How to sell a billion dollars of snacks, with the founders of Chomps

Transcript from https://podmenti.com/t/72ba84ff76125285

The very best founders I know are brilliant at building systems.
They connect teams, they remove bottlenecks, and they eliminate single points of failure. And yet
When it comes to their own wealth.
Most are running a disconnected stack.
A tax accountant here and a state attorney there, a wealth manager who doesn't talk to either one of them.
Creative planning was built to fix exactly that.
One integrated team of tax professionals, state planners, investment specialists, all coordinated by a dedicated wealth manager who sees your full financial picture and keeps every piece working together.
Proactive tax efficiency, state strategy, investments all under one roof.
Creative planning where wealth works together.
Learn more at creative planning dot com slash masters of scale.
Hey folks, Jeff Berman here. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale summit.
This may be our biggest stage yet.
Reed Hastings, Meredith Whitaker, Van Jones, Amjad Masad, and more.
Will be there with us October 20th through 22nd in San Francisco. If you're building something great, or you want to build something great,
We want you there with us too.
Join us at masters of scale dot com slash apply twenty six.
That's mastersofscom slash apply.
Twenty six.
My dad always kinda gave me a hard time saying, you know, you know, you're the only son that doesn't have a master's degree.
I never saw a point to get an NBA. And so this to me was like a living case study. Like, let's do this, let's see if I can get it off the ground.
That business Rashid Ali wanted to use as a living case study.
Chomps, the wildly popular meat sticks that live in my and countless other travelers' snack bags. It's safe to say the company has paid off more than an MBA for Rashid at this point. He'll sell about a billion dollars of Chomps just this year, but it hasn't always been that easy.
It was a bad situation, but
we could always see on the other side. Pete and I do our best work when stress is I when our back's against the wall. Like we both kinda have a bit of a chip on our shoulder where
If you want to see us work really hard, tell us something's not possible.

You gotta have incredible talent at every position.
Huge push. There are fires burning when you're going out. Can you believe it? Such an idiot. And then you go back to this is totally gonna be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right.
Not ball ten years later and be like, well that's just how you do it. We haven't made just how you do it.
This
is masters of scale.
I'm Jeff Berman, your host.
This week on the show, the co-founders of Chomps.
Rashida Lee and Piet Maldonado.
They'll share lessons from failed startups that shaped Chomps how a phone call from Trader Joe's changed everything.
And advice for co-founders about making a partnership work.
Even in tough times.
Rashid Pete, welcome to Masters of Scale.
Thanks for having us. So saying as we were about to start rolling, I've hundred percent net promoter score of your product. So super excited to talk to you guys. I understand you guys have quite a founder Meet Cute. How did you guys get to know each other?
Pete and I met through mutual friends. It was a poker game. We were all playing cards.
And he had mentioned
That
He had started a company to compete with Omas Takes, right? To offer
grass fed, grass finish, like a healthier version on it, which is interesting'cause like
I always felt that
people would eat healthier if it was convenient, right. And what he was doing was effectively offering a convenient option. And then the next day I text him and said, Hey, would you ever want some help? We had I talked about my background in ops and finance and we met
At that diner in the South Loop and
My wife was an attorney at the time, so she like drafted a partnership agreement and that's all ultimately how it started.
Guys went from poker game to uh hanging a diner to let's do this. The speed, I would put it on peak. He runs pretty quickly. I'm a little bit more thoughtful, but I think he kinda pulled me forward and it was awesome the way it worked out. Pete, this was not your first foray into consumer products, is that right? No, I had a
Frozen food company in my early twenties.
called frozen fitness entire meals. This and so we were selling them out of glass top ice cream freezers. And then the goal from there was to start selling online
And that's kinda when it all fell apart.
Wh wh wh what happened? Why did it fall apart?
Well for one kind of going too
big too fast, but then also raising money from the wrong person, I think was was probably the one of the bigger
Mistakes that we made.
Which kind of like influenced the way that we built.
Chomps like going forward. We wanted to make sure we could do this all on our own, grow a self sufficient business that wasn't relying on outside capital.
What does it mean to have raise money from the wrong person? What happened there?
He really had it.
Unrealistic expectations, let's put it that way. He thought he was gonna cut a check and get a quick return.
