Chomps: A Case Study on Leveraging Certifications to Drive Brand Growth

2 | WHO IS CHOMPS?

Chomps was founded in 2012 by Pete Maldonado and Rashid Ali. Seven years later, the self-funded startup company was ranked number 62 on the Inc. 5000 list of the fastest-growing privately held companies in the United States, with a three-year growth rate topping 4,469 percent and over $20 million in revenue [4]. Their naturally-flavored meat snacks are sourced from grass-fed beef, venison, and turkey, and include no added sugars, fillers, or artificial preservatives.

The healthy, low-carb snacks marketed by Chomps are Whole30 Approved, certified Gluten free, Keto friendly, certified Paleo, certified humane, and also non-GMO project certified. After originally selling exclusively online, the Chomps meat snacks are now sold at every Trader Joe´s store across the country, as well as at major retailers such as Albertsons, Wal-Mart, and Amazon.

Creating a low-carb and healthy snack option was one of the motivations that led co-founder Pete Maldonado to originally start the company. As a personal trainer, he would design specific diet plans and grocery shopping lists for his clients. However, with time he found that many of his clients simply wouldn’t follow the plans, partly because of the lack of options for healthy snack alternatives that could keep them satisfied throughout the day.

His work as a personal trainer helped Maldonado learn a lot about the importance of healthy foods sourced from non-GMO ingredients. He says that “I learned a ton about nutrition and the big difference in micronutrients between organic and non-GMO foods and the unnecessary chemicals that could be avoided by eating this way.” This knowledge led him to start Chomps in an attempt to create the healthiest meat snacks from the cleanest available ingredients and using the best methods of processing.

“In order to get non-GMO Project Verified,” Pete says, “our products and every ingredient we use was fully audited. It took a long time to get through the process, but we’re proud to be one of the first in the category to achieve it.” [5]

There needs to be a lot of cross-functional collaboration and at the same time every single one of these employees needs to be innovating. They need to be thinking outside the box. They need to be taking calculated risks…And we, as leaders, Rashid and I and some of the other leadership team, we need to be encouraging that.” [6]

Maldonado says that they are able to achieve this by making sure that all of their employees share the core values of the company, and by ensuring that there is a good cultural fit and that all employees know exactly what is expected of them.

“We also want them to know that they share and enjoy in the responsibilities of being a part of a team. We need people who work creatively and independently, and we have to make sure that they can think like an owner. We do a lot of things to help this, such as culture trainings, looking at individual personalities, and we do Hogan profile assessments for our team.”

Unlike many small business startups that get trapped in the cycle of micro-management that leads to disengaged employees and low productivity levels, Maldonado has made it a priority to encourage his team to take risks and not be afraid to innovate in order to push the company forward.

“During strategy sessions, our whole team participates, Maldonado tells us. “It really is a collaborative effort where everybody has a seat at the table and everyone´s opinion is heard and respected. If you think about innovation…there is no telling where the next great big idea is going to come from. As a brand, we want everyone to be collaborating to make sure that we don´t lose any of those ideas. A lot of brands don’t do that, and because of that several great ideas never get uncovered, simply because they’re not heard.”

The Chomps team also has a strong focus on transparency amongst the entire team.

“The level of information shared from top to bottom is probably unique to our company,” Maldonado believes.

“Everyone knows where we’re at in terms of budgeting, and other elements essential to our business. We think that this information is important for everyone to understand because how can our employees make decisions if they don’t know how those decisions are going to impact the brand?”

In order to create a workforce that feels a sense of ownership with the brand and its goals, Chomps has a rigorous hiring process and also works with leadership coaches to help develop a more productive culture amongst the workforce. Maldonado also says that creating space for all employees to share their ideas, proposals, and suggestions has also created a workplace culture wherein every employee can feel like their opinions and ideas matter. This also creates a spirit of collaboration which helps to drive productivity, creativity, and innovation across the company.

“Back when we started Chomps I was told by some advisors that there is no way we would be able to compete with all of the other private equity and venture capital backed brands in the incredibly competitive meat snacks category,” Maldonado tell us. “We’re not only competing, but we’re leading the better-for-you meat snacks category in the Natural channel and we’re competing head-to-head with billion-dollar brands like Jack Link’s and Slim Jim on Amazon.”

