How an Orthodox Jew Came to Own
North America’s Largest Islamic Food Company
David Muller
My classmates will recall that after graduating the GSB, I went to work for Muller’s Meats, our family’s beef slaughterhouse and meat packing business in Southern Ontario.
The time from when I joined Muller’s Meats in the fall of 1985 to the beginning of 1994, was an extremely stressful time for us in the business. We produced boneless beef and sold it to the commissaries that made burgers for McDonald’s, Wendy’s, and Burger King. Although it was a high-volume business, we had no product differentiation and no cost advantage over competitors, and between the two, it made it very difficult to make a living. Furthermore, nothing positive was on the horizon. There was no reasonable scenario under which we would purchase one of our branded customers, a common method of gaining product differentiation and thus increasing margins. There was also no reasonable way for us to cut costs to gain a cost advantage over competitors.
In January of 1994, I got a call out of the blue from a man who said he was from Malaysia, and that he had been sent to North America on behalf of the government of Malaysia to try to find a mid-sized slaughterhouse that would be interested in selling beef products to Malaysia. He wanted to know if I would be interested in meeting with him. I actually thought that it was one of those calls that one gets from Nigeria asking for one’s bank account information, and “they’ll take it from there.” However, I did some due diligence and found out that he really was from Malaysia and he really was a representative of the Malaysian government.
We met shortly thereafter, and he explained to me that up to that point, people in Malaysia ate mostly home-grown vegetables because that was all that they could afford. However, as the country was becoming more prosperous, there was a demand for meat. But since cattle are not produced in Malaysia, any meat products would have to be imported. As North America has a reputation for producing high-quality beef products, he was sent here to look for a slaughterhouse to provide beef products to them.
Having said that, he also explained that they did not want to actually buy the beef that we produced. All they wanted to buy was the lungs, the livers, and the kidneys. Why only those three items? They wanted only those three items because that was all they could afford at that point. Those three items are not eaten by people in North America; rather, they were being sold for pet food. Therefore, the price per pound of those three items was very low.
He went on to tell me that even though they only wanted the lungs, livers, and kidneys, they wanted to buy every lung, every liver, and every kidney that we produced. He wanted us to box those items, freeze them, and then put them into containers for shipment via ocean to Malaysia.
He went on to explain that because eighty to ninety percent of the population of Malaysia was Muslim, that any beef products that would be sent to Malaysia would have to be zabiha – slaughtered by a Muslim according to Islamic law. Being Jewish, I had a sense of the concept because of the kosher food laws which we follow. The representative explained that there were many aspects to zabiha, but in short, firstly, Muslim slaughtermen would have to be hired. Secondly, the interior of the slaughterhouse would have to be reconfigured so that the slaughtermen would face Mecca. And thirdly, this process involves slaughtering the cattle using a sharp, manual knife, cutting the neck veins and carotid artery in one fell swoop, as opposed to the mechanized method that we were utilizing to that point.
The Malaysians were willing to pay more for those three items than we were getting for them selling them as pet food. I took the price per pound difference between what the Malaysians were willing to pay and compared that with the price per pound we were getting for them selling them as pet food. Then I multiplied that difference by the weight of each of the three pieces. Then, adding up those three numbers gave us the total extra money we would get per animal by selling them to the Malaysians as opposed to what we were currently doing. Then, by multiplying that number by the number of cattle we were processing per day, I came up with the total extra revenue per day we would get by converting our slaughter to the Islamic slaughter. I then compared this number with the extra costs that we would incur by doing this conversion. There were two parts to this: one was the cost of hiring the Islamic slaughtermen who performed the zabiha, and the other was the cost of having the disassembly line move slower because of the cattle being slaughtered by hand.
When comparing these two numbers, it turned out to be the case that it was profitable for us to convert the entire slaughter to Islamic slaughter just to sell those three items to Malaysia. I proposed to my family doing exactly this, and they agreed to proceed, and as of March 1994, all of our slaughter was converted to Islamic slaughter.
We hired Osman Salih and Ahmed Omur, two Eritrean immigrants living in Kitchener, Ontario, to perform the zabiha. The rest of the staff remained the same, as it is only the slaughtermen who have to be religious Muslims, not any of the other staff members. The government of Malaysia appointed a local Islamic social service group, the Islamic Society of North America, Canada division, or ISNA Canada, to oversee and certify the Islamic slaughter at our plant.
In April of 1994 we began to ship containers of frozen halal lungs, livers, and kidneys to Malaysia. This added nicely to our gross margin. With regard to the other 98% of the animal, we continued to ship this product to the same customers as we had shipped it to previously. We did not mention to them that we had converted our slaughter to the Islamic slaughter, because it would have made no difference to them in any case. Furthermore, from a marketing point of view, we did not pay any attention to the fact that we had converted to the Islamic slaughter. We sent those three items to Malaysia and continued on with the rest of our business as usual.
In June of 1994 I was contacted again, this time by a meat distributor in Indonesia. They had become aware of the fact that we were shipping halal meat products to Malaysia, and they said that they too wanted to buy halal meat products from us. When I asked what products they might be interested in, they responded “lungs, livers, and kidneys,” the same three products that we were already selling to Malaysia. We did however, sell a few containers to Indonesia beginning in 1994.
In the beginning of 1995 we were contacted by Singapore Airlines. Since Singapore Airlines flies in and out of a lot of Muslim countries, they were in the planning stages of opening a halal flight kitchen. They were looking for a source of reasonably priced halal filet mignons for their first-class cabin service. We began to supply them with these. This was the first time that we actually sold halal muscle meat, as opposed to just offals.