Which is is not how it works. I think anybody knows that. Right.
supposed to give about two hundred fifty thousand dollars to buy into the company.
Gave me about eighty, sixty of that went into frozen meals. So it was an inventory.
And then the rest of it was to be for marketing, building a website and all that.
I spent the money, I was ready to go.
Yeah, I need to get another check now'cause we'd need to get till the launch and um
He cut me off.
So you said no, I need that money back because this is this was actually when the real estate market was melting down.
Late two thousands. Late two thousands. Yeah. It was like two thousand eight, two thousand nine. And so we were right in the epicenter of it all. Naples, Florida got rocked. And so
He decided he wanted his money back and I'm like that's not possible. It's an inventory.
I ended up actually just handing the company over to him and his attorney.
And I decided I was moving to Chicago with my wife and
I was gonna start over it.
And for a lot of people, that would be a turn off to pursue an entrepreneurial life.
Why did you decide to start another company?
I can never imagine myself having a real job and a boss and all that. I've never had a real job in my life and a corporate job.
So where did the idea for tromps come from?
I was a personal trainer throughout college. I spent a lot of time
making these elaborate meal plans and
Grocer lists and trying to get them to stick with it and just
Never worked.
Back then I think the options for
Good quality protein and
easy meals was just few and far between. They just they didn't really exist at the time, so
kinda like influence all of my CPG ideas going forward and
Chomps is actually one of'em. I grew up eating more Slim Jims than I'd ever like to admit nowadays, but
I liked meat snacks in general, but I like the sticks better because
I could chew them and my jaw wouldn't kill me after and I feel like I would eat a bag of jerky and get a headache. So that's kind of where the idea came from. Like, why is there not a better free virgin? Any meat product is gonna have a USDA legend printed right on it.
And so we went to every sea store, anywhere we could find meat sticks, bought all of them and found every single USDA legend we could find, looked up every one of those plants and called them.
And then we've stumbled on Kevin Western from Western Smokehouse, which is our first Copacker, but now we've we have was it four plants now with them.
And we're doing the big J V in Mexico, Missouri on a pretty massive plant, a three hundred thousand square foot facility.
Rashid, where was the business when you all sat at the diner and started talking about this?
So at that point it was really just
Like a website and it was the
frozen steak business. Right. So when we were doing the steaks, the copacker we worked with also made a refrigerated multi-pack.
snack stick pack, right? So effectively we were selling steak and ground trim, but there's still excess trim. And so he was like, Well why don't I make it into a snack stick?
We wanted to build a profitable business and we didn't want to have to raise money. And we also wanted to present a more convenient option to our consumers.
We did all the the the leg work and we found, you know, this Kobacker and and Greentop that was able to work with us on a sugar free, grass fed version of what we wanted to bring to the market.
I wanna just dial in on this diner
conversation because your background, Rashid, is more corporate consulting. This is a startup. This is a a person you don't know particularly well yet. What was it that made you say, I want to jump into this with you and do this? It's interesting. So
P and I both come from immigrant families, right? We were both born here, but my dad was always
an entrepreneur. And he just always had his hands in these things. So like I saw that and I think kind of in the back of my mind there was always this desire. And
While I was consulting the firm I was at, it was an eat what you kill shop where like I had a good salary, but my bonus was tied directly to billables and if I selled work and so like it had a very entrepreneurial spirit. So it was there.
But the honest reason that like
kind of got me excited is I went to
A public school. I got a whatever degree. But like my brothers
amazing private schools. They all had master's degrees or doctorates. And my dad always kind of gave me a hard time saying, you know, you know, you're the only son that doesn't have a master's degree. He's like, I just say you all have masters because it's easier, like almost downplaying it. So for me
You know, I studied business in college. I never saw a point to get an MBA. And so this to me was like a living case study. Like, let's do this. Let's see if I can get it off the ground. And it's not like I had extra time. My full time role was quite demanding. I traveled
a hundred percent of the time. You didn't give up your day job when you started doing it. No, I mean we did both for a quite some time, me longer than Pete. But it truly was a side hustle.
We purposely designed the company to be D to C, to be e commerce, so we could support it on night and weekends. That was the original premise, but you know, the company
took a a life of its own grew a lot faster than what we could have expected. And at some point we had to lean in and pivot. How did you build a plan that let you scale efficiently and make sure that you could do this without overexposing yourself and without needing to take on outside capital?
