From Battling Diabetes to Launching a Successful eCommerce Business

Diabetes is a frightening condition that affects 425 million individuals throughout the world. Since sugar and other processed foods are the main ingredients for most food products, we aren’t really left with much of a choice.

Jose Hernandez, the Co-Founder and President of ChipMonk Baking, thought otherwise. He and David Downing, Co-Founder and CEO, started the brand to provide healthier snacking options not only to help those suffering from diabetes but audiences who are trying to eat clean and healthy by avoiding sugar or keeping a keto diet.

In this episode, Jose and Michael, the Director of Digital Marketing at Chipmonk Baking, share the story of how ChipMonk Baking started and how they grew a sugar-free, low-carb, and diabetic-friendly brand by focusing on direct to consumer eCommerce sales first.

What’s striking about this episode is how Jose knew from the start that they wanted to build an e-commerce brand that’s scalable - and not be limited to operating at their geographical location like most local bakeries are.

They also share with us the alternative ingredients they used, how they innovate for product development, source consumers, and draw traffic to their e-commerce business through SEO, social media, and paid ads.

Listen to learn more and stay tuned for a sneak peek of the cookie flavors and products they are launching soon!

Virginia Foodie Essentials:

There's a lot of things you can't have. But there's a lot of alternatives and ways to get around the things that you like. - Jose Hernandez
There are so many tools available that you can use to just quickly fix the big things, at least understand how other things can improve. - Michael Downing
Our goal is to keep our ad spend at about 10% of our sales. So if we're going above that, then we're growing too fast. - Michael Downing
We're actively testing flavors on our audience to see what they like so that we can introduce them at the right time. - Jose Hernandez

Key Points From This Episode:

Jose’s journey to reverse the effects of diabetes
Why they use “clean” ingredients in what they bake
Incorporating allulose as a “clean” alternate sweetener
How they source and monitor the quality of their ingredients
Why setting goals are important for a startup business
Their set up to be more effective with e-commerce
How they plan, implement, and organize their content
How Chipmonk Baking finds and draws people to their website
What to expect from Chipmonk Baking in the coming year

More about the Guest:

Jose Hernandez is the co-founder of ChipMonk Baking, a health nut, and was previously diagnosed with type two diabetes. His personal experience of successfully reversing the impact of diabetes has been the driving force behind ChipMonk Baking.

Michael Downing is the Director of Digital Marketing at Chipmonk Baking.

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Click Here for Full Transcript:

Georgiana Dearing: Welcome to The Virginia Foodie Podcast, where we lift the lid on the craft food industry and tell the stories behind the good food, good people, and good brands that you know and love. If you've ever come across a yummy food brand and wondered, “How did they do that? How do they turn that recipe into a successful business?” Then we've got some stories for you.

Georgiana Dearing: Hey there, Foodie folks. Welcome back, and thanks for joining me. It's the start of a new year. And that's the time when people start thinking about diets and clean eating. And today's guests fit right into the category of healthy food choices. ChipMonk Baking creates low-carb, keto-friendly cookies mindfully made from clean ingredients. I first came across ChipMonk through some digital ads, and I backtracked to find a beautifully crafted Shopify site for a very niche product line. If you've been following along, you know that I'm a Shopify partner because I really do believe it's the best tool for small food brands. I thought it would be great to speak directly to a living case study of a successful brand to learn more about how they go to market.

Jose Hernandez and Michael Downing were more than happy to share their story. Listen along as they talk about their origins, their definition of clean ingredients and the three key components of their e-commerce strategy: content marketing, social media campaigns, and paid ads. These are three areas that my clients often struggle with. So it's good to hear how a successful brand uses these digital marketing tools.

So today, I'm with not one but two people from ChipMonk Baking. And I wanted to say, hello, Jose and Michael. Welcome to the podcast. And I wondered if you could introduce yourselves to our listening audience.

Jose Hernandez: Sure. I'll go first. So I am Jose. I am the Founder of ChipMonk Baking with Michael's brother, actually, David. And I am a type-2 diabetic and bonafide health group.

Georgiana Dearing: Health freak.

Michael Downing: Cool. Yes, my name is Michael Downing. I'm ChipMonk's Director of Digital Marketing. I've been with the company for about two years. And my brother is the other co-owner, so that's me.

