In our Nifty 50 spotlight, we feature Abound brands who are ready for retail. This week we sat down with Jeff Schmidgall, CEO of Bubba’s Fine Foods. Bubba’s Fine Foods sells grain free snacks that replace items like Doritos and Chex Mix, is based in Loveland, Colorado, and has been in business for five years. Co
Robin: Why did you decide to start Bubba’s Fine Foods?
Jeff: My brother-in-law, Jared Menzel (aka Bubba), and myself were sickened by the standard American diet, one of us got Type 2 Diabetes and the other Crohn’s Disease. We changed to a grain free diet and drastically improved our health, but missed our childhood snacks of Doritos and cereals.
We couldn’t find a suitable snack in the marketplace, so Jared, a gourmet chef, made them up himself. I was a Health and CrossFit Coach and knew there was a large and growing market of consumers who were also looking for this type of product.
R: How did you make your first prototype? What changes have you made to your product since then?
J: Jared made the first test batches in his home kitchen. We are very proud that we still continue to use the same simple ingredients as our very first prototypes, instead of cutting corners and using ultra-processed flavors. The only change is that we now buy ingredients by the pallet or container load.
R: How do you make your product?
J: We self-produce our product in our own dedicated gluten free facility, with industrial ovens, tumblers, and automatic packaging machines.
R: Where was the first place you sold your product?
J: We first started selling our product out of the back of our cars to Jeff’s fitness clients and co-workers. We quickly set up our website and sold nationwide. Our first grocery store customer was Hy-Vee Health Market in Burlington, Iowa.
R: Where do you sell your product now?
J: We sell nationwide in both natural food stores and conventional supermarkets, our website, Amazon, and office micro-markets.
R: Where would you love to sell your products in the future?
J: Coffee shops, vending machines, airports, convenience stores, and lunch-focused restaurants.
R: What’s your marketing like? Is social media an important part of your business? If so, how?
J: We mostly market via Facebook, Instagram, Google, Amazon, and e-mail.
R: How do you know if your internet marketing is working? What advice do you have for people thinking about starting their own online marketing?
J: Setting benchmarks is the key to knowing what is and is not working with our online marketing. For example, we monitor our customer acquisition cost and repeat purchase rate very closely. Over time, we are able to see whether or not online marketing channels are (1) driving our acquisition costs down and (2) driving our repeat purchase rate up.
If those two metrics are moving in the right direction, we know what we are doing is working. If these metrics are moving in the wrong direction, we can pivot and find better online marketing channels.
With limited time and resources, it makes the most sense to focus on a few key marketing channels that ladder up to your goals. If you’re looking to drive online sales, try not to worry too much about social media unless it drives sales on your website. If you’re looking to increase brand awareness, perhaps sales focused digital ads won’t be your best digital marketing channel.
Online marketing is full of many diversions and “next big things.” It’s best to pick what works best for your goals and then focus on it with reckless abandon.
R: What are some of the most frustrating challenges you’ve had with Bubba’s Fine Foods?
J: Cash. It truly is king. And it can really burn quickly, especially when using the traditional “big distributor” and “big chain store” sales channel. Our greatest challenge is to manage it, not stall growth, and find the right sources for funding.
R: What are some of the greatest achievements and victories you’ve had with Bubba’s Fine Foods?
J: Appearing on the Today Show, winning Paleo Magazine’s 2019 “Best Paleo Granola” award, and seeing our healthy snacks being sold in 7-Eleven in Colorado locations. As a health coach, 7-Eleven was pretty special, since I used to tell all of my clients to plan ahead for road trips so they could avoid gas-station food. It’s so gratifying to be directly involved with the transformation of the food industry.
R: What advice do you have for people who want to sell a product?
J: Invest in good branding right away, utilize e-commerce as much as possible, stay focused on a small footprint to assure proof-of-concept and cash efficiency, and be ready to pivot quickly if necessary.
R: Did you have to make any pivots with Bubba’s Fine Foods?
J: Yes, our biggest pivot was with our branding. We had decided early on to market to male, ingredient conscious snack buyers, and branded our product in the style of beef jerky brands. We wanted to stand out on the natural snack set, since no one else was doing that.
However, after a few years of data, it was clear that despite our male focus, 85% of our customers were female, and for the most part, were not connecting with our branding. So, we made a pretty radical change with our branding and made it more appealing to the female food provider shopper.
R: What are some of the best ways you’ve found to manage your cash efficiently? What do you think is the biggest unknown for people who haven’t been through the big distributor model?
J: Starting off, I recommend doing as much direct business as possible for as long as possible, either direct with the retailer or direct to the end customer. When it is time to branch out to the 3rd party distribution model, start with smaller, regional distributors, or digital distributors (such as Abound). These services typically do not ask for excessive promotional spending and pay quickly.
The biggest unknown with the large, national distributors is how little of the PO you actually get back in payment. They ask for excessive promotional spending, retailers demand free fills, and the payments are often very late, full of charge backs, and still include their ‘early pay’ discounts. It’s not a friendly model for startups without large capital investments backing them up. If you need to go with the larger distributors, stay as regionally focused as you can to minimize the cash burn.
R: What are the pros and cons of having a business partner? Are there any particularly good coping techniques you’ve learned?
J: The pros are being able to grow and progress so much faster than on your own. There are thousands of tasks and initiatives to pursue when starting up your business. It can really feel overwhelming and lonely if you’re doing it on your own. If you can find a business partner that has a different skill set than yourself, you can divide and conquer your goals so much faster and better.
The cons are if you and your partner can’t come to agreement on the big goals of your company, or if you spend energy on your workload not being carried equally. You absolutely need to pick your business partner carefully, as they will become your business spouse.
I was raised in a successful family business with 12 owner-members. The two keys to making it successful were 1) respecting that the other cares about the business as much as you do and 2) not being obsessed about who was working an equal amount of hours.
R: Do you have any favorite business advice or quotes?
J: Doing a startup can feel very lonely and anxiety-filled at times. Remember that “comparison is the root of all unhappiness,” and play your own game for your own reasons. And forget about all the perceived outside voices telling you otherwise.
R: What’s your favorite thing about being a business owner?
J: To be on the frontlines of changing the food industry from a mindset of ‘profit at all costs’ to ‘profits with a purpose.’ It’s incredibly rewarding to create something from a wild idea in our head to a full scale, sustainable, helpful business.
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