The Best Strategies for Evolving Your Branding

0:00Hey, everyone. In case you didn't know, we launched a YouTube channel for Shopify masters. So go ahead and subscribe for brand new video episodes. Thank you so much. We bought every single snack stick on the market and we researched where each of them were being made and we just made phone calls and tried to find a co-manufactured partner. Hey, how's it going? I'm your host, Adam Leventer, back with a new episode of Shopify Masters, your companion for starting and building a business. The moment you quit your nine to five to grow your dream business full time is something you'll never forget. But how do you manage to balance full time responsibilities while scaling a new brand?

0:43And how big is big enough to quit that day job? They're not easy answers. And that's why my guests today are Peter Maldonado and Rashid Ali, the co-founders of Chomps. In 2012, they turned their passion for clean eating into a thriving business, offering grass-fed meat sticks made from sustainably sourced beef, venison, and turkey. But it wasn't until six years later that they both went all in. Peter and Rashid developed an analytics and feedback strategy that allowed them to earn$20 million in revenue that first year they quit their jobs. Fast forward to today, and they've scaled to 10 flavors and can be found in stores across the U.S., including Trader Joe's and Costco.

1:27I don't know when you registered that we are the champions LLC, but that's a pretty cool one. Whose idea was that? Was that yours, Pete? Probably, I'm sure. We had a pretty small office at the time. It was probably just me, Rashid, and one other person. So yeah, pretty sure I was all gung-ho about the champion thing. I thought it was kind of clear. I actually was quite hesitant because the amount of work required to change your LLC, which we didn't necessarily think about once we clicked, clicked. But I do remember it was Pete's idea. And I was like, Pete, why do we do that? It's creating a lot of work.

2:04So that was when? That was back in 2012, was it? 18 would have been when we changed it. Yeah. Okay. Yeah, because we started out as Logic Meat Locker was the name of it. Nice. now chomps a little bit more brand friendly let's call it a little more yeah a little more well i would say logic was actually there was some logic in the name so like low gi low glycemic index it was like it it made sense back then to me at least i don't know maybe not to anybody else but okay so rewinding back you both had established careers busy lives peter you're working in the fitness and personal training space rashid i believe you were in consulting before you guys started Chomps, how did you first meet?

2:47Yeah, so we met through a mutual buddy in Chicago. This was actually, I think the first time we met was a poker night. So our buddy would host poker nights at his house. And I think that night, my wife and Rashid were the two finalists. And there was some threats being thrown around. And my wife gets mad at me when we tell this story. So I got to, but anyway, she, she actually threatened to throw Rashid down the stairs if he won. So, and I think he wanted, he didn't. And he, she did not throw him down the stairs though. So she was all bark, no bite. Is that your recollection Rashid? Well, I do remember winning.

3:26And she definitely did say that. But it was interesting because the night was about poker, but at some point Pete and I, I remember we just started chatting and he was telling me about this project that he was working on, that he met some guy at a wedding that was an organic meat processor, and he launched a company to compete with Omaha Steaks. And I'm like, who is this guy? I mean, he just, he met some guy, and then from the idea, he started this company. And I was like, I kind of talked to him about my background. And it was interesting, because all the stuff that I was strong at when it comes to ops, finance, like thinking of just how do you run a business, and then versus Pete's really good on the ideation, creative, marketing sales side of the business, I was just, I kind of planted the seed to say, like, would you ever want any help with this endeavor?

4:17And the next day, we followed up. We ended up grabbing lunch, inked up a partnership agreement, and we were off to the races. So it kind of planted based on that one poker night, but it was just Pete and I off on the sides chatting about what he was working on. So you drop a partnership agreement right after that first launch? Well, my wife, who's a recovering attorney, she downloaded a template and yeah, she just drafted some partnership agreement and we moved pretty, pretty quickly. Yeah. Okay. So what's the origin story here from a business and value proposition standpoint? Like what's the problem you identified that needed solving in the market?

