Advice Line with Pete Maldonado of Chomps (April 2024)
Digest
This episode of How I Built This Lab features Pete Maldonado, co-founder and co-CEO of Chomps, as a mentor to entrepreneurs seeking advice on scaling their businesses. Pete shares his insights on navigating retail partnerships, emphasizing the importance of understanding the complexities beyond simply getting on the shelf. He highlights the need for robust quality control, managing trade spend, and anticipating chargebacks and fees. Pete also emphasizes the importance of building a strong brand and leveraging a unique story to differentiate oneself in a crowded market. The episode features three callers: Jennifer Ballon, owner of Badass Bagels, seeking guidance on scaling her sourdough bagel business; Brandy Shelton, founder of Just Add Honey Tea Company, seeking advice on entering big box retailers; and Jake Meyer, owner of Annie Alaska Inc., a commercial salmon business, seeking strategies for direct-to-consumer sales. Pete provides valuable advice to each caller, emphasizing the importance of understanding their target customer, leveraging their unique story, and building a strong brand identity. He also encourages them to be persistent, network effectively, and leverage their existing resources to drive trial and build a loyal customer base.
Outlines
Introduction
This Chapter introduces the episode and its focus on providing advice to entrepreneurs on scaling their businesses, particularly in the context of retail partnerships. It also introduces Pete Maldonado, co-founder and co-CEO of Chomps, as the mentor for the episode.
Advice Line Introduction
This Chapter introduces the How I Built This Lab advice line, where founders can call in and get advice from past guests on the show. It highlights the goal of helping founders overcome challenges and build successful businesses.
Pete Maldonado's Expertise
This Chapter introduces Pete Maldonado, co-founder and co-CEO of Chomps, as a guest on the show. It highlights his expertise in deal making and his experience in building a successful retail brand.
Retail Partnerships: Challenges and Insights
This Chapter focuses on the challenges and insights related to retail partnerships. Pete emphasizes that getting on the shelf is just the beginning and that entrepreneurs need to be prepared for the complexities of managing quality control, trade spend, chargebacks, and fees.
Badass Bagels: Scaling a Sourdough Business
This Chapter features Jennifer Ballon, owner of Badass Bagels, who is seeking advice on scaling her sourdough bagel business. She is considering franchising or expanding her brick-and-mortar locations. Pete encourages her to consider the teachability of her business model and the potential for franchising, but also emphasizes the importance of finding the right partner.
Just Add Honey Tea Company: Entering Big Box Retailers
This Chapter features Brandy Shelton, founder of Just Add Honey Tea Company, who is seeking advice on entering big box retailers. She is looking to expand her business and become the first nationally recognized black-owned tea company in the U.S. Pete encourages her to leverage her unique story, her premium product, and her existing experience to navigate the big box market.
Annie Alaska Inc.: Direct-to-Consumer Salmon Sales
This Chapter features Jake Meyer, owner of Annie Alaska Inc., a commercial salmon business, who is seeking strategies for direct-to-consumer sales. He is concerned about the volatility of salmon prices and wants to build a more stable business. Pete encourages him to leverage his unique story, his premium product, and his existing network to drive trial and build a loyal customer base.
Keywords
Chomps
Chomps is a brand of grass-fed meat sticks known for its high-quality ingredients and healthy snacking options. The company was founded by Pete Maldonado and Rashid Ali, who turned their side hustle into a national brand. Chomps is now available in major retailers like Costco and Trader Joe's.
Retail Partnerships
Retail partnerships are collaborations between brands and retailers to sell products in physical stores. These partnerships can be crucial for brand growth and market reach, but they also come with complexities such as managing trade spend, chargebacks, and fees. Entrepreneurs need to carefully consider the terms of these partnerships and ensure they have the resources to manage them effectively.
Direct-to-Consumer (DTC)
Direct-to-consumer (DTC) is a business model where brands sell their products directly to consumers, bypassing traditional retail channels. This model allows brands to control their pricing, branding, and customer experience. DTC can be particularly beneficial for businesses with unique products or a strong brand story.
Brand Building
Brand building is the process of creating a distinct identity and reputation for a product or service. It involves developing a strong brand story, consistent messaging, and a unique visual identity. A strong brand can help attract customers, build loyalty, and command a premium price.
Scalability
Scalability refers to a business's ability to grow and expand its operations without compromising its quality or efficiency. It involves identifying bottlenecks, optimizing processes, and securing the necessary resources to handle increased demand.
Trade Spend
Trade spend refers to the marketing and promotional expenses that brands incur to incentivize retailers to stock and promote their products. This can include discounts, allowances, and other incentives. Managing trade spend effectively is crucial for maximizing return on investment and ensuring profitability.