In 1996 we were contacted by one of the major meat distributors in Egypt. They also had heard about our zabiha beef, and they were looking to distribute various of our beef products throughout Egypt. I flew to Cairo to meet them.
I was only in Cairo for thirty-six hours, but if I had had a movie camera perched on my shoulder running continuously for those thirty-six hours, I think I would have won the Academy Award in the documentary category. Let me give you a few examples of why I say that.
When I landed in Cairo, Ahmed, the distributor whom I was visiting, met me at the base of the stairs of the plane. Everyone got off the plane and got into line to clear Egyptian immigration and customs. Ahmed asked me for my passport, took it in his hand, and ushered me to a different customs agent where there was no line whatsoever. He put a note of Egyptian currency – I do not know what denomination – inside the passport and handed it to the customs agent. The agent took the note, stamped my passport, and waved us through!
What was interesting at that point was that Ahmed took my passport but did not give it back to me, and I was perplexed as to why. I found out in short course. On our way to the car, we took a detour into the duty-free shop. There he picked out four cases of Marlboros and three bottles of Johnny Walker scotch. He took them to the cash register, handed the cashier my passport, and then paid for the goods in cash. Then on our way out the door, he handed me back my passport! (I had always heard that alcohol was not halal, but I guess I was wrong.)
A driver was waiting for us with a Mercedes, and Ahmed and I got into the car for the drive to his facility. The driving methodology used in Cairo is truly unique. Each driver uses one hand to steer and the other hand is on the horn. All traffic is bumper to bumper all the way, so one is virtually continually honking at the vehicle in front, but to no avail, as that vehicle has a vehicle in front of them as well. At one point, we were about twenty-four inches behind the vehicle in front of us, but there was a bicyclist to our front and side who was preventing our car from closing that twenty-four-inch gap. Our driver kept inching up and up, all the while honking continually at the bicyclist. The bicyclist, however, had nowhere to go as he was boxed in as well. As our driver inched up even further, inch by inch, and honking, he finally hit the bicyclist’s rear wheel and knocked him over!
I was impressed by Ahmed’s operation and warehouse. It was clean and sanitary, up to North American standards. In his office, on his desk were many photos of his wife and children.
After we did a tour of the facility and discussed business, he offered to show me a bit of Cairo.
We first made a stop off at the extraordinary Khan El Khalili Market, where Ahmed wanted to show me the meat being sold there. I guess I was not expecting this, but there was no refrigeration. The meat just sat there outdoors waiting for someone to order it, whereupon the butcher cut it to the customer’s specifications.
We then took a bit of a detour as they wanted to show me the Giza Pyramids. I was thrilled to see them and took some great bucket list photos. It is not Luxor, but a great bonus on this trip just the same.
They put me up for the night at the Ramses Hilton. At 6 p.m. Ahmed’s driver took me back to the hotel. I was exhausted and suffering from jet lag and happy to be getting back to turn in early.
What I did not realize is that at that point Ahmed asked me to freshen up, and that he would be back at 8 p.m. to pick me up for dinner and entertainment. He then told me that he would be bringing a girl (not his wife!) and that he would be bringing one for me as well! It took quite a bit of effort for me to convince him that he should not bring a girl for me!
My room at the Ramses Hilton was on the seventeenth floor and had an incredible view of the Nile. When I got back to my room around 1 am, it was a bit warm and I opened the window. When I did, the cacophony of cars honking was deafening! At 1 am!
We ended up doing a significant amount of business in Egypt over the next few years. By 1998 we were shipping halal beef to twenty-two countries around the world.
Al Safa Halal
At the end of 1998 I was contacted by a leader of the Muslim community in the Toronto area, who asked if he could meet with me. We met, and he told me that he had heard that our company was shipping zabiha beef all over the world. He went on to explain that there was a shortage of halal meat for the fast-growing Muslim population in Toronto. For example, at his mosque, a local community member went to a farm on Thursdays and slaughtered a cow and some chickens for all the members to share. That member would set up a small storefront near the mosque, put up a sign, “Ahmed’s Halal,” and sell the fresh meat after prayers on Fridays that he had slaughtered the day before.
The community, the Imam explained, needed a reliable source of prepared halal products, like beef burgers for example. I explained to him that we did not make products like these, but rather we sold the beef to others, who then mixed our beef with other people’s beef to make burgers, etc. After he explained to me the need in the community, he introduced me to some of the other imams in Toronto, who reiterated the need for such products.
I decided to purchase a small machine to make halal burgers, and we made some frozen burgers and boxed them under the name “Canada’s Finest Halal.” We decided to start selling them through halal grocers in the Toronto area. The Imam took me to visit these small stores, and the store-owners all said the same thing, namely that they would love to sell these burgers in their stores, but that they have no freezers. They only had refrigerators, which they used to store the meat that they slaughtered on Thursday to sell on Friday. They said they would put the burgers in their refrigerators and sell them out of there. When we left the store I said to the Imam that one cannot store ground beef burgers in a refrigerator. That would be a recipe to make his congregants sick!
He said, David, you are absolutely right. What we need to do is to sell these burgers at the Food Basics.
Food Basics was the low-price supermarket chain owned by the A & P Group of Canada. The Imam said there was a Food Basics very close to his mosque. He asked me to go to see Food Basics and see if they would carry the products in their freezers.
