Special Lecture

The Story of Hot Pockets and an Entrepreneur’s Life

By David Merage
Entrepreneur and Co-Founder, Chef America

Sponsored by: System Design and Management Program, MIT Entrepreneurship Center, MIT Sloan Jewish Students Organization, MIT Sloan Marketing Club, MIT Sloan Middle East Business Club

About the Speaker:
In 1977, David Merage co-founded Chef America, Inc., a national frozen food manufacturer known for inventing and marketing products including Hot Pockets, Lean Pockets and Croissant Pockets. At the time of its sale in 2002 to Nestlé, the company had reached $750 million in annual sales, employed 1,800 people and was growing at a rate of 15 percent per year, making it one of the fastest growing food companies in the world. Nestlé acquired Chef America for $2.6 billion.

From an early age, David knew he was destined to be an entrepreneur; he never saw himself working for anyone else. His father Andre, an entrepreneur himself, encouraged David to build a family business as a strategy to foster personal and familial strength. Throughout his college career, David pursued opportunities to learn about real estate investment and management, and quickly became an expert at identifying and capitalizing on market trends as he built his real estate portfolio in Southern California.

Upon graduation in 1973, David and his brother, Paul, began importing and marketing consumer products from Germany, Japan and England to the United States. During a business trip to Europe, they discovered Belgium waffles, which had yet to be introduced to the American market. David and Paul researched business models and tested concept viability before concluding that manufacturing and distributing a frozen waffle product to coffee shops and restaurants would yield the highest return. Without any previous experience in food businesses, the team spent nights and weekends engineering equipment, formulating recipes, and creating products in a garage-like setting. By 1977, David, Paul and their father Andre formed Chef America and began mass production of their Belgium waffles. Building on that success, they soon began research and development on a frozen lunch product which they called the “Hot Pocket” and sold to schools, catering companies and vending companies. In 1983, Hot Pockets were introduced to retail supermarkets, and within a short time, achieved 99% distribution. The rest, as they say, is history.

Today, David is principal of Consolidated Investment Group (CIG), a Denver-based investment firm, focusing on Wall Street and real estate investments. CIG holds one of the most diverse portfolios in the country in terms of product type and geography, investing in public equity, private equity, hedge funds, fixed income and real estate, both domestically and internationally.

In addition his work with CIG, David is a venture philanthropist who spends much of his time actively leading two foundations. The primary mission is to promote self-sufficiency through education and community development, both in the United States and in Israel. Mirroring his approach to business, David’s philanthropic approach is to develop new systems or improve existing ones, select like-minded individual and organizational partners, and together bring each project to successful completion. The foundation’s management team is comprised of experts in the education and nonprofit sectors, supported by senior-level finance, legal, management and marketing professionals. Centered on the belief that education is the gateway to optimal life outcomes, foundation efforts are concentrated on four primary areas: Early Childhood Education, Arts and Community, Jewish Life (Domestic) and Jewish Life (International).

David was born in Tehran, Iran in 1949 as one of five children to Andre and Katherine Merage. At the age of fifteen, he traveled to England to pursue his studies and then completed his formal education in the United States with a Bachelor of Science degree in marketing from California State University in Los Angeles. David is married to Laura Merage, who was also born in Tehran. She holds a master’s degree in art from New York University and is an accomplished artist/photographer with works in public and private collections nationally and internationally. David and Laura have two children, Jonathan 26, and Sabrina 22. Jonathan attended Purdue University and conducts severe weather research throughout the country, and Sabrina attends the University of Denver where she is majoring in marketing.