Georgiana Dearing: You mentioned that you're a health freak, and I wanted to speak to you a little bit about your product niche. You're targeting a couple of things like the keto lifestyle and the population that's struggling with diabetes. So could you talk a little bit about how you ended up producing food and selling it?

Jose Hernandez: Yes. So it's actually kind of a long story. When I was in my mid-20s, I was actually diagnosed with type-2 diabetes which was bizarre because at the time I was running a personal training business and we were doing holistic health and coaching people on how to eat better and move better stretch. And a lot of the people I dealt with actually needed a lot of coaching with food so I figured, oh yes, something's weird. I can recognize the symptoms. I was falling asleep. I was tired. I didn't have energy. I fluctuated with food. I had mood swings. One day, I fell asleep driving and it freaked me out. And my parents were just completely losing it so they were, okay, you need to go get looked at. And I said, yes, I understand that let's go. So I went, I got looked at. Everything was fine. The doctor called me and he was like, hey, well, good news. You're in perfect health. All right, you know, good start. His bad news, you have type-2 diabetes which was not really all that shocking to me considering how much sugar I had growing up and the carbs that I was taking. So I said, okay, thanks. And then he's like, okay, well come pick up your medication. And I said, no, I didn't want it.

So from that day to the next, I started eating very mindfully. So I cut back on processed carbs, processed sugar, cut out all the sweets that I was eating, cut out drinking. And over the course of two and a half months, I went on a low-carb diet. Not entirely keto, but sort of. And that coupled with exercise, and I effectively reversed it. And it took me all of two and a half months. But in the process, I had to give up all the things that I really enjoyed. So let's fast forward. It's been four or five years since this diagnosis since I've been managing my diabetes with food. And I was working at a different startup with a college roommate of mine, and we were in this entrepreneurial space. It's like a rework. And that's actually where I met David. He moved really close to the location where we're at. And instead of driving 30 minutes a day, I was like, yes, I'll move in with you. So now, we're living together. We're watching all these entrepreneurs launch businesses, run businesses and I was like, you know what, we could do this. We can do this better than a lot of these guys. And so we started brainstorming. We started thinking like, what can we do? What problem can we fix? And we thought we had it with vitamins. I was like, everyone needs more Vitamin D and B12, so let's do a customized vitamin.

Well, it turns out that other companies are doing that better than I could have done it so that was soul-crushing. So I was a little upset. I was like, I'm going to go make some cookies or something. And David looked at me and said, okay. So I went to HEB and I picked up ingredients to make low-carb, diabetic-friendly cookies for myself because I couldn't find anything that I enjoyed just outright. The things that I like are too sugary. And the things that I can't have, I don't like. So there's always a compromise. So I figured I could try to tackle it myself so I did. I made some cookies, muffins, pancakes. And the pancakes and the muffins weren't all that great. But the cookies are pretty good. I ate them. They tasted fine. I used a sugar alternative. I used almond flour instead of cake flour. And David tried one and he was like, whoa, this is sugar-free? And I said, yes, it is sugar-free, it's gluten-free. That's just like an extra perk. And he said, we should try to sell this. And I looked at him like he was crazy and I was like, what, do you want to sell cookies? And so the next day we handed out cookies at our co-working place. People liked it. And I asked them if they would buy it. And they said, sure. And so we started selling right then and there. And two weeks later, we came up with the name. And we hit the ground running, so that was almost three years ago.

Georgiana Dearing: Wow. So it's like you were looking to be entrepreneurial and then sort of stumbled onto this cookie recipe.

Jose Hernandez: Yes, that's how it happened.

Georgiana Dearing: So I'm just curious. Has the recipe changed much from that initial trial run?

Jose Hernandez: Yes, it has. So in the beginning, I took the ingredients from a regular cookie. And I just replaced the parts that I didn't think I could have. The sweetener that I found was an Earth Monk Fruit-based, which is commonly called Monk Fruit sweetener, but that's a lie. It's like 99% erythritol. So I didn't like the aftertaste for erythritol. We started experimenting and trying to find other sweeteners. And eventually, we stumbled upon Allulose. And Allulose, it's a rare naturally occurring sugar, so that's awesome. My background is in science so I was like, this is what I want. I want something that's naturally occurring. And it was 70% sweet. It didn't have all the negative effects of the sugar alcohols that we were using before. And it behaved just like sugar. So baked well, tasted good, and we started using that in combination with Monk Fruit. The unfortunate thing is that it draws in a lot of moisture. So the cookie recipe that we had didn't really pan out because the cookies were too soft, so they would literally flop over. So we had to increase their density by adding fiber. So we started introducing more health-conscious ingredients like Konjac Fruit, which has rich fiber. It's very gelatinous. It binds things together. And psyllium husk to add some structure, taste and overall, it increases the health benefits of the product. And so, yes, we definitely had to play around with the recipe and reformulate it using some scientific help. Actually, we hired a food scientist from the University of Houston who helped us bridge that gap.

