Pete is the Co-founder of Chomps, a better-for-you meat snack.
Briefly introduce us to Chomps and your journey to founding the company.
Chomps started as a side hustle between my Co-founder Rashid [Ali] and I in 2012. We were both seeing a growing demand for grass-fed beef, especially in the crossfit and paleo communities, as well as interest in protein on-the-go. So, we launched a site and slowly grew this DTC business to the point where we decided to leave our jobs and launch Chomps full time.
What KPIs do you prioritize?
There are a bunch: velocities, household penetration and same store sales (we want to see YoY and prior period growth). Another cool metric we have started following is Units/Trip, which shows the average number of products customers are buying per purchase. We’re at about 2.8 units, which is more than double other natural meat snacks. On top of that we have a 34% repeat purchase rate, which stacks up very high against other brands and incumbents.
What excites you about the meat snack category?
For a long time the whole category got off track. Everyone started these businesses with one goal in mind: a big exit. Companies like EPIC and Krave haven’t lived up to their exits, so a lot of investors have a bad taste in their mouths. I am excited to be an outlier in terms of doing things differently by focusing on sound fundamentals and profitability, thereby removing the stigma that is attached to the meat snacks category.
What are some of the ways that you create demand for your product?
Our entire go to market strategy did just that. We started with DTC and established a loyal following with social media. This allowed us to create ongoing conversations with our customers and form really authentic and insightful relationships. So, once we got into retail, we had an existing customer base that we could tap into to drive them to the shelves.
How do you go about optimizing your shelf space?
We do a couple of different things, the biggest of which is SKU rationalization. We are coming out with our best SKUs and doubling up facings to drive velocities rather than having a massive catalogue of flavor profiles and packet sizes. The problem then becomes determining where your best sellers are and reaching a critical mass before launching a new product.
What do you think is the most important part of a business to get right first?
Margin. You want to make sure your margins are healthy and you have a path to profitability. If you are not going to be profitable right out the get-go, you need to know at what scale you can achieve profitability. However, this can be a slippery slope because things become a lot more expensive than you initially realize. So, it may become a moving goal post and you are never able to hit that target.
We started really small with a combined $6,500. We went to market selling online and turned a profit after thirty days. From that point on, we continued reinvesting our free cash flow and scaling up to the point where we are now.
What is your greatest competitive advantage?
Our scrappiness. We are a lean team — we have eighteen full time employees. But, we will finish the year at over a $50m run rate. We have built this team of high performers and a great culture. It is this culture that has allowed us to continuously nurture our relationships with customers. Our customers understand that we are the real deal and are passionate about what we do; it comes off in our marketing and messaging and gets our customers fired up.
If you could eat a Chomps meat snack with one person, who would it be?
The Rock. He has done everything and everyone loves him — whether it’s the jacked and burley guys who love wrestling or my four year old who loves him because he is in Moana. His work ethic is ridiculous, he posts on social media about hitting the gym at crazy hours and I find it very motivating.
Often, when we are faced with obstacles or things go wrong, we think something is happening to us. But, when we reflect on these moments later on, we tend to find that it actually happened for us. What is one such example you have of this?
A perfect example of this would be that we have been trying to land both Sprouts and Whole Foods for the past four years. Every year we felt that we were not getting the opportunity we should have. But, this is the first year we finally got in. Now, we are launching at a time when our brand following is incredibly strong, so when we actually hit the shelves we are going to come out of the gate swinging and get so much more value from it.
What fictional character do you identify with?
Will Smith’s character Chris Gardner from The Pursuit of Happiness. It never got that bad for me, but I had some serious struggles in my entrepreneurial journey and I know the feeling of having it all on the line.
What is a memento from your childhood that you still keep and how does it serve you?
When I was a kid I was obsessed with dirt bikes. I always wanted one growing up but we didn’t have the money to get one. I became obsessed with them and could draw an entire dirt bike, all parts included, without even looking at a picture. I still have a notebook of these drawings. It reminds me to stay focused on the things that I want. Ironically, when I finally bought a dirt bike (an RM 125), my town shut down all of its trails the next week. So, in a way it was a sign reinforcing how the gift is really the journey, not the destination.
What is your creative outlet and how does it help you channel a flow state?
I am very high strung. So I need to be working out or doing something physically exhausting to let my brain focus. I will literally workout at the gym with my Airpods on sound-canceling mode so I can be in silence while I do something physical.
What is the most spontaneous thing you’ve ever done?
When I was twenty two, I moved to Florida after living on Long Island and working as a personal trainer. I had a weird day, got in a fight with my girlfriend, packed up my Jeep, bought a box trailer and drove down to Florida. I got to Florida in the middle of a hurricane which was unexpected and interesting. Is that spontaneous?
What is one daily ritual that you cannot live without?
Playing with my kids. And my wife!
How has becoming a father changed your values and professionalism?
It’s allowed me to be more patient. I started realizing that not everybody thinks exactly how I think or is motivated the same way I am. It’s about learning how to interact in a way that fosters teamwork and achieving a common goal. When you are dealing with a four year old, everything is a negotiation. And that’s the same with life — although there isn’t a tougher negotiator than my four year old!
What person has given you the best advice about life?
My grandmother. She didn’t articulate these words per se, she showed them with her actions. She was an immigrant from Colombia with six young kids and came here through Ellis Island. When my father was seven, my grandfather died of brian cancer. Rather than going on government assistance, my grandmother got three different jobs without knowing how to speak English. All throughout my dad’s childhood and even through my life — up to the point where she no longer could walk — she was always working three jobs. She went from raising six kids to then raising grandkids with no break. She showed me that there is nothing more important than family, and there is nothing you can’t achieve with hard work.
What is the last:
TV show you binged?
Alone on Netflix.
Movie you watched?
The Biggest Little Farm directed by John Chester.
Song you listened to?
Call Me Up by Patrick Baker.
Podcast you listened to?
The Prof G Show with Scott Galloway.
Book you read?
Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek.
Up Next: Spencer Krug, Principal at Riverpark Ventures