How Maxx Chewning Sold Sour Strips to Hershey's for $75.5M

How Maxx Chewning Sold Sour Strips to Hershey's for $75.5M Speaker 1: You should take advice from a lot of places, maybe from a lot of people who know the space, know what they're into, but you shouldn't take every piece of advice as to like, this is concrete, what you have to do. Throughout the history of Sour Strips, there's probably a ton of decisions that I made that people with a whole lot of experience would have been like, that was, I would have never done that. I would have never done that. But every decision led me to this moment in time. And I think you have to just trust your gut more than you think. I think at the end of the day, a lot of Sour Strips was built in the successes, were built on decisions that I made of just, I go, I think we should do this. Like, I think we should, I think this is the move. It wasn't about what does it cost? What is the profit of this going to be? What is the ROI on this? It was like, I think either way, whether this would be cool, or this is something that I really want to do, or I think this will work. And I think the more and more you trust your gut, I think you'll be pleasantly surprised. Speaker 2: Welcome back to another episode of Chew on This. Today's a really special one because we get to bring back somebody which we rarely do. Actually, it might be the first time we're doing this. But we get to bring back Maxx Chewning who I know you guys know because we've had an incredible first episode where we talked about Maxx building not just his personal brand but also Sour Strips. And in a quick, short time, we couldn't even finish a whole season and you've sold the company. Yeah. Acquired by Hershey's. So we're actually here to break that down. Maxx has been super, super gracious for this time to be able to talk about all things about the acquisition, what led up to it, what after acquisition feels like. But before that, Maxx, give us a little bit of just breakdown of What the hell transpired from when you were here, you were just talking about, hey, this year we're going to have a large year. We're growing and scaling. And then next thing you know, you said it happened really fast. Speaker 1: When did we film? Was it two years ago? Speaker 2: I think it was, yeah, it was like a year and a half. Speaker 1: I mean, it goes to show you so much can happen in such a short period of time. But I mean, the acquisition was something that A lot of people, it's probably like what I mentioned in the last episode where I was like, when I started the brand, I never got, I never like thought about selling the company. It's more like, oh, like maybe this would happen, but I would just get asked by everyone of like, would you ever sell a company? Would you ever sell a company? And then I guess in like my space, like I didn't, I didn't even like process that selling the company was something that people like start companies and they like want to like aspire to have this, like this sale. I was more like, I'm having fun doing it. I like doing it. I like candy a lot. So it was like, It was just like fun the entire way. So then when this opportunity came up to sell it, that's when I had to kind of like really think at that moment in time of like, is this something that I want to do? And I kind of weighed all the pros and cons and the pros outweighed the cons. And, you know, and yeah, it's been a wild year. I mean, 2024 just in general, in terms of, you know, getting married, selling the company, got another dog, found out that we're having a child. Speaker 2: So I'm building a house. Speaker 1: Yeah, yeah, got a new land. So I mean, it was like this. I guess we didn't get the dog till January. So but yeah, like so much happened in 2024. Like and it all was like the last Q4 is wild. Speaker 2: Wild Q4. That must be an understatement. So I'm really curious on, there must have been a moment where something happened and you're like, okay, I got to consider this, right? And whether it's like an email or a conversation that was maybe just a thought that turned into like, hey, this is actually something that could happen now. Give us that first moment. What was that where you're like, Okay, this is potentially happening now. Where does that switch happen? Because a lot of things stay in imaginary land and then you have the, oh wow, I got it. Speaker 1: Well, so I actually had some conversations with Hershey's over the years, but it was They didn't really like go anywhere. It wasn't this like, hey, if you hit these target numbers, these metrics, we could really be interested. It was just like a friendly like vase, which I assumed these bigger brands were like seeing what we were doing. I was, you know, I was kind of thinking like, hey, when we get the sales data from Target, and I can see all the sales of all the other brands, like I know that all the other brands are seeing the same thing. And I was getting this like, Getting this high off of like whether it be taking shelf space or knowing that I'm above these brands that I've been eating for years and it wasn't this like pompous thing but it was just like a cool feeling like it's like I'm just a dude who likes candy and now we're specifically in Target like we're selling more of the candy that we came up with you know with this brand and so it was a super surreal moment and so I guess they kept kind of like just Have warm conversations with me over the years like I'd like one one call a year. I'd be like just hey, we like what you're doing Yeah, you know just like what are some