Growing a $100 Million Candy Business Through Retail & Celebrity Partnerships

0:00it became clear to me that going from$100 million a year revenue company to$200,$300 or$400, which would translate into trillions grams of sugar kicked and impact in the world that we really needed a partner who had been down that path before. Hello and welcome to Shopify Masters, your companion for starting and building a business. I'm Shuang Esther Shan. When it comes to picking out candy at the store, what are you looking for? chewy, fruity, or maybe even sour? For Tara Bosch, she was on a mission to lower the amount of sugar in her favorite gummies and treats from childhood. Tara dropped out of university and launched SmartSweets in 2016 by creating recipes in her own kitchen.

0:49Today, the bright and bold packages of SmartSweets can be found at retailers like Whole Foods, Target, CVS, and much more. With recent features in Meghan Trainor's music video, Made You Look, and Kourtney Kardashian's Poosh Holiday Gift Basket, smart suites have become the it candy. Tara is here now to share how she disrupted the candy industry, came up with creative marketing strategies, and scaled smart suites to a$100 million business. Tara, welcome to the show. Thanks so much for having me. Very excited to dig into your business journey. I know that your grandmother is a big inspiration behind the idea for SmartSweets.

1:34So how did your relationship with her and also the ritual of enjoying treats together really shape the business? Yeah, so I loved candy growing up and enjoyed it all the time with my grandma, who I called by Oma. And it was something that just created such an emotional bond for us and so many special moments. And it wasn't until I had a conversation with her where she shared that she regretted having so much excess sugar over the years because of how it made her feel about herself that I really paused to think, okay, well, why can't you feel good about enjoying candy? And that was really the catalyst for the idea of Smart Sweets.

2:24So you noticed this gap in the market where you wanted the treats, but maybe a little bit less sugar and you have this idea which you pursued dropping out of university. What advice do you have for other individuals who are looking to make a similar switch within their life? something that was really helpful for me was really ruling out what I didn't like to do I was at university and I wasn't passionate about anything that I was studying and I originally had another startup idea that ended up failing but kind of just staying in a place of curiosity is really what led me to the idea of smart tweets naturally so I think one piece of advice I would say is if you don't know what you want to do, that's totally okay because often it's what you don't want to do that leads you to where you're meant to go.

3:20Awesome. And you started very scrappily. You tested recipes within your kitchen. So how did you approach enhancing and fine-tuning the recipe in the early days? I think it's wild just the access to information we have nowadays. it's so normalized that you can like Google anything. The breadth of information that's available to us is pretty remarkable. And with SmartSweets, when I was recipe testing in my kitchen, I was reading food science journals that I was just Googling. And then I was finding raw ingredient suppliers and getting samples from them and just really doing trial and error, but just leaned a lot, honestly, on just the quickly accessible information from Google and was shocked just at like the depth and level of detail that you can really find information.

4:13And a lot of founders kind of go through the similar journey where they take a recipe from their kitchen and they need to scale it into production. So what advice do you have for looking for production partners and finding the right facility and manufacturing partnerships? I think what was really important for me was really finding a partner who got behind the vision and really what I believed with such conviction we were going to create in the world and helping them to see that if they help us now in bringing us on board, although our minimum order quantities may be less than what they typically use and things like that, that may not be as beneficial for them in the beginning.

4:59if they come on this adventure with us, that it's going to really translate into a huge partnership and the future of their industry for them having that partner. So for me, of course, I got most no's, but it was just that one yes. And that yes stemmed from getting them behind the vision to see what the opportunity would be for them if they took a chance on us now. and did that hesitation have to do with the fact that you weren't producing a traditional recipe and there were different ingredients and not leaning into the typical formula where it did have a lot of sugar did it impact the production in that way yeah absolutely i'd say because we were doing something that had never been done before which is taking sugar which is 99.9 percent of what candy is out of the recipe.

