The Secret Behind 1UP Candy’s Explosive Success (And FaZe Rug’s Role) | CREATOR COMMERCE S1E7

0:00One Up is a creator brand disrupting retail. We really saw a glaring white space within non-chocolate candy. Really there was no brand that was authentic. We want to One Up the candy game. New sensory experiences, new flavors. And FaZe Rug is not just the face of the brand. From day one he was very involved. He authentically integrates this into his content. It's not forced.

0:21Ian Shepherd:I spoke to the founders about what makes a creator the right fit. Obviously there has to be alignment in terms of consumer profile of that talent with the categories. We care less about the followers' size and more about their ability to drive traffic. And launching into retail. Walmart leaned into the fact that we were ahead of the curve. At that time, we honestly did not have a supply chain, we did not have products. We do see a lot of opportunity to launch new products, do limited drops, get consumer feedback. If you want to know how to launch a creative product in retail, this is an episode you don't want to miss.

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1:40Ian Shepherd:And now you can too, using my special link in the description. Right, let's get on with the show. Excellent. So can you please set the scene? Give us the headline story for One Up Candy. So as a venture studio, we're always looking for what are opportunities in white spaces to dive into, where are there opportunities to really solve a consumer problem? And at the end of the day, you know, one of our first concepts was looking at the candy space. Non-chocolate candy has been the same old for the last hundred years. It's a very tough category to crack into. And looking at it analytically, just innovation hasn't been what we thought it could be, especially for a younger generation, Gen Z and Gen Alpha.

2:22So as a studio, we really are focused, and as a company within 1UP, focused on hitting the younger generation. And what we know is that younger generation wants new twists on the familiars. They want things that authentically speak to them. And we really saw a glaring white space within non-chocolate candy that really there was no brand that was authentic and owned by Gen Z and Gen A. And that's really where it started. It was as simple as that. from an innovation standpoint. And from there, obviously, we built out a company that would bring a couple different things to our audience. One, new sensory experiences.

3:04Two, new flavors. And three, new textures in candy. And so those are our kind of three pillars. I think it all ladders up to what one-up is, is we want to one-up the candy game. And that means doing that in all three pillars and ultimately bringing the joy back to candy. I think as kids, you know, I'm 34 years old, grew up with the warheads generation where, you know, me and my friends would be trying this super sour candy and social media didn't really exist back then. And so we use that as a large muse to what we were building. Excellent.

3:41Ian Shepherd:Well, I'm excited to learn more about OneUp, the bigger business, and also how you're working with content creators. So can you just tell us with one up, obviously FaZe Rug is intimately involved in it. How did he come into the business? So FaZe Rug came in initially based on a relationship that we had with FaZe Clan. So we had typically when we start with any business, we look at consumer insights. So in this case, we identified something that we found to be a problem. within non-chocolate candy. And we knew, based on a relationship we had with FaZe Clan, that FaZe Rug had an affinity for the category.

4:23He had talked about it organically and authentically across his platforms for years that had high engagement within that category, and that he was hitting the demo on the head in terms of Gen Z and Gen A. So we knew naturally, based on those figures, that he was the right partner to engage with, to bring in as a co-founder to that business.

4:44Ian Shepherd:Excellent. And so what does being a co-founder look like for him? Is he involved in the ideation, obviously the marketing? What does the ongoing role look like? for us anytime we bring in a co-founder talent um we we want to make sure that there's significant buy-in um so the appetite level needs to be extremely high we we there's typically um an expectation that they they would want to join um buyer meetings and conversations directly with retailers attending retail locations uh based on certain kind of concepts that we put together for pop-ups, obviously developing some form of cadence across social on a weekly and monthly basis based on certain drops and new SKUs that we're launching at retail locations.

5:33And so it's kind of a mixture of both social and conversations that we have with both buyers and new investors as we're raising additional capital around the business. So I would say pretty heavily involved across the board in terms of ideation, you know, from the beginning, heavily involved in terms of trying new flavors and textures, getting feedback. But then ultimately, we rely heavily on consumer feedback. Obviously, we want RUG to have that buy-in and excitement, but we also, more importantly, need the consumer buy-in. Yeah, and I would just say, from day one, just to give you a sense of his involvement, when we first flew out to see Brian, Faye's RUG, and we brought about 30 different types of innovations that we thought were really appealing, whether it's things that we were creating or things that we saw in other marketplaces that we felt could be a good fit.

6:25And we all sat down. We had our POV. He really leans on us as operators to make the right decisions. But we obviously value and need him to authentically buy in. And so, you know, from day one, he was very involved in some of those flavor profiles and, you know, and then ultimately leaned on us. But what you'll see is that I think what's really unique about Brian is that he authentically integrates this into his content. It's not forced. It's not, you know, you'll see he puts up, he's one of the few creators with as large a following as he does to put up two or three videos a week. And he's done that consistently for 15 years.

