The Chocolate Bar For All Health Conscious Chocoholics with Jake Karls

Good morning and welcome to Essential Ingredients. I'm Justine Reichman, your host. Today with me is Jake Karls. Welcome Jake. Thanks so much for joining me. How are you?

Oh, I'm killing it. I'm in Austin. So like, what's there not to enjoy the weather's nice and not a -20 where I'm from. I'm just exploring this beautiful place, and people are just super, super friendly here. Super friendly.

Really? Have you ever been to Austin before?

I went once when I was a kid. When I was younger, my brother for South by Southwest, didn't know a single thing that was going on. I was too young to understand so I didn't remember it. So when I got here, I was just like, this place is magical. The people are really genuine here. And I think that's a big thing.

Yeah. I hear a lot of people are moving. I live in the Bay Area, and I keep hearing more and more people moving out of the Bay Area to Austin. Have you come across a lot of people that have left the Bay Area or bigger cities to move to Austin?

Many. Actually, a lot of the people I've met over the weekend have been from Los Angeles, San Francisco, San Diego. And I just keep asking them, well, what are you doing? And like we moved here. I'm like, how long gone? It's in the last three months. So it seems like there's a huge group leaving and coming here. They're very open minded. They like the culture here. I don't know. The weather is also pretty good, not gonna lie.

Well, I haven't been there. It is on my list of places to go. Of course, with everything going on here, being in the Bay Area, I'm not that eager to go through the airport and travel. I am going to travel by car, but haven't done that yet. So anyway, I'm excited for our listeners to get to know Jake and learn a little bit about what you're doing, the Healthy Hershey as I'm referring to it now. But maybe you could just introduce yourself, a little bit about your chocolate company so our founders and listeners can get to know you, and what you're working on.

So fired up. First of all, thanks for having me in the first place. Yeah, my name is Jake. I'm one of the co-founders here at Mid-Day Squares. We started Mid-Day Squares in 2018. We actually launched it then, but it was started way before. We're a family business. Me, my sister, my brother in law that started. They're married. But before they got married, my sister was actually making this snack for her husband now, Nick, my partner. At the time they were married, he basically had an addiction to chocolate, and she was her best friend, and she really loved researching all superfoods, like different ingredients from around the world. So she said to him: "I can make you a chocolate snack that's way healthier than the snacks that you're eating, like Hershey's, etc." And she made the snack which is now the Mid-Day Squares to take to his office and just eat every day as an afternoon chocolate craving killer. And long story short, they ended up playing around with that, having fun with that, she was making it for a while. She was in fashion. He was in software. He ended up selling out of a software company. And he had a two year non compete. And he was in the shower one day and he said to my sister, he's like, we should start that company, that chocolate bar you're making and commercialize it. And she's like, Are you crazy? Why would we do that? And he's like, no, trust me. It's magical, and it's tasty. It's got all the superfoods you need. It does more than just chocolate. So she's like, No, no, no, no, no. Anyways, long story short, they convinced each other. She went to McGill University to reach out to their program there, the food and science program to help us commercialize this actual product. So that kind of figured out how they can make this for sale. Miguel took it on, and then they reached out to me. Once the product was fully developed in June 2018, they reached out to me. They're like, yo, do you want to be our third partner? And I was like, for what? They're like, this chocolate company. And I was like, guys, that's just like such a saturated space to be in, like, no chance. I'm like, if you guys ever looked at the protein bar aisle in the grocery store? There's like 60 brands there. And they're like, Yeah, but we're different, different, different. I'm like, no, no. I'm not interested. I politely rejected it. Politely, very much. I love them as entrepreneurs, but politely rejected them. I was still like throwing parties on college campuses, selling clothing, and having the time of my life. So that was great. But then, my brother kept on insisting, coming, coming, coming to me to join this company and they wanted me to be the extroverted company, the person that brings the brand out there that makes noise, that meets people, gets the product out there.

I'd say, he's actually done that. I've seen your videos. Do you have a clip right now you can show?

I don't have one on me, but I could send you.

I think we should add that for our listeners that are paying attention to this podcast. They won't get the benefit of that, but for everybody watching the YouTube video, I'd love to include that because it is so inspirational. And it was so fun to watch. You got me out of my seat.

