Entertained by shows like Shark Tank and Dragons’ Den, the audience gets a rare glimpse into what it’s like to raise venture dollars and negotiate with seasoned business pros. For a brief few moments, we’re privy to a world where the risks are high, stakes are high, and the rewards are even higher.
Matt Schnarr has been through it all. Co-founding AWAKE Chocolate with two friends, Matt and his team have literally been there and done that. Creating a brand new consumer product in the food and beverage category was no easy task by any stretch of the imagination. The hard work and effort eventually paid off as AWAKE Chocolate’s popularity soared and the team was selected to pitch on the CBC hit show Dragons’ Den.
Here are Matt’s insights on business, AWAKE Chocolate’s success, and what it’s like building a business from the ground up.
1. AWAKE Chocolate – fantastic name, who came up with it?
THANK YOU! It was a team effort and the product of endless hours of brainstorming. With very limited marketing dollars to communicate to consumers and a small packaging footprint, we wanted a name that conveyed the product benefit. The best example that I can think of is VitaminWater.
2. What were the early days in business like and how did the 3 of you manage the chaos?
I would still say that we are still in the early days and certainly chaos is the norm more than the exception. Good news is that we all thrive on being very busy. We try our best to allocate clear responsibilities so that everyone has their own accountabilities. All major decisions are made by majority. With a team of three, this guarantees that we will always reach a decision and since we all are aligned to rules of engagement, there are rarely hard feelings.
3. How long did it take to raise some seed money to help your business grow? What were your stakeholders promised in return?
We put the seed money in ourselves. That covered all of the critical start up costs like, R&D, market research, legal fees and manufacturing assets. By the time we raised money from external investors, we had a very clear business plan and a product that was ready for mass production and marketing. It took us about one year to raise all of the launch funding we were looking for. We probably could have moved faster than that, but we were looking for strategic investors and that takes time. Ultimately, we have been able to raise money from investors that have a wealth of experience in marketing or in running large consumer goods companies. In return, our investors get shares in the company and an opportunity to earn very large returns should the brand take off.
4. Caffeine overdoses have been linked to hospitalization and in some cases fatalities. Can I possibly have too much of AWAKE Chocolate?
Caffeine is a drug and we believe that consumers need to monitor their intake in a responsible way. AWAKE has 101 milligrams of caffeine, about the same as a regular cup of coffee. Consumption of 500mg to 600mg per day is generally regarded as safe for adults, so you would need to eat half a dozen AWAKE bars to reach that limit.
5. How did you guys prepare for your Dragons’ Den pitch & looking back, would you do anything differently?
We prepared for Dragons Den by clearly prioritizing our objectives for going on the show. We set “good reception to the product” above “raising money”. We were all very clear on who would answer what types of questions so as to demonstrate strengths and clear accountabilities. We are VERY HAPPY with the result on the show and would not change a thing. We signed our deal with David Chilton within four weeks making it the first deal done on Dragons Den this season. Dave has been an EXCELLENT partner and we are very proud to consider him a friend as well.
6. What past experience had the most significant impact in shaping you as an entrepreneur?
We all have deep experience in the consumer packaged goods industry. In particular, we had all worked together to launch new products for some very large companies. We also share a common passion for owning a business and building a brand from scratch. That has translated to pride of ownership, honesty, accountability, and being extremely results oriented. Individually, none of us could have pulled this off, but thankfully, we have complementary skills.
7. What’s your favorite chocolate bar?
Seriously? is this a fair question? I guess to mix it up a bit, I will say the soon to be launching AWAKE Caramel.
8. What advice would you give someone who was thinking about starting a food/ beverage business?
Work in the industry for several years on different products. Learn what makes brands great and what makes them fail. Recognize your own limitations, and surround yourself with partners that have complementary skills. Focus on business ideas with a point of difference and opportunity for first mover advantage. Finally, make sure you fell passionately about your idea. This industry requires a ton of time and effort in order to be successful; without that passion, it is unlikely that you’ll make it.
9. AWAKE Chocolate can now be found in stores like Shoppers Drug Mart, Loblaws, and Petro Canada. How did you overcome the distribution challenges in the beginning when you didn’t have all of these channels?
We have lots of experience building sell stories for many of the largest retailers in the country, so we knew in advance what elements of our brand would appeal to the trade. We focused on a few influential retailers to build momentum with early on and leverage that success with others. AWAKE leverages a major trend observed across many categories but more or less absent in chocolate. This trend is the growth in functional foods as seen by probiotic yogourt, vitamin enhanced water and caffeine enriched foods.
10. Where do you want AWAKE Chocolate to be in 5 years?
We want to be a Top 10 ranked chocolate bar in North America. We also want to be a go-to product for consumers who need a pick-me-up and are looking for a fun, lively brand with great taste.
For more info on where to get AWAKE Chocolate check out www.awakechocolate.com. Also follow AWAKE Chocolate and Matt on Twitter: @AwakeChocolate/ @SchnarrMatt.
