EP 18: Midday Squares: Jake Karls on Finding your Sweet Spot in an Oversaturated Market
Mary Harcourt 0:05
Welcome to Ready Set glow, a podcast where I interview the person behind the brand. We're gonna talk about what it took to get started, the lessons learned along the way, and the advice they have for you on your own journey. I'm your host, Mary Harcourt, founder and CEO of Cosmo glow. Today we're chatting with Jake from midday squares. They first launched in 2018. And only 20 months later celebrated their 1,000,000th Bar sold. That is a huge accomplishment for a new food industry brand in a saturated market. So how did they do it? We're gonna find out in today's episode, Jake shares how being transparent and vulnerable as a brand was a part of how the company ran since day one, we talk about creating brand loyalty, working with family and advice for entrepreneurs. Let's hear how it all got started. As the first functional chocolate bar. Everything a chocolate bar isn't an everything a protein bar wishes it was. Jake, welcome to the show. Let's hear about midday squares.
Jake Karls 1:10
Yeah, midday squares. I'm one of the cofounders of this company with my sister, my brother in law, we started in August 2018. And the idea was, we wanted to create a chocolate bar that had function. What I mean by that is had high fiber, high protein, good fats and a clean label, but also tasted absolutely delicious. And that was something that we had in mind. And what we did was we created it, and we launched in August 2018. And now fast forward almost four years later, it's wild, you know, it's been a wild, crazy journey. And I always like to say we call it midday squares for the reason that it's a midday snack. So imagine your 2pm craving for chocolate, you want something that tastes good, but you also want something that will carry you right through the afternoon. And that's what we built in their little square format. So that's a little bit about us.
Mary Harcourt 2:00
I love it. We know I bought these for my crew, because we have lunch and lunch is great. But sometimes you get that little like after lunch, food coma, and then around 230, you want something you don't really know what you want, it's a little too late for coffee, you don't really want to go eat a bunch of carbs and a bag of chips, but you kind of want something. So I ordered them. They haven't gotten there yet, but I'm super stoked to try them. Because I love how effective they are. It's clean ingredients. It's a little bit of sweet, a little bit of protein. And you know, if I can give my employee some brain food halfway through the day and get them to perform just a little bit better I am in for it.
Jake Karls 2:35
Ya know, the idea was simply based because we wanted an afternoon snack in that market. And it seemed like there was nothing really there. You know, you had your protein bars, you had your typical chocolate bars, but you didn't have a baby of the two. But that got rid of all the junk that's in protein bars. So like our focus was give our fans an absolutely delicious chocolate bar that satisfies that chocolate craving, but also give you benefits of approaching bar without feeling bloated without feeling like shit and actually getting yourself to the afternoon. And one thing our customers say and our fans say in our reviews is that it actually keeps them full. So we really focus on delivering on what we offer. We really care about that aspect.
Mary Harcourt 3:20
Yes, let's talk flavors, what kind of flavors do you offer.
Jake Karls 3:23
So we have three flavors. At the moment we have our original which is a fudge which is actually going to be called brownie batter brownie brittle very soon, we have an element crunch, which is basically like a crunchy Alman chocolate. And then our third flavor which our best seller is called peanut butter. And that is kind of like a healthier version of a Reese in my opinion. It's better. I've never tried it. So I'm allergic to nuts, but that's what our customers say. And then we're launching a cookie dough flavor as our fourth flavor in fall. Yeah,
Mary Harcourt 3:54
I think peanut butter is gonna be my that's my thing. I love Reese's Cup third, that's my go to dessert, or little snack for the day. So I think that's that's my that's where I'm going with it. So how did this all get started? You have an interesting story you guys blew up you're crazy successful. You've been a massive Instagram you work with your sister like what's How did this all get started?
Jake Karls 4:15
So first of all, family business is tough. And I don't recommend it unless they're your partners are meant to be your partners in business. And I think a lot of people like to take that path of working with family because it's family. But that is a very dangerous route to take unless you're meant to be as partner. So the story started when my sister who is the creator of the product, she was in the fashion world and she she had a line and fashion and she was making this snack this this chocolate snack for her husband, my brother in law who was in the software space, and he would crave like chocolate 2pm every single day and she's like I can make you something that's cleaner than everything on the market that tastes great and you won't feel crappy after having it. And so he she made it for fun because she's a foodie And he brought it to his office and everyone freaked for it. Everyone was loving it, like they wanted more and more. And it was this delicious chocolate snack that actually did what it said. And long story short, she ended up closing her fashion brand. Because it she had no more capital, actually. And she was just exhausted from the actual experience in that industry. And my brother in law ended up selling out of his company, and at a two year non compete. And they always wanted to work together on something, they always wanted to be partners on something and they both really loved food, like food was a passion of both of theirs. And so then started looking for different things in the food industry. What can they make better than some of the current markets, they checked out the morning OIC category, they checked in other categories, and they realized that they couldn't make something better in those things. And one day, my brother in law came out of the shower, and he opened up an email. And he read a report that showed that real chocolate, so darker chocolate above 55% made with cocoa butter, not palm oil was on a tear like 40 something percent year over year growth and that vegan proteins was on another tear at like 36% year over year. And then in that moment, the light bulb clicked everything made sense that Lesley, his my sister, her his wife was making a baby of these two massive growth categories, these massive saturate markets that were growing. And he realized that she has an innovation within this massive market of chocolate. And that was the moment they started to create the product and actually formulated to be more, you know, macro friendly, you know, commercial. And basically when they came to me in July 2018, after eight months of development, and they said, We need a third partner that's going to build this brand. And I was like, well, what's the product now? Like, it's this chocolate bar. And I tried it and I was freaking I was like, it's delicious. But I'm like, Do you guys know how busy the food industry is, you know, saturated the grocery store is there's three to 40,000 different products on a shelf. And I said, we're gonna have a hard time winning even if the product is unbelievable. How do we get it out there? How do we make the noise and they're like, well, that's your job. And I said no many times rejected them many times, then finally I caved. And the reason why I caved was I realized that if we take a different approach from every other food and beverage brand, and what I meant by that was I showed my partners on a slide a PowerPoint, I showed them the ratings, the TV ratings for keeping up with the Kardashians, I showed them the TV ratings for shark tank, and I show them the TV ratings for their social media following of Elon Musk. And I said if we take the three of these, and we make a baby a triangle with the three of these things, we can blow up from a community standpoint, which will create the awareness which will create the trial which will build fans. And then we will build a step out and shine bright in the grocery store, instead of spending millions and millions of dollars on trade marketing. And what that meant was I said, Let's make a reality show on entrepreneurship. Let's take the drama from the Kardashians of having a reality show of a family that's building a business. Let's take the aspect of entrepreneurship from Shark Tank which people love so much. But let's go so deep into the good, the bad, the ugly. And let's be bold like Elon Musk, where he you know, we speak out and we're not typical founders. We're not typical, you know, executives or CO CEOs, whatever it is. And that was the moment we launched. And we said we had a great fucking product, excuse my language. And we had an amazing marketing strategy that was just like, we're going to document everything and just share it like literally be the most transparent company, show breakdowns, show successes, show everything. And then things started just going. And it was like it was history from there. And we still do that exact strategy today.
Mary Harcourt 8:40
I love that. I mean, you're clearly the intricate part of the group and that's why they want to do so bad. They didn't take no as an answer. And here you are doing your job you can ask so that's awesome. Shark Tank is amazing. It's one of my favorite shows. Elon Musk is like my heroes. You guys are all up my alley. I am I'm already obsessed talking about an oversaturated market. That's the first thing I think of is to me it is a crazy oversaturated market, especially for protein bars. And I think chocolate How did you guys just kind of build your brand to be different? Like how did you overcome that?
