Mid-Day Squares’ shameless journey to change what it means to be a modern day chocolate conglomerate
Mid-Day Squares isn’t a traditional chocolate business: the CPG industry knows it, and entrepreneurs hope to learn from its whirlwind path to a multi-million dollar business glorified by an enthusiastic fan base in full swing. boom.
the Montreal confectioner, best known for its chilled chocolate bars which come in three different varieties – Fudge Yah, Almond Crunch and Peanut Butta – coupled with the exuberance of its founding team reality TV-show on Instagram and frequent social media activity, reportedly sold 325,000 chocolate bars in June, exceeding the total number of bars sold in its entire first year.
These three SKUs, which are available from 1,600 North American retailers, have also helped the company achieve $ 10 million in revenue to date, 40% of which is from direct-to-consumer sales.
Total transparency on the entrepreneurial journey
Mid-Day Squares’ growth trajectory and ultimate goals are crystal clear: with a $ 6.5 million funding round recently raised from investors including Boulder Food Group, Selva Ventures, Harlo Capital and Mike Fata, along with additional $ 3 million in funding through the local government of Quebec, the company is looking to quickly expand south of the border in 2021 with already secure lists from Sprouts and Whole Foods, and aspires to become one of the region’s largest snacking players with expected sales of $ 100 million over the next five years.
“We’ll be a conglomerate,” said Jake Karls, a fashion industry veteran who helped found Mid-Day Squares with his sister Lezlie Karls and husband Nick Saltarelli, and has since become the main character of the virility of the brand.
Unlike other traditional food and beverage brands, Mid-Day Squares relies on full transparency that allows consumers to follow the journey of its founding members. “Kraft was created by a human, and this human looked like us. But now it’s a big conglomerate, and you don’t know who runs Kraft, ”Ms. Karls said.
“We never want Mid-Day Squares to feel like this, even when we become a conglomerate, we want you to know us every step of the way,” she said, noting how much of creating tribalism by taking lessons from brands such as Nike and Lululemon is the main strength of the company that has helped attract a multitude of investments.
Kiva Dickinson, Co-Founder and Managing Partner of Selva Ventures, stressed how quickly he sympathized with the Mid-Day Squares team during their first meeting in March 2020. Dickinson said: “The Mid-Day Squares team are ready to be themselves shamelessly. in front of the camera in front of thousands of people. They show their community everything, including the misadventures and emotional roller coasters that come with the entrepreneurial journey.
“Exposing themselves the way they do can be scary, but it invites a human connection with your consumer that a lot of people crave.”
Seize opportunities in a saturated market
However, that wasn’t necessarily what Mid-Day Squares had planned four years ago.
In fact, its launch story sounds too familiar and even a little generic: Saltarelli, who ran a software company, was a junk food eater. Ms Karls, who was his girlfriend and roommate at the time, wanted to make Saltarelli healthy alternatives to KitKat and Snickers using herbal ingredients. After learning how plants and chocolate are growing exponentially through market research, the duo decided to market a product that can effectively capitalize on these two categories.
“We knew there was one thing missing, and that was Jake,” Ms. Karls told me. “Jake was working on a [now defunct] clothing company called Chase & Hunter. It didn’t work out, but one thing that was so crazy and powerful was that it was able to create hype around a brand and get people excited about that community.
Then it took three months to convince Mr. Karls of their chocolate business idea, “as if we were convincing Madonna to quit her tour,” said Saltarelli, citing the former’s initial concerns about a category. saturated where competition was further increased by brands such as Hu Chocolate and Lily’s Sweets, recently acquired by Mondelēz and Hershey, respectively.
Mr Karls said: “When you went deep you could see there was a lot of open water where no one was drawing the combination of the two. [plant-based and chocolate]. So, we jumped on this gap like sharks. We knew we had longevity because we hadn’t chosen a niche. Chocolate is a $ 140 billion market … there are a lot of opportunities to be seized by making changes in this saturated space.
Making chocolate by hand was easy at first, but scaling up with co-makers has proven to be a major challenge due to Mid-Day Squares’ unique product format of what Saltarelli described a day as a “Hu Chocolate Bar Plated on a Perfect Bar,” forcing the team to build their own production facility which is currently capable of making 90,000 bars per day.
“After meeting 26 co-packers across North America, the common thread was that they wanted us to change our recipe and that was a ‘categorical no’ for us,” Ms. Karls said. “It’s amazing to have control of your own manufacturing, so that you can control the quality and own your process. “
As Mid-Day Squares begins to roll out in the United States, the company also hopes to locate its future manufacturing facilities near distribution and shipping centers in major metropolitan areas. “The goal would be to build these micro-factories across North America as needed,” Karls explained.
Instagram goes public
The expansion of Mid-Day Squares is proving effective thanks to its online strategy. Behind these quirky and entertaining Instagram posts showing dances, production teams, and even founders revealing their vulnerabilities is a team of social media strategists closely monitoring their engagement with followers, which in turn will help the team to decide how to better target consumers.
“The concentration of followers that Instagram provides on a city basis gives us a very good indication of the strength of the brand in this area,” said Saltarelli. “It allows us to decide where to do our distribution. We are waiting for a specific threshold to launch physical retail in a city. “
Rather than counting the number of likes or views, the ultimate KPI of these social media activities is whether they add brand value, according to Karls, “because if you don’t pay to play, you really have no control, which is why you should always take your point of view with a grain of salt. ”
As the buzz continues to grow about a possible Mid-Day Squares IPO in the coming years, the team said the IPO is an overly romantic fundraiser that is supposed to reward consumers who believe in their missions, highlighting how the current challenge is being addressed. “Blitzscaling” that has affected the business infrastructure of Mid-Day Squares, which means that the company must constantly find new resources to maintain its capacity.
“Our dream someday,” Mr. Karls said, “is to have a destination where refrigerated snacks are placed so that the consumer can buy them easily, and for us to become an impulse buy, a convenience buy, at the same time. instead of a single listed item. “