pain point like it was just like a really quick conversation And I didn't really understand like what it went from it wasn't like hey We'll talk in one year. We'll talk in six months. It was just like yeah, that's Really like what you're doing. If you ever, you know, need anything, let us know kind of thing. I was like, okay, back to work. Um, so it was, uh, it, I never really like crossed a mind. It was always, always like, Oh, I've had conversations with them, but I, nothing, it didn't come from anything. So I didn't want to get like caught up in the, the what ifs and keep like thinking like, Oh, it's going to happen. I, I, I'm going to reach out and when they call, I answer the phone and, and then when it was over, I'd get back to work and just continue on and then just had a connection over the years, I guess. And then it was September of like last year, I got a call again. And I was like, here we go. Another, another yearly, another yearly call, I guess. And just kind of checking in the same thing. And I, They were like, hey, we're going to be, um, would you, we'd like to love to like chat in person. Like we come down to Houston. I was like, Oh, I'm actually going to be in New York next week. This is last September. I was coming up for, um, my wife was walking in New York fashion week and it was, we were doing a Sour Strips event. It was my birthday week. So I was like, Oh, I'm going to be in New York. And they're like, even better. You know, we're close by. So, um, I met, I had a lunch with them and it was like that It was kind of the same thing at the lunch, like, how are things going? Yeah, we see, you know, we see what you're doing. We like what you're doing kind of thing. And then after lunch, I even went back to the hotel and to my wife and she's like, how was it? I was like, I don't really know what happened. I don't really know. It's not like, you know, they're not like, here's the offer at the lunch. Also, we'll take another loaf of bread, you know. Sign it. Yeah. So I was like, I think they might want to like keep talking after this point. So they were like, yeah, we'll reach out over email. And then starting that Friday, so the call was on like a Wednesday. And then starting that Friday was essentially the start, which I didn't know at the time was the Starting of the due diligence process, it was just like, hey, we're going to send over some questions, like find out more about the company. And then from that moment on, it took two months to close the deal, which I've learned is like a record breaking time frame. It usually takes six months, a year. But with Sour Strips, I guess without me knowing it, we have a It was a good thing if you're ever looking for an acquisition that your team is like really small and you don't have any debt and you don't have, you know, maybe it's not complicated with the ownership, right? Or in my case, owned 100%, no debt, profitable company, super small team, you know, didn't have a ton of contracts like with a whole bunch of different people that I, you know, maybe without knowing like signed throughout the years because I was really hesitant to even just sign any contracts. So I was able to like do a lot of like distributor deals just with like, nah, I'd rather just let's just handshake and let's just like work together type of thing. And so that I guess that was to my benefit. And then it was just that that two month period of the due diligence, I'd heard a lot of people talk about their Their experience is like selling a company and how, you know, like it's like so much calls and it's so much hard work and you'll be out of this place and they call and you need to go like step away. And it was it was exactly like everything I experienced or everything I heard. It was it was like the most intensive project that I've ever done outside of like the first year of starting Sour Strips where that was like, I don't know what I'm doing. It felt like I was back in school almost, because they give you this Excel spreadsheet with hundreds of questions that you should know the answer to, but I'm kind of doing them out of order. I'm like, no, don't know that one. Skip that one. OK. Yeah, I can do that one. I'll come back to this one. Speaker 2: A ton of procrastinating. Speaker 1: Yeah, exactly. And then it just progressed over the two months. And then it closed on the 18th of November. And so I guess from September 11th to November 18th was the time frame. And I've heard of a lot of deals like closing or not closing, like right before the finish line kind of thing, like a falling through. And I was kind of, it's everything like pointed to like, this is going to happen. Like this is going to happen. And then it was like the closing call. It was like, all right, everyone's lawyers on the call. You're good. I'm good. I'm good. All right. Wire's in and out. We'll post on social media later today. And it was like, okay, so. Speaker 2: I was so curious, in the two months you have Ferrero, you have Mondelez, you have Mars Wrigley, and then you have Hershey's. Did you even talk to anyone else? Did you care to talk to anyone else? Speaker 1: Whenever I would get asked about selling the company, my first thoughts was first, hey, we're profitable, I'm making money, and I'm really enjoying it. I don't really need and we're like growing so fast, right? So it wasn't this like desire. It wasn't like I need to sell because of like cash flow or I need to sell because I'm like hating doing this. It was like I'm in, I'm doing candy, man. Like this is like my dream. And we were just, I