I appreciate it. I'm super fired up. Yeah, the goal was for me to make noise, get the people excited about the brand, make them feel something, not just a chocolate snack that adds more value. So I ended up saying yes at the end of July 2018. We joined the three of us, we launched it in August 2018. And from there, it's history. And what it is, is simple. It's a chocolate bar, as a baby with a protein bar but gets rid of all the junk that's in protein bars, the artificial flavors, the preservatives, the additives, the chemicals, it's vegan, it's gluten free, it's real food ingredients and it actually tastes good. So we were that afternoon snack because everyone was touching the protein bar like pre post workout or morning snacks. We want it to be the afternoon snack that when you crave chocolate and you want a little more than that, Mid-Day Squares is your bar.

I love it. I want to taste it.

I'll send you some.

Okay, I can't wait. I can't wait. So before you were in chocolates, what were you doing? I know you were on your college campus doing that. But when you got involved in this, what were you working on?

Oh, I've always loved people. People have energized me to be more amazing every day and be more comfortable myself actually. So before Mid-Day Squares, I was running a brand which I don't even know what I was basically selling because I was just having so much fun with people. Basically it was called Chasing Hunter. It was a clothing that basically sold crop tops, sweatshirts, t-shirts and college apparel.

What year is this?

2015, 2016. I was just going campus to campus across Canada college campuses, and literally throwing parties, and setting up a pop-up shop on campus and selling the clothing. Long story short, what's interesting about this is in order to run a business, so everything was failing the accounting, the operation, I don't even know what was going on in that field. But I did have 10% of the whole NFL wearing the crop tops. And I had Sophie Turner and celebrities that were massive wearing it. But again, I was losing money because I had no idea how to run a business so I failed. After two and a half years, I lost it. Ended up losing like 35,000, which is a lot actually, don't get me wrong. But it led me to Mid-Day Squares after because my partners, Nick and Leslie, who are my family obviously watched me build something so hype and cool with a community even though there was no engine or business behind it. So they were amazed by it. They're like, we need you to come do that exact thing you did, and make people feel something special, go around something like community wise with a chocolate company that's actually functionable and operable.

And then surround yourself with the people to do the finances for you.

Yes, there you go. Now you're taking it, I like that.

Right. Surround yourself with the people that have the skill set to support you. So that together, you guys have a cohesive team. That's what my mother taught me at least, we don't have that. We don't have to do it all ourselves. And we don't have to have all the skill sets to do everything, play to our strengths.

Yeah, I like that. People ask me why I partnered with my sister, my brother in law, and it has nothing to do with family. Obviously, it's great to be with your family every single day. It's awesome, and I'm super close to them. They're like my best friends. But it had nothing to do with that. Actually, we had to do that, our skill sets fit the puzzle piece together. My brother in law is a great operator. He is a software engineer, and he really gets the whole digital field. My sister is probably the best executer. I know she runs the factory, the manufacturing facility, she built it out too. She's also a creative director of a company so she's really like their CEO, but she runs the ship. So we look up to her neck and eye on all the bigger decisions on that end because she knows that heart to heart conversations, and how to manage people really well. And then they come to me for anything, relations or anything to do with the customer experience, or anything to do with making noises and getting people excited. So you bring those together, you create a tripod that's almost unstoppable.

Yeah, it sounds like a great team. And it sounds like you really play to your strengths. It's very cohesive. You're lucky to have been able to create a really well rounded team.

Super lucky.

Super lucky. So let's talk a little bit more about this functional as they like to call it, I think chocolate bars. Tell me more about the space that you're in. Because we know from what you mentioned that there's a million chocolate bars out there, but what does the functional chocolate bar space look like?