Jake Karls 9:12
Mary I want to add into something about family business. I know I didn't get to it but we partnered because we are the best at what we do to complement each other. So what my sister is not good at I'm good at or my brother in law's not good at I'm good at so we also see. Yeah, and that's important. So we love each other as family but we also complement each other as a unique we call it a tripod. But I think something important is we see a business therapist once a week mandatory since day one. So since August 2018 We've been going to therapy together as three of us as partners to open communication, our leadership, our empathy, our perspectives understanding how to work with each other, because if we build this business $2 billion plus let's call it and and we end this business not loving each other or hating each other. It wasn't worth it. So we really focused on the priority of how do we stay so close as family, but how do we also optimize our partnership and not be afraid to have those hard conversations, be bold and actually get through this crazy pressure cooker journey. So I think that people should know that we invest right now. 75 to $100,000 in therapy a year. Now, some of our teammates are coming out with us, which is really exciting. But yeah, so that's for the family business part for the actual, you know, chocolate part. Yeah, chocolate is $140 billion a year. And the beauty of our chocolate is why we chose it was because not only do you have an innovative product within that saturated set of chocolate bars and protein bars, but chocolate is, is easy to teach anybody, you don't have to do it. Sorry, you don't have to do any teaching. It is just a love language. I could show chocolate in the UK, I could show chocolate to the United States, I could sell chocolate in Canada, in Asia, wherever. And everyone knows what it is. So we didn't have to go spend money on educating, we didn't put crazy ingredients that don't make sense. In our product. We put protein fiber, high fats, clean label and an amazing tasting chocolate bar. We compare ourselves to becoming a new age version of a chocolate conglomerate. And what I mean by that is, we don't we're not trying to sell the company in three to five years, we're trying to build what Maurice built what Hershey's belt what Mondelez has built over the last 100 years we're trying to do in the next 20 to 30 years. And the reason why we compare ourselves to them is not because we have seen products, we do not have the same products, we compare ourselves because of the impact and the actual size of the company that we want to become. And we want to do things like they've done. And I think that we have a true path to getting there over the next 2025 years. And we want to be not take them down but stand next them put our flag next them on the mountain and be that new version, that younger version of that chocolate company, a modern day chocolate company. And that's what we tried to do.
Mary Harcourt 11:56
I mean, that's the best description I've ever heard, because you took me from oversaturated to understand and there's actually a hole in the market. And I think you guys can fill that. I'm a Hershey girl I grew up in Pennsylvania Hershey was my life I had a season pass to the amusement park, I have written there a little damn ride so many times you get a free chocolate bar at the end, that I live and breathe chocolate. But as they've grown, they've also sold out a little bit and they lost that genuine flavor. And I think there is a huge hole in the market for somebody that is a fresh new labelled brand that has quality ingredients. I mean, that's exactly what you guys describe. So there you go.
Jake Karls 12:34
Yeah, I, you know, and mad respect to these businesses like Mars and Hershey's and Mondelez. And, you know, like, you know, we've had our struggles with them and stuff like that. But at the end of the day, they've built you know, the true founding principles and the core values they started with were truly inspiring. And they built something extremely impactful, that has had an impact on tremendous amounts of people around the world, I would say global. Now, the kicker here is, I think people are looking for something new in terms of product development in under chocolate, and also the way that the community is built. So for us, we're innovating on the way that we offer a chocolate bar, it's a new version of a chocolate bar, it's not the milk chocolate, it's not the high sweetened sugar chocolate, it's real food ingredients, it tastes good, it makes you feel good, it gives you energy keeps you full, so it adds that value. But then on top of that, we're building a brand on full transparency. So we're sharing everything. And that's what today's world we're seeing from Generation Z all the way to boomers want to actually be part of. So that's where I think we have this differentiation is obviously on product innovation, but also on the way that we're building the community, we might not be building it, you know, to the the level that they have built it yet, but over the next 20 to 25 years, I can assure you that mark my words today, whatever it is July 7 2022, or whatever it is to July 2022, we will be the next version of that. And I like to always tell people, if Hershey's or Mars were to start in 2022, they would look more like us than they look like themselves now. And I think that that's the indicator of where everyone's going in the world.
Mary Harcourt 14:14
So I saw you guys have a podcast I was on your website and talk a little bit about that because I feel like it is truly transparent and you can watch the entrepreneur journey from like, Hey guys, we have an idea to let's try this. Let's try that manufacturing all the ways to what it is now. Do you just have the podcast? Or do you have a YouTube channel? Like where do people buy into this community?
Jake Karls 14:34
So the podcast is something very special to us. We did we have one we had one season we just started our second season again last week actually just super exciting. But the whole idea of the podcast was it was a time for the three of us and my partner's my sister, my brother in law and I to sit down and actually go into real chat just like let's chat about a deep topic and go deep and actually have a fireside chat together. And what that does is we get so into Do it and we share. There's no boundaries, there's nothing, it's we're going to show you everything. If it's about fundraising, we're going to show you the shit stuff from it, we're going to show you the amazing stuff. If it's about, you know, the amount of bullets we're taking now, because of the price increase we made, we're going to talk about that. And I think what's beautiful about it is, it's relatable. It's real, it's not bullshit. It's not. It's none of that stuff. So what we do with that podcast is bring people along the actual mindset on how we're and the feelings we're going through. But for our community, we're, they're on LinkedIn with us, they're on Instagram with us. They're on Tik Tok now with us, and we're going to be investing a lot into the YouTube platform, going forward to have these like Docu series versions of what's going on in the business, you know, week to week or month to month. And given that like really like that low down. Because if you came to our office right now, Mary, you would see, we have cameras set up in every room, every area for recording purposes to create content. So our team, our marketing team is built from videographers, editors, producers, stuff like that. So the approach is, is that we treat this business like a TV business, like the entertainment world, not the CPG world. I think that that's what's allowing us to really create amazing content the community likes to be part of, we're almost like a Netflix entertainment for some of our fans a night.
Mary Harcourt 16:18
I love it. It's great. It's working. And I can't wait to buy it and just kind of follow up a little bit more meat as well going through a company that scaling incredibly fast. I can relate to every single episode title and go, Oh, God, we've been there. We're there. Now we're doing that we're almost there. So I Good luck to you guys. I hope it all pulls off. What's the future for midday? You you currently have just one product right in three flavors.
Jake Karls 16:41
Yeah, so our future is this stay true to this product line. For now we have a road a path to going to 100 million across North America. And then going global after with this functional chocolate bar that we call it. And we're going to have about six to seven flavors, different flavors. And we want to be known for that core, that core product line not to say in the future, that we won't do something under chocolate. But again, we are a chocolate company, our first product was a functional chocolate bar, we kind of like the Gatorade model or the power raid model, where they have a core group of products that drive older revenue. So we want to do that we have a long way to go in that space. And then from there, we'll see if we could acquire businesses in the chocolate world or we could keep growing under that. But function. Chocolate and clean ingredients is where we're heading with the company.
Mary Harcourt 17:29
I love it, there's room for that you guys got in Whole Foods, which is so incredible. I mean, congratulations on that you're a Canadian based company, but you're coming into the US Whole Foods is going to be great for that. What is that, like being a Canadian food based company coming into the US?
Jake Karls 17:47
It's extremely difficult. And the reason being is yes, we're both on the western civilization aspect. And you know, like very similar in a lot of things in terms of the countries, but we're very different and consuming behaviors. And what I mean by that is yes, we'd like the idea of the same stuff. So we like chocolate, we all like chocolate or we all like plant based stuff, or most people do. But then when you go into the specifics, the habits are different, that type of ingredients are different that you like. So Canadians and Americans actually have a lot of differences on the shopping experience and the retail level at the grocery stores the way that they place things, how they how they actually, you know, build out the stores. So I think that there's this misconception is you just go and launch the product in another country and say, Okay, leave it it's going to work no, you need to put tons of effort energy branding, building community work into the country that you're going to offer. So when we launched the US we launched sprouts actually, they were our first retailer now we're in available, you know, central markets were available at Whole Foods are available at Wegmans Fresh Direct aim is a lot of accounts. And it took a lot of work. And it's still taking a lot of work to pick up it takes a lot more to get people excited that never heard about it because our Canadian brand awareness barely transitioned over to the US and we have to almost restart that in the US and it's working but it's taking time, money and energy right. And I think a lot of brands think you just launch it and then let it go or invest a little bit. No, you need to put 180% of your energy and time and money into the new country.
Mary Harcourt 19:14
I mean, I believe that it seems so hard to get into a whole foods I mean all of those stores I've been to and personally love especially Wegmans I mean that's great. But I look at it as a huge accomplishment because it does require so much work and the right people and the right connections. And honestly trust in your brand knowing that people are gonna buy it like it go back and buy it again. tell their friends put it on social media tag that they're gonna use it bring it into the salon, tell everyone this is what I'm snacking on all day and go from there and watch it grow. But to me it's it's almost terrifying to break into a US market coming from a Canadian but you guys are doing it. So congrats to you.