didn't have time to think about it because we were just growing so fast. Like it was just new accounts, new accounts, new accounts. And we get an account and then we do really well. And then by the time we can like manage them, I'm trying to figure out the supply chain of how we can keep up with them. And then by the time you're like, Halfway done with them, you are, you know, you already have another account reaching out. And then it was like this snowball. So I never had a time to like think about it. I got approached a couple times. They probably maybe like cold emails of, hey, we're a private equity firm, like, you know, we'd love to invest in the company. And I was like, I don't I don't need the money. And I also don't want I never wanted like a PE company to buy it to buy the brand because I always said my goal with Sour Strips was to create this brand that would last forever, this legacy brand, and I wanted it to change my life. And change people around me's lives. And I also wanted to just like prove that I could make it, I could change an industry that like I as a kid, up until I was an adult, like grew up obsessed about, right? So it's just this cool feeling. So I had no interest to sell it to a company that was just gonna use it for cash flow. I mean, I guess that's what all businesses do. But I was like, I wanted a strategic, I wanted a candy company. If that would be where the conversation was, because I knew at some point, like, yeah, we're growing like a weed. Yeah, we're growing, you know, we're scaling crazy. But I knew at some point, like, I'm only gonna be able to go so far before, like, a lot of, like, really beneficial resources from outside companies would really help take the company to the next level. So I knew that, like, a strategic buyer was something that I would be open to the conversation of, whereas the other ones, I would just ignore the emails. So I never talked to anyone else. And with Hershey, it was, I was really excited about Hershey being the one that ended up buying it and even just contacting us because From my perspective, I looked at a lot of other big conglomerates as to like, okay, you know, hey, we would fit in a lot of their portfolios because they're in gummy, they're in, you know, sour, right? And we would fit well with them as another one of help them like take over. But with Hershey, I was like, well, let me look like they're the kings of chocolate, like, right? Like they dominate the chocolate with Reese and all these things. I was like, but they're on their gummy and sour side. They have Jolly Rancher and they have Twizzlers, right? So they don't really have like a, I guess a predominant like sour specific. They have a lot of extensions. So I was like, I feel like if Hershey's interested in us, that means they want to really get into the sour kind of world specifically, right? And if we're that kind of like vessel for them to put all their power into, then that means they're going to want to Go against all the other big brands and if that's the case, then they're really going to want to pour the gasoline on this brand to compete with these others, right? Because if they're going to get into the sour space specifically, then they don't want to look foolish, right? So they're going to make sure it's successful. I was like, I feel like it's this perfect fit of this monster company who is, you know, for generations done these like incredible things, but now it's like, Hey, here's a new age brand specifically in the sour category and you can go against the other like large brands. I just thought it was like the perfect fit. Like I really did. Speaker 3: I'm very curious how the deal is structured where I would imagine you would still want to be somewhat involved just because this is your brainchild and obviously you're doing content and things like that. Talk through what that post-sale involvement looks like because I'm sure there's brand owners that are like, you know what, I want to sell this and be done with it. And then there's some that are like, well, I still want to have some say in what the future of the brand looks like. Speaker 1: I would ask people if they were ever like, hey, I wanna sell the company, get a payout and walk away. I'd almost, in my mind, that would either tell me that the person is so stressed out about the brand that it's consuming their life or they're maybe started it with, their only goal in the company is to have this exit, right? And I feel like, well, that's not a bad thing to have. I think you should just be passionate about the products and the services that you're providing. And for me, it was like, Candy and I've talked about this a lot of like candy was this like It is this like just obsession for me, right? It wasn't this, I saw a gap in the market. I saw this opportunity. I analyzed the space and realized no innovation has happened in this. It wasn't any of that. It was like, I love candy. I think I can make a cool candy brand because I can do everything that I would want as a candy lover and I can just build a brand around what I would want because I know if I would really like these things, everyone else who likes sour candy will probably like these as well because I'm one of them, right? So I think the idea of like just exiting the company and walking away would be kind of honestly surreal. I feel like you'd be like, what do I do? So I really wanted to be continue to be involved with the brand and after you sell, especially with a company that's like smaller and like, you know, I didn't have everything structured the