I had never done business with A & P before because we did not do business at that time with supermarkets. I cold-called the A & P buyer who took care of buying for the frozen meat section and set up a meeting with him.
At the meeting I told the A & P buyer about halal–he had never heard the word. I explained to him that just like he carries kosher items to attract Jewish consumers, so too, if he carried halal items, he would attract Muslim consumers.
The A & P buyer responded that he would be willing to do a trial of the halal burgers in twelve stores of my choosing. He then explained to me that their stores’ freezers were full. In order to put our product into these twelve stores, he would have to remove something else to make room for our halal burgers. He said he would remove the slowest selling item from the freezers of these twelve stores. He then said that he would give us twelve weeks. If after the end of the twelve weeks, our products were selling at least as much as the slowest selling item that he removed, then he would keep our burgers in the stores. If at the end of twelve weeks, the products were not selling as much as the removed item had been selling, then he would ask us to pick up the remaining product and the trial would be over.
Then he mentioned one last thing. In order to do this trial in these twelve stores, there is quite a bit of work to do at the store end. They have to enter the products into their system, make sure they scan at the register, get them into their inventory system, remove the other products, and stock our products onto the shelves. In order to do all that, there would be what they call a non-refundable “slotting fee,” and in this case, that fee would be $25,000! Whether the product succeeded or failed after the twelve weeks, the supermarket chain would keep the slotting fee for their trouble!
Not expecting this, I stumbled over my words and I told the buyer I would get back to him. I left the meeting and called the Imam. I told him, Imam, you are not going to believe this. He wants $25,000 to try the burgers in his stores.
The Imam said, David, I want you to make another meeting with the A & P buyer, and this time, I want to come with you. So I did just that, I called the buyer, and booked another meeting.
The next week I went to the A & P headquarters again, this time with the Imam. He came in wearing full Islamic garb. He also brought a map with him that the two of us had prepared together. It was a map of the Greater Toronto Area (GTA). On the map were twelve green pins which were the locations of the twelve largest mosques in the GTA and twelve red pins of the twelve Food Basics nearest those mosques.
As we were walking in, the Imam said, “David, this time let me do the talking.”
We walked in to the A & P buyer’s office, sat down, and the Imam began speaking. He said “Good morning Mr. A & P.” (He called him Mr. A & P throughout the meeting). “At my mosque on Friday afternoons, we have three thousand people attending the prayers. These people only eat halal food. Your Food Basics is right down the block from our mosque. My people do not shop at the Food Basics because you do not have any halal food. My proposal is this. If you carry David’s burgers (he called them David’s burgers throughout the meeting) in your store near my mosque, I will make an announcement after the prayers telling my congregants that Food Basics now carries halal products and I will encourage the congregants to go to Food Basics to buy those burgers. Now, when these people go to the Food Basics to buy the burgers, they are not going to walk in, just buy the burgers and leave. No, they will buy fruits and vegetables and milk and everything else they need. So for you, it is not the profit on a box of burgers that you will gain. You will gain the profit on a full grocery cart of a whole new shopper who has never been in your store before.”
The Imam continued, “And if you put David’s burgers in all twelve of these stores, I will arrange with the other eleven imams to also announce after their prayers that their nearby Food Basics now carries halal products, and all those people will become new shoppers for you as well.”
Then the Imam concluded, “But Mr. A & P, please drop the demand for the $25,000 fee, because otherwise, this project will never get off the ground.”
“Mr. A & P” responded: “You know, every year in North America, there are fourteen thousand new frozen food products developed, and every one of those wants to be on our shelves. But no one has ever come to me and said that just because you put my products on your shelves, I will bring you a whole new shopper who has never been in your store before. And that is a very powerful thing to say to a supermarket executive. Therefore, I will give you the twelve-week trial in these twelve stores without charging you any fee.”
The Imam and I left and did the biggest high five of our lives. We were ecstatic!
The beef burgers came eight in a box, and there were twelve boxes in one master case. Each of the twelve stores ordered three cases for the initial trial, so each store had thirty-six individual boxes for sale.
We had a meeting of the twelve imams and they all agreed to participate. We printed up twelve maps, one for each mosque, showing where the mosque was and how to get to the Food Basics from there. We printed thousands of small copies, 4.25 inches by 5.5 inches. And on a given Friday the imams all announced after prayers that the halal burgers were now at the Food Basics. I could not be at all twelve mosques at the same time, but I did attend one of them.
Now I cannot tell you how many of the three thousand congregants went to the Food Basics after the prayers, but I can tell you this: all twelve Food Basics sold out of the products on that day!
That is when I realized that I was on to something.
At the Imam’s suggestion I formed a small advisory council of Islamic religious leaders and other community leaders to advise me on various aspects of the project. One of the aspects that they advised me on was the name. They stated that the name “Canada’s Finest Halal” did not have a familiar ring to it. One of them suggested the name “Al Safa,” and when he did, I asked him what “Al Safa” was. He told me the story of Al Safa mountain in Saudi Arabia. Muslims believe that Ibrahim (Abraham) brought his wife Hajar (Hagar) and son Ismail (Ishmael) to Arabia, between the two mountains Al Safa and Al Marwa. G-d commanded him to leave them there, and he obeyed. When Hajar began to run out of food, she went to search for more, leaving her child so that she could move more quickly. She could see her son from each of the two mountains, so she ran from one to the other, always seeking to keep her son in sight. Today at Mecca, the city every Muslim is required to visit at least once in a lifetime, there are two hills that Muslims travel between when they circle the holy Kaaba that is the center of Mecca. In memory of Hajar, the two hills are called Al Safa and Marwa.
