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Massoud Kazemzadeh kays naturals holding box of cereal

Innovation Celebration

–by Dan Lemke

Left to Right: Head of Operations Kathy Swenson, Company Founder Massoud Kazemzadeh and his wife and Company President Ann Jones Kazemzadeh show some of Kay’s Naturals most popular, high protein products.

As the saying goes, sometimes the leading edge is also the bleeding edge. Many Minnesota businesses and entrepreneurs know that axiom all too well. However, those innovators may find that, in the course of successfully navigating the difficulties of developing a new product or process, they have carved out a niche for themselves.

Since 2002, AURI has recognized these kinds of businesses with the Ag Innovator of the Year award, presented to a Minnesota company that has shown innovation in the development of an ag-based product or process. The goal is to recognize the accomplishments of one deserving business and draw attention to value-added agriculture’s contributions to the state.

“We present this award to recognize innovation and excellence in Minnesota’s food and agriculture space,” says AURI Executive Director Shannon Schlecht. “AURI sees many great ideas from across the state and the award provides an opportunity to highlight a unique idea and innovative business.”

Ag Innovator award recipients are AURI clients who use Minnesota agricultural commodities. In
choosing a winner, various elements are considered. Have they created a unique or disruptive use? Have they been successful or are they on the verge of greater utilization of Minnesota agricultural commodities in a higher value product manufactured locally?

“If you look at a good portion of AURI clients and past Ag Innovators, at lot of them have been ahead of their times and ahead of trends,” says Michael Sparby, AURI senior project strategist.

AURI focuses its resources in coproduct utilization, renewable energy, food and biobased materials. Past Ag Innovators have come from all of AURI’s focus areas and are representative of the diverse environment in which the organization operates.

“AURI is fortunate to be able to work with many great companies covering a range of products such as cat litter, biodiesel, biomass energy, food coloring, bioplastics, fishmeal replacements and firefighting products,” Schlecht says. “We recognize just one company of the dozens AURI works with every year and still the recipients are this diverse. The award list highlights that Minnesota has many creative individuals and companies.”

The range of award recipients reflects diversity and highlights the breadth of AURI’s assistance and expertise in helping equip businesses for success.

“It also shows the importance of AURI’s impact over our 25-plus years and how early technical and project assistance across a breadth of areas yields innovative advancements in utilizing the state’s agricultural production to create jobs and economic activity,” Schlecht says. “I believe we help de-risk ideas and shorten the idea-to-commercialization
time period.”

A Natural Choice

The 2016 Ag innovator of the Year winner has overcome many of the challenges that welcome entrepreneurs, and carved out a successful business producing healthy food products now in demand nationwide.

Massoud and Ann Kazemzadeh own Kay’s Processing of Clara City, Minnesota, which produces a variety of unique, healthy food products, including those made by Kay’s Naturals, a company owned by 27 investors but operated by the Kazemzadehs.

Massoud, a processed food expert and former college instructor, had developed several snack food items that were high protein, high fiber and low in sugar because his first wife was diabetic and had few healthy snack choices. After she passed away, Massoud continued the quest to provide healthier food options for diabetics and other health-minded people.

Challenging Start

Kay’s Naturals products were originally made in Clara City, but the plant they were using closed and reopened several times their first several years, throwing production and marketing into upheaval.

“We had a tremendous amount of difficulty,” Massoud says. “Every time we advanced in one area, we fell behind because of manufacturing or something. We would spend money to advertise our product and then we wouldn’t be able to deliver.”

Eventually the Kazemzadehs made investments of cash and sweat equity to purchase the facility. Ann, an attorney, developed the business plan while Massoud designed and equipped the facility.

The company has put those early difficulties behind them to find success in the marketplace. Kay’s Naturals produces a range of products balancing protein, carbohydrates, fiber and fats. Kay’s Naturals produces 18 all-natural, gluten-free products that have low calories, high protein, zero cholesterol, lower carbohydrates and high fiber. The line includes three types of cereals, three varieties of chips, three cookies and three kinds of pretzels. They also make other snacks including trail mix and even a complete meal plan. Products are available at over 9,000 stores nationwide. Kay’s Processing also produces snacks marketed under other private labels, including for some weight management companies.

Innovative Focus

Kay’s Naturals products found earliest success in the sports nutrition area, but they’re well positioned in the market as consumers give more attention to nutrition.

“Kay’s Naturals is a good example of a company identifying trends before they’re popular,” says Sparby. AURI has provided technical assistance to Kay’s Naturals and Massoud is part of AURI’s food industry thought leaders team.

Massoud Kazemzadeh says Kay’s Naturals was probably 10 to 15 years ahead of their time, but being innovative is key to staying in the market. That’s why new products are continuously in development and several new items will be added to Kay’s offerings in 2017.

“Innovation is the backbone of success in this market,” Massoud says. “Most products have about five years in the market and then you have to come up with something new.”

Massoud says he doesn’t have a crystal ball to see the future, but he does pay attention to trends. Markets such as organic or non-GMO products that were once niche products are now becoming more mainstream. He sees the growing world obesity epidemic as an opportunity for food processors like Kay’s Naturals to play a role in the solution.

“The only way to solve this problem is to make healthy food available that isn’t full of empty calories,” Massoud says.

To learn more about Kay’s Naturals or to order products, visit

Previous Ag Innovator of the Year Award recipients include:

Pet Care Systems: Manufacturer of Swheat Scoop, wheat-based cat litter

Minnesota Soybean Processors: Farmer-owned soybean processing plant and biodiesel refinery

Soy-MorBiodiesel plant now owned by Renewable Energy Group

USA Solutions: Manufacturer of Compost-A-Mat hog and pet mats

Protein Resources: Soy-based feed ingredient

Suntava: Natural food ingredient and colorant from purple corn

EarthClean Corporation: Environmentally-friendly, ag-based fire suppressants