way that I should have. You know, my team is super small. You know, there's like four or five of us that are doing the big behind the scenes kind of operations. And then there's a lot of team leads and managers and more on like the warehouse side of the team. But of like pulling the big levers of like decisions is myself and two other people, two, three other people. Because of that, it was, you can't really, it wasn't like set up in a way that someone could just like walk in and then just like take it as is and run with it because it's so like, I'm wearing 50 different hats in the company. You know, the other two people are also wearing 20 hats in the company. So it'd be, you know, it's kind of like, hey, who does this? Like, oh, I do that. Why don't you have like a, why don't you have this person? Like, well, cause I can just knock it out in 30 minutes. Like, why am I going to pay someone that cost me that much money? And I'd rather just not. You know, do all that. So, you know, they have to, like, learn. They knew the success of the brand, but they needed to understand the, like, the dynamics of, like, how we build it. And Sour Strips is, like, a really unique brand in terms, I mean, look at the candy space and the social. It's been the same way for, there's a reason why Sour Strips was successful. There's a lot of reasons, but one of them is because, like, the space has just been the same for so long that no one's kind of, Hey, let's do this new age. Let's focus on social media. Let's be kind of edgy. No one's kind of done that until we came in the space, right? So because of that, we do things really uniquely. So you can't just plug the same systems that have been working for generations on the business side. It's like, hey, if we want to keep Sour Strips authentic to what the brand is, Which is why it's so successful, then we need to make sure that we don't screw that up. So Hershey was gracious to be like, hey, you know, we want you to continue to like lead the brand. We want to take off all the things that, you know, maybe you don't enjoy. It's almost like It's kind of like what I've told my employees for like a long time is that, you know, every time I'm like, hey, if you ever feel like you hate doing the thing you're doing or get overwhelmed, like you tell me what you don't want to do and I'll, and I'll take it off your plate. Like I'll, I'll find you just, I want you to work on what you're passionate about. I want you to work on what you enjoy as much as you can at a job, right? That's how, you know, delegation happens and people, other people can level up. And so that's kind of what Hershey was like was, you know, Hey, you clearly love brand direction. What I, what I want to do is continue to like, keep the authenticness, authenticity of the brand and the cool factor. And so they want me to continue to stay on for the foreseeable future to keep like leading the brand. And I'm like happy to do it as well because there's so many like, yeah, we created this cool brand and we have these, you know, 12, 13 flavors and a couple extensions, but you know, in the vault of my brain, I had like, I had like the next like five years of things that I wanted to do, but I can never do because, you know, I don't have maybe the resources or it didn't make sense to like, you know, deviate from the main brand to do this sub other sour candy brand that I also now I see that like, oh, there's room to like improve in this category in the candy space. But I was like, I'll get to that eventually. So now it's like, they're kind of like, hey, you tell us like what dreams you have and we can, you know, help, you know, make it come true. So it's kind of like this, the best of both worlds because I created this brand that changed, it really impacted the industry, was able to sell it to a company that is, wants to take this specific category of sour and gummy and go against the other, their other mammoth competitor. So I know they're gonna put fuel in the fire. It solidifies this brand to that, you know, for, Hopefully forever, Sour Strips are going to be in every single store for generations, which is great, and I'll be really proud that I did that. I was financially able to secure myself and my family for the foreseeable future. I was able to take chips off the table of risk, and I'm able to stay on and continue doing what I love. And getting paid for it. So it's like, you know, so it's like, it's kind of like it. Yeah, it's really cool. Now I can be like, hey, all the admin stuff, I really don't want to do that anymore. Like, I just want to make packaging tweaks when new flavors come out, like create the designs for them and work with the designers. I create cool marketing campaigns with my team and that's what I like to do. Speaker 2: That's awesome. When a brand does get acquired, you'd kind of imagine the team is a little bit apprehensive. What happens to me, Maxx? How was your communication with the team and how did they take that? Speaker 1: Yeah, that was a tricky one. When the acquisition happened, I didn't know. I was like, okay, who do I talk to this about, like within my team, right? So during the acquisition, actually only one person on my team, Mona, who's been kind of like my right hands for a long time. She's like my day one Sour Strips employee, but also like my day one employee for my Ever4 clothing. Like she's been with me for a long time. You know, every like weird idea I have, you know, she would help me execute that. She moved from Virginia to Texas and started a life in Texas. Now she lives in Hawaii