Nicholas Kheny & Mike Schanbacher Of Blobs On 5 Things You Need To Create a Successful Food or Beverage Brand
An Interview With Martita Mestey
Great product: Whether we’re talking to potential investors, retailers or distributors, etc., we always lead with giving them our product to try, and it has opened a ton of doors for us. Being confident in your product and then delivering a good experience will almost always be more important than any other aspect of the business. It gives people confidence that you will succeed and is the most important aspect of customer loyalty as well.
As a part of our series called “5 Things You Need To Create a Successful Food or Beverage Brand”, I had the pleasure of interviewing Mike Schanbacher and Nick Kheny.
Mike Schanbacher is the co-founder and co-CEO of Blobs, a delightful candy company specializing in crafting irresistibly soft, all-natural, low-sugar, fruit-flavored candies that bring joy without guilt. Mike’s journey began in the advertising world, where he honed his digital marketing skills at Ogilvy and Partner Commerce before reaching new heights at the New York Times. His venture into the consumer packaged goods (CPG) industry started as the Director of Growth Marketing at quip, followed by a role as Head of Growth at Hawthorne and later as Senior Director of Growth at USA TODAY. With a knack for building successful teams and achieving incremental wins, Mike now leads Blobs in their mission to create a delicious product and a fun brand that rekindles the carefree joy of childhood candy consumption.
Nick Kheny is the co-founder and co-CEO of Blobs. He embarked on a diverse career journey from engineer to sustainability advocate before venturing into the world of candy making. Armed with degrees in BioChemical and Environmental Engineering, he initially delved into real estate private equity, pioneering sustainability programs to reduce carbon emissions and costs. His passion for sustainability led him to establish Skymarq Capital, introducing innovative loan covenants to encourage sustainable practices in companies. Following an MBA and experiences at Boxwood Capital and Three Ocean Partners, Nick was inspired to create Blobs, a candy company that captures the essence of childhood while offering a healthier alternative. Blobs crafts delightful, all-natural, low-sugar, fruit-flavored candies, and as co-founder and co-CEO, Nick oversees operations, strategy, finance, and R&D, supported by a top-tier advisory team.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
Nick: I’m a South Philly native & grew up a surfer, environmentalist, and loving candy. I spent all my birthday money every year until college on as much candy as possible (no joke).
Mike: I grew up in Cheltenham, which borders north and northeast Philadelphia. As a kid, I was constantly trying new business ideas, whether it was mowing lawns or even starting a candy stand at a local sports field with friends. I was always a big fan of sweets, specifically gummies (I was obsessed with gummy worms for a good portion of my childhood), so Blobs worked out perfectly.
Can you share with us the story of the “ah ha” moment that led to the creation of the food or beverage brand you are leading?
We wouldn’t say we exactly had a “ah ha moment” specifically. During the pandemic, we were looking for “healthier” candy options and found that the space was largely filled with health-focused brands imitating traditional candy products. We realized there was an opportunity to make something a bit more unique in flavor and texture, and to create a fully new candy brand around it that focuses on the outrageous fun of eating candy, rather than just the nutritional aspect.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
We definitely made a ton of mistakes along the way in the creation of the actual candy itself. From originally trying new flavors at home in our kitchens during the pandemic that turned out to taste like chalk to constantly tweaking ingredients to get different textures that ranged from goo to rocks, there was constant trial and error. We originally budgeted three months to develop the candy itself and that ultimately took closer to nine months, though it was definitely worth the time spent to get things right to create the Blobs on the market today.
What are the most common mistakes you have seen people make when they start a food or beverage line? What can be done to avoid those errors?
Nick: Launching a product with zero market potential or misunderstanding the addressable market size of a product. The easiest way to avoid this is to pick up the phone and call people. If you have an idea for a product, call your local stores, friends, and family, and understand who would buy this product and where they shop. The second mistake I see is launching a great idea without having the proper skill sets to make it successful. Make sure you have a well-rounded team in place to help with all aspects of launching a new product.
Mike: The biggest mistake I see is people that focus too much on an idea rather than the fundamentals of what makes businesses successful, and taking those ideas one step at a time. For example, when we started Blobs, we focused on two specific things: having the best product on the market and creating a brand that evokes pure fun. This involved a ton of consumer testing that lasted almost a year. Once we had those two down, we then moved to the next step of proving product-market fit, and then on to strategic growth. If we had spent less time on the product and brand in the beginning, the next steps would have each been much more difficult. The best way to avoid this is to focus on the next steps in front of you rather than getting excited about an idea or a whitespace and sprinting into it. Obviously, there needs to be a long-term strategy, but getting too far ahead of yourself will lead to death by a thousand cuts.
Let’s imagine that someone reading this interview has an idea for a product that they would like to produce. What are the first few steps that you would recommend that they take?