5:54Everything from the recipe being able to run through the machine without the pipes bursting to it being able to set in their drying rooms without taking up too much time that would cut their production capacity in other areas. It was something so foreign to them and their machinery wasn't built to run. And on the financial side of things, you initially bootstrap the business and then you apply to a few fellowships. How do they help the business? And I guess, what advice do you have for founders who are looking for similar programs to apply to? I think it's pretty incredible. Like in today's DNA is just the amount of access there is to programs out there and programs and peer groups out there of people that are also having the courage to act on their ideas and bring to life the impact in the world they have with their visions.

6:55So for me, I would really just Google and see what exists. And then I would always have imposter syndrome in my mind and think, oh, I probably won't get accepted, but you don't know unless you try. And what was so powerful about being accepted into those programs was really just that instant connection to other people doing the exact same thing that you are. You know, if I would have really hard days and I'd feel really down seeing my peers have really hard days and feeling really down and just going through that journey together. And then also So having the access to resources that maybe it would take you LinkedIn-ing someone and now all of a sudden you can get a direct introduction to someone really makes a big difference.

7:42Yeah. So just not only the financial resource, but the resource of mentorship and network and support as well from the fellowship. Yeah, yeah. The Teal Fellowship specifically, which was a 100K grant over two years, was an amazing resource because it allowed us to really support our team and then have the small excess funds that we had at the time to pour into growing and scaling. So that was hugely valuable. And then you also had a few rounds of friends and family equity raises. And I understand in 2020, you also partnered up with a private equity firm. What have you learned from the different range of raising funds?

8:27And what would you share to founders who are kind of entering the process of raising funds? Yeah, I'm a big believer in debt financing and really leveraging that to scale. And there's some pretty incredible resources out there that can allow you to do that. with having the ability of not diluting yourself and having being able to retain more equity to give to your team and people like that. So for me, in the beginning, I launched the business off of debt financing and then did a small convertible note that really carried us over to a place where we could get a valuation that allowed us to be way less dilutive than we would have in the super early days.

9:13And so what I would say there is just being really intentional about why it is you're wanting to raise and really mapping out from the top down your growth vision to see, you know, if I raise today at this valuation, will I be able to keep the majority of the company if we need to do X, Y, Z at X, Y, Z point in growth? And you can really begin to get a clear sense of what that will look like and what's important to you. And then for us, partnering with TPG really allowed us at that point, we were doing well over a hundred million in sales a year. And it was really helpful to have a partner who could help pour just more fuel on the rocket ship to help us take that next step in growth and bring a new level of sophistication to the business that we needed at that stage to really leapfrog us to the next.

10:13And I think touching back on debt financing, a lot of founders initially might be intimidated because they feel like it's more risk to the business. But I guess there should be a moment of mind shift to realize it's all just about cash flow and giving yourself a bigger runway to scale for just different chapters of growth. Totally. It is a lot else like about there's no right or wrong. Everyone has a different risk tolerance in a different scenario. To get the debt financing, I had to take out like life insurance and put my one asset, my 2009 Honda Fit hatchback. And so certainly there is higher level of risk in terms of what you have to like personally be attached to.

11:01But there's much greater reward as you scale and as you're able to retain the equity and the control, which really for us allowed us to be able to give back so much more to our team. For example, every single person had equity on the team. That was super meaningful and things like that. But yeah, so certainly no right or wrong answer. And debt financing definitely keeps you more cash strapped. There were times where after all was said and done, I think we had like 10K or 20K left in our bank account after payroll. And that's not a comfortable feeling, but it really allowed us to get to that place where we could raise at a higher valuation, which paid itself in spades.

11:51Mm-hmm. So for you partnering up with TPG Equity Group, what was it about entering this relationship that made sense to you? Because a lot of founders get intimidated with private equity, sensing that they're giving more control of their company versus maybe an earlier investment coming from a venture capital per se. So for me, I always knew at some point in SmartSweets' journey, it would make sense to partner in a larger way with someone who really had the resources and the capabilities to expedite the next chapter of growth that we could scale into becoming the global leader in revolutionizing candy.