When we built the model, like we were able to find
Little work and capital games.
That allowed us
To do it.
I mean,
If we were
in early days to 10x the business. No, we would have definitely required more cash to be able to fund the the inventory, but we did it more gradual growth, like doubled or tripled year over year and and allowed us to build it.
What I'm hearing is that you
were willing to throttle the growth potential to control your own destiny to not be in a position where you had to take on the outside capital and and expose yourself. And I think it was actually smart because in early days people get so excited and they just want to go
all out. They have a huge opportunity to go national with a partner, but it's like you haven't tested the product. You haven't pressured your infrastructure to see if you can scale. In retrospect it was the exact right thing to do to grow gradually as we were trying to figure out who we actually are. But that's also why we're
So successful in retail is all that
foundation that we laid in the D to C world, building that community, building a loyal following, brick by brick, one person at a time, one email list at a time. That's why when we came out of the gate,
At Trader Joe's our velocities were
Insane and they still are insane.
You referenced Trader Joe's, which was your first retail partner. When did that deal happen? How far into the company were you? And how did that change the company for you guys?
Yeah. So I was walking my dog early twenty sixteen. I get a phone call on my cell phone.
From some random number and it's uh
very high up person at Trader Joe's and introduced herself and said, We want to put chomps in the store. This is a cold call from one of the largest grocery chains in America. Yeah. Just saying we're my favorite store like in the world. And I was like, Yeah, no, this is totally I'm not getting punked here and
I thought it was uh you know, a prank for sure. So first initial questions were like
Could you support this type of volume and do you have the funding to do this? And I'm just like, Of course we do. And we got this. And then the other thing was like, you know, they wanted to discuss private label, but for us it was it was me and R she'd um
Neither of us were full time at the time. Like I was still doing some real estate deals to pay bills and he was flying around the world.
And so it was like could barely support what we're doing. One single brand. Like if you do a private label, you're essentially running a
second brand. So I said, you know, we just don't have the bandwidth to do that.
So um I said no.
We could do it.
As a Chomps branded item. Back and forth, a few phone calls like that. And then she decided she wanted to put us in and give us a shot.
They were specifically looking for whole thirty approved items at the time. They put us us in, I think it was R X bar, there were a couple of other ones.
their buyers and their category managers are so in tune of like what's trending before the trend actually happens.
We always thought we had the ability to grow into something big, but they s they saw it even before we did, I think. How big was that initial order? One point one million sticks, I believe. It was big. They don't pay in advance for that, right?
No, they don't. They have great terms though.
They pay like net three half the time. They're good to work with in that way.
But yeah, we needed the upfront capital to produce. Now we know now Trader Joe's is really the unicorn retailer where the way they operate is quite unique.
Did we say more about that?
Ninety percent plus of the items are private labels. So they're Trader Joe's branded products. So for you to actually get a branded product within Trader Joe's, it's like it's extremely rare. They say
Give us the product for your
Best price.
And we deal with the rest. They won't even let you. You can't you can't go in there in the store and go merchandise. Like they it's all on them. And so that.
For us it was great because one, we didn't have a team. It was the two of us.
And two, we had no idea what the hell we were doing.
we just were able to focus on creating great product, a quality product, and deliver it to them. And then they took it from there. That doesn't happen at any other retailer that we work with. So that was we were incredibly blessed and fortunate to have that as our very first retailer to work with. From a revenue perspective, how big were you when the trader
Joe's deal came in. Yeah. So I think we had finished the prior year at about four hundred. And I think after we got the Trader Joe's order, we did about four million that year. Wow.
Yeah. Incredibly backloaded, by the way. But the bulk of that was between August eighth and the end of the year. So I mean that you're talking about 10x growth in a few month period here.
And it's still just the two of you guys?
How do you manage that? When the purchase orders came in, I remember I'm I'm at home
My family was in town, we're playing spades and like
Trader Joe's would fax the POs. And so we would get like a text or email of the fax. And so it was like one, two, three, I think there were seven for each of their DCs. And like I'm doing math in my head and I'm like
I told my phone I was like, I gotta go pull out my my my Excel and I call P. I'm like, dude, this is like 1.1 million sticks. And he's like, he's so excited. So for figure it out. For me, I'm like, well, this is not what we discussed. Like I'm I I had to do the math to say like what would it cost us to even fund this order, and it was just over a million. This was like a Thursday Friday.
