2024 Entrepreneurs of the Year: Oasis Falafel driven by entrepreneurial spirit

The founding of Oasis Falafel in 2004 came at a key turning point in the lives of its co-owners, Naftaly Stramer and Ofer Sivan.

Mr. Stramer has left his position as vice president of development at Stockpoint, an Iowa City IT firm, and had just taken a job with a new local high-tech company, while Mr. Sivan was a recent University of Iowa graduate with a degree in mechanical engineering – a field that, in hindsight, didn’t particularly suit him and wasn’t generating any job offers.

“I didn’t really understand it,” he said. “I graduated, but I had a C-plus average. Maybe even a C-minus.”

Mr. Stramer worked with Mr. Sivan’s father at Stockpoint, so the two men had become acquainted. As Mr. Sivan, his older brother, and Mr. Stramer sat in the Iowa City Ped Mall in May 2003, they began discussing their respective futures – beginning a 20-year venture that’s now led to a new honor, the CBJ’s 2024 Entrepreneurs of the Year.

“I think we were drinking mochas from the Tobacco Bowl,” Mr. Sivan said. “We must have just been talking about what we were going to do, and I remember my brother said ‘Why don’t you guys open a falafel place?’ We looked at each other and were like ‘Yeah, that’s a good idea.’”

Mr. Sivan had moved from his native Israel to Iowa in 1981, and had grown fond of falafel (a deep-fried fritter or ball made from ground chickpeas, herbs and spices). The dish wasn’t widely available in Iowa in the early 1980s, and Mr. Sivan said he was hoping to enjoy falafel once again when his family moved to Chicago in 1988.

“But it wasn’t good,” he said. “Actually, it was kind of lousy. I was disappointed. So every time I would go back to Israel when I was a teenager, I would eat falafel every day. If I was leaving the next day, I’d go get it twice. I was becoming sort of an aficionado, but I never thought it would be a career. I just thought I liked falafel.”

Meanwhile, Mr. Stramer had landed a new position in early 2004 and had just begun working for the new company, a startup.

“I was a vice president, so I knew about business. But when they came with this suggestion, I was like, ‘Seriously? What do I know about food?’” he said. “We didn’t decide at the time, and so I started with the new company. But I told the lady who owned the company ‘I may not survive here for a long time, because I have falafel in my head.’”

Falafel was also a favorite for Mr. Stramer, a native Israeli who moved to Iowa City in 1994 when his wife took a position with the University of Iowa. But when the idea of opening a restaurant was first floated, he wasn’t fully convinced.

“I said ‘let’s talk about this,’ and we started putting together a business plan,” Mr. Stramer said. “My wife was asking me, ‘What are you doing with all those spreadsheets? You guys are talking about opening a falafel place, but what is all this?’”

Mr. Sivan and Mr. Stramer finally decided to move ahead with their plans in early 2004, opening with a food cart, and became vendors for the Iowa City Arts Festival and Jazz Festival that year while they developed their recipes for falafel, hummus (a dip made from chickpeas), tahini, baba ganoush and other Mediterranean favorites.

As the operation ramped up, the restaurant’s recipes went through numerous iterations, from preparation methods to vegetable combinations. 

“Falafel was meant to be dressed up,” Mr. Sivan noted. “It’s not that interesting on its own. We had a lot to learn.”

Location, location

As Oasis gained popularity and the duo considered a permanent storefront, they first explored a space at the Old Capitol Mall (now Old Capitol Town Center).

After that deal fell through, they began negotiating with the owner of the building at 206 N. Linn St., which was then the home of Chill and Grill.

The then-owners initially offered a building lease, but Mr. Stramer and Mr. Sivan insisted on a purchase. In hindsight, the two agree, purchasing the building was the right decision.

“20 years on, it's ever more apparent than buying was so good,” Mr. Sivan said. “There's so many established businesses here, and either their lease options run out or the building sells and a malicious person takes over and wants to double the rent.”

In some ways, opening a Mediterranean restaurant in Iowa City in 2004 was a bit risky – there wasn’t that much culinary diversity at that time, despite Iowa City’s multinational population.

“When we opened here, there were far more ethnic eateries in Cedar Rapids,” Mr. Sivan said. “For Indian food, Thai food, soul food, anything like that, Cedar Rapids was the place to go.”

Nevertheless, Mr. Stramer and Mr. Sivan said they weren’t too worried about the reception they would receive.

“In 1988 there wasn’t sushi in Marshalltown, either, but now every town has it, even the smaller ones,” Mr. Sivan said. “This is a college town, so we were pretty optimistic. But we definitely wanted to check the market. It’s not something that we (knew) would succeed. That’s a different question.”

Expanding to retail

Oasis’ expansion into the retail market began in 2006, when the restaurant’s hummus was first introduced at the New Pioneer Co-Op and, just weeks later, at Hy-Vee stores in Iowa City.

Since then, retail operations have grown exponentially. Oasis hummus is now available at John’s Grocery in Iowa City, Gary’s Foods in Mount Vernon, Savor the Barn in Monticello, Hy-Vee locations through the company’s seven-state footprint, and area Fareway, Natural Grocers, and Sunset Foods stores.

Oasis also signed an agreement with Costco in Coralville to sell hummus in a larger, 24-ounce size – the largest container Oasis has on the market. That venture launched in May 2021, and Oasis hummus is now available at six Costco locations, with a seventh coming online soon.