12:35And so for us at the stage of growth that we were at, I always try to be really rooted in asking myself the question, you know, how am I holding up the vision from being executed and coming to life. And at that point in time, it became clear to me that going from a hundred million dollar a year revenue company to 200, 300 or 400, which would translate into trillions grams of sugar kicked and impact in the world, that we really needed a partner who had been down that path before and could help us see around the bend and help us bring on the resources and the new levels of depth that we didn't previously need to build to that point.

13:19So it just felt like the right timing for us to bring on a partner that also brought more structure to the company. At the same point in time, it was intentional when we were raising early on in our journey that I didn't go the PE or VC route because I had felt at that time that it would add a necessary structure to the company that would take away from kind of the magic that you have as an entrepreneur of following your gut and just going with the decisions that you feel are right and that your team members feel are right without having to consult anyone else. It's truly amazing, especially in such a short amount of time that you were able to reach that nine-figure annual revenue mark.

14:09Now smart suites can be found in thousands of stores, but take us back to that first big memorable moment when you got your initial retail relationship. Yeah. So for me, I was really intentional from the start of when we wanted to launch in retail that we wanted to have national partners from day one, because I believed in the power of social media and that we could really push our community into the doors nationwide. Whereas 10 years ago, people were going and launching regionally and then kind of building in your own backyard and then growing. But I felt like we could make that leap right away just because of the power of social.

14:54And so our first big partner that came on board was actually in Canada. It was Bed Bath and beyond, which seems like a very random partner. But they were amazing because they really got behind the vision. They wrapped all of their cash register with smart suites from day one. And it was a pretty special moment.

15:19Myself and our first team member spent all night packing up the boxes in the space we were working out of through the accelerator program and Canada post came and picked them up in the morning. We had no sort of fulfillment or anything sorted out at that time. It was just all super manual, but it's kind of one of those magical moments on your entrepreneurial journey of like, wow, is this real life? Amazing. So excited to chat more Tara. I'm joined by Tara Bosch, the founder of smart suites. I hope you're enjoying our conversation. And if you haven't already, please subscribe or follow Shopify Masters wherever you get your podcasts and leave us a review or comment for the show.

16:01So now smart suites can be found in so many more retailers like Whole Foods, Target, CVS. What advice do you have for maintaining those relationships over the years? We're in today now about 150 ,000 retailers. And so I think it just comes back to the simple things, You know, like from day one, forging authentic connections with the retail partners and really seeing how can I add value to this retail partner in their unique way and their shelf set. And then as you grow and it can't be you having those, all of those face to face conversations anymore, having the team that that really connects and having yourself resourced so that your team members are able to have the time to have those authentic conversations and really maintain those relationships.

16:55And as you continue to scale and become more accessible, become more creative with how can we honor our partners in the unique ways that we used to when we only had them as a partner and not 100 other large retail partners to also think about. Our whole office at Shopify stock smart suites in our snack wall in our offices and me personally shopping. I love the packaging because it truly stands out in the different aisles. So tell us more about your branding philosophy and how you take care of your social channels to make sure that it's fun and playful and cohesive. yeah well that's amazing that um that smart suites is available for shopify and and everyone there the yeah for us we really kept it simple when you bring it back we're like okay social media is really now just the new age way to um have those um face-to-face conversations with people that you used to have in person and so we would from day one always call our consumers our friends and we really made a commitment to treating them as our friends and showing up for them as our friends and what that looked like was one talking to them as if they were our friends and so having really kind of a we would call it a fun and fruity brand voice where we would you know if they commented and had posted our smart suites and they had pink nails and we thought their pink nails were cool we would say thanks so much for being on the mission to kick sugar by the way your pink nails are bomb, really creating those just genuine connections and taking the time and energy to do that, as well as from a response time perspective.

18:46We had a response time of an hour across social media, whether someone DM'd us or whether they posted smart suites on Instagram or they posted us in their story, we would always respond within an hour. So kind of felt like how you would respond as if you were texting a friend and the resource it took to be able to scale that kind of closeness level of connection was pretty significant but it really resulted in creating this incredible community who truly felt an emotional connection to the brand and really like they were part of our journey and that they were our friend. Speaking of the amazing community you build on social.