Friday over the weekend, we had to figure out how are we going to raise a million to fund this order.
Where does it come from? We did friends and family.
We did dead only and we were able to find the right folks.
That would trust. I mean, we were transparent too, because we were like, look at this is backed by a purchase order. But at the end of the day, I'm like, we've all cooked steaks.
We've all
screwed something up and and and we're gonna do this at significant scale, but we can we
We we can tell you that we're gonna do everything we can to make sure that we can operate as flawless as possible and avoid any issues, but like to be fully transparent, like there's risk here. So in exchange for the risk, we gave a really healthy interest rate. My brother was one of the individuals that came in and he made me do a personal guarantee. I mean, understandably and and no equity. This is all debt.
Why not do equity, right? You're taking on risk, bringing that debt on. You're you're giving a personal guarantee to a family member.
Why not sell equity? Doing what we were doing was already stressful enough. And if we can find a way
to not take on equity, why do we need to? Like I again, like I always thought this as like it was me and Pete were doing this. We were gonna figure this out. Then you wanna hold off as long as possible, right? Cause then you just get a better evaluation down the road.

Still ahead.
How Trumps totally overhauled its brand strategy.
Вене реаліз сам тим сопрайсі.
about its customers
Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely.
From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode.
I hope to see you there.
Humans will never be more intelligent than AI.
Those were great at AI and those that went out of business because they weren't. How do we build a future?
That is human centered.
I'm Rana El Chayubi.
And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone.
Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives.
Find pioneers of AI wherever you tune in.
Welcome back to Masters of Scale.
You can find this conversation and more.
on our YouTube channel.
What happens when you go into trader jobs?
I would love to be in the store like demoing and stuff. I guess like what we want to do, but they don't let you do any of that stuff. So it's literally just like you send it in and pray. Like that's literally what happened.
If it were me, I'd be at Trader Joe's though, walking the aisles, Oh, look at this product. I mean we we were you know, checking it out. I was staying in touch with the buyer. It was like two days in.
And she's like, These numbers are really strong. And I was like, Okay, she but that's a you guys are on these end caps where they do new item end caps.
And she's like, This happens all the time and you'll see like a big pop and then it and then it bottoms off. I'm like, Okay
And then like five days later, I keep I keep touching bass, I'm like, Is it still going? Still going? So five days later she's like
The numbers are growing.
It should have been dying down by now because you're coming off these end caps.
Actually, we're gonna run out of inventory really soon. Wow.
That first PO they gave to us, they gave us seventeen weeks of lead time to deliver it.
'Cause we needed it. We were bringing in uh beef from Tasmania and all this stuff. It was
Long lead time. So anyway, she goes, I need to get POs in now because you're gonna go out of stock. This was supposed to last us five months and it's gonna be gone in five weeks. Wow. And this is from a sophisticated retailer. They've got a lot of data. They should have a pretty good idea of how product's gonna perform. I mean, that's an incredible five months to five weeks.
You're flying off shells.
Flying. So let's put it in perspective. So like a good retailer would now like um like a health food store like a whole foods or whoever might do like fifteen, twenty, thirty units per store per week.
We came out of the gates doing three hundred and sixty units per store per week of this product.
That's massive. Like one stick at a time. Not selling multi packs, it's single stick.
And so that never slowed down and it still hasn't slowed down, actually. We continue selling that at that rate.
That was a single skew doing those types of numbers.
Unheard of.
And so great relationship starter for us. You know, we're still working with them today.
So is this a moment where you say
We really ought to quit our day jobs and do this full time. We ought to be pitching other retailers. We should be building teams out. Like what does this do for you guys leading the company?
part of in the back of our minds we're saying, okay, we've just launched in this retailer, right? We have to figure out like, does it have staying power?
There's so many people in our ears saying it's Trader Joe's
they're going to private label you, right? There's not longevity. But we believe strongly that our performance will lead to staying power. P
thankfully went full time to be able to like really man this. I still was like, let's wait and see this through. And so he went full time in 2016. I didn't go full time until 2018. And in 2018 is when we opened an office and we hired our first employee, but like that two years when some brand may have said, okay, we have a window to grow into retail.