Jake Karls 19:55
Yeah, no, it's been extremely difficult and we hired an amazing team out in the us, we started to build out that team, you know, different types of roles out there. And it's like I said, it's an investment, the whole thing is an investment. And if we hit it, we will be the next biggest chocolate company there, because the numbers that are translating are really high. But again, we're only in 3000 stores across Canada in the US together. And you know, in the refrigerator where we're located in the retailers, there's about 42,000 options of doors between Canada and the US, at minimum, at minimum. So we're willing 3000, we have a long way to go.
Mary Harcourt 20:30
Yeah, well, everyone listening, go buy some there at your local stores, you can also go online. And I was thinking coming from a salon industry, we take clients like 12 hours a day, there's always somebody that we're running over, there's always somebody showing up late and all of a sudden, this lunch break that huge ramped up is gone, this would be such a perfect snack to keep in the salon, you have two minutes to eat. And all of a sudden you got a pump of protein, you got that sweet green out of the way. And now you can go on about your day in a much happier and pleasant mood because I get hangry. And that reflects on my client. So I feel like this is the perfect snack. You guys should just go get some if they're not at your local Whole Foods, order them online. Where do you ship to? Do you ship worldwide? Or is it mostly just Canada and US right now.
Jake Karls 21:12
So right at the moment, we're shipping just Canada, in the United States, all over Canada and all over the United States. But we will one day be shipping globally. Again, we're focusing right now just Canada, US growth, the next country will be up to that in another country after that. And then keep going across though. As long as we stay in business. We're gonna be global.
Mary Harcourt 21:30
I love it. Hey, you know what, you got to start somewhere we're about to go global to I would have never imagined and it's super exciting. But it's like the where there's a will there's a way if you know what's gonna happen, it will happen.
Jake Karls 21:42
Exactly. You got to manifest you have conviction, and you have to never give up. I think that's the beauty.
Mary Harcourt 21:48
Yeah, that's a huge part. I mean, start is half the part and then never giving up as the other half. And then you'll get there. You guys have great brand you talked about brand earlier, your brand is rapidly growing, people are kind of buying it as a cult brand. They're following you through this. They're watching the transparency. How did you figure out where you're gonna go with your brand? Do you feel like it was more organic? Do you feel like it's a big push in media? Is it the in store locations, kind of all the above?
Jake Karls 22:14
I think it's a holistic approach. So I think having an amazing product is your most important thing. So you need product market fit, do not launch a product, if there's no market fit, get the rocket sales, the beginning, but they're going to come down because the returning customer will be there. That's number one. Number two is what the way we approached our brand was we didn't care about virality, we cared about adding value of content to the consumer, I like to call it the thesis was build fans, not customers, it was kind of like we took a rock band mentality. So we basically said, we are going to be like a rock band, we're going to think like when we're going to act like one. And basically what that means is we're going to create such relatability because rock bands have their music, but they also have their lifestyles, who they are as people the human side, which people fall in love with and become fans of and then, you know, we're three different characters here. So, you know, if you'd like one of us, you're likely gonna like the brand, right? So we took that approach. And it works. Because a lot of corporations don't humanize their brands, they don't put a face they don't or they put a random face that they pay as a celebrity endorsement, which does not work, in my opinion, in most cases for long term success. For us, we built ourselves and our team as the influencers. And what that does is again, it creates a fan base. And I think a lot of brands got to start looking at how do we approach fandom instead of you know, acquisition of customer think that's a big thing that we do differently,
Mary Harcourt 23:35
or Yeah, it's true. And I mean, you're a spokesperson here, you have so much energy that ripples through because now I'm pumped up and excited for your company to grow. I think us is a huge market for you guys. I can't wait to see you in more stores. What advice do you have for somebody that wants to take their small idea and grow it into a larger scale like you guys have?
Jake Karls 23:56
I think the most important thing for any entrepreneur out there that starting a business or wants to is you need to be able to withstand pressure. Yeah, you know, entrepreneurship, unfortunately gets portrayed as glorified. You know, flowers, this company sold for 500 million. They don't show you the 30 years that went into that. They don't show you the hardships. The difficulties in Shark Tank is an amazing show. Don't get me wrong. It's inspired a lot of entrepreneurs and people. But what it doesn't show is a lot of the actual failures and it's minimal and it's very surface level. I think what what you need to know if you're going into business is yes, it is really hard. It is a lonely journey. It is the most rewarding journey you can be on but it is lonely. At times. I feel depressed. Personally, I feel sad. I feel alone even though I talked to 1000s of people. And I think it's hard to relate now. If you can withstand pressure for a very long time, and you can have conviction and follow your gut. I believe you will be successful in anything you launch. I think those are the main things And, and never giving up, you know, the we're going through a change right now and operational change which has shocked the company and has created a tax like we've never seen from everything possible. You know, we raised prices, we had no choice we changed ingredient decks, we had a lot of things that happen. And you know, we got attacked, but it's so hard to go through, because you got all this positivity for three and a half years. And then right now you have all this negativity surrounding and, and we're dealing with that and we cried the other day, all three of us were just like, holy shit, this is crazy. And the reason, the reason why we're gonna get out of this and gain back our momentum is because we've learned to appreciate the pressure learns how to deal with it, and actually withstand it, even though it is the hardest thing in the world. And I think that that's my advice to you is have conviction, be able to withstand pressure, and trust your gut.
Mary Harcourt 25:54
I love it. I mean, I agree with that 1,000% is building that resiliency, getting that grit, you have to just keep going. So let's talk supply chain, you guys mentioned you have a price increase, we recently had a REIT raise our prices as well due to supply chain stressors, and just the economy. Everything's going up. And we felt that what was that process like for you guys having your supply chain a little stress, the prices increased? How would you work your way through that.
Jake Karls 26:23
So we started eight months ago, working on this stress supply chain, realizing that our two square pack, we were going to have to raise the prices to uh, you know, instead of it being 399, it was gonna have to be 499 or 549, which is way too high. And it's not where we want to be as a business. For us. We want to be available for everybody. So we want to be in a $2 range two to $3 range max. And, and, yeah, so we started working on what strategies or models can we do, and we basically had no choice but to change the one square changed some of the ingredients and increase the prices, instead of it being $1.99. For one square, it's 249. And we made a video about this, we shared the transparency of why here's the ingredients that went up in cost. Here's what what we didn't, this was a question of not making more money, it had nothing to do with that it actually had to do with survival. If this business wants to exist in three months, this is the decision, we have to make the hard decisions that we have to make. And we made them and rip the band aid off. And we launched it about June, in mid June. And it's been disastrous. Because people humans don't like change. And people are angry, and they're suffering right now, from a lot of shit going on in the world. Unfortunately, you know, there's all kinds of rock things that are happening. And they're, they take it out on companies like ours, for example, who has a very positive brand, extremely transparent, vulnerable, authentic, great product, and they'll they'll be mad. And I said to my teammates, I said, we gotta be okay with this. This is life, you know, it's there's actually a fringe minority that speak up and try to attack or get mad and angry, and a lot of time actually has nothing to do with what you're doing. It has to do with what they're going through. Right. I think that we passed this increase, we we stayed committed to it, we're staying, we're dealing with the pressure now. But we're getting back on momentum, you know, and I think that it was the only decision that had to be made to keep this company alive. So, you know, if someone can't appreciate that, then then they we don't need them as a fan or a customer because again, that's, you know, we're humans, we're all humans here, you know, and obviously, there's bad apples that take advantage of this stuff. But at the end of the day, this is real real life, there is a crisis, you have a war, you have political, you know, turbulence, you have inflation, gas prices, you have groceries going up, you have everything changing. So it's like, you know, some things just need to need to happen. I think the transparency helped us but I think still, we're still dealing with a little bit of travelers coming through that we have to deal with always
Mary Harcourt 28:45
gonna have those Exactly. Like you said, it happens with us too. But I think it's the ripple effect.