4:54And I can turn it over to you, Pete, for that. Yeah, for sure. So, well, the business initially started out again, like Rashid mentioned, it was almost like an Omaha steaks, but it was focused on grass fed beef. so we're doing steaks and ground beef and the reason why we started there was because I started crossfitting uh and so I started crossfitting about 2011 I think one of the things I realized about that whole community there was the people were so diehard about anything that was made for crossfitters right and so like I went out to the crossfit games out in Carson which is like right outside of LA and there's just thousands and thousands of people there at and uh you know And one of the big things, like I got trying to think in CrossFit was like, nobody wears their shirts.

5:36Like the guys don't wear shirts, right? So you're like, they're walking around. And I've never seen more six-packs in my entire life. And so for me in the fitness world, I know what it takes to get and look like that. And these people just walk around like that all day long. So you kind of know how diehard they are about the sport and the nutrition. And so the other thing is like they had a vendor village. It was like almost like a trade show that was taking a place right outside the CrossFit games. So you walk out there and there's all these different, you know, supplements companies or whatever they're selling, like different gadgets or equipment.

6:11And then one thing I was noticing, though, is that there was huge lines for specific products. So one of the brands was called Progenix, and this was a supplements company. And so they were selling like whey protein, like creatine, like just like the normal supplements you could go and get at a GNC. but because this was made by CrossFitters for CrossFitters, they were charging like four times the price of what I could get the exact same stuff for at GNC, but people couldn't. They had to have it. They just had to have it because that was the brand. For me, it was kind of eye-opening, and I realized this kind of a cult-like following, because of that, if you could create something that starts to sell well, it could take off like wildfire.

6:53That was really the initial reason why we focused on CrossFit. I feel like it served us well over time, especially when we had no money starting. It was easier for us to go with very little money just to go door-to-door hitting all these different CrossFit boxes. That's the lingo for a CrossFit gym. Meeting the founders of the gyms and then going in and letting people try the samples. That was the easiest way for us to get some early traction. It was interesting. You could call it strategic or call it luck, but aligning on a CrossFit focus. First, CrossFitters were very vocal and passionate about what they do.

7:35And so when they found products that they liked, they would talk about it. So think about influencer strategy before it really was a strategy. Like these CrossFitters were influencers because they walked the walk and talked the talk. They were pinnacles of health, the way they looked as a result. So when they spoke about certain things, their friends who may not even be in CrossFit would follow them. The other thing was the CrossFit community really branched into then paleo, keto, Whole30, other communities we could kind of focus on and allow us to have really targeted efforts. But it all was rooted kind of in that CrossFit community, and then it allowed us to expand out even further.

8:11So when you say, you know, paleo versus keto versus Whole30, etc., how were these diets and or these trends shaping the strategy of the company at the time? It shaped it in a big way because, again, like what I said earlier, just like kind of focusing on that very niche community. It allowed us to kind of make waves and to be known within that small community for a very small dollar amount. Just for us to go so wide and cast a really wide net would have required a lot more funding. But because of that, as Rashid said, we were able to kind of go to these early influencers. And again, to Rashid's point, these were not called influencers back then.

8:52They were like the bloggers or whatever they were, but they had a lot of influence. And so they were putting out great content. And if we knew if we could align with those people, that would be a great way for us to build brand recognition. But then on top of the recognition, it was also kind of that credibility that those bloggers and those people putting out that content already had. So we were able to kind of leverage their relationship with their audience. That was the big thing. I think one of the things we realized is building the business block by block and us maintaining and building a genuine, direct relationship with the audience, which wasn't entirely scalable, right?

9:27Because nowadays it'd be really tough to do that with millions of customers. But back then when it was 10, 20, a couple hundred customers, it was easy for us to go and have direct conversations. And I think early on, I just basically managed all the inbox. So if you wrote into our email there, if you had any kind of issues or whatever, I was the one responding. And I think early on, that allowed us to really build these authentic and direct relationships. When you say you're going door-to-door selling these product samples to CrossFit boxes, did you have a website spun up at the time? Did you have a brand?

10:07Did you just have sort of a small inventory of product samples that you were trying to sell at the time? What did the first inning of this thing look like? Yeah. So let's back up a bit because I got to give the timeline of how this all happened. So when we launched the business, I learned how to create a website using a template on WordPress initially. And this was like right before I think Shopify was getting big and I really hadn't heard of it yet. but then I heard that Shopify might be an easier one especially for e-commerce so I was having this real issue trying to get this WooCommerce plugin for my WordPress website to work and spent a bunch of time trying to figure this out.