We were gonna be the best Trader Joe's partner.
possible. What did that mean? That meant that was our only retailer. We focus on e commerce, we focused on scaling, we focused on like branding and packaging and who our consumer was. At the end of this two year stretch where Pete, you're not full time with the business. You are relentlessly focused on
quality and on super serving Trader Joe's being the best vendor they could possibly ever dream of having.
What flips what gets to the point where you go, We we need to start hiring and going into other retailers and what's the inflection there? At the end of the day, concentration risk is real.
Right. And we knew we needed to continue to grow. I mean there were still growth opportunities.
At Trader Joe's, but I think we started to learn who our consumer was and we knew right that next channel we needed to go after was the natural channel.
So in the natural channel, there's two major distributors, and you have to be in those distributors to be able to service like the whole foods or sprouts or fresh market. And so that kind of started our natural journey. And again,
P and I still just kinda had to figure it out. Cause again, Trader Joe's is clean. Yeah. Single truckloads in. And so
It's almost a blessing and a curse that'cause we thought reta was gonna be that easy. We didn't really even understand what trade spend meant. And so we had a crash course and we were able to figure it out.
Pretty quickly.
What did you learn about the customer?
Well, I think we realized was
most of our customers were female. So if you think about the legacy brands within Jerky, it's very masculine.
Right. It's serving a male demographic. I mean Randy Macho Man Savage, right? I mean one of one of the great spokespeople for the category. Yeah. And like it wasn't necessarily about
our consumer, we call it the healthy achiever. It's someone who's health conscious, right? And so no one was speaking to that consumer. And so
If you look at the original Chomps branding, the Chomps logo used to be like
A cow brand. It kind of mimicked
what all the other brands were, but we realized no no, we gotta lean into this. We didn't want a feminine product, right? We wanted a product that was fun, approachable. And so like we worked with an amazing creative director at the time and she helped kind of bring this brand to life and
There's a little nuance in there. Like even if you open up a chomp's stick, we have what's called the chomp spiration, where it's almost like a fortune cookies motivational comment. So it's like little things within the packaging that throughout 2018 we worked on the ideation. I think late 1819 is when it kind of came to shelf. Retailers are notoriously stingy with data. Where were you getting this insight that your customer was
Disproportionately female. That was the first time that we had the money to actually do real panel data.
So we did like attitude and usage studies. So it was pretty it was eye opening for us. And realized that we weren't even speaking to our core customer.
with the messaging and with the you know branding and all these things. And so we realized, man, we need to reposition everything about us.
And that really resonated.
It was a major unlock for us. You raised money eventually. What led you to raise the capital?
So we actually had um it was I guess you would call them like advisors or whatever they would be. Like they were small investors. We took money from them not because we needed money.
We were supposed to be like a formality and, you know, skin in the game here.
So that was early, it was twenty seventeen type thing. How much do you move? A total of less than seven hundred thousand over the course of like the two year period that we were
working with them. So relative to the scale that we're talking about here, it's not money. Ten and twenty million. So we worked with them for from uh you know seventeen and eighteen or something like that. So but yeah, it was uh it was more for skin in the game. So we, you know, even to this day we've only that's all the primary primary capital ever
Taken.
Even aside from we did a private equity raise at the end of twenty twenty one.
That was a little bit different. We were and we still didn't need the money. It was more the company need the money. We um
We wanted people that have been there and done that. We realized this thing was getting
Very big.
And we realized, you know, there were so many opportunities, but the risks were getting greater and greater. And we just came through
COVID and that was a scary one for us. We learned a lot.
But we also realized that we weren't bulletproof.
And so we wanted to uh just have a good financial partners to to back us. As you are
White knuckling your way through this COVID moment.
Was there a moment where you pulled the team together and had the hard conversation about here's where the business is, here's what we're facing?
Necessity's a mother of invention and we are in a moment of need and and then insights came out of that. I would say Pete and I are maybe we err on the side of complete transparency. Like there was no hiding anything. There wasn't like Pete and I behind closed doors being like, We are screwed. Like w no, we we believe strongly
wanna get everybody's perspective and let's think about this collectively and figure out what the right path for it is. And we're all in this together, right? We need to figure it out. So like no, we were completely transparent and you know, it was a bad situation, but
we could always see on the other side of it. You always had to have that optimism that we were going to get through it. It's really
shitty and it's challenging, but like also
There's some joy in that too. Like I feel like Pete and I do our best work when stress is high, when our back's against the wall. Like we both kind of have a bit of a chip on our shoulder where if you want to see us work really hard, tell us something's not possible. Pete, having been burned once before raising capital, when you guys decided to raise the money.