Jake Karls 28:52
It's the ripple of everything that's happening, like think that humans will have it will come back together eventually. But I think it'll just take time, you know, you came up with pandemic, people were living in their house, they didn't move. You know, it was, it was crazy. They're isolated their minds, you know, the whole thing. So, I think there's a lot of changes happening. And the one thing I could tell you is, I always said about internet trolls and trolls and etc. I said, My friend told me it's like they these trolls actually want to love you. They really do. They just don't know how and the way that they're expressing it is in hate or anger. And you just need to teach them how to love love you and if you can't, then you got to let them go. But it's like for me like I'm inspired by Elon Musk because he doesn't care and what he does is he has fun with it. He's good vibes but he's not bad vibes isn't doesn't attack you if he makes it a lightful experience right? The other day I just checked one of the emails my customer experience team got and it said Go kill yourself because he was angry about the price increase. And ya know, and I posted about it and got virality on my Instagram and people were like I didn't post the person's name obviously but I showed that this is the world this is something that we're going through, and it's real. We were there for that person. And we try to, you know, help and relate. And but, you know, at the end of the day, again, people are suffering, unfortunately. And the lash out.
Mary Harcourt 30:12
Yeah. And I think it's gonna happen more I know with us, we just had a price increase as well. And we really took it internally for a long time. I mean, I lost 1000s upon 1000s, upon 1000s of dollars, waiting for the prices to go back down. And after three months of a skyrocketed price that we were absorbing, I had to choose, it's either my company or saving everybody money on their lights, because I'm paying for that bending over backwards. And it's just a display of what's going on the economy. But you know, you have these times in your life going back to entrepreneurship, these are the moments that make you and that's that's how I explained it to my company or to my team is these are the moments when others crack we rise, because we never gave up, we never stopped giving amazing customer service, we never whittled down on our quality, we're giving out a great product, same as you guys. And it might be a little ripple that you're going to recover. And especially getting into all these stores and all of this brand loyalty that you're going to acquire, you're going to grow and a your year later, we're going to look back at this episode and be like, Yeah, we got over it.
Jake Karls 31:16
Humans are resilient. The world is resilient. In the end, you've seen it over the last evolution of how many 1000s of years? I think that, yeah, we're gonna get over it. It's just when you're in the moment, you feel it so much. And when you get these trolls you feel hurt a little bit, which is normal, because you are human, and I am human. And you know, some people just don't have empathy. And I think that, yeah, we're gonna look back at this and say, this was part of the journey. This is part of chapter, whatever chapter you are, you're on your journey. And I think that it makes you stronger. Like, you know, we had to unite our team the other day, because there was just a lot of like demoralization of everything going on. And the electricity from the uniting was so powerful it brought, it's bringing us closer, and we're gaining this momentum, which is super exciting. And it's like, Fuck, I haven't felt that in two years. So it's like, you know, even though you're killing in terms of revenue last year, it's I didn't feel it. I didn't feel that energy. Right. So I think that yeah, we're all gonna get through it. And, again, the people that can withstand the pressure, the most will win will be most successful.
Mary Harcourt 32:21
The greatest companies were built in the worst timeframe. So I'm rooting for you guys. So let's talk manufacturing, you guys self manufacture, right?
Jake Karls 32:30
Yeah, we had no choice. So this wasn't something we wanted to do at the beginning. You know, in August 2018, we were making these bars, out of the squares out of my sister's condo, kitchen, and we would hand make them about 60 bars a day. And then, you know, usually in the food and beverage space. Most brands go to a third party manufacturer, they call them a co manufacturer or CO Packer. And there's a lot of them out there, there's a ton of them that do every product out there that you can imagine, if you go to the grocery store, I think 85% of the products are actually made by third party manufacturers, and then the companies just do the marketing and sales, right. So what we did was we actually went to 26 of the best bar manufacturers and across Canada, United States and Europe. And each one of them actually told us the same thing, they said that we cannot scale this product the way it is. So if you want to scale it, we're gonna have to invest in potentially custom machinery and nearing all this stuff that would be millions of dollars to our, into their facility. And or we got to change the product and do it so that their machines can build this kind of product, right. And, you know, we're a very innovative product cuz of the chocolate, the way we do our chocolate and stuff. And my sister came back one day discouraged after 26 them and said, You know what, screw it, we're gonna, we're gonna build our own factory, you know, we can figure it out, if they could land people on the moon, we're gonna figure out how to make this chocolate bar at scale. And she came back with a budget of like $3 million. And the government helped us out here where we are in Quebec, and we ended up building a factory or two and a half years later, that could support 90,000 bars per day. So you know, 60 million in revenue a year and we're starting to build a potential new factory in 2023, end of 23, that will be able to support about 150 to $200 million dollars a year in revenue of chocolate bars. So yeah, it was difficult to again, get when the herd goes one way we go the other way. And it's worked out to our benefit, but let me tell you, the stress, the hardships, the problems that we have with manufacturing, the labor shortages, everything, every gain something you happen so it's great and it's it's good and it's bad.
Mary Harcourt 34:34
I feel you that we manufacture in the USA with a contract manufacturer that produces strictly for us and I feel like every day there can't be something else that goes short. It will get a call. We're out of cardboard and we don't know when we're getting it back in we have reached reached out to 30 different vendors and we can't find any cardboard. There's a cardboard shortage. We ran out of screws one day like how do you run out of screws just go to the store but there are costs Made screw. We've run out of phone we've run, it's just like every day you think you can't, there's no way that one more thing could run out or be stressed. And sometimes things are just sitting because the carriers have delays. So even though it was ordered three and a half weeks ago, it should have been here on Tuesday. It won't get here until next Thursday. And going through that is something I think every single manufacturer in North America and honestly, probably the world at this point is going through and it's you just got to get through it.
Jake Karls 35:30
You got to keep pushing, you got to keep pushing, got enough fun with what you're going to do in life. Like seriously, like whatever you're going to do, whether it's you work somewhere or you're starting your own business, have fun with it, do what you love, when times get tough, like you got to really love what you do because that will keep you going with fuel.
Mary Harcourt 35:47
So we talked the whole time you guys have a podcast everyone needs to go listen to you have a product everyone needs to go buy. They can order it online, they can get it in a couple of stores you have you have a product, zip code location finder thing on your website, I typed in Austin found that it was a couple stores near me. So where can they find you? What's all your handles? Where can they contact you guys?
Jake Karls 36:07
So if you want to follow me, mine's Jake, Carlos, j, k, e. And then space ka RLS. On LinkedIn, I'm active on Instagram, Makhdum and tick tock. And then for the brand at midday squares is the handle on all of our platforms, Facebook, Instagram, LinkedIn, YouTube, we're starting now now in Tik Tok. So, yeah, and our podcasts on our website, or Spotify, Apple music everywhere. So like, check us out. And if you want the product, we're available online, or you'd like like Mary said, you can go on our website and check the Store Locator page, and we'll find the closest store to you. But when you get to the store, the kicker is that we're in the refrigerator. We're not where the other bars are. We're located in the fridge.
Mary Harcourt 36:49
Awesome. So you guys have a name that fits you so perfectly. Obviously it squares and there are a midday snack. Was that something that you easily stumbled on? Or was it hard to find a name for? You
Jake Karls 37:02
know, it was actually easy. And the reason why it was easy was because there was this company this is there is this company called five hour energy that has these like little like, cans of energy or knows what they are. And the reason why I like I don't I don't drink them. But the reason why I like the concept is because you know what you're getting, you're getting five hours of energy and with products, there's no education. For us. We really want to define what we are we are a midday snack, and it's a square format. So it kind of tells you what it is when you have it right. And so I think that that's the reason why we chose the name. And as we go, we're slowly moving towards MDs, because that's what our fans have been calling the brand. Nice. I love it.
Mary Harcourt 37:40
Well, thank you so much for spending your morning with me. I've had a blast talking to you. Like I said, we ordered squares. I can't wait for them to come in. I'm gonna go follow you on all your platforms and keep spreading the joy.