The members of the advisory council agreed that all Muslims throughout North America, regardless of their native language, know about the mountain Al Safa. And so it came to be that the name was changed from Canada’s Finest Halal to Al Safa Halal.
I put an e-mail address and 800 number on the box, and we received many calls and e-mails, mostly with the same theme. “Alhamdulillah (Arabic for ‘Thanks be to G-d’), thank you so much for making these halal burgers. My children love them. Please provide us with more halal items!” One theme which was especially prevalent was that their children did not attend Islamic schools; rather, they went to public school. And after school their friends would all go to McDonald’s and have chicken nuggets. The Muslim children would come home and exclaim, “Why am I punished for being Muslim that I cannot have McDonald’s chicken nuggets?” So please make chicken nuggets that are halal and that taste just like McNuggets!
With roughly the same population of Muslims as Jews in North America, and with no other halal branded product in North America, I was quickly coming to the realization at that point that Al Safa Halal could be a major brand, equivalent to Manischewitz and Empire all rolled up into one. And in fact, the next time you meet a Muslim person in North America, if you ask them what comes to mind when you say halal chicken nuggets, I will wager money that the response is Al Safa Halal. To this day, there is no competing brand of any size. But more on that later; I am getting ahead of myself.
I also quickly came to the realization that it is very difficult to make chicken nuggets in a beef slaughterhouse. I had no experience with poultry at all and certainly no idea how to make chicken nuggets. I canvassed my colleagues in the beef industry, and was fortunate to be introduced to a man named Steve Hahn, who worked at Cuddy Foods, the company that made the chicken nuggets in Canada for McDonald’s. Steve managed the McDonald’s account there and it is fair to say that there was no man in Canada who knew as much about making chicken nuggets and other further-processed poultry items as Steve did.
I also realized that it takes millions of dollars to build a branded food line in North America. Seeing this as a once in a lifetime business opportunity I put together a proposed business plan and presented it to my family. The slaughterhouse/deboning business was not doing well and I saw no prospects for its improvement. My proposal was to sell that business, including the assets, for whatever we could get for it, and take those proceeds and invest them into this new brand Al Safa Halal.
The amount that we could get for the slaughterhouse business was far less than “we had in it,” and as a result, my family was not interested in pursuing that plan. Furthermore, the slaughterhouse business had gotten no better, and whatever cash there was there was needed for capital improvements. Thus they had no interest in investing in a fledgling consumer brand.
Realizing that there was no point of me staying with Muller’s Meats, I decided to go out on my own to embark on this new venture. As Steve Hahn was hired by Muller’s Meats specifically to create a consumer brand there, and seeing that that was no longer happening, I took Steve with me to help create Al Safa Halal.
I needed funding to get the project off the ground, and I believed that the best place to get investors would be in the Gulf countries. I was fortunate to be introduced to many of the largest investment groups from Saudi Arabia, UAE, and Dubai, and I made presentations to them, but alas not a single one of them was interested in investing in Al Safa. They pointed out that the level of projected profitability was not interesting enough for them. This was at the time when dot-coms were booming, and these investors were not interested in making a reasonable percentage return on their money – they wanted five times their money in the “next eBay.”
One day I was visiting my friend Warren Cole in New York and he asked me what I was up to. I told him about Al Safa and about the fact that I was not having luck getting seed money from Middle East venture funds. He was intrigued and mentioned that he and the brothers he worked for could potentially be interested in funding such a venture. Warren set up a meeting for me with his bosses Daniel and Moshael Straus. These two brothers had inherited a huge nursing home conglomerate and looked to make outside investments. They also brought to the meeting a friend of theirs, Jonathan Kolatch. They were intrigued by my presentation, and along with Warren, invested the seed money we required to get off the ground. They also introduced me to Irwin Schlass and Abraham Goldstein of Interequity Capital Corporation, an SBA funded investment fund which took a share.
Between Warren and his group, and the SBA fund, we raised half of the money that we were looking to raise. It was enough to get us started, and in September 1999, we incorporated Al Safa Halal and set up offices in Cambridge, Ontario.
Steve worked on the supply chain and I worked on the customer base.
Our business model was to have all our manufacturing outsourced so that we would not have to spend money on bricks and mortar. We got our beef from MGI Packers. For the chicken, Steve approached Port Colborne Poultry and made arrangements with them for us to take over their plant for one day to do halal slaughter that whole day. We brought in our own Muslim slaughtermen to slaughter the chickens halal. Then the Port Colborne Poultry employees deboned the halal slaughtered chickens and we bought all the boneless poultry produced in the plant that day. Because we paid Port Colborne a premium for the boneless poultry, it was a win for them as well. At first we only went in about one day a month, because that supplied us with enough chicken meat to keep us going for a month. After sales started to increase, we went in more often. By the time we were several years in, we were doing the halal slaughter there on a full-time basis every day.
With the raw beef from MGI and the raw chicken from Port Colborne Poultry, Steve set up a group of manufacturers to make the finished products for us. For each manufacturer, we would set up a given day that they would run Al Safa Halal product. We would supervise the clean up the night before, making absolutely certain that no non-halal product remained in the machines or anywhere near where our product would be made. Then we brought in the halal beef or chicken and supervised the manufacture of our product, making sure that there could be no possibility of any intermingling with non-halal product.