7:04So his community is really engaged. And that was one of the largest driving factors for us was, you know, his 30 million fans are almost like family. They know everything that's going on in his life. And so that was really appealing to us. And he just was very authentic from the start. Got it.

7:24Ian Shepherd:And I mean, I think there's a big opportunity aligning creators with CPG brands. When you're thinking about a partnership, what are the key characteristics that you're looking for in a creator? You've mentioned a couple there, like the authenticity. but is there metrics or follow account or how would you advise people to think about that or how you think about that? I think it starts with the individual first. Obviously, there has to be alignment in terms of consumer profile of that talent with the category. So typically, we start there and then we need to meet that person in person or virtually to have an initial conversation because we'd like to see firsthand what kind of that buy-in and appetite really looks like because a lot of times there's just a misalignment in terms of what's going on with their primary careers or day-to-day life that would affect them from being a true co-founding partner.

8:20And for us, that requires a lot of meaningful time and effort from all parties involved. So that's huge as well as I would say aptitude. So understanding how to drive value into a consumer brand, leveraging that audience is super important. How do you do that storytelling effectively. And you see it very well with folks like Logan and KSI with Prime. I mean, they were, I would say, great figureheads to showcase how a talent should drive value into a business. And so having that certain level of aptitude, I think, is critical. But again, data is very important for us at the onset of business. So really understanding, do they reach the right demo in terms of age location um as well as the fact that you know do they have certain level of engagements great follower count is nice but unless they unless their engagement and ability to convert is extremely high uh we care less about the follower size and more about their ability to drive traffic either through doors at retail or or purchase behavior online got it and how do you

9:28Ian Shepherd:think about structuring a deal like this with a creator are you able to you don't need to give the specifics but generally just how how the deal is structured at a high level um we incentivize talent through it uh it effectively a a talent equity pool so we carve out a pool of equity for talent that we would invest over a period of time um and so they're incentivized meaningfully with equity and ownership in the business as well as a royalty. So they see upside on a quarterly basis based on the performance of the business. That way talent aren't just betting on a future outcome that might never happen.

10:09We'd like to be able to show that there is going to be some form of distribution given to them as the business continues to scale. Got it.

10:18Ian Shepherd:And let's get into the product there and you sort of spoke about the the meeting with rugg and the different ideas that you had what was the um the insight that led you to this freeze-dried sour strips was it data was it uh just intuition or instinct how did you how did you land upon that product yeah i think to to get there it's important to understand kind of where we started and i think you know day one we started with kind of a test and learn approach, which we like to take, which is how do we test that this, you know, our belief, right, in disrupting non-chocolate candy can be true. And the way we did that was with a very simple sour gummy challenge launch.

11:02It was basically like, let's try to break the internet. This isn't our everyday candy, but this will show us that we can start social chatter around candy unlike any other company that exists today. And so we developed with a nutraceutical company what we termed as our sour gummy challenge, which was like really sour gummies that you would hold in your mouth. It was a social challenge. And what came out of that was something we didn't expect, which was just organically driving over a billion impressions on TikTok of people trying it from celebrities to regular, you know, consumers who are buying this.

11:41And that led to us getting a call from Walmart saying, you know, we see what you're doing. And so that immediately kind of validated what we had thought from the beginning was, you know, there is a yearning for more interesting, more innovative, more experiential candy. And so it started there. We then launched at Walmart and eventually we got to what we believe is one of our core SKUs today, our freeze dried sour strips, which we're actually rebranding. And how that led to that was it was pretty simple. I mean, freeze dried was on fire. The category was growing tremendously at the beginning. So 2024 freeze dried started to dip naturally.

12:28And we felt there was going to be one or two major SKUs that would win. and if you just look at the items that are doing well tangentially in candy, you know, Skittles, obviously number one or two candy item. Freeze-dried Skittles translated really well. And Sour Strips on fire for Gen Z, Gen A, and no one had done it. So part of the attraction was we can do something really different and something in a product SKU that we know works. And so that's how we got there. There's obviously a lot of in-between that we'll go into of how we got to today, but I think it's important to understand some of the story.