Georgiana Dearing: I was just going to ask when did you bring the food scientist in? Because there's a lot that goes. Even just in traditional recipe making, there's a lot that has to happen between the four dozen that you make at home to an industrial baking environment.

Jose Hernandez: Yes. So we brought them in pretty early on. I think we were probably less than six months old because at that point we set a goal from the beginning to be an e-commerce brand. And we wanted to scale so we needed a shelf-stable recipe that withstands shipping, so at least two or three months of shelf life. And so we needed his help and he helped us pave that route. But yes, he was a huge help.

Georgiana Dearing: You mentioned a whole bunch of things that I wanted to follow up on because your site, talked about using clean ingredients. And then you mentioned this sweetener, Allulose, and you said it's naturally occurring. So can you tell me about that? How do you define clean? And can you tell me what Allulose is?

Jose Hernandez: Of course. So for me, clean is something that's not heavily manufactured, something that your body can accept, and or a pass-through without any major repercussions. So Allulose is a rare natural sugar. So it ends in -ose which denotes that it is sugar. So glucose, fructose, Allulose, same carbon ring. Fructose and Allulose are actually chemically identical. They have the same chemical formula. But structurally, they're slightly different. So the key doesn't fit anymore. So you can recognize that it's sugar in your mouth and you can taste it. But in your bloodstream, the proteins that would normally bind and break down Fructose can't digest the Allulose. So it doesn't affect your blood sugar. It doesn't spike your insulin which is huge because that's what I was really looking out for.

And then your kidneys filter out 90% of it. So you get a 10th of the calories, 70% of the sweetness, and no blood sugar impact from Allulose. That's a huge win in my book. To make it a little bit sweeter, we added Monk Fruit which is a little melon from China. And what they do is they mash it up into a pulp and they let it dry out. It becomes a powder, and it's an antioxidant so it's zero calories, zero everything. And also, low-glycemic. So that combination of sugars is what makes our product sweet in a very non-impactful way in your body.

Georgiana Dearing: What does Allulose come out of? You said it's naturally deriving. When you say fructose, I think, oh, apples have fructose. What does Allulose come from?

Jose Hernandez: So it's in barley, maple stab. Some just are some fruits here and there. It's just in such small quantities that our body's never developed. Enzymes to interact with it. Now, it's produced. It's a man-made item that's mass-produced. And so they take fructose typically from corn or any other source and then they convert it into Allulose using a bio enzyme. So it's a complicated process, but all they have to really do is flip that one carbon upside down, so that's pretty new.

Georgiana Dearing: So where do you source from Lincoln? How do you monitor the quality of your ingredients for this clean labeling?

Jose Hernandez: So we use a couple of different sources, and we've been sourcing non-GMO corn Allulose. Mostly because it's currently the only thing that's available right now because of the supply shortages. But it's also just a more mindful ingredient. I know a lot of people have concerns over genetically modified anything. And so, we're trying to keep it as clean as possible so we use non-GMO Allulose.

Georgiana Dearing: Well, I'm going to flip this story around just a second here. That was interesting to me to know where Allulose comes from because I hadn't really heard of it. But the other thing you mentioned way early in your description is that you said, we knew from the outset, we wanted to be an e-commerce company. And so, that's really my big question for you today is how is all around your e-commerce channel? You're a small team. I saw there were nine people on a recent team-building event so you're still a pretty small company. But you seem to have some pretty decent online sales. So I'd like to know how you're managing that and some of the things about that decision that we want to be an e-commerce brand?

Jose Hernandez: So I think that the goal behind starting an e-commerce brand, and that's the keyword, brand, is building a company versus just building a bakery. We didn't want to be like a small local bakery here in Houston. We wanted to be a brand that went national and sold in stores. But first, we wanted to sell to people directly. Mostly, because we saw the potential in Amazon and e-commerce. And then 2020 solidified that with COVID. It just launched a lot of e-commerce. So we were a little early to that, but the plan was always to build something greater than just an individual bakery. And so that's where the idea came from, and that's why we started the way that we did.