Committing to healthy, non-GMO, sustainably sourced ingredients has certainly helped Chomps develop a loyal customer base across the country. However, their dedication to creating a healthy and flourishing workforce culture that is centered on the ethic of mutual collaboration and a deeper sense of ownership is the real driver of their incredible business growth.

4 | THE ROLE OF THIRD-PARTY CERTIFICATIONS IN GROWING BRAND AWARENESS AND CONSUMER TRUST

Certified Paleo was the first, independent, third-party certification that Chomps received as a young, startup brand. “As a brand, we kind of started inch by inch,” Maldonado says. “At the beginning we were completely direct-to-consumer for four years (2012 to 2016). We always had a Paleo and Keto friendly product, but once we launched that certification, it certainly helped us to identify with those consumers.”

Numerous studies have shown that independent, third-party, impartial certifications for food products plays an important role in reducing decision friction via social proof heuristics and psychological kinship heuristics. This, in turn, leads to less point-of-purchase scrutiny and increased sales for brands. These effects are likely compounded by other factors, such as reduced trust in industry and first-party package claims.

Recent studies have found that more than half of Americans (53 percent) find nutrition labels on food products to be misleading, with 11 percent consumers believing that these labels are completely misleading. [7]  Furthermore, the 2016 Nielsen’s Global Health & Wellness Survey found that roughly 60 percent in North America distrust manufacturer’s claims on their food labels and packaging [8]. This lack of consumer trust in food products is also declining notably year after year.

While the growth in certified “organic” products has certainly been growing in recent years, studies are finding that this rather generic certification is also losing trust amongst consumers. A 2015 report from market research firm Mintel found that more than half of shoppers believed that organic certification was simply “an excuse to charge more.” Furthermore, more than one-third say they believe the word “organic” was empty jargon “with no real value or definition.”[9]

Because organic certification is mostly overseen and regulated by the USDA, this seems to point to a lack of consumer trust in government-led certification efforts. Despite these trends in government-led certifications, studies by Cone Communications and Globescan (among others) found that 76 percent of consumers agree that third-party product certification is the best way to verify product claims and increase their trust in a brand [10].

As a startup, direct to consumer brands, Chomps understood the marketing advantages that came with independent, third-party certifications from invested in Paleo and Keto certification from the get go. “When we were just getting started we made an effort to entrench our brand into the Paleo community,” Maldonado tells the Paleo Foundation.

“We went down to the Paleo FX tradeshow in Austin, Texas. We also worked some Paleo media such as Paleo Magazine and others in the Paleo Niche. I think we also did some stuff with blogs such as Paleo Hacks and Paleo Mom, among others. We really were entrenched in the Paleo world online. Because of that, Paleo certification was critical in terms of establishing ourselves as a Paleo brand. We wanted our customers to know that we had products made for a Paleo dieter. The certification certainly added credibility to us as a brand, and it also added a “cool factor” that helped us get attract customers.”

Maldonado recommends third-party certification to smaller brands, and especially early on in the process. “These certifications help to establish as much credibility as you possibly can. For startups, I think the key thing is to focus niche by niche. If your brand or products caters to a specific diet or group of people, then do everything you can to entrench yourself in that community.  Getting the credentials and certifications you need to be trustworthy and to be seen as a leader or expert in that space in a community is part of that process.”

5 | THE ROLE OF THIRD-PARTY CERTIFICATION FOR CONQUERING NEW RETAIL MARKETS

After four years of direct-to-consumer marketing, Trader Joe’s was the first big retailer that reached out to Chomps. Though Maldonado admits that the brand initially didn’t have any ambitions to go into retail, everything changed once they got into Trader Joe’s.

“To be honest, with Trader Joe’s it was mostly about our Whole30 approval. That’s what Trader Joe’s was looking for. Obviously, there are so many parallels between Whole30 and Paleo. In general, as a retailer, Trader Joe’s was looking for better quality products and brands that would check the boxes for people on the Paleo, Whole30, and other diets.”

Today, Chomps is Paleo and Keto Certified, certified Gluten-Free, Whole30 Approved, and Non-GMO Project Verified. For Maldonado, the brand’s Keto certification has played a major role in helping to conquer new markets and attract new consumers.

“It’s worth saying that our Keto certification is probably the most important, at least currently,” he states. “Keto is off-the-charts in terms of popularity. We specifically designed our product to have no sugar added to it as a way to make our product available to people on Keto. Because of its popularity, we wanted our products to be Keto friendly for anybody and to take advantage of that trend.”