But as the retail venture continued to expand, capacity issues became more prominent.

“Until just before COVID, we were doing (hummus) seven days a week,” Mr. Sivan said. “We started at 3 a.m. here, making hummus for eight hours. We had two trucks doing deliveries seven days a week.”

As a result, the company negotiated a co-packing agreement with Kalona Direct in 2020, using that facility’s larger commercial capacities.

“We taught them how to do hummus,” Mr. Stramer said.

But the Oasis standards have remained the same, and the duo visits the Kalona operation frequently to ensure quality control for the products they sell.

“We decided from day one that we were not going to compromise on quality, and that’s what we’ve done for 20 years,” Mr. Stramer said.

“It’s the same method,” Mr. Sivan added. “They just scaled it up. We were doing 45-pound batches, and they’re doing 60 pounds. It’s a little bit bigger machine, but it’s the same recipe. It’s so cool and clean. It’s fun to watch it.”

The company is now split into two divisions – Oasis Falafel, the physical restaurant’s operations, and Oasis Street Food, which encompasses the commercial and retail hummus operations. Sales are about evenly split between the restaurant and the retail supply operation, Mr. Sivan said.

The company’s hummus has been sold under the Oasis Street Food label since 2021, to avoid confusion with the restaurant’s name and offerings, Mr. Stramer noted.

“Our old hummus labels said Oasis Falafel Hummus,” Mr. Sivan said. “People would ask, ‘what’s falafel hummus?’ So we came up with a new brand, but we use the same logo.”

In some ways, expanding distribution to a wider geographic area would be challenging. Unlike most national brands, Oasis doesn’t use any preservatives in their products, which limits their shelf life, in most cases, to two weeks – or less – from their preparation date.

“As a brand, we just have to embrace that,” Mr. Sivan said. “If we went to Chicago, we could make hummus on Monday and it would be on shelves by Wednesday or Thursday. That’s very fast for the industry. A lot of them would say, ‘oh, that’s too short.’ But once the customer gets used to it – we just like to say, that’s why it’s so good, because it’s fresh, and they start to obsess about it, like they’ve bought an idea. That’s part of the brand experience.”

Entrepreneurship is risky, the two men agreed, and success has never been assumed.

“I honestly didn’t even think about it when we started, which is typical of a 25-year-old,” Mr. Sivan said. “I just figured if it didn't go, I would have time to start another career.”

“We didn’t know it was going to pan out,” Mr. Stramer said. “Even now, after 20 years, we’re an institution, but we cannot relax. You need to look for the next thing and make sure that whatever you do is repeating itself, so people know what they're getting.”

Oasis’ story has become one of extended success, with a core of long-term employees providing a solid base of operation.

In 2017, Oasis was honored with the statewide Outstanding Immigrant Business Award at the 2017 Immigrant Entrepreneurs Summit in Ankeny.

The future

There’s innovation on the horizon. Two new hummus flavors – roasted red pepper and garlic lovers – are set to debut soon. And ironically, Mr. Sivan said he was initially convinced he wouldn’t like the red pepper variety.

“A lot of people think they don’t like hummus because of some of the national brands,” Mr. Sivan said. “(Mr. Stramer) said ‘let’s try red pepper,’ and I said ‘no, red pepper hummus is bad,’ because I’d only had the national brands. I felt trapped with some of the same (thoughts) as potential customers. Then we made it anyway, and it’s so freaking good. And I realized ‘oh, God, I almost did it to myself.’”

Oasis is also introducing frozen falafel that can be prepared at home, Mr. Stramer said.

“We’re starting that local, to give people a chance to give us comments,” he said.

Other opportunities may arise in the near future, and Mr. Sivan said Oasis is always open to those opportunities.

“It’s not so easy to just whip up a product line,” he said. “There's so many good foods that we could introduce, and some of them aren't really even new – they're just new to these markets. And I think that people would see our logo and be like, ‘Oh, that's Oasis. I should try this.’”

Not all the company’s ventures have been successful. Like most entrepreneurs, the pandemic brought serious challenges for Oasis. A second Oasis location in Omaha opened in late 2018 and closed permanently in August 2022. And while the company continues to supply hummus lunch kits to the University of Iowa, it no longer operates on-campus cafe locations.

But as a longtime presence in the Iowa City community, Mr. Stramer said he’s never been afraid to ask for help as the business has changed and expanded.

“You don’t know what you don’t know,” he said. “And you don’t know everything. If you don’t know how to change and make sure you’re doing things better, then you won’t succeed.”

Over the years, Mr. Sivan said he’s become most gratified with the presence of Oasis in customers’ experiences – and not just as a restaurant.

“I remember, maybe a year after we opened, I was cleaning tables and I could see a couple was breaking up,” he said. “And in a way, that was awesome, because that meant this had become a place where life was happening. They're taking for granted that we're here. People were having their lives here. We hear from people that their first date was at Oasis. We've done a ton of weddings, we’ve done funerals. People will say, ‘my dad really loved your food.’ That’s meaningful, that we can become one of the things people love about their life.”  

https://corridorbusiness.com/real-success-with-nate-kaeding-naftaly-stramer-and-ofer-sivan-oasis-street-food/