To ensure the complete confidence of the halal consumer, we also contracted with a group called the Islamic Food and Nutrition Council of America (IFANCA). We had them send an independent inspector into the plant while we were making our products so that they could verify independently that the products were 100% halal. We also worked with them to design a logo, a Crescent M, for them to put onto our packaging to inform the consumer that the products were independently verified as halal.
We contracted the services of Grand River Foods in Cambridge, Ontario, to make our chicken nuggets, strips, and patties. Cardinal Meats in Mississauga made our beef burgers. Windsor Marketing in London, Ontario, made our pizzas.
We began our sales of the products in the Toronto area at supermarkets Food Basics and No Frills. We also sold products to independent halal shops and to a couple of food distributors who serviced independent food stores. Sales began climbing.
The largest concentration of Muslim consumers at that time was, and still probably is, in the New York City boroughs of Queens and Brooklyn. At that time the dominant supermarket there was called Pathmark. I arranged to see the Pathmark meat buyer, and like we did with our Food Basics meeting in Toronto, I made a map of the major mosques in their area, and superimposed on the map the locations of the nearest Pathmark. Pathmark agreed to a trial of the product, and it would be delivered to them via one of their frozen food distributors, Nebraskaland, whose warehouse and distribution center was located at the Hunts Point Cooperative Market in the South Bronx.
At that time our family went to Los Angeles to visit Joyce’s sister, and while there I met up with my friend from business school, Paul Vogel. We were catching up and I was telling Paul about Al Safa Halal and about the fact that we had raised half of the money we needed. Paul suggested that he would be interested in investing, and also mentioned to me that I should set up a meeting with another of our classmates, John Pasquesi. Paul contacted John and set up the meeting for me. I met with John, and between him and Paul and several other people that John brought in–including Arthur Rock and Warren Hellman–and classmates Bob Horne and Dan Baldini – we were able to get the other half of the funds we needed.
That really propelled us into being able to grow out our sales team, and by 2004 Al Safa Halal products were sold in all fifty states and all ten provinces.
One day I was able to secure an appointment with the ethnic frozen food buyer at WalMart in Bentonville, Arkansas. It is not easy to get there: one has to change planes in Chicago and then take a second flight to NWA Airport. I flew into NWA, and most of the people flying into NWA are salespeople calling on WalMart. Every twenty minutes or so a WalMart shuttle bus takes everyone from the airport to WalMart’s headquarters and then returns to the airport with the salespeople who have finished their meetings and are returning to the airport to catch their flight home.
I got on to the shuttle bus, took an available seat, and began a conversation with the man on the bus next to me. He asked me what business I am in and I explained Al Safa Halal to him. I asked him what he does, and he told me that he is a salesperson for Marvel Comics.
We disembarked at WalMart headquarters, and I had my meeting with the WalMart buyer. I had extra time before my return flight, so I went to visit the WalMart Museum, located in Sam Walton’s first store.
I then got back on the bus to go back to the airport, and upon embarking, saw the same person whom I had sat next to on the way to the headquarters from the airport. I took the seat next to him. He asked me how things went, and I told him they went well and I had gotten a trial order for twenty stores. I asked him how things went for him, and he told me they went amazing: in fact, he got a seventy million-dollar order.
We got to the airport, I got on my flight, had to overnight in Chicago, and then flew back home the next morning.
When I got back to my desk the day after that, I opened the newspaper and read the following headline: Marvel Stock Up 14% on News of Huge WalMart Order!
Now, I knew that news before anyone else did by virtue of our conversation on the bus. Had I thought of buying out-of-the-money Marvel call options at that moment, I could have made a fortune! (Whether or not I would have been convicted of insider trading is another interesting question!)
In addition to WalMart and Pathmark, our products were sold in Kroger, ShopRite, Winn-Dixie, Wegman’s, Tops, Price Chopper, and many more supermarket chains throughout North America.
Divesting of Al Safa
When Joyce’s Mom passed away in March 2006, Joyce told me that she wanted to spend her father’s last days with him, however long that would be. Her father was eighty-four years old at the time and lived at the Polo Club in Boca Raton. We decided that we would move to Boca Raton for Joyce to be near her father. I knew that I could not run Al Safa from there, so we decided to sell the business. We hired Stevenson & Co out of Chicago to run the process, and they ended up making a deal to sell the business to someone out of Providence by the name of Duran Nanjiani. He in turn arranged with a Sovereign Wealth Fund out of Malaysia to fund the purchase of the business and the capital required to grow the business. The date of the closing was in August of 2007. Just before the closing, the buyer announced that he required a few more weeks to complete his deal in Malaysia.
School in Florida starts in mid-August; thus, in order to get there in time for school to start, we moved to Boca Raton in August 2007, even though the deal had not closed yet, though the closing date was imminent.
On a given date in the late summer of 2007, I was flying up to Buffalo on Southwest Airlines for the closing, which was to take place at the office of Bob Olivieri of Hodgson Russ, our law firm in Buffalo. When I got off the plane, I had a voicemail and an email from Nanjiani. They both said the same thing, namely that the Malaysians had backed out at the last minute, and that the deal was off, with no chance of it being reinstated.
In retrospect we came to realize that Nanjiani had no intention of ever closing the deal. He strung us along simply to get as much information from us as possible, so that he could start a competing brand, and in fact, that is exactly what he did.