So yeah, the space is very cool. So we're in the refrigerator, we're living in the fresh snacks because we don't use preservatives, we're proud that our bars expire. We're next to like Perfect Bar, Honey Mama's, Hail Merry. OHi, all those great brands. Some great brands in the refrigerator with us. And then there's the whole other market of protein bars which are on the shelf like RxR bar, Clif Bar, all of those. So we actually are very different from all of them. I'll tell you why we actually focused on chocolate, being a chocolate bar, real chocolate using like real dark chocolate 90% almost. And giving people that have that addiction to chocolate every day a snack that will also get them to their next meal. So the goal was, when you crave chocolate at 2pm, we wanted you to be able to get to your 6:00 PM, or your 5:00 PM lunch, or dinner, or workout and feel satisfied, and also get nutritional benefits. So using real foods, real chocolate, no one was doing it. Everyone was doing enrobe chocolate, flavor chocolate, or it was a protein bar, or it was a chocolate bar, but it wasn't the hybrid and very competitive. But there was room for our product because we're different. It's a complement of other products. It's not a cannibalized source, like when you put us next to a perfect bar, you could grab both of them. It's not one or the other because we're chocolate, they're focused on protein. We do protein, but it's not our main function.

I love that. I need one every day at 3:00 o'clock. Because I feel like I just want to take a nap and get me through the rest of the day. And even so, I remember, I'm originally from New York and I used to go in the afternoon and grab a snack of these chocolates that I used to get for us. It was a takeaway place called Organic Avenue. They made everything from juices, to salads, to healthy snacks. And they made these chocolate macaroons that sound a little bit like what you're talking about. They were in the refrigerator, they were raw, they were all these kinds of things, and I would eat them and they'd be very satisfying. I wouldn't be tired after them, and they had all these really great ingredients. Now, Organic Avenue does not exist anymore, which is unfortunate, but I would feel great after them. It wasn't the same feeling that I would get after I'd eat a chocolate bar that either had sugar in it or other ingredients that did not agree with me. So I'm excited to try yours.

Yeah. We use cool ingredients, like yacon syrup, which is very unknown to a lot of people. It's a really good natural sweetener, very expensive, kind of like the Rolls-Royce of them. It's low on the glycemic./ For us, we chose quality and integrity on the product over price points and stuff like that, because we knew that chocolate lovers wanted more than just chocolate. They love their chocolate, but they always want to eat more, they'll snack, they'll snack again. After 30 minutes later, they'll do something else. And all the protein bars taste like chalk. So it's like who wants that chalky cardboard taste and that artificial chemical types of ingredients that have that aftertaste. We said, let's solve all that by just making a chocolate bar to satisfy chocolate cravings but also get the people that want that more, that little extra boost, that little bit good gut health, that good brains feel, all those buzzwords that everyone tries to use today.

Can we go back to the low glycemic? Does that mean that, where does this fit into the diabetics? Is this something that somebody that's a diabetic is able to enjoy?

We didn't build it for people that are diabetic. That being said, as we launched the business, we started to get dieticians reaching out to us and saying to us, I sometimes give these to my clients as a chocolate snack that won't spike their sugars as high. That doesn't mean that, I'm not saying go eat the whole bar, but the pieces of it are very good because of its quality. The sweeteners we use are low glycaemic. That being said, we don't want to say, if you're diabetic, you should have these. But we do say that there are a lot of diabetics out there that eat our bars, and are very happy with them. And we are going to do a lot more research probably with Miguel, their food science team to go really deeper into this topic. And also deeper into cancer patients that can eat this because the product for a lot of cancer patients actually, that are on chemo, does not taste like metal. When they have it, the proteins don't taste like metal. And it's good caloric. So what's good for them is when they're on it, they're able to eat it. And we've had a lot of stories come our way from patients letting us know that it's made their day because they're able to have something that tastes so delicious, and not feel that metal taste and still get their nutritionals. That being said, we still got to do a lot more research on that, medical research and stuff like that. But it's been cool to hear those stories come in recently with the brand.

I think that that's amazing. Because I think the more we can hear about those stories, the greater impact we're going to be. Everyone's going to be able to have, whether it's food as medicine, functional food, all these new places that food is taking in the world and on the shelves. They're carving out new spaces. And with that said, I'm curious, you're having such a great impact in the world with food with your organization, what are some of the other impacts you're hoping to create and have for the future food?