Georgiana Dearing: So Michael, you've been silent. Is this where you come into the story? Because you're the marketing guy. Do you support this e-commerce channel?

Michael Downing: I do, yes. I'm happy to talk about the website, Amazon, or just general marketing efforts.

Georgiana Dearing: Yes. So it looks like your main website, you're using Shopify. That's a tool I recommend quite frequently just because of how it just works. And it's very expandable. So how did that come about? Do you build that personally, or do you work with someone? Is that outsourced? How did you set up to be effective with e-commerce?

Michael Downing: Definitely. Almost two years ago, we had just a standard Shopify template website. It was doing all right for us. It was maybe a little bit just limited, and there were a lot of features that some of our competitors and brands we liked had that we just didn't have and couldn't figure out how to do without having a million apps. So we started working with a developer named Theo Morel. We put together, basically, a design of what we want in our website. We showed him several of the examples, combined features from those. And he was able to, within Shopify, custom code that for us. So that's how we ended up with the product we have, which is also still very customizable. He built the backend like that for us so we can change things around, react to the seasons, react to special promotions. But aside from that, we still do definitely use quite a few just Shopify apps as well to help improve the experience.

Georgiana Dearing: So it sounds like, I'm trying to drill down into layman's terms. It sounds like your developer made a very customized theme for you rather than one of the things you can do is go in and find a theme that does 80% of what you want and then pay to have that. Is that right? So made it like a ChipMonk Baking theme specifically to how you wanted your site to act?

Michael Downing: Yes, exactly.

Georgiana Dearing: Then when you do that, does that require periodic updates? I'm thinking of the old WordPress model where you'd be on the WordPress platform but the more you customize the code, WordPress might make an update. And so then your template layers over that would have to be updated, do you have that back and forth in the Shopify environment? I'm just asking because I haven't run across it yet.

Michael Downing: No. I attributed it to Theo's good coding. But so far, as Shopify has changed, it has just worked. And whenever we add new apps or try to integrate new things, it seems to be fairly seamless. But he's very responsive. So there have been a couple of small issues, but he's gotten them fixed very quickly for us.

Georgiana Dearing: Well, that's good to hear. I like the platform because of how stable it is and how expandable it is. There are things that you can do in Shopify that a brand as they grow, it will adapt with them. In particular, you mentioned, at some point wanting to be sold in stores. Very easy to add a whole wholesale component to a Shopify site and serve both audiences. So that's good. So other questions I have for you on marketing since you're strictly an e-commerce brand is, I see that you have a lot of content on your site. How do you plan and implement all of those pieces where you're adding? You have recipes and you have lifestyles stories and you even have some behind-the-scenes information. Is that all in your area, Michael?

Michael Downing: Definitely. So it's not, I sort of direct it to the best of my ability. Jose is actually responsible for being the face and the main proponent of a lot of that content. And we also recently hired an intern who has been very helpful. And something we decided fairly recently to just guide all of the content creation is like, what as a brand do we want to be saying? When we tried to focus on that, and the answer we came up with is anything about how you can improve your life with food. And so, recipes are an obvious way to do that. Silly memes also. Just informational videos, how to make a thousand cookies? What it's like at the bakery? And so, I would say we haven't been very focused in that realm but now that's where we're moving. And hopefully, that will be good for us.

Georgiana Dearing: So have you seen any kind of impact on your sales from the kind of content that you're adding to the site?

Michael Downing: I would say we see the biggest impact on our sales is more from just collaborative content, giveaways with other brands. And also specifically for us, a big driver of sales is small batch and new products. So promoting content around these like new temporary flavors, like this month, we're doing some jalapeno cheddar biscuits so we want to make sure all the social channels, all the remarketing channels are talking about, you know, come grab this product while it's still here.

Georgiana Dearing: Jose, what is your product development plan like? How far in the future do you see for what things you might be introducing?

Jose Hernandez: So the low carb diet is difficult. There's a lot of things you can't have. But there's a lot of alternatives and there's a lot of ways to get around the things that you like. For instance, I love noodles. Noodles are processed. They're refined. They're not great for you. So in order to make them nutrient-dense versus energy-dense, you can use something like spaghetti squash. And so that's kind of how I live my life, and so that's how I view a lot of the products that we make. How can we take something that everyone wants and or needs, and make it better for you?