Frankly, I was crushed and physically sick by the collapse of the deal. I now had moved to Florida and had a business in Canada. Our entire year of dealing with Nanjiani had totally taken our eyes off the ball, and I knew right away that it would take a very long time to put the pieces back together again.
For four years I commuted from Florida to Cambridge, Ontario, to run the business. I tried very hard to arrange affairs such that the business could run without me being there so much, but I was entirely unable to do that.
After four years, on May 6, 2011, we completed the sale of the company to Engro Foods, a subsidiary of Engro Corp. of Pakistan. That sale process also took a year, and it was a grueling and very unpleasant process. Pakistanis have a deep-seated belief that in any transaction there is a winner and a loser. The idea of win-win is simply not in their belief structure. Having decided they were interested in buying the company, they basically spent a year trying to answer the following question: If a Jew wants to sell us the company for X, then it must not be worth X, for if it were, the Jew would not be selling it for X. What is he not telling us that makes the company worth less than X?
The fact is that we were not hiding anything from them. However, they hired Price Waterhouse who came in and literally examined every invoice we had ever issued and every payment we had ever made, all the way back to 1999. After all that, which was a matter of many months, PWC determined that everything was in order.
Changing the Relationship between Jews and Muslims
There was a very interesting corollary to my time at Al Safa. We encouraged imams and other community leaders to visit us, and in fact, over the years, we had many of the major North American imams, scholars and heads of Islamic organizations come to visit. I became close personal friends with many of these leaders. From spending so much time with Muslims, I came to see how similar Judaism was to Islam, and also how different both of those religions were from Christianity.
Very often, I gave speeches in mosques and at Islamic meetings and conventions throughout North America. In addition to talking about Al Safa Halal, I often spoke about my view that Islam and Judaism were so similar in so many ways.
Here is part of the text of my speech that I would give at such events:
“One visitor [to Al Safa Halal] was a prominent imam from Washington, DC, by the name of Imam Johari Abdul-Malik. After his tour of our facilities, he came into my office, sat down and said to me, “David, you and I are going to change the world.” I responded to him, “Imam, how are we going to change the world? There is so much fighting, so much hatred.” He went on to say to me, “David, all over the world–forget about the fact that people say they hate America – actually, people want to emulate what is being done in America, whether it is wearing Levi’s or drinking Pepsi–whatever is done in America is considered to be cool. When people around the world see people like you and I (meaning the Imam and myself) embracing one another in public forums, speaking from the same platform, and working in public toward common goals – people will start to say to themselves, “If Muslims and Jews are getting along with one another in America, then there must be something to this.” It is not that all hatred and fighting in the world will suddenly disappear, but it will have an impact, both initially and even more so as such behavior becomes more widespread and in the open. And long term, the impact will be large.
The words of the Imam rang loud for me, and when I went home that night, I said to Joyce, “Perhaps G-d put me on earth for more than to just sell chicken nuggets.” Although I cannot prove it, there is probably no Jew in America who has been in more mosques than I have – no Jew who has been in more imams’ homes than I have. I have also attended dozens of Islamic conferences and conventions, and even spoken at some. And because of this unique opportunity I have had, there are probably few Jews who have had a chance to get an inside view of Islam in North America as I have. And what have I seen?
At a typical Islamic conference, one can attend seminars with such titles as “The Problem of Intermarriage and How to Confront It,” “The Dangers of the Internet and Network Television,” “The Need for More Day Schools,” and “Family Purity Issues.” I have also attended conferences of Jewish groups such as the Orthodox Union. There I have attended seminars with such titles as, “The Problem of Intermarriage and How to Confront It,” “The Dangers of the Internet and Network Television,” “The Need for More Day Schools,” and “Family Purity Issues.”
In fact, I have found that Islam as it is practiced in North America is strikingly similar in so many ways to the way that Orthodox Jews practice their religion in North America. And it is specifically these two groups that are so similar. For example, if in the middle of this radio show, I were to say to the host, “I must leave for a few minutes now because the time has arrived for my afternoon prayers,” the Muslim host would say to himself, “That makes sense – I also have specific times that I have to say my prayers.” A non-Muslim host might say to himself, “That is such strange behavior–why can he not wait until the show is over?” Similarly, if someone sees a Muslim woman walking in the streets of Toronto in hijab, they might think to themselves that the Muslim woman is oppressed as part of her religion and they might feel sorry for her that she belongs to a religion that oppresses women in this way. An Orthodox Jewish woman, however, upon seeing a woman in hijab, says to herself, “Oh, I understand that – I cover my hair as well–it’s a part of who I am, and I am proud of it.” Similarly, the Muslim woman can identify with many of the family purity laws observed by the Jewish woman, a lifestyle that would seem totally foreign to others, who have no such guidelines to live by. I could give you a hundred other similar examples.
So if in fact the two communities have so much in common, what is the extent of their interaction? Let me tell you two stories to illustrate the answer.
Last year I gave a speech at a mosque in Mississauga on the topic of “How Al Safa Came To Be.” After the speech a woman came up to me whom I had never met before and she said to me, “Mr. Muller – I really like you. I hate Jews, but I really like you. And by the way, you’re the first Jew I have ever met.” When I came home that night, I said to my wife that I had a very successful day. She asked me why, and I responded, “Well there is now at least one Muslim person in the GTA who likes 100% of the Jews that she has ever met.”