First, size the market, then get an understanding of product positioning, industry margins and business model based on market potential. To launch a new product, you have to research, research, research prior to getting your team together.
Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?
Just start working on it. Start making calls, don’t be afraid to admit what you don’t know and talk to people who do know. One of the biggest hurdles we had to get over was actually just committing to the idea of creating Blobs and starting the conversations both with people we knew and the cold calls to random people in the industry we found by researching.
There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?
This is not a path we went down so it’s hard for us to say.
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
Only raise capital to pursue opportunities. If your opportunity is to test an idea, bootstrap it. If your opportunity is to build 1m units for retail distribution, raise capital. Overall, raising money for investors needs to be just as strategic as spending it.
Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?
For ingredients, it’s all about research and setting up great QA/QC procedures. When finding a manufacturer, you need to first understand what the “must haves” and the “wants” are and then start calling. Things like the size of the manufacturer you want to work with or where they are located can have a major impact on the relationship. For retailers/distributors, we always focus on the customer first. Who are we trying to reach through the relationship and what are our goals? Getting into retailers is great, but ultimately, you need to be in the retailer for the right reason if you want the relationship to be successful and for the store to re-order. There needs to be an overarching goal aside from just short term growth.
Here is the main question of our discussion. What are your “5 Things You Need To Create a Successful Food or Beverage Brand” and why?
1. Market Opportunity: At the end of the day, you can’t grow any business without a market that will buy your product, no matter how good your product is. When starting Blobs, we floated around a few different ideas in the candy space, but ultimately settled on gummies when we realized how fast that market was growing across the board, not even just in the better-for-you space. And since doing that initial research, it became super evident in everyday life. We started noticing that gummies are everywhere!
2. Great product: Whether we’re talking to potential investors, retailers or distributors, etc., we always lead with giving them our product to try, and it has opened a ton of doors for us. Being confident in your product and then delivering a good experience will almost always be more important than any other aspect of the business. It gives people confidence that you will succeed and is the most important aspect of customer loyalty as well.
3. Great brand that connects with the target audience: Especially in a retail setting, a brand that pops off the shelf and creates a lasting impact in the consumer’s mind makes all other aspects of the business easier. While consumers will remember products that offer utility, they will love products with a great overarching brand that they can connect to on some emotional level. Probably the biggest piece of feedback we get from consumers is how much they love our name and brand aesthetic.
4. A great team: It becomes evident very quickly that no matter how competent you are, you need to surround yourself with the right people. When we first started, finding advisors to guide us through processes that we weren’t as familiar with such as manufacturing was crucial for us to even be able to get the brand off the ground. Because we focused heavily on formulating a great team early on, we were able to use our time more efficiently and fine tune the outstanding details of the brand and product.
5. Patience: While we were eager to start sprinting right when we incorporated, things did not move as quickly as we originally planned. We had originally budgeted three months to get our product just right, but with user testing it actually took us nine months to get to a point where we were satisfied. Ultimately, our patience paid off and we were able to quickly get traction due to our strong product, but it wasn’t easy to accept at the time. Even still, we’d be further behind where we are now if we didn’t take the time in the beginning to make sure we were doing everything right.
Can you share your ideas about how to create a product that people really love and are ‘crazy about’?
First, you need to address a market need/opportunity to get users to try the product, but you also need to go a few steps beyond that. It is important to be obsessed with not just creating the best product or brand, but also with WHY you are creating them and showcase that on every level.
For us, it was creating the best tasting product on the market and having the most fun brand in the space. That is at the core of every single thing we do to this day. We could have easily cut corners to move faster and try to take advantage of the white space, but that doesn’t make people LOVE you. Instead, we spent nine months going through countless rounds of taste testing over a dozen different flavors along with different textures, coatings, etc. to create a perfectly formulated product.
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
We’re still very early, but really what we’re trying to do is make being “better” more enjoyable. We aim to make better-for-you candy that tastes amazing and is fun to eat, which makes the consumer’s decision easier. We’re aware that we are at somewhat of a premium price point now, but as we grow, we hope to make Blobs more accessible so that more and more people can make that decision. On top of that, we plan to be carbon neutral by the end of 2024 and are already using wind energy throughout our supply chain.
You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
If Blobs were to inspire a movement, we’d love it to be the merging of the traditional snacking space and the better-for-you space. While we’re at a time where it makes sense for a lot of better-for-you brands to play in the more “health food” focused space and/or toying with trendy design styles, we still don’t see a lot of these brands applying more classic branding. It makes sense because they need to stand out in one way or another from traditional products, but we’d love to see a world where better-for-you brands stand on their own among all snacks/beverages and aren’t considered a separate category.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
Nicholas Kheny & Mike Schanbacher Of Blobs On 5 Things You Need To Create a Successful Food or… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.