What did you do to get comfortable that you were taking money from the right partner, getting the business someone you could really trust and be aligned with going forward?
It was more of us interviewing them than it was them interviewing us. I mean we
put them I think through the ringer.
But we actually turned out we like we really liked um our current partner stride consumer partners
because of the way that they were kind of returning that hyper diligence. And so we realized like they're not gonna go make a bad decision and partner with us. And we're doing the same. And for us it was like, you know, the check part of it, like the actual money was that was kind of table stakes to be like negotiating with us. Again, the company was profitable already, was doing great, didn't need the money.
And this was more of like, you know, just for us and the the families. But yeah, we asked a lot of questions. We wanted to meet everybody and so it was a lot of like in person, onsite.
The biggest thing you could do with a private equity partner is meeting the operating partners that are gonna be the ones that are supposed to be helping drive value.
And so that was one of the things that we loved their oper we still love their operating partners. They've added so much value since we've partnered with them. The other thing is I guess anyone going through the process.
Talking to the team, spending time with the team.
But also
Talking to
Their
Investments.
Right, talking to the portfolio companies that they worked with and not just the ones that they give you as a reference.
networking with the other ones too. Right. And I think one of the like the eye opening discussions is we were able to find one of their investments that didn't go so well. And we talked to the founder and CEO who effectively got pushed out. And you know, the individual that we work with, the lead partner, he mentioned his name. He's like if JM calls me for a deal, I would invest in him.
Yeah, he's like the challenge I had was with there was another individual, but also he's like, I understood what they were doing. Like I get it, it was a bad situation, but I got it. But like
the character, the ability to think through things like and so like that came from an unsolicited reference from someone who shouldn't have necessarily been so positive. So it was those little things that got us a really good comfort level where it's like, Yeah, I know these guys would be a good partner. Building on what he was saying there, you sit with these private equity guys and every single one of them goes through their list of wins.
Wind after wind after wind. And you're just kind of like
This is boring, man. Like I wanna hear about, you know, when things went bad, like what happened. That was how they approach it actually.
You can just tell those guys are good operators because they come in and it's never, you know, a pretty thing. I mean, it's a startup world, and it's like tough.
And so they they started talking about some of the things where they went wrong.
They're like, Okay, this was happening at this, you know, company. Mike had to go quit his day job, basically, go jump in as an interim CEO at that place. And he rolls his sleeves up, got it over the hump and like
That's what you want to hear. Yeah. Because anybody could be a good partner when things are going
Right.
I wanna know what's gonna happen when things go in bad.
I've been through it where I had a bad partner and I could not work. You cannot make it, you cannot be successful in that environment. Where is the business today? How big are you guys and what's next for the company? Yeah. So we'll do just about a billion in retail sales this year.
That's nearly.
doubling from last year, there's a lot of white space. There's a lot of opportunity. If you think about, you know, the jerky category.
Nearly half of it is in what they say C store, like convenience, right? Small format, travel, gas station. And so that's all white space for us. The other thing is household penetration. There's just a lot of households that are just left and the white space is enormous. Yeah.
I love it. Like we we we kinda laugh about it now because we love it when we you meet somebody and we're like, Yeah, you know what, we're co founders of Chomps and just like what never heard of it. And I'm like, Awesome. Yeah. That's like humbling. I like it. It's like it's just still a ton of work to do because that happens more often than you'd imagine. Has the recent focus on protein and diet been a boon for the business as well, has that driven growth over the last year, especially? Oh yeah.
Tons of momentum. It's interesting. Last year
We commissioned a study because we wanted to understand overall snacking. And what we understood is like snacking as a whole is a$126 billion category within that in the US always. Yeah. In the US. Within that
protein snacking is growing three times faster than any other subcategory. And so we're like, okay, so there is this big momentum and it is being driven by the GLP ones is obviously building that momentum because we call it like conscious calories. Like you have to be more cautious about the calories you're consuming because if you're not consuming the right thing, you're going to lose
Lean mass versus
the fat, the folks that are on it and the the doctors that are that are prescribing it, they're they're letting folks know like you need you need to eat the right thing. So Chomps has really benefited from that.