I think the one thing that Mid-Day Squares, two things that Mid-Day Squares wants to accomplish throughout this is, sorry, three things. We don't want to sell our company, we're not going to sell it, mark my words. We're not selling as we grow, we actually want to stand next to her, she's at the top of the mountain. Not take them down, but stand next to them as a modern day brand that is consumer focus. So really focus on the consumer's communication, where they want to be communicated to and then when they want their products being built. That's number one. Number two is we want to inspire entrepreneurs and people in jobs, whatever you're doing to just go out there and be yourself. But you could do this being yourself. You can go build the business at the top level by being yourself and being proud of that. And that means you don't have to cave for the red tape of the world or the corporate world. And we're really for that. We share everything in our business online. Meaning, we have content creators that film with videographers full time in house. Two of them that film,every single thing that happens, whether that's a firing, whether that's a therapy session, whether that's anything to do with building this business, we put it out there because the truth is business isn't glorified. It's not always sunshine and flowers, there's moments that are really tough, that people should be in the moment, not after the fact. So for us, storytelling is definitely the modern way that you got to do business. But do it being yourself, don't do it being someone else because it will all catch up to you. Number three, just go out there and have a good time in the food space. It's a great space to be in. There's a lot of support there, but make sure you're having fun. Because if you're not, then there's no point of doing what you're doing in creating amazing things because we're in a world where we need that positive energy and good vibes. So if you're not going to spray it with islands, a spray with a bubble, like a bubble gun, the bubbles, then for us, we don't know what the point is.

I love that, and not enough people are doing that. I totally believe in transparency. And I think it's really important because the more transparent we can all be, the more people can see the flaws and can see that we don't have to look up to perfection because no one's perfect. And idolizing that it's just not a reality. And if we can see that you struggle, and this one has problems, and that one has problems, then we can have problems too, and it's not just so easy. So often we see people, it looks to us like overnight success, but it's not overnight success. It happens over the years. But somehow we seem to think that that happened overnight, but by documenting it as you're doing, people get to see how it happens from the beginning, and they see the challenges, and they see the wins, and they see the struggles. It's an amazing opportunity to share your story, not just for yourself but for other founders that are listening and watching as you go through it. I think you're doing a great service for the people that are working with you to be able to share their story but also for the founders that are watching for inspiration as they grow their businesses.

Day one, when we started, or when I came on board, I said to my partners: "The only way we do this is if we film everything. The good, the bad and the ugly." And two and a half years later, I think we have 22,000 videos on our Google Drive of the story, all unfolding. And it's the coolest thing because it's actually allowing your consumers to come on the roller coaster with you rather than watch you on the roller coaster.

Now, how does your team feel about that? Because obviously, was that part of the conversation when you brought them on? You had to be transparent about that?

Yeah. First, when we hire, it needs to be a cultural fit because we're very wacky. We're very weird. We like to have fun. We show everything about our personalized almost. So the conversation happens at the beginning. Are you interested in this? This is what we kind of do here. If so, they signed their contract. And the contract says that everything's on camera, everything's allowed to be shown. And if you're comfortable with this, then you can sign the paper. Not totally cool, but it's what has grown our customer base, to make us a business, to employ 37 people. We look at it as a mandatory check mark. If you want to join this company, you need to be able to do so. And it's okay not to be good on camera. Don't get me wrong, we'll help you. We have producers in house that work with the team. It's not acting, it's being yourself.

Like creating a docu series.

The same thing. Reality television docu series, the whole nine yards.

That's amazing. That's amazing. I'm curious, over the last year, the world has been experiencing the COVID pandemic. How has that impacted your ability to continue on to build Mid-Day Squares to process? How has it changed now? What it looked like before pre COVID? How are you planning to post COVID?

