Industry: Food & Beverage
Products: Grain-free snacks
Founders Jeff Schmidgall and Jared Menzel forecast a big jump for their crunchy, craveable snack company this year.
"Jared and I are byproducts of the standard American diet," Schmidgall says when explaining the inspiration behind the duo's grain-free snack company. "Jared developed diabetes in early adulthood, and I had developed inflammatory bowel disease. We both changed our diets and saw a huge turnaround in our health."
However, while Schmidgall was relying on the only paleo diet-compliant snacks he could find at the grocery store to curb between-meal hunger pangs -- namely pork rinds and kale chips -- Menzel was whipping up his own. "He made a grain-free salty, crunchy snack mix that I loved the moment I tasted it," Schmidgall recalls. "I knew there was an opportunity there, so we started Googling our way through how to start up a food business."
The pair combined Menzel's restaurant background with Schmidgall's industrial manufacturing experience and Bubba's Fine Foods -- named after Menzel's childhood nickname -- was born.
"Very little investment is needed to start a food company when it's simple ingredients and a simple manufacturing process," Schmidgall adds. "We've relied mostly on internal funding and friends and family to grow to this point."
Bubba's Fine Foods' Snack Mix, 'Nana Chips, and UnGranola are manufactured in the company's 17,000-square-foot facility in Loveland. "Our best-selling products are our grain-free Snack Mix and our kettle cooked 'Nana Chips," Schmidgall says. "Our top four flavors are the Savory Original, Righteous Ranch, Garlic Parm, and Blazing Buffalo."
Despite the size of the U.S. salty snack market, which was $24 billion in 2017, Schmidgall and Menzel were able to grow Bubba's revenue by 95 percent in 2018. "We're expecting at least 130 percent growth this year," Schmidgall adds.
He notes that Bubba's Fine Foods products stand out from the general competition because of their simple, natural ingredients. "When you look at other salty, crunchy snacks in various flavors, it's like a chemical bloodbath on their ingredient list," Schmidgall says. The duo's products are also superior to many competitors in the natural snack market. "We've defined the snacking trifecta and deliver bold, addictive flavors with craveable crunch and simple, transparent ingredients," he adds.
Bubba's grain-free, gluten-free, soy-free, dairy-free, non-GMO, paleo products are available at 1,800 retail stores throughout Colorado and online through the company's website and Amazon.
Challenges: "Cash flow management and growing at the right pace," Schmidgall says. "We have to figure out how to be the most efficient with our cash. In quarter four of last year, we turned down an opportunity to go into 1,600 stores for a very large retailer because we didn't think we could support it with the marketing that would be required to do well in the store."
Opportunities: Schmidgall sees opportunity for future growth in ecommerce and "alternative channels." He says that in 2019, Bubba's Fine Foods is switching it's focus away from expensive brick-and-mortar retail growth and into other non-grocery avenues. "We are an impulse snack buy and, as the food industry is changing towards more natural products, other avenues are starting to offer natural snacks instead of solely conventional ones. This includes convenience stores, micro-markets, offices, and vending machines."
Needs: Schmidgall says that the company's growth trajectory is based on its current level of funding. To grow even more, "our biggest need would be finding appropriate additional sources of funding," he adds. "I say 'appropriate' because it needs to be somebody who understands our space and doesn't cause too much dilution. We need the right funding source that will allow us to really kick up our sales growth in the right way."