10:50I had no background in web development or coding or anything like that so it was just kind of like just wasting a lot of my time but then I went and tried Shopify and I figured I would just try to have a second website and see if that was any better. And oh my God, like within like a couple of days I had, I bought a template and I had it up and running. I was taking orders. We had our, our moms actually on there, but they were our first customers. Um, and it was, to me, it was like, oh my God, this is so much easier. It makes a lot more sense. So got rid of WordPress, focused a hundred percent on Shopify.

11:21Um, put a little more time, like over time, like once we had like a working website, we would kind of like, you know, we would go hire a photographer, get some more images, we would do like video, whatever it was, like so slowly just kind of building into it. But we already had a functioning website where we can convert, we could take orders. During that time, though, we figured out that the concept that we were we were selling was going to change completely. And it started out almost like it was frozen beef that we were shipping to customers. We realized very quickly, we were doing this in the middle of summer and it would you would ship it out to the customer if they weren't home the package would sit there on their doorstep for a day or two or whenever they picked it up and the meat's completely rotted and who would have to pay for that us and so we figured out very quickly that that was not what we wanted to spend our time doing and we felt we just honestly felt it wasn't scalable obviously butcher boxes proved us wrong in a big way because they have a great business now.

12:22But I think for us, it just really wasn't something that we were focused on doing, especially as a side hustle. Cause that's, you know, we both had full-time jobs. Um, so yeah, anyway, so we were already selling though chomps, they had to be refrigerated. It was eight sticks in a package. So you've got like eight sticks and they were all announced. It was an eight ounce package and we would ship, we were selling those on the website with all the, the steak and ground beef, but the people would buy them. And we kept getting feedback from everyone saying, we love these sticks. We love chomps. And I actually, we actually named it chomps.

12:56And I had this terrible logo that I kind of created for it using like, I think word art on, on Microsoft word. And, but yeah, so people, we got to have the feedback already. But the thing, the thing that we realized was we had to create something shelf stable and single serve. And if we can figure those two things out, I think we have a home run. So we just went to 10 figuring out. Yeah. And the, the comment, the comment that we were using for the stakes really didn't have, right. Cause if you're making a ready to eat product, it's a, it's a different beast versus just a butcher. And so Pete and I learned very quickly that any meat product has to have a USDA establishment number printed on that product.

13:39And so effectively we bought every single snack stick on the market. And we researched where each of them were being made, and we just made phone calls and tried to find a co-manufacturer partner that would, A, consider even working with us. B, would be able to do a low MOQ, minimum order quantity, that would make sense, right? Because we didn't necessarily have consumers at the time. And then three is to make sure that they would meet the attributes we wanted, right? In addition to the grass-fed and grass-finished, We wanted zero sugar. We wanted to use clear casing. There were certain things where we really wanted to make the product a certain way.

14:17And it went against the science that most of these guys were used to. Sugar is used to allow them to hit shelf stability. It's not necessarily a sweetening aid. It actually helps with the manufacturing process. So when you remove it, it's a very tough product to make. And so we stumbled on this small little co-man at the time in Greentop, Missouri. And Kevin Westerns was the, he was running this small operation. He had taken it over from his father, who was like the local butcher in the area. And a lot of these, that's how it starts. They originally just kind of, it's a butcher shop. They do some of the harvesting of hunters, animals that they hunt.

15:02And it just kind of evolved where Kevin had this idea around, hey, Snack Sticks is where it's at. I really want to focus there. And he was excited about what Pete and I were thinking and was willing to partner with us and really start allowing us to do a few hundred pounds or a few thousand pounds of production versus some of the bigger guys. Most of them wouldn't even pick up the phone. And so I get we're pretty lucky landing on that partner that would work with us to create the formula. You know, the recipe we developed with him is the same original beef recipe we have today. It sounds like that was a good partnership to have early on.