So pre COVID, we were on fire. We were getting ready to launch the west coast of Canada. Things are going well. We were opening up our new manufacturing facility, we built it out, it was in our fully automated facility. We were on fire rate to start the engine up, it was our year. COVID came, our first month of COVID and I think March, sales dropped 70%. We were unsure with $10,000 in the bank count at one point then, which is crazy, especially having a payroll at the time of 26.4 people. And we were worried. We we're actually, for the first time ever in the two years, sorry, a year and a half, we were worried about the business because we didn't know what was going to happen. But my partners and I, we met, we solved for a day, said what can we do, this is shitty, this is sucky. Let's take a day off, we took a day off, we went home, we came back the next day, 24 hours later, with firepower. We came in with a game plan where we executed the entire game plan. Meaning, everything from how we're gonna make sure our staff are okay, to feel comfortable, turning the already good manufacturing practices and even crazier sanitized manufacturing practices. And then on top of that, focus all our budget from retailer mode. I think 85% of our retail budget to digital, to build our digital squad. And actually thing, so we actually hired eight people during the pandemic, sorry, 10, 12 now. And we went on the offense, we didn't go on defense. And then by June, sorry, by July, we started, we launched our third flavor. And we started hitting our highest month in sales ever. And then last month, January was actually our highest again. So we just keep hitting the record breaking because we kept going on the offense. We went full throttle, we obviously would navigate the demoing, and sampling, and stuff like that's been very hard, you can't do that. But again, that doesn't stop us from creating really great content, really great storytelling, really great connecting with our consumers from both customer experience from quality assurance of the product. And just optimizing on manufacturing, on cost structures, a supply chain, and then an innovation, recreating your products, working on new things. But again, being positive throughout the whole thing and making sure that our team is positive, and making sure our consumers feel that energy that we were willing to give off. It's been a lot, it's been very hard. I'm an extroverted person that needs to be with people all the time and I haven't been able to do that for nine months. So I've struggled and actually hit rock bottom in the summertime because I felt like I was completely lost. My whole job was like a rainmaker, basically going out there, meeting people, relationships, hanging out, getting to the events, networking, speaking at conferences, that was cut completely. I got smoked by June 2020. I was at the lowest point of my life. I got back up and I found myself in a different way. I'm not saying I did pivot on certain things, but I figured a new way of looking at things for what we're living right now. And yeah, it's gonna be an interesting rest of the year, but I believe 2021 is the year that we really do well in the US. Believe it or not, we're launching literally a couple of days here.

Well, I can't wait for you guys to launch out here too. I'll tell my cousin's, if they're not familiar with Mid-Day Squares of Montreal, that they need to be. Well, apparently they may already be because you seem to know my cousin anyway.

Yeah, exactly. Small world, you see?

Small world. So as you're talking about these new initiatives and these new innovations that you're doing, I'm curious about the marketing that you did. COVID was a little bit different, you had to pivot away from sampling. What are some of the strategies that you took on?

We really got good at storytelling so we really, a digital team built of engineers. Software engineers, not marketers. So all they do is analyze data while our content team, like I said before, we have a producer, we have a creative director, we have two videographers and editors, they're creating content that relates as much as possible to our consumers. So little about the product, more about building the business and connecting with what humans go through every single day. And it's just an engine right now. It just goes, and it creates this alongside a great customer experience team that's focused on not automating, just humanizing. So we actually send videos. I spend an hour and a half every morning sending personalized videos to our customers, thanking them, their names, about them. I spent an hour and a half. So you can imagine, I've sent out like 50, 70 videos a day to our consumers. So doing things like that have really allowed our base to grow stronger, or loyal. And less about the product ,more about like, they came for the chocolate, but they stayed for the story.

Amazing to talk to me about those videos that you create. So your team helps you create those, but you really talk to each person individually.

Yeah. I basically, my customer team will find 50 to 70 customers for me. Send me a list of people that have purchased, reached out to us, engage with the brand and I'll go through their contact. So basically, if they have Instagram, I'll look at them on Instagram. I'll actually stalk them a little bit in a good way. And then get to know something about them. And then just bank them, and be honest with them, and send literally a selfie video. Very basic through whatever channel we use, Facebook, Instagram, email, whatever it is, and it makes the biggest difference. I remember when COVID started, before we did all this stuff, we had like 100 Google reviews on our Google reviews. Now, we're at like 12,115, and five stars, which is really cool.

Now, I hope our founders are listening to this because I think that's a great idea. And it's really a great way to engage with your customers, and get to know them on a personal level, and make them feel like they're connected. That's a really creative idea. I love that.

Yeah. Being human, being human.