19:33You also include the community when you're developing new flavors. How are you approaching being creative with recipes nowadays? Going back to our friends and for us, they were always and still are what we would call our North star. So really looking to them for any critical decisions that we're making. They're really the ones making the decisions for us. And so when it came to coming out with new innovations, we would always leverage our friends and specifically we had a program called the champion program which was a group of our friends that I would email weekly just really whatever was going on and like if all the dogs were in the office I'd email them a photo of the dogs in the office and be like hey all the dogs are in the office hope you're having a great week

20:26but when it came to innovation we would really bring them into the process so we would send all of them by the end there was a thousand champions we'd send every single one of them our new innovation to try when it was still in the um the super rudimentary white plain wrappers that came straight from our lab um and get their feedback and then iterate on it and and do it get and iterate on it. So they were really a fundamental part of the process. And because we were taking the time and energy to include them, they really, really took that to heart and provided such valuable feedback for us. And then in kind of more macro ways on social and in our community, we're always constantly getting a feel for what they would like to see next and what they don't want to see next and all of the things.

21:18So Smart Suites were featured in Meghan Trainor's latest music video. They were also included in Kourtney Kardashian's Push Holiday Gift Baskets. How do you recommend founders go about developing relationships and opportunities for their businesses and making sure that it aligns with their brand? Yeah, totally. Those were two really, really fun, fun moments to be included in. And I think for us, it really, no matter if it's a celebrity like Courtney or Megan, or if it's just your friend who's not a celebrity, for us, it just always comes back to having an authentic connection. So with Megan and Courtney, when any celebrity that has been involved in SmartSweets in some ways, whether it's through their music videos or things like that, we never reached out to someone in like a cold call way saying, hey, would you like to do this or this?

22:16We would always just wait to see who's already enjoying the product. So both Courtney and Megan already had smart suites in their house and it was something that was an authentic thing in their life that they were already enjoying. And so then we would just reach out and build off of that and then create a relationship from there. And that just went a really, really long way because consumers can tell when something is authentic or not. And for us, it was incredibly important to always have that genuine connection. In addition to those partnerships, what other marketing strategies are you experimenting with nowadays that you're excited about to scale smart suites to the next chapter?

22:59Our team, which we call our squad, I think from a social perspective, like many other brands, we're leaning into TikTok and new avenues and leaning less into ad spend and all that. Now that that has changed pretty significantly in the past few years in terms of the ROI that you get out of it. We've also leaned a lot more into in trade marketing and in-store executions and really bringing to life experiences for consumers in store. But really the like fundamentals of our most effective marketing has not changed. And that's really continuing to build our friend base and connecting with them and making sure that they really feel seen and heard, whether that's through our newsletter or through our social channels and just any avenue or touch point that we can connect with them.

23:54And another important aspect for the business is that as a female founder, you also lead a team that I believe has over 80 % female workers who are building the company day to day. How does this shape and affect the brand? It's been and has been a pretty special part of SmartSweets journey. I think there is something so special about having so many women in the seats making the key decisions, especially for a brand like SmartSweets, where our consumer, she is primarily female. And so it's our consumer that's making the decision in that we can really see and understand her because we are her. in many ways.

24:41And that has been so powerful.

24:48And how are you navigating, I guess, like mental wellness and as you're scaling the business and going through so many different changes throughout the years? It's such an interesting topic to navigate because as you're scaling the business, you're constantly firefighting and you're constantly in that kind of problem solving mode and kind of wrapping your arms around whatever challenge is coming on any given day. And so for me, I think mental wellness looked a lot different in years one, two, and three than it does now where we have a PE partner on board and we've established, I think, a lot more balance for our squad in their day-to-day lives.

25:34Yeah. And so I I think what that looks like in kind of the day-to-day of smart suites, we have restoration days where our squad members can choose to take a day if they need to for their own mental health that doesn't count as their sick days. We have different monthly wellness chats where a different expert will come in and do kind of a fireside chat type thing. And then our squad does a really great job of just engaging in different conversations on a regular basis about how are we doing as a company to ensure that all of our squad members, mental health and wellness, is in a place that's feeling good for everyone.