Another story: one Sunday morning after prayers in our synagogue, the man next to me, whom I don’t know well, asked me what I was doing that day. He was simply making conversation. I responded that I was giving a speech at a local mosque later that day. When I said that, he jumped back startled and exclaimed “What? You are going into a mosque? Are you not afraid that you will be shot?” I am not relating the conversation because he was someone in particular – he is simply an average Jewish person who lives in Thornhill, Ontario, who thinks that if David Muller enters a mosque in the Toronto area, he incurs a risk of being shot.
It is my belief that if these two groups were to spend time with one another, each would find that at the very least the others are not nearly as bad as they thought they were. Actually I believe that more than that, members of each group would find that they actually like the others. I believe that a Muslim family who comes to my home goes home saying, “those people are a lot like us,” and that a Jewish family going to the home of a Muslim family for an evening would go home saying, “those people are a lot like us.”
Furthermore, having spent time with many of the imams of the GTA and having met many of the Orthodox rabbis in the GTA, it is my belief that these people would have a tremendous amount in common.
So, in conclusion, I would like to propose that we form groups to begin such interactions and I would like to volunteer to begin putting the groups together, with your help. For example, let’s form the “Council of Imams and Rabbis of the GTA.” Can you imagine if we have a photo of a group of ten imams and ten rabbis on the front page of the Toronto Star or the Globe and Mail, with a caption under it reading, “Leading Islamic and Jewish Leaders Meet to Announce Formation of Council of Imams and Rabbis of the GTA To Discuss Common Concerns.” And let’s say that such a story gets picked up by the Associated Press and the photo and accompanying story is beamed across America. These imams and rabbis are inevitably going to receive calls from imams and rabbis all over America – the rabbis asking the rabbis here if it is true that they met with imams – and the imams asking the imams here if it is true that they met with rabbis. And the leaders here will respond to them, “yes, it is true, and you wouldn’t believe it, but they are just like us. And they are really good people and nice people. You ought to try the same where you are.” And then the idea will have spread across the continent and will receive attention across the globe, and who knows what good things will spring from that?
One of the questions I have been asked when presenting this idea to various leaders, is, “If these people were to meet with one another, what would the agenda be? What would they talk about?” I believe that the agenda is in fact not that important, that the interaction itself would lead to the goal. Having said that, however, one of the items for an agenda could be, “Funding for Religious Day Schools in Ontario.” We know that full-time religious schooling for Catholics is 100% funded by the government, whereas there is no funding at all for other religions’ full-time schools, such as Jewish or Muslim schools. This seems really unfair, and seems like something that the Jews and Muslims ought to be working on together. I can think of several other items like this that could be agenda items, and I am sure that you can think of some as well.
This idea could spread far beyond just the religious leaders. What about a regular meeting of the Jewish and Muslim lawyers of the GTA, or the Jewish and Muslim medical doctors, and so forth? All with the purpose of fostering the inevitable goodwill that will arise from such occasions. And college campuses could be an excellent place to have such groups.
Imam Johari gave me another good idea, which is to have the two groups work together toward helping the poor and disadvantaged in Toronto, not necessarily the poor and disadvantaged of either religion. For example, Jewish and Muslim members of such a group might decide to staff a soup kitchen and feed the hungry once a month or more often. In such a circumstance, the Muslims and Jews will work together toward a common goal, and inevitably camaraderie between the two groups will result.
And slowly but surely, we will whittle away at the walls that make Jews in Toronto think that a Jew is in danger when entering a mosque, and that make Muslims hate Jews that they have never met.
Unfortunately for all of us, tensions in the Middle East are at a terrible point right now. And as such, it might be said, “this is not the right time for such an effort.” My response to this is that G-d has given us only so many days on this earth, and as such we have to get started today.
Al Safa Halal started because I was approached by Muslim leaders asking if I could fill the void in the community of true halal food products. First and foremost has always been our commitment to hand-slaughtered zabiha, and we have never veered from this, nor will we. Secondly, we are committed to giving back to the community and we have sponsored masjid events from coast-to-coast in USA and Canada – there is probably no corporation in North America who has given back as much as ours to the North American Muslim community. Thirdly, we proudly have many Muslims on our staff who earn their living from Al Safa Halal and are proud of what our company has accomplished during our short existence in building the market for true halal.”
After Selling Al Safa Halal
It was my intention after selling Al Safa Halal, to devote myself full time to improving the relationship between Muslims and Jews, specifically in North America, with the hope of the movement becoming worldwide. Alas, I ended up starting a new business right away, and I never did fulfill this intention.
Why Did Al Safa Not Grow as Large as I Thought It Would?
There are at least four reasons why Al Safa Halal did not grow as large as I thought it would. One is the Jewish ownership, the second is the overestimate of America’s Muslim population, the third is 9/11 and its aftermath, and the fourth is that most American Muslims do not keep halal, or at least not all the time.
- Jewish Ownership. It is common in business that when a product or idea takes off, copycats come in to the market to take advantage of that success. That happened to Al Safa Halal. Al Safa was the first to provide widely-available halal foods for the Muslim community of North America. Other firms brought competing products to market. The problem for the other firms was that they were never able to develop a unique selling proposition. They were not able to say that their products were more halal, because Al Safa Halal products were prepared to the highest religious standard. They were not able to say that their products tasted better, because Al Safa Halal products were all produced in world-class facilities that made foods for the world’s largest fast food chains. They were not able to sell the products cheaper, because Al Safa Halal products were always priced competitively. Thus, these would-be competitors came up with a different selling point, as follows: David Muller is a Jew, and all Jews donate money to Israel, and Israel oppresses Palestinians. Therefore, by buying Al Safa Halal products, you are aiding the oppression of Palestinians.