Being Human, I love that being human, #beinghuman.

I like that.

I know you have a podcast too, can you share a little bit about that? Some of our listeners might check your podcast out.

Yeah. It's our fastest growing platform right now. Over all them actually, over Instagram, Facebook, LinkedIn, YouTube, the whole nine yards. It's basically just a way that the three of us, my partners and I get to sit around a table and talk about anything. We don't do this often enough. So when we get together, we're super excited to chat about things. Let's say a topic will be about empathy, leading with empathy, and like how important empathy. And the episode gets wild. We like to say it's about family, business, entrepreneurship, chocolate, whatever's on our mind. And the key to that is it can relate to everyone. It's not just business, it's not just entrepreneurships, it's not just work, it's personal growth. It's funky. It's being yourself and not being shy, but being unapologetically yourself. And yeah, it's been our fastest growing platform. They can see it on our website, they can go on Spotify, Apple, all those things SoundCloud, but it is the fastest growing because it allows people to go really deep into understanding who we are, what the brand really is and what it stands for and the core values behind it.

And what's the name of the podcast?

Mid-Day Squares Uncensored.

Oh, I like that. Okay. Well, we'll also add that to the show notes for anyone that missed it here. But as we just wrap up a little bit, are there, just three to five tips that you might recommend for better for you food entrepreneurs as they build their business.

Yeah, for sure. Get comfortable with being uncomfortable. That's where the real growth happens. You gotta put yourself in uncomfortable scenarios, and you're gonna start to see things come towards you and don't have to chase them as much. So that's one thing. Number two, go out there and make on average decisions. Because on average decisions will lead to an average outcome, and that might mean an outlier. So it's either good or bad, but at least it's an outlier. It's not in the middle. So a lot of people go out there and they make averages every single day, and you're gonna get an average outcome. If you want to swing a home run, you have to take an average hit at it. So I think a lot of entrepreneurs out there, they're scared. Use fear as an ally, not as your enemy. It is real fear, but use it to your advantage because it could really power you just like fire. Fire can be as destructive or it could be beautiful in the sense where it heats up your food, it helps you cook things, keeps you warm. There's a lot of things you can do. So fear as an ally, not an enemy, and make an average decisions.

I love that, those are great. Maybe you could just recommend for our listeners hear your favorite Mid-Day Squares products.

Funny, funny, I'm actually allergic to nuts and peanuts so I can't have two of our flavors. I've only done the first one, the Fudge YAH. The fan favorite and the most popular in terms of distribution sales is the peanut butter. It's like a healthy reese, very nostalgic.

I love Reese's Peanut Butter Cups.

You're gonna love it, you're gonna fall in love. This is actually real food, though. It's not like the artificial stuff, but it's not exactly, it's not a me too product of, it will remind you of it, but it's a very different product.

All right. Well, I think our listeners will appreciate that. And those that grew up in the 80's will really appreciate that. I'll take them back to the movie theaters.

100%.

Is there anything as we wrap up that you might want to offer our members so that when they go get their product, there's something special for them?

Yeah, if you guys are interested in buying the product, go to the website, www.middaysquares.com, one word. When you check out, use the discount code, THANKU10. So T-H-A-N-K-U, and then 1-0, caps lock on the website, and we'll give you a discount code and free shipping.

Okay, wonderful. Thank you so much Jake. And for those of you that want to connect with Jake, I'm gonna invite both Jake and you guys to download the NextGenChef app. It is a free app. It is the LinkedIn for those of you in food and beverage, it's a way to connect, meet with other food and beverage entrepreneurs and get where you are just a little bit more quickly. It's a great community for you folks to be able to connect, collaborate and innovate. I'm hoping that you'll connect with each other there, ask each other questions, access some of the older episodes and find me there as well. So this episode, as always, is sponsored by NextGenChef as well. And if you like this episode, please don't forget to subscribe to the Essential Ingredients Podcast available on Spotify, iTunes, iHeartRadio, whatever it is you listen to your podcasts on. We're here every week, and I hope you'll join us again next week. Thank you again, Jake, so much for joining us. Can't wait to try the Mid-Day Squares. And I want to thank our listeners for joining us again.