26:16And what are we not doing that we need to be doing to be able to be better at that? So I think just being really honest about ourselves and having the conversations regularly with our squad has been something that's really important. And our HR leader does a really amazing job of that in the early years. When we had no HR leader, it would be me thinking of things and that sort of thing, which was much more challenging when we had a million other fires that we were having to put out that day as well. So we have the gift of more resources now, I think, to do a better job at that than we did in the early days.

27:00And zooming out a little bit, I get this feeling where at a bigger scale, a lot of founders are balancing three things, which is the business, the team environment, and also the growth of themselves. So I guess for yourself, how are you balancing these like three different pillars? Yeah. So since we brought on TPG at that point in time, I also knew that it, for me, the timing and bringing on a new CEO that had that foresight and had been down the path before, that it was the right timing for that. So that really created a massive shift in what that looked like for me, because I went from being at the helm of executing to really having the ability to take a step back and lean more into different specific areas like our innovation and things like that.

27:56So in bringing on a CEO, I think for me, it was kind of a big catalyst and shift that would be a lot different from a founder who perhaps is still the CEO at this stage in growth and has the PE partner. Was it a tough mental hurdle to let go of something you built for such a long time and entrusting the company in the hands of someone else? I think for me, like from the beginning, I always ask myself the question in like a non-tearing yourself down way, like, you know, what do I suck at? And what gaps do I have that's impacting the business's growth? And so in the beginning, that looked like, okay, I suck at finance and spreadsheets.

28:43And so we brought on a finance person much earlier than we otherwise would have. And then as we scaled a little bit more, I was like, okay, I suck at balancing operations and the squad part of the business and giving the time and the genuine care to those weekly one-on-ones and all that. So we brought on a COO. And so I've always never felt attached personally to my role in SmartSuite so much as I felt attached to our mission and ensuring that whatever my role is, that it's in the most meaningful way possible to further our mission and vision. so when we brought on TPG if we had not brought on a partner and continued executing without that I still would have brought on a CEO because I knew that for me at that stage in growth my gap and what I sucked at in terms of holding the business up was just that I no longer had any foresight to see around the bend and to understand what operationally do we need to be putting in place right now?

29:52How do we need to equip ourselves as a team? How do we need to finance ourselves so that we can really pull the levers to be able to get to the next stage in growth? And so being able to do that really allowed me to lean into where I served the business the best at that point in time, which was really innovation. Sounds like you went through a lot of great reflective periods and also really understanding what the business needs. We understand that over the last six years, there's been over 10 different product launches. What are some new candies or partnerships that we can expect from SmartSuites?

30:32I think the really cool thing about scaling a company and having a vision is that when you start to execute on that vision and bring it to life, as far as it feels like you've come, you realize that you're just getting started and how much further there is to go. And our vision is to be a global leader. And right now we're a leader in North America. But really, when you think of your favorite candy, the vision is for you to be able to go to where you go buy your candy and Smart Sweets be the brand that's creating the amazing kick sugar version of it for you. So that vision we're still getting started on.

31:14We've really focused on innovating and kicking sugar a lot out of gummy based innovations. And I have now launched some hard candy innovations like lollipops and, and Jolly Gems, and some innovations that lean more on kind of that sweet, savory side like caramels. And now in our innovation pipeline, we're just continuing to expand the breadth of that innovation so that when you go to the store, whether you're wanting a chocolate-like candy or your classic peach ring, SmartSweets can be the brand that is creating that experience for you. Very exciting. Looking forward to all of the new products.

31:57I mean, can't wait to hear what you think. Thank you so much for being here, Tara. Yeah, thank you so much for having me. It's been an honor. That's Tara Bosch from SmartSuite. And thank you for joining us on Shopify Masters. Our show is produced by Megan Quoyle and Gogo Zoger. Our engineers are Matt Schwartz and Miku Betlam. Benjamin Gottlieb is our supervising producer. And I'm Shuang Esersham. And we will see you next time.