Jake Karls 37:51
I appreciate you so much, Mary. Thank you for having me and had a great conversation. Yeah,
Mary Harcourt 37:55
of course. Thank you. That wraps up today's episode. For more information on our guests. You can find them at Mary harcourt.com under the episodes tab. You can always find me on Instagram at Mary Harcourt underscore in app the cosmic glow light. I hope you enjoyed today's episode and many more to come
Welcome to Ready Set glow, a podcast where I interview the person behind the brand. We're gonna talk about what it took to get started, the lessons learned along the way, and the advice they have for you on your own journey. I'm your host, Mary Harcourt, founder and CEO of Cosmo glow. Today we're chatting with Jake from midday squares. They first launched in 2018. And only 20 months later celebrated their 1,000,000th Bar sold. That is a huge accomplishment for a new food industry brand in a saturated market. So how did they do it? We're gonna find out in today's episode, Jake shares how being transparent and vulnerable as a brand was a part of how the company ran since day one, we talk about creating brand loyalty, working with family and advice for entrepreneurs. Let's hear how it all got started. As the first functional chocolate bar. Everything a chocolate bar isn't an everything a protein bar wishes it was. Jake, welcome to the show. Let's hear about midday squares.
Jake Karls 1:10
Yeah, midday squares. I'm one of the cofounders of this company with my sister, my brother in law, we started in August 2018. And the idea was, we wanted to create a chocolate bar that had function. What I mean by that is had high fiber, high protein, good fats and a clean label, but also tasted absolutely delicious. And that was something that we had in mind. And what we did was we created it, and we launched in August 2018. And now fast forward almost four years later, it's wild, you know, it's been a wild, crazy journey. And I always like to say we call it midday squares for the reason that it's a midday snack. So imagine your 2pm craving for chocolate, you want something that tastes good, but you also want something that will carry you right through the afternoon. And that's what we built in their little square format. So that's a little bit about us.
Mary Harcourt 2:00
I love it. We know I bought these for my crew, because we have lunch and lunch is great. But sometimes you get that little like after lunch, food coma, and then around 230, you want something you don't really know what you want, it's a little too late for coffee, you don't really want to go eat a bunch of carbs and a bag of chips, but you kind of want something. So I ordered them. They haven't gotten there yet, but I'm super stoked to try them. Because I love how effective they are. It's clean ingredients. It's a little bit of sweet, a little bit of protein. And you know, if I can give my employee some brain food halfway through the day and get them to perform just a little bit better I am in for it.
Jake Karls 2:35
Ya know, the idea was simply based because we wanted an afternoon snack in that market. And it seemed like there was nothing really there. You know, you had your protein bars, you had your typical chocolate bars, but you didn't have a baby of the two. But that got rid of all the junk that's in protein bars. So like our focus was give our fans an absolutely delicious chocolate bar that satisfies that chocolate craving, but also give you benefits of approaching bar without feeling bloated without feeling like shit and actually getting yourself to the afternoon. And one thing our customers say and our fans say in our reviews is that it actually keeps them full. So we really focus on delivering on what we offer. We really care about that aspect.
Mary Harcourt 3:20
Yes, let's talk flavors, what kind of flavors do you offer.
Jake Karls 3:23
So we have three flavors. At the moment we have our original which is a fudge which is actually going to be called brownie batter brownie brittle very soon, we have an element crunch, which is basically like a crunchy Alman chocolate. And then our third flavor which our best seller is called peanut butter. And that is kind of like a healthier version of a Reese in my opinion. It's better. I've never tried it. So I'm allergic to nuts, but that's what our customers say. And then we're launching a cookie dough flavor as our fourth flavor in fall. Yeah,
Mary Harcourt 3:54
I think peanut butter is gonna be my that's my thing. I love Reese's Cup third, that's my go to dessert, or little snack for the day. So I think that's that's my that's where I'm going with it. So how did this all get started? You have an interesting story you guys blew up you're crazy successful. You've been a massive Instagram you work with your sister like what's How did this all get started?
Jake Karls 4:15
So first of all, family business is tough. And I don't recommend it unless they're your partners are meant to be your partners in business. And I think a lot of people like to take that path of working with family because it's family. But that is a very dangerous route to take unless you're meant to be as partner. So the story started when my sister who is the creator of the product, she was in the fashion world and she she had a line and fashion and she was making this snack this this chocolate snack for her husband, my brother in law who was in the software space, and he would crave like chocolate 2pm every single day and she's like I can make you something that's cleaner than everything on the market that tastes great and you won't feel crappy after having it. And so he she made it for fun because she's a foodie And he brought it to his office and everyone freaked for it. Everyone was loving it, like they wanted more and more. And it was this delicious chocolate snack that actually did what it said. And long story short, she ended up closing her fashion brand. Because it she had no more capital, actually. And she was just exhausted from the actual experience in that industry. And my brother in law ended up selling out of his company, and at a two year non compete. And they always wanted to work together on something, they always wanted to be partners on something and they both really loved food, like food was a passion of both of theirs. And so then started looking for different things in the food industry. What can they make better than some of the current markets, they checked out the morning OIC category, they checked in other categories, and they realized that they couldn't make something better in those things. And one day, my brother in law came out of the shower, and he opened up an email. And he read a report that showed that real chocolate, so darker chocolate above 55% made with cocoa butter, not palm oil was on a tear like 40 something percent year over year growth and that vegan proteins was on another tear at like 36% year over year. And then in that moment, the light bulb clicked everything made sense that Lesley, his my sister, her his wife was making a baby of these two massive growth categories, these massive saturate markets that were growing. And he realized that she has an innovation within this massive market of chocolate. And that was the moment they started to create the product and actually formulated to be more, you know, macro friendly, you know, commercial. And basically when they came to me in July 2018, after eight months of development, and they said, We need a third partner that's going to build this brand. And I was like, well, what's the product now? Like, it's this chocolate bar. And I tried it and I was freaking I was like, it's delicious. But I'm like, Do you guys know how busy the food industry is, you know, saturated the grocery store is there's three to 40,000 different products on a shelf. And I said, we're gonna have a hard time winning even if the product is unbelievable. How do we get it out there? How do we make the noise and they're like, well, that's your job. And I said no many times rejected them many times, then finally I caved. And the reason why I caved was I realized that if we take a different approach from every other food and beverage brand, and what I meant by that was I showed my partners on a slide a PowerPoint, I showed them the ratings, the TV ratings for keeping up with the Kardashians, I showed them the TV ratings for shark tank, and I show them the TV ratings for their social media following of Elon Musk. And I said if we take the three of these, and we make a baby a triangle with the three of these things, we can blow up from a community standpoint, which will create the awareness which will create the trial which will build fans. And then we will build a step out and shine bright in the grocery store, instead of spending millions and millions of dollars on trade marketing. And what that meant was I said, Let's make a reality show on entrepreneurship. Let's take the drama from the Kardashians of having a reality show of a family that's building a business. Let's take the aspect of entrepreneurship from Shark Tank which people love so much. But let's go so deep into the good, the bad, the ugly. And let's be bold like Elon Musk, where he you know, we speak out and we're not typical founders. We're not typical, you know, executives or CO CEOs, whatever it is. And that was the moment we launched. And we said we had a great fucking product, excuse my language. And we had an amazing marketing strategy that was just like, we're going to document everything and just share it like literally be the most transparent company, show breakdowns, show successes, show everything. And then things started just going. And it was like it was history from there. And we still do that exact strategy today.
Mary Harcourt 8:40
I love that. I mean, you're clearly the intricate part of the group and that's why they want to do so bad. They didn't take no as an answer. And here you are doing your job you can ask so that's awesome. Shark Tank is amazing. It's one of my favorite shows. Elon Musk is like my heroes. You guys are all up my alley. I am I'm already obsessed talking about an oversaturated market. That's the first thing I think of is to me it is a crazy oversaturated market, especially for protein bars. And I think chocolate How did you guys just kind of build your brand to be different? Like how did you overcome that?