I cannot say in definitive numbers what impact this had on Al Safa Halal sales, but I can definitively say that it had a large impact. For the twelve years that I owned and ran Al Safa Halal, it was day in and day out a huge albatross around my neck. Our competitors and other detractors assured that social media was constantly abuzz with Jewish Al Safa, boycott Al Safa, and the like. It was a battle that we were always facing and were never able to win, and frankly, it was discouraging to me and especially to my Muslim employees, who bore a huge brunt of these loud voices.
- Overestimate of American Muslim Population. When I was pitching Al Safa Halal to prospective investors, I would always say that there are five million Jews in America and five million Muslims, and the kosher market is a billion dollar industry; therefore, the halal market will also be a billion dollar industry, and we will have first mover advantage, yadda, yadda. I got the figures of the Muslim populations from studies published by groups such as the Council of American Islamic Relations (CAIR) and Muslim American Society (MAS). I have now come to realize that one of the goals of these groups is to increase the profile of the American Muslim community, particularly in political circles. If someone is running for an elected position and believes that there are a large number of a particular group within their constituency, they are more likely then to address the issues of that constituency. Thus, these Muslim political action committees have vastly overstated their populations. After eleven years in the business, I can say that these estimates overstate the actual Muslim population by somewhere from two to three times.
- 9/11 and Its Aftermath. On the morning of 9/11 when the news was first coming out about a plane hitting the North Tower of the World Trade Center, Steve Hahn walked into my office and said, “David, we had better pray that Muslims had nothing to do with this.” Steve saw the impact from the get-go, and he was so right. The instantaneous display of anti-Muslim sentiment in America cannot be overstated.
There were four different ways that this affected us: one was the tremendous anti-Muslim sentiment in America following 9/11, the second was the large number of Muslims who left America after 9/11, the third was the dramatic decrease in Muslim immigration to the United States following 9/11, and the fourth was that the community and community members increased their assimilation and decreased their Muslim identity and identification following 9/11.
- Anti-Muslim Sentiment Following 9/11: Our sales proposition to supermarkets was that if you carry our products, we will bring you a whole new group of consumers into your stores that have never shopped in your stores before. After 9/11 it was impossible to say this to anyone, because the response would have been that we do not want to have Muslims in our stores because they will scare away the rest of the shoppers. Some people in America were scared of Muslims after 9/11.
- Large Number of Muslims Who Left America After 9/11: My employees and I spent a lot of time day in and day out with the Muslim community, and we determined very quickly that Muslims were leaving the country in droves after 9/11. Some left because they were deported. Many left because they were in America illegally and left quickly voluntarily before they were caught, arrested, and deported. It became harder and harder for Muslims to get jobs in America, and thus many went back to their home countries, their American dream having become harder or impossible to attain.
- Dramatic Decrease in Muslim Immigration to the U.S.: After 9/11, it became much harder for Muslims to move to the U.S., thus ending the decades-long stream of immigrants from countries such as Pakistan, Bangladesh, and Sri Lanka. Firstly, the process changed such that it was much harder for people from such countries to successfully complete the U.S. immigration process. Secondly, the employment prospects for them once here were dramatically reduced, thus decreasing the allure of moving to the U.S..
- Assimilation of Muslims in America: After 9/11, it was scary to be a Muslim in America. Thus, Muslims stopped attending mosques and stopped shopping in Middle Eastern or Southeast Asian grocery stores. Many stopped referring to themselves by names like Mohammed, changing to Mo or Mike instead. Thus, one of the last things they had to worry about was what kind of food they were eating.
The summer before 9/11 we had just bought a fleet of 15 Honda Civics, one for each of our field reps around America, and each of them was covered with our logo and our tag line “Proudly Serving the Muslim Community.” As soon as the day after 9/11, our salespeople starting getting people swearing at them, motioning threateningly at them, and even cutting them off on the road. They all said that they had to remove the signage right away, and we agreed, and they did.
- Many Muslims Do Not Keep Halal. I designed Al Safa Halal using my knowledge of and experience with the North American Jewish community and observance of Kashrut. In particular, I knew that Orthodox Jews are careful not to violate the laws of Kashrut.
What I came to realize is that the Koran, the Muslim holy book, seems to have different passages that can be, and are, interpreted in contradictory ways. For example, one part says that you should only eat halal, whereas in another part, it says that you should eat halal when you can find halal, but that otherwise you can eat non-halal and just say a prayer before you eat the food and then you are okay.
Because of this, what I found is that most Muslims in North America eat halal at times, and eat non-halal at times. They have no religious problem eating a burger at McDonald’s with their kids and just saying a prayer before eating it. Therefore, an argument such as there are x number of Muslims and they eat three meals a day, therefore, the market size is $Y billions, is simply not applicable. The amount of halal they actually eat is a tiny fraction of that Y number.
As an indication of how small the market really is, even after the company was bought from us by Engro Foods of Pakistan, the company never grew past the point it had attained under our ownership. This is despite the fact that the brand continues to be ubiquitous in the North American Muslim community as North America’s premier brand of Muslim foods. Ask any North American Muslim if they know of a brand of halal chicken nuggets, and the answer one always gets is Al Safa Halal.