So in the beginning, we decided to focus on dessert first and foremost, because dessert is the hardest to find on the shelf. Something that's satisfying and it's good tasting, and it's good for you. It's a very rare combination. And that's what I struggled with the most. And I have a background in this and I was struggling, and so I can only imagine how difficult it must be for some other people. So we decided to tackle with dessert, first and foremost, as the first major product as we get some more wheels under the company and grow. There are talks, and we do have plans to expand into other products. For right now, we are perfecting our craft if you will before we decide to do more. But yes, there's a lot of potentials. Namely, I think in snacks, readily available snacks, is what I think we would like to tackle.

Georgiana Dearing: So right now you've got a cookie line, you've got bites and then your bundles are just bundled packs of products.

Jose Hernandez: We did just make a protein cookie in collaboration with a fitness company out of Houston so we recreated a protein cookie using better ingredients. Things that fit under our morals and our standards, and it's delicious. And so we're going to package that up and start selling it soon enough. It's already on the website. The branding isn't right just yet but we'll get it there.

Georgiana Dearing: So you already have that. I thought, oh, maybe we're getting a sneak peek.

Jose Hernandez: There are two flavors, chocolate chip pecan, and white chocolate macadamia. Eleven grams of protein swing with Monk Fruit and Allulose. It's relatively low carb. It's more of a balanced meal than a low-carb meal. So it's speaking to another audience right now. Our main audience is low-carb keto. People doing sugar-free, sometimes gluten-free, but this cookie is more tailored to the active gym-goers, people that want more protein in their diet. An easy way to get it is always a tasty snack. So this is where this cookie just slides right in.

Georgiana Dearing: So how are you finding those people and drawing them to your site? I think people, sometimes a brand thinks, if I build it, they'll show up. And the internet's pretty huge. So just how are you drawing them to you?

Michael Downing: I'll handle this one. I think there are three directions that we focus on to try to get traffic to the site. It's SEO, social media, and then just paid advertising at the bottom. So in terms of SEO, we regularly audit the site and try to keep it optimized. None of us are SEO experts or really know exactly what we're doing, but there are so many tools available that you can use to just quickly fix the big things, at least understand how other things can improve. And so, from that perspective, we're just constantly trying to make a better with the understanding that it's never going to be perfect, which is a little frustrating. We also can rank for quite a few keywords just with our blog content, and that's useful. Occasionally, the most random blog will get picked up in the right way. What was the one David did a visit? It's like an old parable tale that David retold from a different perspective and a lot of people were Googling it. And so that brought a lot of people there.

Georgiana Dearing: And then did you see sales from that?

Jose Hernandez: I actually saw one person. He emailed me and said like, hey, I found this story, this blog on your website. And then I checked out your product and I love it. And I was like, wow. That's like the first time I've connected those two together because, in the beginning, I thought it was just, I guess, not the best traffic for us. But the more eyes you get on your product, the better so it all really works.

Georgiana Dearing: Okay. So you had this Tale of Two Wolves is one piece of content. What else is drawing people to you, Michael?

Michael Downing: I think the recipes which we try to push through social but are on the website. Posts like demonstration videos or just photographs from them, and then use the link to get them there. That's definitely a way to get people interested in low-carb baking to the website. And that's the audience we want to speak to. And so we're on Facebook, Instagram, Twitter, Pinterest, YouTube. Amazon has a social platform now, which is also surprisingly the most valuable for us because have you seen the Amazon social platform before?

Georgiana Dearing: I have seen it. I have seen it more as a shopper and went, whoa, this is crazy.

Michael Downing: Yes. If you are regularly creating that feed, you're getting free clicks from people looking for your initial product to the product itself. And that's even more direct than something that Instagram or Facebook can do for us.

Georgiana Dearing: And that's direct to Amazon sales. So you're on Amazon, it's why you mentioned that, right?

Michael Downing: Yes. We're on Shopify, Amazon, and we have a little bit of effort in the Walmart marketplace. But that's not our favorite so far.