Jake Karls 9:12
Mary I want to add into something about family business. I know I didn't get to it but we partnered because we are the best at what we do to complement each other. So what my sister is not good at I'm good at or my brother in law's not good at I'm good at so we also see. Yeah, and that's important. So we love each other as family but we also complement each other as a unique we call it a tripod. But I think something important is we see a business therapist once a week mandatory since day one. So since August 2018 We've been going to therapy together as three of us as partners to open communication, our leadership, our empathy, our perspectives understanding how to work with each other, because if we build this business $2 billion plus let's call it and and we end this business not loving each other or hating each other. It wasn't worth it. So we really focused on the priority of how do we stay so close as family, but how do we also optimize our partnership and not be afraid to have those hard conversations, be bold and actually get through this crazy pressure cooker journey. So I think that people should know that we invest right now. 75 to $100,000 in therapy a year. Now, some of our teammates are coming out with us, which is really exciting. But yeah, so that's for the family business part for the actual, you know, chocolate part. Yeah, chocolate is $140 billion a year. And the beauty of our chocolate is why we chose it was because not only do you have an innovative product within that saturated set of chocolate bars and protein bars, but chocolate is, is easy to teach anybody, you don't have to do it. Sorry, you don't have to do any teaching. It is just a love language. I could show chocolate in the UK, I could show chocolate to the United States, I could sell chocolate in Canada, in Asia, wherever. And everyone knows what it is. So we didn't have to go spend money on educating, we didn't put crazy ingredients that don't make sense. In our product. We put protein fiber, high fats, clean label and an amazing tasting chocolate bar. We compare ourselves to becoming a new age version of a chocolate conglomerate. And what I mean by that is, we don't we're not trying to sell the company in three to five years, we're trying to build what Maurice built what Hershey's belt what Mondelez has built over the last 100 years we're trying to do in the next 20 to 30 years. And the reason why we compare ourselves to them is not because we have seen products, we do not have the same products, we compare ourselves because of the impact and the actual size of the company that we want to become. And we want to do things like they've done. And I think that we have a true path to getting there over the next 2025 years. And we want to be not take them down but stand next them put our flag next them on the mountain and be that new version, that younger version of that chocolate company, a modern day chocolate company. And that's what we tried to do.
Mary Harcourt 11:56
I mean, that's the best description I've ever heard, because you took me from oversaturated to understand and there's actually a hole in the market. And I think you guys can fill that. I'm a Hershey girl I grew up in Pennsylvania Hershey was my life I had a season pass to the amusement park, I have written there a little damn ride so many times you get a free chocolate bar at the end, that I live and breathe chocolate. But as they've grown, they've also sold out a little bit and they lost that genuine flavor. And I think there is a huge hole in the market for somebody that is a fresh new labelled brand that has quality ingredients. I mean, that's exactly what you guys describe. So there you go.
Jake Karls 12:34
Yeah, I, you know, and mad respect to these businesses like Mars and Hershey's and Mondelez. And, you know, like, you know, we've had our struggles with them and stuff like that. But at the end of the day, they've built you know, the true founding principles and the core values they started with were truly inspiring. And they built something extremely impactful, that has had an impact on tremendous amounts of people around the world, I would say global. Now, the kicker here is, I think people are looking for something new in terms of product development in under chocolate, and also the way that the community is built. So for us, we're innovating on the way that we offer a chocolate bar, it's a new version of a chocolate bar, it's not the milk chocolate, it's not the high sweetened sugar chocolate, it's real food ingredients, it tastes good, it makes you feel good, it gives you energy keeps you full, so it adds that value. But then on top of that, we're building a brand on full transparency. So we're sharing everything. And that's what today's world we're seeing from Generation Z all the way to boomers want to actually be part of. So that's where I think we have this differentiation is obviously on product innovation, but also on the way that we're building the community, we might not be building it, you know, to the the level that they have built it yet, but over the next 20 to 25 years, I can assure you that mark my words today, whatever it is July 7 2022, or whatever it is to July 2022, we will be the next version of that. And I like to always tell people, if Hershey's or Mars were to start in 2022, they would look more like us than they look like themselves now. And I think that that's the indicator of where everyone's going in the world.
Mary Harcourt 14:14
So I saw you guys have a podcast I was on your website and talk a little bit about that because I feel like it is truly transparent and you can watch the entrepreneur journey from like, Hey guys, we have an idea to let's try this. Let's try that manufacturing all the ways to what it is now. Do you just have the podcast? Or do you have a YouTube channel? Like where do people buy into this community?
Jake Karls 14:34
So the podcast is something very special to us. We did we have one we had one season we just started our second season again last week actually just super exciting. But the whole idea of the podcast was it was a time for the three of us and my partner's my sister, my brother in law and I to sit down and actually go into real chat just like let's chat about a deep topic and go deep and actually have a fireside chat together. And what that does is we get so into Do it and we share. There's no boundaries, there's nothing, it's we're going to show you everything. If it's about fundraising, we're going to show you the shit stuff from it, we're going to show you the amazing stuff. If it's about, you know, the amount of bullets we're taking now, because of the price increase we made, we're going to talk about that. And I think what's beautiful about it is, it's relatable. It's real, it's not bullshit. It's not. It's none of that stuff. So what we do with that podcast is bring people along the actual mindset on how we're and the feelings we're going through. But for our community, we're, they're on LinkedIn with us, they're on Instagram with us. They're on Tik Tok now with us, and we're going to be investing a lot into the YouTube platform, going forward to have these like Docu series versions of what's going on in the business, you know, week to week or month to month. And given that like really like that low down. Because if you came to our office right now, Mary, you would see, we have cameras set up in every room, every area for recording purposes to create content. So our team, our marketing team is built from videographers, editors, producers, stuff like that. So the approach is, is that we treat this business like a TV business, like the entertainment world, not the CPG world. I think that that's what's allowing us to really create amazing content the community likes to be part of, we're almost like a Netflix entertainment for some of our fans a night.
Mary Harcourt 16:18
I love it. It's great. It's working. And I can't wait to buy it and just kind of follow up a little bit more meat as well going through a company that scaling incredibly fast. I can relate to every single episode title and go, Oh, God, we've been there. We're there. Now we're doing that we're almost there. So I Good luck to you guys. I hope it all pulls off. What's the future for midday? You you currently have just one product right in three flavors.
Jake Karls 16:41
Yeah, so our future is this stay true to this product line. For now we have a road a path to going to 100 million across North America. And then going global after with this functional chocolate bar that we call it. And we're going to have about six to seven flavors, different flavors. And we want to be known for that core, that core product line not to say in the future, that we won't do something under chocolate. But again, we are a chocolate company, our first product was a functional chocolate bar, we kind of like the Gatorade model or the power raid model, where they have a core group of products that drive older revenue. So we want to do that we have a long way to go in that space. And then from there, we'll see if we could acquire businesses in the chocolate world or we could keep growing under that. But function. Chocolate and clean ingredients is where we're heading with the company.
Mary Harcourt 17:29
I love it, there's room for that you guys got in Whole Foods, which is so incredible. I mean, congratulations on that you're a Canadian based company, but you're coming into the US Whole Foods is going to be great for that. What is that, like being a Canadian food based company coming into the US?
Jake Karls 17:47
It's extremely difficult. And the reason being is yes, we're both on the western civilization aspect. And you know, like very similar in a lot of things in terms of the countries, but we're very different and consuming behaviors. And what I mean by that is yes, we'd like the idea of the same stuff. So we like chocolate, we all like chocolate or we all like plant based stuff, or most people do. But then when you go into the specifics, the habits are different, that type of ingredients are different that you like. So Canadians and Americans actually have a lot of differences on the shopping experience and the retail level at the grocery stores the way that they place things, how they how they actually, you know, build out the stores. So I think that there's this misconception is you just go and launch the product in another country and say, Okay, leave it it's going to work no, you need to put tons of effort energy branding, building community work into the country that you're going to offer. So when we launched the US we launched sprouts actually, they were our first retailer now we're in available, you know, central markets were available at Whole Foods are available at Wegmans Fresh Direct aim is a lot of accounts. And it took a lot of work. And it's still taking a lot of work to pick up it takes a lot more to get people excited that never heard about it because our Canadian brand awareness barely transitioned over to the US and we have to almost restart that in the US and it's working but it's taking time, money and energy right. And I think a lot of brands think you just launch it and then let it go or invest a little bit. No, you need to put 180% of your energy and time and money into the new country.
Mary Harcourt 19:14
I mean, I believe that it seems so hard to get into a whole foods I mean all of those stores I've been to and personally love especially Wegmans I mean that's great. But I look at it as a huge accomplishment because it does require so much work and the right people and the right connections. And honestly trust in your brand knowing that people are gonna buy it like it go back and buy it again. tell their friends put it on social media tag that they're gonna use it bring it into the salon, tell everyone this is what I'm snacking on all day and go from there and watch it grow. But to me it's it's almost terrifying to break into a US market coming from a Canadian but you guys are doing it. So congrats to you.