13:08Ian Shepherd:That's great. And you make it sound so easy getting a product stocked in Walmart when I know it's not. What's the timeline for something like this? Yeah, it's not easy. You're right. And we go on podcasts or interviews and it all sounds glorious. But every single night, you know, we're getting calls and putting out fire drills. And, you know, we were very fortunate to, you know, have a partner like Walmart from the onset. I think a lot of it was just right product, right time, a little bit of luck. I think if you don't admit that, then, you know, it's just part of the game. but Walmart leaned into the fact that we were ahead of the curve in terms of looking at a new sub-segment of candy at that time freeze-dried but more they were bought into the fact that we were building a candy company that spoke to the younger generation and freeze-dried was just one was our launch pad we're not a freeze-dried candy company we've got a lot of other innovation and SKUs that are out there.

14:13And so, yeah, it's been very nice to work with Walmart. I think they give you the scale right from day one and you're able to hit a lot of the consumers that we always wanted to hit.

14:24Ian Shepherd:And can you give us some war stories like what's the biggest challenge scaling nationwide so quickly? Yeah, I think the first story is how we got into Walmart. We got a call from Walmart, I want to say in January or February of 2024. They wanted, you know, they had interest in what we were doing. We had actually pitched to them the idea of freeze-dried candy because it was blowing up at the time. At that time, we honestly did not have a supply chain. We did not have products. We went in there and we were really confident in our ability to do all that. And so in a matter of three or four months, we figured it out.

15:04we were on shelves in May or June, which is just an incredibly fast timeline to go from concept to on shelf. And I think some of the stories are, you know, figuring everything out the nitty gritty of like, how to get our product on boats here quick enough, you know, how to get how to get make sure that the product arrives at the warehouse and is is fulfilled in the right ways and understanding having you know never been at walmart nationally understanding the intricacies of that so there's a lot daily war stories i would say the big one is how quick we were able to figure it out and there was a point where we didn't think we'd be able to do it and then we found a faster boat and a faster manufacturer and so those are the small things it's great to hear and i guess

15:53Ian Shepherd:feastables and prime are great case studies can you talk about how retailers are really responding now to the idea of creator-backed businesses? Yeah, I think retailers are certainly buying into it. However, what I would say is that the business has to solve a consumer problem. The creator is, there's very few Logan Pauls and Mr. Beast out there who are incredibly powerful and could probably sell anything, to be honest. So our philosophy is start with a product and a consumer problem and solve that problem. And if you do that well, then the celebrity is just the hack and the accelerator. And that's every business we build.

16:34And so I think retailers understand the power of celebrity in terms of like getting incremental folks into their doors. But the key question is repeat, right? I think anyone could go and get someone to buy a product at once, especially with the marketing power that some of these brands have. The tougher, I think, long-term solution is like, how do you create a product that can speak for itself? And I think you see the success stories and you see the horror stories of, you know, brands going from zero to, you know, rocket ship and then flatlining or declining. And so retailers understand it. I think they value celebrity, but they always value product price and the core fundamentals of what drives CPG.

17:24Ian Shepherd:And what do you think the solution to that is then to avoid that spike? And then for what are you kind of building into your business and one up as an example to try and solve for that? Yeah, I think it starts with just start with the consumer problem in the product. So create a really great product that can be amplified by the celebrity. And that doesn't mean like it's natural to have spikes and dips. But if you create the right product, you solve a problem, you create something innovative enough, then typically product's going to win and that will stabilize. And how we're doing that is by, you know, I would say over the past year, we've flanked the category with innovation that was powerful and different.

18:09And as that innovation became maybe less disruptive, we were always thinking about what's next. And so we launched our Sour Chews, which were at Circle K nationally. We launched our Sour Strips in freeze-dried. You know, our next product launch will be in Mexican-inspired gummies. We see a lot of analytics there. But at the end of the day, we are building up to go after the core, which is sour and your Haribo gummy bear. And we feel like there's an opportunity to go after both those segments. But that's what we're in process of now. Great.

18:46Ian Shepherd:And how do you think about the different channel mix? So you're obviously in mass market through Walmart and Circle. But what about D2C? Is there a play there for your business? Definitely. To be candid, we're a lean team. We're a team of two or three folks. And so in candy, you know, 95 % of that business is an impulse decision that's made at retail. That being said, we do see a lot of opportunity D2C to launch new products, do limited drops, get consumer feedback. That will be the next, over the next 12 months, we'll start to roll up, roll out some D2C drops as we get more bandwidth as as a team because we're in the midst of a fundraise and part of that fundraise is bringing on more team members but d2c will play a role in basically helping to test and learn and do limited drops and create excitement but ultimately everything's got to lead back to you know where 95 of the purchase is made which is at retail yeah and Can you tell us a bit more about that Sour Sweeps campaign?