Georgiana Dearing: Oh yes, we could do another whole thing about the Walmart market. It's different. It's like a different animal than anything else. One of the things that I've heard some people say is a couple of brands have reported to me that they are on Amazon, but they often see their Shopify or direct sales go up when they go on Amazon. And that's that they attribute that to being discovered on Amazon, but then people backing out and trying to learn more about the company. Have you seen anything like that?

Michael Downing: I couldn't say we have.

Jose Hernandez: I think so. Mostly because, at one point, we didn't have all our products on Amazon. So I'm sure it's pretty common for e-commerce brands step to limit the amount of skews that they have on one platform. And so if you want more of that same product or more similar products, you go to the source. There's also a slight price difference between Amazon and e-commerce websites because of the percentage that Amazon charges the vendor to sell the product. So typically, there's a slight markup on Amazon versus a direct website. Though that can probably be offset by shipping charges. Amazon is just cheaper to ship. They have more power there. So it has its positives and negatives. I would say that there are people that have found us on Amazon and come to our website afterwards. But typically, if you're an Amazon buyer, you'd probably continue to purchase on Amazon because you have prime. And that's just a preference, I think.

Georgiana Dearing: Yes.

Michael Downing: We can't beat the convenience of FBA. I actually wonder if sometimes we acquire customers on the website and then they go to Amazon.

Georgiana Dearing: But it's also profitable. If you have your product price right. It's just how you're managing that channel. Well, this has been a lot of really interesting insight. Is there anything else you can think of, Michael, that you'd want to share? I feel like sometimes I cut you off.

Michael Downing: No, there's like a million different aspects to digital marketing. I guess the only thing we didn't talk about was paid advertising.

Georgiana Dearing: Yes.

Michael Downing: I don't know what you'll recommend for your clients in that realm, but we definitely do quite a bit of it.

Georgiana Dearing: I just said, I have a lot of emerging brands come to me and they don't have a big budget for paid advertising. And the threshold that I keep running across is $500 a month, is the point where you really start to get some velocity. And you don't need to share real numbers with me, but you said that that was kind of down at the bottom of the things that you're doing. Percentage-wise of your marketing spend, what are you spending on digital ads?

Michael Downing: Our goal is to keep our ad spend at about 10% of our sales. So if we're going above that, then it's we're growing too fast, in my opinion. It's about 10% of the sales.

Georgiana Dearing: I just explain that when you say if we're going above that, we're growing too fast. So if your ad spend is at 5% of sales and you're growing too fast?

Michael Downing: No. So think of it as a ratio of how much you spend versus total sales. And if at 10% we aren't seeing a growth in sales then we have to spend more than that. It just stops being profitable. So we have to be on that line. But anything less than that just doesn't seem to actually drive growth because like you said, you need to reach a spending threshold to actually see anything happen. So as the e-commerce sales grow, that 10% value also grows. So our ad spend has been increasing as our sales grow. I want to see them grow together and certainly not converge too much in an unhealthy way.

Georgiana Dearing: Right. So, and when you're considering that percentage, the e-commerce dollars you're looking at, are those the dollars coming from your Shopify site or combined Amazon and Shopify?

Michael Downing: We consider the metric separately for Amazon and Shopify. And on Amazon, in general, we want to see a better ratio because the costs are higher and they take a commission. But yes, so it's like the same metric but two different places.

Georgiana Dearing: Okay. I was just trying to frame that because we have these discussions with brands. It's like, I don't know, I will be honest with my very, very, very first client I ever had in my entire life. She said, I spent this much on an ad and I didn't get that much in sales. And I was like, oh my goodness. I've had that conversation my whole life. One isn't enough. You have to invest a little bit.

Michael Downing: And tracking has changed so much over the last year that you have to also just, you can't just look at one metric to understand the whole picture. I'm talking about the iOS 14 thing that freaked everyone out.

Georgiana Dearing: Yes, yes. Can you explain that to listeners?

Michael Downing: Sure. So Facebook basically stopped all tracking from Apple iOS 14 devices, which means a lot less data on whether or not. So even if you're getting sales, you may not be attributing them. It takes longer to optimize your campaigns and stuff. So what we saw was a higher CPA pretty much immediately. And I talked to a lot of people who saw the exact same thing which is why instead of just focusing on that number, we still want to keep that number in our profitability realm while understanding that it's always a little bit underreported at this point. But that ratio of ad spend to sales holds steady, regardless, like can look at the whole environment. And if you see growth in both of those, it almost doesn't matter. If the cost per click is higher or the CPA is higher, as long as that ratio in that growth exists.