Jake Karls 19:55
Yeah, no, it's been extremely difficult and we hired an amazing team out in the us, we started to build out that team, you know, different types of roles out there. And it's like I said, it's an investment, the whole thing is an investment. And if we hit it, we will be the next biggest chocolate company there, because the numbers that are translating are really high. But again, we're only in 3000 stores across Canada in the US together. And you know, in the refrigerator where we're located in the retailers, there's about 42,000 options of doors between Canada and the US, at minimum, at minimum. So we're willing 3000, we have a long way to go.
Mary Harcourt 20:30
Yeah, well, everyone listening, go buy some there at your local stores, you can also go online. And I was thinking coming from a salon industry, we take clients like 12 hours a day, there's always somebody that we're running over, there's always somebody showing up late and all of a sudden, this lunch break that huge ramped up is gone, this would be such a perfect snack to keep in the salon, you have two minutes to eat. And all of a sudden you got a pump of protein, you got that sweet green out of the way. And now you can go on about your day in a much happier and pleasant mood because I get hangry. And that reflects on my client. So I feel like this is the perfect snack. You guys should just go get some if they're not at your local Whole Foods, order them online. Where do you ship to? Do you ship worldwide? Or is it mostly just Canada and US right now.
Jake Karls 21:12
So right at the moment, we're shipping just Canada, in the United States, all over Canada and all over the United States. But we will one day be shipping globally. Again, we're focusing right now just Canada, US growth, the next country will be up to that in another country after that. And then keep going across though. As long as we stay in business. We're gonna be global.
Mary Harcourt 21:30
I love it. Hey, you know what, you got to start somewhere we're about to go global to I would have never imagined and it's super exciting. But it's like the where there's a will there's a way if you know what's gonna happen, it will happen.
Jake Karls 21:42
Exactly. You got to manifest you have conviction, and you have to never give up. I think that's the beauty.
Mary Harcourt 21:48
Yeah, that's a huge part. I mean, start is half the part and then never giving up as the other half. And then you'll get there. You guys have great brand you talked about brand earlier, your brand is rapidly growing, people are kind of buying it as a cult brand. They're following you through this. They're watching the transparency. How did you figure out where you're gonna go with your brand? Do you feel like it was more organic? Do you feel like it's a big push in media? Is it the in store locations, kind of all the above?
Jake Karls 22:14
I think it's a holistic approach. So I think having an amazing product is your most important thing. So you need product market fit, do not launch a product, if there's no market fit, get the rocket sales, the beginning, but they're going to come down because the returning customer will be there. That's number one. Number two is what the way we approached our brand was we didn't care about virality, we cared about adding value of content to the consumer, I like to call it the thesis was build fans, not customers, it was kind of like we took a rock band mentality. So we basically said, we are going to be like a rock band, we're going to think like when we're going to act like one. And basically what that means is we're going to create such relatability because rock bands have their music, but they also have their lifestyles, who they are as people the human side, which people fall in love with and become fans of and then, you know, we're three different characters here. So, you know, if you'd like one of us, you're likely gonna like the brand, right? So we took that approach. And it works. Because a lot of corporations don't humanize their brands, they don't put a face they don't or they put a random face that they pay as a celebrity endorsement, which does not work, in my opinion, in most cases for long term success. For us, we built ourselves and our team as the influencers. And what that does is again, it creates a fan base. And I think a lot of brands got to start looking at how do we approach fandom instead of you know, acquisition of customer think that's a big thing that we do differently,
Mary Harcourt 23:35
or Yeah, it's true. And I mean, you're a spokesperson here, you have so much energy that ripples through because now I'm pumped up and excited for your company to grow. I think us is a huge market for you guys. I can't wait to see you in more stores. What advice do you have for somebody that wants to take their small idea and grow it into a larger scale like you guys have?
Jake Karls 23:56
I think the most important thing for any entrepreneur out there that starting a business or wants to is you need to be able to withstand pressure. Yeah, you know, entrepreneurship, unfortunately gets portrayed as glorified. You know, flowers, this company sold for 500 million. They don't show you the 30 years that went into that. They don't show you the hardships. The difficulties in Shark Tank is an amazing show. Don't get me wrong. It's inspired a lot of entrepreneurs and people. But what it doesn't show is a lot of the actual failures and it's minimal and it's very surface level. I think what what you need to know if you're going into business is yes, it is really hard. It is a lonely journey. It is the most rewarding journey you can be on but it is lonely. At times. I feel depressed. Personally, I feel sad. I feel alone even though I talked to 1000s of people. And I think it's hard to relate now. If you can withstand pressure for a very long time, and you can have conviction and follow your gut. I believe you will be successful in anything you launch. I think those are the main things And, and never giving up, you know, the we're going through a change right now and operational change which has shocked the company and has created a tax like we've never seen from everything possible. You know, we raised prices, we had no choice we changed ingredient decks, we had a lot of things that happen. And you know, we got attacked, but it's so hard to go through, because you got all this positivity for three and a half years. And then right now you have all this negativity surrounding and, and we're dealing with that and we cried the other day, all three of us were just like, holy shit, this is crazy. And the reason, the reason why we're gonna get out of this and gain back our momentum is because we've learned to appreciate the pressure learns how to deal with it, and actually withstand it, even though it is the hardest thing in the world. And I think that that's my advice to you is have conviction, be able to withstand pressure, and trust your gut.
Mary Harcourt 25:54
I love it. I mean, I agree with that 1,000% is building that resiliency, getting that grit, you have to just keep going. So let's talk supply chain, you guys mentioned you have a price increase, we recently had a REIT raise our prices as well due to supply chain stressors, and just the economy. Everything's going up. And we felt that what was that process like for you guys having your supply chain a little stress, the prices increased? How would you work your way through that.
Jake Karls 26:23
So we started eight months ago, working on this stress supply chain, realizing that our two square pack, we were going to have to raise the prices to uh, you know, instead of it being 399, it was gonna have to be 499 or 549, which is way too high. And it's not where we want to be as a business. For us. We want to be available for everybody. So we want to be in a $2 range two to $3 range max. And, and, yeah, so we started working on what strategies or models can we do, and we basically had no choice but to change the one square changed some of the ingredients and increase the prices, instead of it being $1.99. For one square, it's 249. And we made a video about this, we shared the transparency of why here's the ingredients that went up in cost. Here's what what we didn't, this was a question of not making more money, it had nothing to do with that it actually had to do with survival. If this business wants to exist in three months, this is the decision, we have to make the hard decisions that we have to make. And we made them and rip the band aid off. And we launched it about June, in mid June. And it's been disastrous. Because people humans don't like change. And people are angry, and they're suffering right now, from a lot of shit going on in the world. Unfortunately, you know, there's all kinds of rock things that are happening. And they're, they take it out on companies like ours, for example, who has a very positive brand, extremely transparent, vulnerable, authentic, great product, and they'll they'll be mad. And I said to my teammates, I said, we gotta be okay with this. This is life, you know, it's there's actually a fringe minority that speak up and try to attack or get mad and angry, and a lot of time actually has nothing to do with what you're doing. It has to do with what they're going through. Right. I think that we passed this increase, we we stayed committed to it, we're staying, we're dealing with the pressure now. But we're getting back on momentum, you know, and I think that it was the only decision that had to be made to keep this company alive. So, you know, if someone can't appreciate that, then then they we don't need them as a fan or a customer because again, that's, you know, we're humans, we're all humans here, you know, and obviously, there's bad apples that take advantage of this stuff. But at the end of the day, this is real real life, there is a crisis, you have a war, you have political, you know, turbulence, you have inflation, gas prices, you have groceries going up, you have everything changing. So it's like, you know, some things just need to need to happen. I think the transparency helped us but I think still, we're still dealing with a little bit of travelers coming through that we have to deal with always
Mary Harcourt 28:45
gonna have those Exactly. Like you said, it happens with us too. But I think it's the ripple effect.