15:36I mean, you are bootstrapping the business. As I understand it, you started with something like$6 ,500 in your pocket. I would assume that at some point you grow out of this co-manufacturer in Missouri and you move to another manufacturer. Like, what does that process look like? When did you outgrow that initial partnership? So it's interesting. That's normally what happens, right? Where the smaller one that can work with a brand at a certain scale is not able to grow as quickly, especially if you think about the growth trajectory that Chomps had. But in the early days, we were growing at the right clip that allowed Kevin to grow his facility around us.

16:14And then when things really changed in 2016, when we onboarded a significant retail partner, he said no to us probably a dozen times because the volume would have just collapsed its operations. But I think we asked the question enough different ways where eventually we got him to say yes. And that co-man is now still one of our six processing facilities and one of our top facilities that is putting out significant volume. So he ended up growing the facility. He ended up taking some outside money and eventually selling. But that facility is still within our network, and it makes phenomenal product, which is rare.

16:49I mean, I would say, like, typically, that's not the case. So if you say that that Coman is one of six facilities, like, how do you maintain the quality that you expect for the product and the consistency that you want throughout that manufacturing process when you have to manage six different manufacturing partners? Yeah, it's a big feat. And it's one that it took a lot of work in developing the infrastructure we have today to make sure that the team can execute on that. So one thing is we manage all the protein sourcing, right? It's critical that the beef or the turkey or the venice is sourced from the same place at the same specifications.

17:27So we manage that. The seasoning blend has to be procured from the same place pre-blend. So it's pre-blend offsite. So when it's delivered into the facilities, it's the same mix. And then we also have a very robust manufacturing team, quality team, food scientist team, where we're having folks on site monthly to make sure that the comends are following our standards. We also now have a sensory team where they're actually testing to make sure that the product is coming out consistent each time. And then another piece that's quite unique is we own all of the packaging assets. So on-site at each of the commands, while it's a third-party facility, any packaging line is fully Chomps-owned, and it only is running Chomps product.

18:14And the reason we made that investment, because it is quite significant, you think about each of these lines could be anywhere from half a million to$750 ,000. And I think right now we have about 10 lines operational. It's a quite significant investment. But in the early days, we did not have a consistent product. It was all over the place. So we implemented 100 % hand inspection. So once the product was made, it was shipped to a third-party warehouse. And at the time, Pete and I or even our wives and friends were actually going through and inspecting every stick to make sure that it was consistent color, the seal was proper.

18:49We would let the product sit anywhere from two to four weeks to see if a leaker formed and the stick got moldy. We'd be able to cull it out. And so when we did that, we realized that all these defects were rooted in the packaging line. And a lot of times it was at the beginning of the run. So these packaging lines are meant just to be run and not touch. But when you have multiple customers, these commands are changing the dyes out. And those changeovers led to a lot of quality defects. So we made the call to say, like, no, we can't have these defects happening. So we have to own the packaging assets.

19:21And so we made that call. And it was a result of our kind of pretty robust quality process that was in place. And Pete, I assume at the same time, you're trying to find product market fit on the consumer side, you're building out the Shopify front end of things. And as I understand, you learned early on that you were talking almost to the wrong people. So as the business is growing, how do you nail down your target buyer demographic? Yeah. So, well, obviously Shopify provides a lot of customer data, which is amazing. We had Google analytics data as well to leverage. And then additionally from there, we would actually just reach out.

19:59So again, having that authentic, direct relationship to the customers, especially early on is super important, especially so could you want to kind of understand who your customer is. Nowadays, though, we're a little more sophisticated than that. We have actual panel data where we leverage third parties, that's where all they do is, you know, help us to go and get widespread, you know, answers from these people. So they're able to go and get like different panels and surveys or whatever it might be that they're doing. So, and like, and we always, um, so with that 2018, actually, it was the first time that we were able to actually afford that type of data.

20:38Um, and when we paid for a third party to do it, they actually came up with something very different than what we were seeing in our GA data and our, even in the Shopify data. So, um, and we learned for the first time that our customers were about 70 % female, um, which, you know, early on, you know, Rashid and I created us something that we thought was good for ourselves. Like all the branding, the product, all of that was really made for us. And we thought other people might like it. Right. So I actually, I sent you guys over a picture of what the early packaging looked like. The logo is completely different than what you see now.

