In this episode, we meet Jake Karls, the co-founder and "rainmaker" at Mid-Day Squares and resident Social-Personality. He builds relationships and makes noise.
Mid-Day Squares manufacture Functional Chocolate Bars: Everything a chocolate bar isn't, everything a protein bar wishes it was.
We will learn how Jake make’s it rain via making friends online and get deep insight into how this hot health snack bar went from modest door-to-door beginnings to a nationwide launch in Target on track to doing $20M in sales.
Jake’s sister, Lezlie, was making a “better for you snack” his my brother-in-law Nick. He was eating chocolate every day and would feel like crap after eating it. They realized they had a huge opportunity after reading reports on high-quality dark chocolate and vegan protein trends.
Jake came in as a co-founder to focus on brand, community, and hype. Instead of doing traditional CPG marketing, Jake modeled the entertainment world. That meant making a baby of Keeping up With the Kardashians and Shark Tank. And sharing it all online for the world to see to drive interest in their functional chocolate bar.
Jake’s role is solely focused on building relationships and community for Mid-Day Squares.
For example, to get into Whole Foods, Jake would befriend the team there - genuinely and with no agenda. Week to week, he’d make new friends on social, FaceTime, and even fly out to hang out with them. And when his sales team says, “Hey, we need to get into Whole Foods.” He has the relationships ready to go.
He builds connections every day via social media and showing up in real life.
Jake starts his day with ideating and posting on LinkedIn and Instagram. And then engaging with his community - messaging, responding to comments, sending videos, etc.
After that, he moves on to calls and cold outreach to people who’d be good friends and partners of Mid-day Squares. But focus on friendship, before business transactions.
He travels ~40% of the year to meet all the friends he makes on social. And when he is on the road to meet people, he'll set up 10-15 other meetings in 2 days in that region.
To build hype, he also does speaking engagements on TV, radio, and at conferences. All of which gives him more credibility for his networking and outreach efforts. .
Mid-day Squares had very modest DTC beginnings. They started with online orders and local hand delivery in Montreal. To make the brand human, put a polaroid of the founders in each package.
Eventually, with some testing, they found unit economics that worked and started shipping 12-packs. At the same time, they started going door-to-door to local retailers. By the end of year one, they hit ~$1M in revenue; ~80:20 DTC to retail.
Three years later, they have a ~25:75 split retail DTC to retail.
Mid-Day Squares launched into Target ~3 months ago with ~1700 stores and 2-3 SKUs per store. To do so, they built a strong relationship with their brokerage and the chain over 2 years. meaningful way.
On the marketing front, they built awareness on TikTok and Instagram with influencers. In the last 12 weeks at Target, their peanut butter SKU is the highest velocity item in the health food and refrigerated snacks set.
However, out-of-stock rates were outrageous. They were up to 41%. Now they are down to about 14% but shooting for 5%.
That’s all via collaboration and open communication with retailers and brokers.
When they first launched other stores, they didn't have anything ready. They were just excited but didn’t even know where the placements were. Now, they suggest the best product placement sections.
It’s all in the numbers. Every launch they learn something. For instance, 20% of the stores do 80% of the volume. So they guide influencers to those stores, and have, advertisement strategies ready to go.
And they reverse engineer our plans based on the best-selling product in the set. They come very prepared with data and a heavy focus on collaboration.
New categories often get misplaced. Mid-day Squares would get placed in the dairy section, but is a vegan plant-based product. Sitting next to eggs and milk, Mid-Day Squares would get lost.
They started to test in smaller retailers, where managers would move them around the planogram. They would see an increase in sales and share the data with other stores.
Early on, Mid-Day Squares sold to a big retailer. At that time, they didn’t have comparison data. The sales team overestimated by a tremendous amount.
It was the failure of our understanding of a few things: distribution timeline, selling velocity, and understanding of inventory needed. It’s fine between being out of stock and having products go bad.
Now they get the data they need through partnerships with retailers, brokers, and distributors and can optimize accordingly. Spins is also a great source of data. You sometimes have to make mistakes to learn.
Mid-Day Squares is learning as they go. For DTC shipments, they still put a Polaroid picture in the packaging with handwritten notes. Scaling this has been difficult, but it provides a human experience.
From a retail standpoint, the best thing they can do from experience is put the product in the right place and keep delivering quality.
Jake’s mission in life is to spread good vibes every day and be unapologetically yourself. And to show everybody that by being you, you are your best superpower. No one can take from you.
Jake put his whole life on social media. Even his therapy sessions. But people can relate to that and it helps him build friendships.
Once you let go of what people are gonna think of you, you start to step into the zone of discomfort. And that discomfort is truly where any outlier results will come. Even if the results, are bad, it’s still good because it’s a learning opportunity.
There are 3 things you can do.
First, realize your story's not boring. You live it so it’s hard to see. But, others will find it interesting because they're not living your story, they're living their own. Sharing your unique experience will breed curiosity.
Second, you don't need to start with big risks. You can start small. Little wins lead to momentum. Momentum eventually compounds. So start very small.
Finally, block out the noise and negativity. The bolder you are the more people are in your ear, doubting you. You don’t need that. At the same time, more people love you and are in your corner. Focus on those people.
Thing you wish you can change about the omnichannel world we live in.
The CPG distribution model. We need to be able to reorder our product within the store. And not have to rely on reps from the distributors. It causes large out-of-stock rates on a fast-selling items.
Favorite social media channel,
Favorite event you're planning on going to this year?
Where can people connect with you?
LinkedIn. And follow the Mid-day Squares reality show on Instagram and TikTok.