Area snack company chews on some bold moves

Conventional wisdom with food and beverage companies — especially in upstart brands — is to never take too big a bite out of your marketing budget. Customers can be fickle, and there’s always another brand ready to snag shelf space.

Naples-based Chomps, makers of a variety of meat snack sticks, from original beef to jalapeño turkey, went against that wisdom. At the height of the pandemic, when lockdown orders were put in place nationwide, the company essentially shut off its entire marketing platform. That included Facebook, Instagram, search engine optimization and cultivating and paying brand influencers. “We went dark,” Chomps co-Founder and CEO Pete Maldonado says. “All of it was turned off for period of time.”

That lasted about two months, most of April and May. But the decision, rather than handcuff Chomps or detract from customer awareness, actually was a win for two reasons. One, Maldonado says the company didn’t have to worry about the awkward optics of advertising meat sticks during a pandemic. And two, notably, the decision saved the company a hefty sum — into the seven figures, Maldonado says. That’s the difference, he adds, between a profit and running at a loss during the crisis.

The marketing decision was one of several big choices Maldonado made with Chomps, founded in 2012, to guide the business through the pandemic. The 18-employee company, after two years of growing revenue at least 60% a year, to $34.58 million in 2019, will likely have a slightly slower growth rate in 2020, Maldonado projects. It’s now approaching the fourth quarter, with $50 million in run rate revenue a reasonable goal.

‘It was a major spike. There was some real surge buying going on.’ Pete Maldonado, Chomps
 

The fast and large growth track at Chomps makes the company, under the LLC We Are the Chompians, a major player in the fragmented niche meat-based snack sector, undergoing a consolidation phase.  That market, on a global scale, has grown from $3.75 billion in 2015 to $7.4 billion in 2018, according Allied Market Research. It’s expected to reach $11.3 billion by 2026, the firm adds in a report, with North America and Europe the main growth spots.

The Chomps coronavirus pandemic survival story starts out the way it does for many other companies in the region: Things were going gangbusters the first nine weeks of 2020. And, early going in the pandemic, sales ballooned. “It was a major spike,” Maldonado says. “There was some real surge buying going on.”

By April, Maldonado says, “it was like the rug was pulled out from under us.” Sales cratered for two months — particularly in grocery stores. One of the issues was most of the grocery stores that carry the product were hyper-focused on essentials, such as paper towels and toilet paper, in the spring. So a product like Chomps meat sticks was left out of trucks, and then, in turn, the snacks left in the stores would sell out, leaving shelves empty. Maldonado understood the predicament. “People can live without Chomps,” he says, “but they can’t live without toilet paper.”

The sales slowdown coincided with the marketing shutdown. At that point, Maldonado and the team instead focused on e-commerce, utilizing a key lesson he’s relearned through this process: go-to market diversification. “We had a major uptick in e-commerce, and that saved us,” Maldonado says, adding e-commerce sales during the pandemic are up by at least 50%. “You need to appreciate and understand all the channels where you could sell products.”

That diversification carries over into how Chomps aims to position the meat sticks in the marketplace. For most of the company’s life, the goal was to create a brand around selling a product to protein-starved people on the go. Now the company is looking at Chomps meat sticks as a kitchen-based essential, something eaten on its own or as a salad topper or other meal add-ons, a noncook protein. One of the new marketing pieces is a video of Maldonado and his 3-year-old preparing dinner with Chomps. “We want to go where our customers are,” Maldonado says. “We want to be a pantry staple.”

One positive development out of the pandemic was time to renew the focus on landing more grocery retail accounts. The company, all through video-based sales pitches, recently signed deals to put Chomps in Walmart, Kroger’s, Sprouts and Whole Foods Global. Those stores complement other chains it’s already in, including Trader Joe’s, Safeway and Winn-Dixie. Combined with the new panty-staple focus, Maldonado is excited for 2021. “We are gearing up for a massive year next year,” he says.

That said, one large grocery chain — Chomps’ Moby Dick — has eluded the company: Publix. The company has met with the Lakeland grocer several times and in late August was preparing for another session in early September. “People ask me all the time how come we are not in Publix [because] we are a Florida-born company,” Maldonado says. “But we still haven’t gotten them.”

(This story was updated to reflect that Chomps products are also in Sprouts and the fourth quarter projections are for run rate revenue.)