21:15The packaging had cow hide in the background. And then the actual logo looked like a rusted cow brand almost. So it was much more masculine than we have right now, but also just very, I don't know what you want to call it. It's kind of hardcore. Like it's just, it wasn't, there was nothing soft about it. Right. It's very in your face about like, yeah, you're eating an animal right now, which I think is, you know, that does not go over well with a lot of customers. I think back then we had a little bit of leniency because I think we were serving a very niche audience, the paleo community, those people were kind of diehard.

21:49If you think about like, what, like, you know, Epic bar, that's another brand that, you know, that we, we kind of launched around the same time as those guys have like a big picture of like a deer head on their venison product or like the same thing for like a cow or whatever. And, um, and we were realizing like, that's just, you know, way too harsh. Like people don't want to actually look at the animal that they're eating. So we were able to soften that a lot. Um, we were able to go and we did a lot of other things too, in terms of just standing out on shelf. We did not want this masculine looking packaging anymore.

22:23We needed something more female friendly. And when I say female friendly, that's not feminine. You're not going to have a bunch of like pinks and purples and all of those types of feminine colors, but we wanted to be female friendly. And again, all of these decisions were being made based on actual feedback from customers or panel data. And we had a bunch of females on the team then, and they were all like dead set that we cannot have a feminine brand. So we're really happy with that, with where it all turned out. So we've got a flood of color on all the packaging. So we have our typical red for our original.

22:57We've got, you know, and if you look at the brand block on shelf now, it pops off. Because we're up against like the Jack Links and Slim Jims of the world where it's red, it's black, it's very masculine. And then there's chomps as it stands out. Some great points, Rashid. Pete says something I wanted to get your take on, which is this idea that the initial version of the product is something that you guys made for yourselves. versus doing all of this initial primary or secondary market research to find out what the market wanted and then developing a product and or a brand around that. So just for founders that might be listening, do you think the way you guys approach this, which is to start with something that you yourselves would buy, is the right approach at least in the early days and then let the data tell you what to do with the brand?

23:44Or do you feel like you would have done all of this initial research to get the data up front and then build product market fit after that. Based on how Pete and I are wired, I don't think we would have done a bunch of research before we started running. But while Pete is exactly right, the initial idea was like, hey, I used to eat a bunch of Slim Jims. Can we make a healthier version? It was rooted in serving a community that wanted a product, right? So at the same time, it leaned into the CrossFit. So it wasn't about like, we want to make it because it's going to be something we consume. That was a benefit.

24:19It was really saying we could also lean into this community that would help grow volumes. And then we tried to find other communities to help grow it. So I think there's a little bit of a difference there where it's like it wasn't a filling a void where like we don't have any snacks that we can eat or convenient. The idea came from, well, we used to eat this. Could we use that to serve these communities? but it's interesting because the way that we think about the the brand and the product evolved as pete and i matured and our lives changed because originally it was these two single guys that had this side hustle and it was kind of fun and exciting but fast forward to around you know 2016 2018 pete and i get married we have families we have kids we start looking at labels and we start realizing that like a lot of the food that our kids are eating is garbage.

25:09And so then you almost see a shift in the way we think about the company and the culture. And it really translated into a real significant growth and velocities on the shelf when we really leaned in. And it was just like a natural progression on how we thought about the brand and the real passion behind it. Rashid, when you jump in full time in 2018, was that because the revenue was at a certain point that it just justified you diving in full time? Did it have to do with this retail partnership you inked in 2016? What were the factors that led to making that decision? Yeah, I think some of it was like, it was personal because my wife wasn't working.

25:48We had one kid at the time. And so there was a bit about, you know, could the business afford two incomes? Pete went full time in 2016 when we got the retail launch and that retailer was Trader Joe's. and it transformed the business. We were really heads down focus. And then when 2018 came around, there was just so much momentum behind the brand. It required 100 % focus of both Pete and I, and we needed to start building a team. So it was time where I had to kind of return my laptop and stop consulting and just go heads down. You know, I think long and hard about like, did I wait too long? And I do believe that the timing worked out well because again, we didn't want to pull business out of the cash, pull cash out of the business unnecessarily.