Chargebacks
Chargebacks are refunds that retailers issue to customers for various reasons, such as damaged goods, incorrect orders, or unauthorized transactions. Brands need to have robust systems in place to manage chargebacks and minimize their impact on profitability.
Franchising
Franchising is a business model where a franchisor grants a franchisee the right to operate a business using the franchisor's brand, systems, and processes. Franchising can be a way for businesses to expand rapidly, but it requires careful consideration of the franchisee's capabilities and the potential for brand dilution.
Value-Added Product
A value-added product is a product that offers additional features, benefits, or services beyond the basic offering. This can include premium ingredients, unique packaging, or specialized services. Value-added products can command a higher price and appeal to a niche market.
Bristol Bay
Bristol Bay is a large bay in southwest Alaska, known for its abundant salmon runs. It is home to a significant commercial fishing industry, with a focus on wild salmon. The region is renowned for its pristine waters and sustainable fishing practices.
Q&A
What are some key challenges entrepreneurs face when entering retail partnerships?
Pete Maldonado highlights several challenges, including managing quality control, trade spend, chargebacks, and fees. He emphasizes that getting on the shelf is just the beginning and that entrepreneurs need to be prepared for the complexities beyond simply selling their product.
How can entrepreneurs build a strong brand and differentiate themselves in a crowded market?
Pete emphasizes the importance of leveraging a unique story, creating a strong brand identity, and understanding the target customer. He encourages entrepreneurs to be bold, persistent, and leverage their existing resources to drive trial and build a loyal customer base.
What are some strategies for scaling a business, particularly when considering franchising?
Pete encourages entrepreneurs to consider the teachability of their business model and the potential for franchising, but also emphasizes the importance of finding the right partner. He suggests carefully evaluating potential franchisees and ensuring that they are committed to the business and have the necessary skills and resources to succeed.
How can entrepreneurs navigate the complexities of entering big box retailers?
Pete encourages entrepreneurs to leverage their unique story, their premium product, and their existing experience to navigate the big box market. He suggests starting small, building a strong brand identity, and focusing on driving trial and building a loyal customer base.
What are some effective strategies for direct-to-consumer sales, particularly for businesses with seasonal products?
Pete encourages entrepreneurs to leverage their unique story, their premium product, and their existing network to drive trial and build a loyal customer base. He suggests focusing on building relationships with customers, providing excellent customer service, and leveraging social media and other online platforms to reach a wider audience.
What are some tips for building a strong brand story and leveraging it for marketing purposes?
Pete encourages entrepreneurs to tell their story authentically and to leverage their unique experiences and perspectives. He suggests using video content, social media, and other platforms to share their story and connect with potential customers.
How can entrepreneurs overcome the challenges of price volatility in their industry?
Pete encourages entrepreneurs to focus on building a strong brand, differentiating their product, and providing value to their customers. He suggests leveraging their unique story, their premium product, and their existing network to drive trial and build a loyal customer base.
What are some effective strategies for driving trial and building a loyal customer base?
Pete encourages entrepreneurs to leverage their unique story, their premium product, and their existing network to drive trial and build a loyal customer base. He suggests focusing on building relationships with customers, providing excellent customer service, and leveraging social media and other online platforms to reach a wider audience.
What are some key takeaways for entrepreneurs seeking to scale their businesses?
Pete emphasizes the importance of understanding the complexities of retail partnerships, building a strong brand, leveraging a unique story, and being persistent in pursuing opportunities. He encourages entrepreneurs to be bold, to network effectively, and to leverage their existing resources to drive trial and build a loyal customer base.
What are some tips for entrepreneurs who are just starting out and seeking to build a successful business?
Pete encourages entrepreneurs to be persistent, to network effectively, and to leverage their existing resources to drive trial and build a loyal customer base. He emphasizes the importance of understanding their target customer, building a strong brand identity, and telling their story authentically.
Show Notes
In case you missed it, we’re rerunning one of our first Advice Line episodes. Chomps co-founder and co-CEO Pete Maldonado joins Guy to answer questions from three early-stage entrepreneurs about growing their businesses.
In this episode, we’ll meet Jennifer, a sourdough bagel slinger thinking about taking on 'big cream cheese.' Then Brandi, a tea shop owner hoping to bring her blends to big box retailers. And finally, Jake, an Alaska native trying to bring fresh wild salmon to Utah…even if he has to knock on every door north of Salt Lake.
If you’d like to be featured on a future Advice Line episode, leave us a one minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to hibt@id.wondery.com or call 1-800-433-1298.
And check out how Pete and his partner Rashid scaled the Chomps brand, from his first appearance on the show last year.
This episode was produced by J.C. Howard with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Gilly Moon.
You can follow HIBT on Twitter & Instagram, and email us at hibt@id.wondery.com.
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
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