Yeah.
There is an entrepreneur
who is listening to or watching this conversation right now, who's in their first few months of launching a CPG business. I'm sure that they've gotten a lot
from this conversation. What's one piece of advice each of you has for that entrepreneur as they go off into their day and try to build to the scale that you guys have reached? One, just get started. That's the hardest part.
Nothing's gonna be perfect when you try to get your little baby out there before you're bringing it to market. I remember I learned that the hard way. I can always iterate, you can always fix it and improve over time.
That's the first thing. Second thing is obsess over the details.
Period. You should know your business inside and out. And if you don't
You're not gonna succeed. Yeah, since P gave two, I'll give two as well. I'll say
Listen to everybody.
but know that like what they accomplished doesn't necessarily mean that, you know, what you're gonna do is replicate it. I think in early days, you know, we would a brand that we may respect a lot, they would
You know, use this agency or this partner, do this. And we would think, well, if we use it, we could replicate their success. But no, every case is different. And so you want to get a lot of feedback, but then you have to look at it through your brand's lens. And I think that's what we're doing now is we think of everything through the Chomps lens, but we'll figure out what everybody's doing and be aware not only of competition, but other categories. So it's important to like look.
look it through your brand's lens. And then the other piece is you have to understand your unit economics. You have to understand that. And there's this fallacy in that, you know
economies of scale will lead to an improved gross margin and it just doesn't happen.
It does like at the end of the day, our whole thing was like wait as long as you can before you have to take outside money, right?'Cause you want to maximize your own enterprise value. So like really understanding your unit economics will allow you to build the business the right way. And in some cases, you are going to need outside capital.
some companies require it. You know, we were fortunate to find a way to defer it as long as possible. But yeah, you gotta understand those economics. We've been in conversation with a lot of co founders on Masters of Scale. I'm really struck by the energy between you two, the dynamic that you have. What's one reason this works so well? It's interesting because as you spend time with P and I, we're very different.
Like we approach the world and business in two different ways. But I think from a partnership
It's actually the best thing.
'Cause when I'm thinking about something one way, he's kind of thinking out a little bit different. So it allows us to really see the whole picture.
it creates a lot of tension'cause you think about things differently and and we're also super competitive. But I think
At the end of the day.
We share the same core values, we share the same passion for.
For Chomps winning, very similar family dynamics. And so like all those things are the same, which are important, but then when we look at the world, it's a little bit differently. So I think that was like a really
great testament to the partnership we developed. I mean, we have a lot of leadership coaches that we kind of joke around like saying it's like marriage counseling that we've used over the years to help root out some of the spirited discussions, but I think that's probably a testament to some of our success. When we try to instill us in the team too, it's like you operate with no ego, right? Which are always trying to learn
We're always trying to have that self awareness as well.
We have mutual respect for each other, but we also understand what we're good at and what we're not.
And we realized that we compliment each other. And it wasn't always like that. Like he said, we had to do the marriage counselling first, but once we figure that out and we figured out how to work together, it was just kind of supercharged. That's amazing.
Mm.
Rashid, Pete, thank you for being on Masters of Scale.
Thank you very much. Thank you. This is awesome.
Mm-hmm.
Rish and Piet's story is an exceptional example.
Of the power of focus.
Instead of chasing every trend or spreading themselves too thin, they started off slow and steady,
with a dedication to quality ingredients and serving the customer.
That led to an incredibly strong foundation on which to build.
In our protein obsessed moment, I have no doubt that Rashid and Pete will continue to hyper scale chomps, and I really do hope.
They will make a breakfast stick.
Free idea, guys.
Just saying.
I'm Jeff Berman.
Thank you for listening.
Masters of Scales await what original.
Our executive producer is Eve Tro. Our senior producer is Trisha Bobida.
The production team includes Masha Makutunina, our senior talent executive is Stephanie Stern.
Mixing and Mastering by Aaron Bastanelli and Brian Pew.
Original music by Ryan Holiday.
Our head of podcasts is Letal Malad.
Visit mastersofscale.com to find the transcript for this episode and to subscribe to our newsletter.