands of products on the market: data, information, and demand are changing what does or doesn’t make it into what you pick up at the supermarket. Anton brings up Kroger, one of the largest food manufacturers in the world, which refuses to use 101 controversial ingredients in their private label products.
Dagan and Anton first developed the idea for a database of food label information back in the early 2000’s, while Dagan was in college in Australia. Their father was having heart problems, and was instructed to change his diet. “I was studying nutritional sciences at the time, and he came to me and was like, ‘I need to change my diet, and I don’t really know how,’” Dagan recalls. He began collecting information about the cholesterol and saturated fat levels of common foods to help his father decide what to eat.
“I was in the supermarket collecting data, bringing it back to my dad, and we were going through it–we were using very primitive methods of collection.” Dagan would go to supermarkets and stores with a dictaphone and record himself reading the label information. “That was a crazy time–I was still at University. I think I was like 19 or something. There were no smartphones back then,” he remembers. They soon discovered that store managers and retailers didn’t have access to the data they were collecting–and if they had something similar, it was not in one easily searchable place. “My dad pulled me aside and was like, ‘Right–I think we’ve got an opportunity here to try and start a database.’”
Dagan recruited the help of his college friends and together they’d scan the aisles, traversing the cereal and breakfast food aisle, the canned food aisle, the bakery, and so on. “Then we’d come home with the tape–like an actual tape–put it in the deck, plug in earphones and start typing data into our system,” he says. A friend created a software program they’d use to manually input information for each product. “That was one of our 10, 20 different ways of collecting data. We were starting from scratch,” says Dagan. “We don’t do that anymore,” says Dheeraj.
They set up a small office in Australia, where Dagan, Anton, and a group of friends all worked on the project together. “We didn’t really know what we were doing,” says Dagan. They now use a sophisticated smartphone app to collect data, but he remembers when they did it with a notepad and pen. “I’ve been living, breathing, and eating food labels for my adult life,” he says. Anton elaborates further. “For the small niche of knowing ingredients in food products, Dagan’s probably one of the top 10 people in the world for that kind of knowledge.” Dagan looks at the speakerphone and laughs. “There’s only like, 10 people out there–he doesn’t normally say very many nice things,” he teases. “As far as background goes, this is it. This is what I’ve been doing.”
Dheeraj, who had moved to the United States to attend the University of Illinois in Champaign, Illinois, hadn’t seen Anton in ten years when he learned about Food Essentials. At Anton’s wedding, the brothers told him about their fledgling company, and explained it was becoming increasingly expensive to maintain the database in Australia–they also weren’t getting the traction they were hoping for in the Australian market. The U.S., home to many of the world’s largest food manufacturers and a much larger population, seemed a more viable option. “I said, ‘My basement’s available if you want to open up in the U.S.’ They took me up on that and incorporated in 2008 out of my basement in Chicago,” says Dheeraj, though Anton and Dagan remained abroad. “That’s how we started in the U.S. It was a very trying time.”
The company was entirely self-funded in the beginning stages. “Our parents, in the beginning of the business, lost their house because of their over-dedication to our mission,” Anton says.
“Yeah–Mom and Dad put all their money in,” says Dagan. “We all crowded around them and managed to get them back up.” Even with the company based in Chicago, their idea still wasn’t taking off. “We did feel there was a huge opportunity, but were just not breaking through,” Dheeraj remembers.
That changed in February of 2009, when the FDA approached them with a small assignment related to a study about trans fats. They hadn’t been able to find the type of data Food Essentials had been gathering, and promised the team a couple thousand dollars if they could return the assignment within a week. Instead, they completed it overnight. The FDA was so impressed, they offered Food Essentials a five-year contract. “People started answering our calls,” says Dheeraj. “It’s really helped us grow.”
In February of 2012, Dheeraj received an email from Anton about Arch Grants in St. Louis, the local business plan competition that awards funding and mentorship to promising young companies under the condition that they come to St. Louis. “We applied and won–which was surprising to us at the time, because we never win anything,” Dheeraj says. With the exception of Anton, all the team members are now based in St. Louis. “Since then, things really exploded. The St. Louis community really embraced us–we really understood what it was like to be a part of a community that really wants to see you grow and puts their money where their mouth is.” In September of 2012, the startup was awarded another $50,000 of funding through Capital Innovators, and in March 2013 they raised another $600,000 in seed funding from Cultivation Capital.
“Don’t try to do it all alone … surround yourself with people that you can spend a lot of time with. Because there are times when you just need support,” Ronak adds. He met the other three members of the team at the T-Rex building downtown, while working on a sports-related data startup of his own. But after hearing about their project, he became the team’s fourth member. “We told him what we were doing, and we were able to scam him into thinking that we had something,” says Dheeraj. “Since December 2012, he’s been working for us full-time and a half.” Ronak responds earnestly. “Sometimes you meet people and you quickly learn about who they are, the type of people they are, and the way they approach things. And you’re drawn into that.”
“All four of us, we can sit around the table very quickly and communicate,” says Anton, his voice rattling through the speakerphone. “I could maybe give a few examples about some of the shit we’ve been through. For starters, we’ve spent more than many, many months, even years, working without pay. And we’re not young kids anymore–two out of the four of us have young families. That’s really been a challenge. Dagan has had a personal breakup with his partner of 10 years because of Food Essentials. Pretty much all of us have almost been through divorce–”
“Almost. No actual divorces,” Dheeraj clarifies.
“You give almost your everything to a business–sometimes your everything can be too much,” says Dagan, ruefully. “It’s very hard when you don’t know–when you can’t plan into the future. For so long there it was no money coming in. It was, ‘We don’t know where we’ll be, but we’ll keep trying.’” Anton agrees. “When you’re having to face the death of a loved one, yet still have to check your email–that’s bordering on insane. And several of us have been through those kinds of cases.” A pause settles over the room, perhaps unbeknownst to him, 4,380 miles away. “I don’t know if that’s what you’re looking for, but I just wanted to–that’s something we think about a fair amount.”
Dheeraj breaks the silence. “There’s no shame in being vulnerable, at least in this group. If you can be vulnerable, you can be really strong, because the people you can be vulnerable to will be able to give you strength because you can tell them exactly how you feel. They can help you get through it, and I think that is really the key. But if you don’t have that trust, it’s very hard to be vulnerable, which I think is true for any relationship, no matter who,” says Dheeraj. “We’ve really evolved over the last 12 months. But it still sucks, and it’s still difficult,” says Dheeraj. “The funny thing with startups is you’re either one breath away from cheering and giving each other high fives, or one breath away from breaking down and crying,” says Anton.
“This isn’t the correct Food Essentials blue,” Dheeraj jokes, pointing to their logo on a piece of paper that the team has been instructed to pose around for photos. Shuffling up from the table to gather for photos, someone has the idea to video chat Anton and project his image on the wall, so the rest of the team can stand around him. “Pictures? Damn,” says Dagan, amused. “Anton, are you decent?” Dheeraj says to the computer monitor. “You just have to avoid this part,” says Ronak, motioning towards his shirt. “I spilled lunch on myself.” Amidst the disarray, Anton conjures up a pair of digital red devil horns, which he then positions around the image of his face projected onto the wall. The team members position themselves around him, smiling broadly. “There’s never a convenient time, so you better get to it,” says Dheeraj. “Otherwise, you’ll be old and gray before you realize you never got to do what your passion was.”
For more information about Food Essentials, visit www.foodessentials.com.