19:50Ian Shepherd:It was hugely successful for you, I know, user-generated content. What's the background to that? Yeah, I mean, it started in 2023 with the Sour Gummy Challenge. And that was just organic, to be honest. We had celebrities and rug who we gifted and seeded product to. But again, product won the day. At the end of the day, it was an experience that we had thought had the potential to go viral because it brings us back to these days of trying warheads. And for kids, there's not many of those experiments out there and experiences that they can do. And so we had a good feeling about that. I think it turned out, again, some luck.

20:35you know it turned out to be amazing and to see the joy and and the funny clips that would come out that you know regular people getting tens of millions of views was incredible to see but we do have a large creator network that we tap and seed product to that post because it provides good content and so yeah I think that that was really successful and then you know we launched our sweepstakes with circle k and around our our launch there and and that was also successful um i think we just want to in some ways give back to the community that has helped us grow um and also reward consumers with an opportunity when they're purchasing our product to get something unique and special and we we gave away ten thousand dollars a week for ten weeks and um a lot of learnings from that for sure very cool well let's take a step back i'd love to learn more

21:28Ian Shepherd:beyond just one up what are some of the other products that you're developing that you can share with us chris you want to you want to take yeah level so at a high level we're really interested in protein right now so we're working on something um in the clearway space uh both for adults and then something for kids one's going to be powder format another one's going to be an rtd So we're really excited about protein. I think that has been a big consumer trend that we've seen over the last 12 to 18 months. And so we'll be bringing two different concepts to market focused within that category. We're also heavily exploring something else in protein that will be more of a food kind of think of something like a Clif Bar format.

22:22that we'll be exploring, that we'll be kids-focused as well. So that kind of area for us has been super exciting. And fortunately, we have great supply chain in place where we feel confident we can become pretty profitable with the right talent partner behind it. So we're pretty shortly going to be announcing some of that information over the next couple months. Yeah, we're beating around the bush a little bit. But our dig sites really are, you know, how do we bring nutrition in different formats, right? Protein being one of those. And the second dig site for us is kids. And there's a lot of opportunity within sub-segments within kids.

23:00And yeah, as Chris mentioned, we'll have more to share in the coming months of new companies we're launching. But those are dig sites analytically that we just believe in. Yeah.

23:13Ian Shepherd:Well, excited to see the announcement. Are you able to explain sort of what's the criteria? or what drives your interest in a particular category? Yeah, we look, I mean, it starts really simply with looking at consumer data. We look at, you know, Amazon, we look at retail, we walk the floor, and we see kind of what the missing gaps are, or maybe even look at an ingredient profile that we believe heavily in that, you know, has maybe a low market share now or is new, but we believe has the opportunity to grow. And so a lot of our dig sites actually start with, you know, really fascinating like ingredients or particular sub segments.

23:56And we use those to kind of explore what we want to use that ingredient in. And so, you know, without getting into the details, that's how it started on the protein space. It's how we got into some of the concepts we're building for kids. we try to always stay ahead of like new innovation whether that be ingredient innovation or new in the supplement space if there's new things that are coming out we like to be ahead of that and then we think of how to best use those and format them and package them and so it all starts with you know but it all starts with amazon it all starts with looking at retail aisles and and and ingredient profiles.

24:37Ian Shepherd:And you talk about innovation, it's 2025, we can't not talk about AI. I'm curious, like, how do you use AI across the business? Is it a factor? Does it help you with the research and understanding consumer sentiment or anything like that? Yeah, I mean, I would not say we are, you know, the most progressive AI users. However, what I would say, it's been obviously the whole world now uses chat, GBT, and what you're able to accomplish from a research standpoint, which would normally take eight hours, two days that you could accomplish in 30 minutes, is hugely helpful. I think we're still trying to tap into like how can AI help us with supply chain and manufacturing because there are solutions out there.

25:17And right now we're doing it very manually, meaning like people. So I think we have a lot more to grow into on the AI side, but it's certainly a huge component of how we research and get to certain concepts. Got it.

25:33Ian Shepherd:And when you're looking out there, are there other creator-led startups in this space that impress you with what they're doing or how they've launched? Yeah, there's a bunch. I think in our same category as OneUp, I think Ryan Trahan and Joyride are doing a great, great job. I think Ryan is the type of person that's clearly putting in the work and invested in the brand. And I think that's the only way it works. Right. And so I think that's one. I think there's obvious ones like, you know, Rhode and Haley Bieber just made a lot of sense. Right. It was authentic to her. And again, she just put in the time and the effort to scale that business and brought on the right team around her.

26:16So it's there's a bunch. And I think we try to learn from the successes and the failures in the space because there's more and more coming into, you know, creator led brands. Um, but ultimately what we find works is it has to be a great, you know, consumer product that solves a problem and it has to be a talent that is actually like putting in a hundred percent of their, their life into the brand.