Georgiana Dearing: Right, because that cost per click is really an attributed click. And if you're not tracking any clicks through into iOS 14, sales are probably happening. They're just not getting reported back out.

Michael Downing: Yes. I think that's what it is.

Georgiana Dearing: Yes, because you're saying that 10% of overall sales is how you think of your ad spend, which makes sense to me. Trying to explain it on a podcast where people can't see me waving my hands, that's what's going on here.

Michael Downing: And there's so much jargon in e-commerce.

Georgiana Dearing: So you are personally responsible like you or someone inside the company and the brand, and you are running your ad campaigns rather than having an outside source.

Michael Downing: We do actually work with a freelancer for our Amazon ad campaigns as well because that's just a whole space that I do not know enough about. And he has been very good at growing that account for the last year.

Georgiana Dearing: I'm there with you. Amazon is a whole other environment. It's own updates and changes. So, good move to try not to be an expert in that space as well. So what is on the horizon for ChipMonk Baking? What's next? What can we expect from your brand in the coming year?

Jose Hernandez: So our next big push is going to be getting into more distribution. So bigger stores throughout the country. Right now, our biggest specialty chain is Central Market in Texas. That's 10 big stores, very premium specialty goods. But the next move would be finding equivalent stores throughout the country and expanding our wholesale presence. So being on the shelf at a store to make it more readily available. Some people still prefer going to the brick-and-mortar versus ordering online. Some people are the complete opposite way. I want to give people the option.

Georgiana Dearing: Yes, retail sales are another whole animal and an environment of behavior. That's actually where my background comes from, is that retail distribution network. So yes, there's a lot to get sorted out on pricing and chargebacks and distribution, and all those things.

Jose Hernandez: We're currently dealing with all that at the moment so yes, I get it.

Georgiana Dearing: Well, good. So we can look to seeing you on more store shelves in the coming year. But your e-commerce and Amazon sales will go strong and probably can help you with some of these retail relationships because you've got some good market data that you can share about who really is a good customer for you.

Jose Hernandez: Yes, exactly.

Georgiana Dearing: How about on the product side, anything exciting? New flavors? You mentioned the jalapeno something or other.

Jose Hernandez: So Michael mentioned we do like one or two monthly new flavors that we just rotate them. We poll our audience. We asked them what they want to have, and then we make it. And then we make anywhere between 200 and 500 of the product, and usually in pouches. And there, we call them our small-batch flavors. And if they do really, really well, and we consider them for a seasonal lineup. So our current seasonal flavor is gingerbread because it did so well last year. We have a pumpkin spice that comes out in the fall. And in the spring, we'll have an Easter-themed flavor that also did really well the previous year. So we're actively testing flavors on our audience to see what they like so that we can introduce them at the right time.

Georgiana Dearing: What a great idea for product development is to poll your audience, right? That's what they meant when they started talking about crowdsourcing is ask your audience what they'd like to see and then see how they responded to it. And then when it works, roll it out for the following season. What a great product plan. Very entrepreneurial of you. Well, can you tell our listeners where they can find you if they wanted to try and taste some of your keto, low-carb desserts?

Jose Hernandez: Absolutely. So the easiest place is going to be our website, chipmonkbaking.com. They can order directly from us. They can also find us may be at a grocery store near them. They had just had to find this on the Locations tab at the footer of our web. So we're in over 300 plus stores throughout the country at the moment. There might be one near you. So that's also an option, but if not, if you prefer Amazon, ChipMonk Baking on Amazon will pop up with all our products. So you can order it any which way.

Georgiana Dearing: That's great. Thank you for that. I've really enjoyed talking to you. I appreciate so much that you're sharing some of the behind-the-scenes with your success. And I really hope next year is really profitable for you guys.

Jose Hernandez: Yes, thank you. We hope so, too.

Michael Downing: Thanks very much.

Jose Hernandez: And thank you for having us.

Georgiana Dearing: Sure, it's great. All right.

Michael Downing: Thank you very much.

Georgiana Dearing: Thanks for listening. And if you want to learn more about how to grow your own food brand, then click on Grow My Brand at vafoodie.com. If you're a lover of local food, then be sure to follow us. We are at @vafoodie on Instagram, Facebook, and Twitter. Join the conversation and tell us about your adventures with good food, good people, and good brands.

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