Jake Karls 28:52
It's the ripple of everything that's happening, like think that humans will have it will come back together eventually. But I think it'll just take time, you know, you came up with pandemic, people were living in their house, they didn't move. You know, it was, it was crazy. They're isolated their minds, you know, the whole thing. So, I think there's a lot of changes happening. And the one thing I could tell you is, I always said about internet trolls and trolls and etc. I said, My friend told me it's like they these trolls actually want to love you. They really do. They just don't know how and the way that they're expressing it is in hate or anger. And you just need to teach them how to love love you and if you can't, then you got to let them go. But it's like for me like I'm inspired by Elon Musk because he doesn't care and what he does is he has fun with it. He's good vibes but he's not bad vibes isn't doesn't attack you if he makes it a lightful experience right? The other day I just checked one of the emails my customer experience team got and it said Go kill yourself because he was angry about the price increase. And ya know, and I posted about it and got virality on my Instagram and people were like I didn't post the person's name obviously but I showed that this is the world this is something that we're going through, and it's real. We were there for that person. And we try to, you know, help and relate. And but, you know, at the end of the day, again, people are suffering, unfortunately. And the lash out.
Mary Harcourt 30:12
Yeah. And I think it's gonna happen more I know with us, we just had a price increase as well. And we really took it internally for a long time. I mean, I lost 1000s upon 1000s, upon 1000s of dollars, waiting for the prices to go back down. And after three months of a skyrocketed price that we were absorbing, I had to choose, it's either my company or saving everybody money on their lights, because I'm paying for that bending over backwards. And it's just a display of what's going on the economy. But you know, you have these times in your life going back to entrepreneurship, these are the moments that make you and that's that's how I explained it to my company or to my team is these are the moments when others crack we rise, because we never gave up, we never stopped giving amazing customer service, we never whittled down on our quality, we're giving out a great product, same as you guys. And it might be a little ripple that you're going to recover. And especially getting into all these stores and all of this brand loyalty that you're going to acquire, you're going to grow and a your year later, we're going to look back at this episode and be like, Yeah, we got over it.
Jake Karls 31:16
Humans are resilient. The world is resilient. In the end, you've seen it over the last evolution of how many 1000s of years? I think that, yeah, we're gonna get over it. It's just when you're in the moment, you feel it so much. And when you get these trolls you feel hurt a little bit, which is normal, because you are human, and I am human. And you know, some people just don't have empathy. And I think that, yeah, we're gonna look back at this and say, this was part of the journey. This is part of chapter, whatever chapter you are, you're on your journey. And I think that it makes you stronger. Like, you know, we had to unite our team the other day, because there was just a lot of like demoralization of everything going on. And the electricity from the uniting was so powerful it brought, it's bringing us closer, and we're gaining this momentum, which is super exciting. And it's like, Fuck, I haven't felt that in two years. So it's like, you know, even though you're killing in terms of revenue last year, it's I didn't feel it. I didn't feel that energy. Right. So I think that yeah, we're all gonna get through it. And, again, the people that can withstand the pressure, the most will win will be most successful.
Mary Harcourt 32:21
The greatest companies were built in the worst timeframe. So I'm rooting for you guys. So let's talk manufacturing, you guys self manufacture, right?
Jake Karls 32:30
Yeah, we had no choice. So this wasn't something we wanted to do at the beginning. You know, in August 2018, we were making these bars, out of the squares out of my sister's condo, kitchen, and we would hand make them about 60 bars a day. And then, you know, usually in the food and beverage space. Most brands go to a third party manufacturer, they call them a co manufacturer or CO Packer. And there's a lot of them out there, there's a ton of them that do every product out there that you can imagine, if you go to the grocery store, I think 85% of the products are actually made by third party manufacturers, and then the companies just do the marketing and sales, right. So what we did was we actually went to 26 of the best bar manufacturers and across Canada, United States and Europe. And each one of them actually told us the same thing, they said that we cannot scale this product the way it is. So if you want to scale it, we're gonna have to invest in potentially custom machinery and nearing all this stuff that would be millions of dollars to our, into their facility. And or we got to change the product and do it so that their machines can build this kind of product, right. And, you know, we're a very innovative product cuz of the chocolate, the way we do our chocolate and stuff. And my sister came back one day discouraged after 26 them and said, You know what, screw it, we're gonna, we're gonna build our own factory, you know, we can figure it out, if they could land people on the moon, we're gonna figure out how to make this chocolate bar at scale. And she came back with a budget of like $3 million. And the government helped us out here where we are in Quebec, and we ended up building a factory or two and a half years later, that could support 90,000 bars per day. So you know, 60 million in revenue a year and we're starting to build a potential new factory in 2023, end of 23, that will be able to support about 150 to $200 million dollars a year in revenue of chocolate bars. So yeah, it was difficult to again, get when the herd goes one way we go the other way. And it's worked out to our benefit, but let me tell you, the stress, the hardships, the problems that we have with manufacturing, the labor shortages, everything, every gain something you happen so it's great and it's it's good and it's bad.
Mary Harcourt 34:34
I feel you that we manufacture in the USA with a contract manufacturer that produces strictly for us and I feel like every day there can't be something else that goes short. It will get a call. We're out of cardboard and we don't know when we're getting it back in we have reached reached out to 30 different vendors and we can't find any cardboard. There's a cardboard shortage. We ran out of screws one day like how do you run out of screws just go to the store but there are costs Made screw. We've run out of phone we've run, it's just like every day you think you can't, there's no way that one more thing could run out or be stressed. And sometimes things are just sitting because the carriers have delays. So even though it was ordered three and a half weeks ago, it should have been here on Tuesday. It won't get here until next Thursday. And going through that is something I think every single manufacturer in North America and honestly, probably the world at this point is going through and it's you just got to get through it.
Jake Karls 35:30
You got to keep pushing, you got to keep pushing, got enough fun with what you're going to do in life. Like seriously, like whatever you're going to do, whether it's you work somewhere or you're starting your own business, have fun with it, do what you love, when times get tough, like you got to really love what you do because that will keep you going with fuel.
Mary Harcourt 35:47
So we talked the whole time you guys have a podcast everyone needs to go listen to you have a product everyone needs to go buy. They can order it online, they can get it in a couple of stores you have you have a product, zip code location finder thing on your website, I typed in Austin found that it was a couple stores near me. So where can they find you? What's all your handles? Where can they contact you guys?
Jake Karls 36:07
So if you want to follow me, mine's Jake, Carlos, j, k, e. And then space ka RLS. On LinkedIn, I'm active on Instagram, Makhdum and tick tock. And then for the brand at midday squares is the handle on all of our platforms, Facebook, Instagram, LinkedIn, YouTube, we're starting now now in Tik Tok. So, yeah, and our podcasts on our website, or Spotify, Apple music everywhere. So like, check us out. And if you want the product, we're available online, or you'd like like Mary said, you can go on our website and check the Store Locator page, and we'll find the closest store to you. But when you get to the store, the kicker is that we're in the refrigerator. We're not where the other bars are. We're located in the fridge.
Mary Harcourt 36:49
Awesome. So you guys have a name that fits you so perfectly. Obviously it squares and there are a midday snack. Was that something that you easily stumbled on? Or was it hard to find a name for? You
Jake Karls 37:02
know, it was actually easy. And the reason why it was easy was because there was this company this is there is this company called five hour energy that has these like little like, cans of energy or knows what they are. And the reason why I like I don't I don't drink them. But the reason why I like the concept is because you know what you're getting, you're getting five hours of energy and with products, there's no education. For us. We really want to define what we are we are a midday snack, and it's a square format. So it kind of tells you what it is when you have it right. And so I think that that's the reason why we chose the name. And as we go, we're slowly moving towards MDs, because that's what our fans have been calling the brand. Nice. I love it.
Mary Harcourt 37:40
Well, thank you so much for spending your morning with me. I've had a blast talking to you. Like I said, we ordered squares. I can't wait for them to come in. I'm gonna go follow you on all your platforms and keep spreading the joy.
Jake Karls 37:51
I appreciate you so much, Mary. Thank you for having me and had a great conversation. Yeah,
Mary Harcourt 37:55
of course. Thank you. That wraps up today's episode. For more information on our guests. You can find them at Mary harcourt.com under the episodes tab. You can always find me on Instagram at Mary Harcourt underscore in app the cosmic glow light. I hope you enjoyed today's episode and many more to come