and she's living the real dream. She works remotely from Hawaii on the beach and is setting up distribution. It's wild. If you met Mona, you wouldn't be like, you're a wizard that's setting a McLean vendor item set up. She was like the documentation person in the company where it basically is like, hey, if we need this vendor set up, this item set up, this insurance set up, like, hey, Mona, like you tackle all of this. So she had the knowledge of all that. So I knew that I would just be asking every second for like some sort of document. She'd be like, why are you asking me for like all these documents? So right when we started to do diligence, I was like, OK, hey, Mona, I called her and because I even told her, I was like, hey, I'm going to Hershey's meeting. She's just like, I was always open communicating with her about everything in the company. So when I was having these meetings, I was like talking to her about it. And then we started the due diligence. I was like, hey, I think they're like interested in acquiring the company. I was like, I need you to help me like tag team this like this due diligence project. And I decided to not tell everyone else in the company because it's You know, it's one of the things, you know, first of all, you don't want to mess up the culture, right? Because you also... The last thing I wanted to happen, I was like, I'd rather myself and Mona can handle if we go through all this and you know, she's wondering what's the future going to hold for her. Um, you know, me as well. And then it doesn't happen how that's going to shift the, uh, you know, the, the vibe at work. Right. But if I told the whole company about, or even just a bunch of my employees, like it was a struggle. I didn't know what the right thing to do was. Um, maybe there's not a right answer. I didn't want, Them to be stressed out, then the deal not go through and then them wonder, is he just looking to sell it at all times? Like, what is my job security? Like, what are all these things? Um, so I only had communication with Mona throughout the entire time. And then once the, the sale was super finalized and I was very key, I was like, Hey, I'm not telling anyone else until like it's done done because I can't, I can't have it fall through and me tell them. And then that changed the dynamic at work. So when it sold, I basically pulled all my key employees and had a meeting with all of them and disclosed it to them and just like you probably imagined, they were like, what? Like what? Like, and they were kind of like the reaction at first, you know, so I did with them and then about 20 minutes later after that, after I had some one-on-ones, then I had a company-wide meeting and told the whole, the, you know, the 20 people that work at the brand. And you know, the reactions are probably what you imagined at first. It was, it wasn't like. Unknown Speaker: Woo. Speaker 1: It wasn't like, hell yeah, man. No, it was, it was like, what's this mean? Yeah, well, like, what? Like, what? Like, do we have jobs? Like, like, what is what does this mean? And it's a really finicky position to be in because, you know, I can, I can basically try to like predict what the future will be, try to predict how the transition will be. But the future is always unknown. And it's been unknown even with, you know, me just running the company, right. But I basically was like, look, like, We're in really good hands. Like, Hershey doesn't want to screw up what we have going on here. And I, and once I kind of like explained to them kind of like why I did it and the struggles as you know, hey, they only see X, Y and Z in the business, right? They don't see what Maybe they don't care about what I'm having to deal with on the outside of things, but I was like, guys, like there's a difference of scaling a business from 0 to 5, 0 to 10, 0 to 20, 0 to 50 to 100 million, to 150 million. And the people you have to bring in and like the company has to get structured and you have to bring in outside expertise. And I was just like, Now we can do all these things with the power of this Hershey behind us and we're able to scale at a dramatic more pace. And like I said, Hershey, they don't want to disrupt the world we have going on because they're like, hey, it's been working for so long. Y'all do you. We just want to help. We want to scale the brand into infinity. So it was a tough day for sure. I can't dive super deep into it, but I knew from the moment that if I ever sold the company, I would do right by every single person that works in my company, whether you've been there for a week or you've been with me for a long time. I took care of my employees. That's like the one thing, being the face of social media, it was kind of like one of those things that everyone was like, man, you sold the company, you better help this person, you better have done this. I'm like, guys, when have I done anything besides showing that I'm like a good guy? I'm not like, yeah, give me the money, give me the money, you know? Like, screw y'all, right? While it is definitely a bittersweet, I was The sale was able to change more lives than just myself. I'll leave it at that. It was something that I was very adamant about doing immediately after the sale. It was a really cool feeling and there's a lot of emotions going and it all ended in happy tears. Then Hershey people came down. They met with all the team and that kind of like eased everyone. It's hard to know what people are feeling, but I've stressed with Hershey how important the team is and how I want to keep the team as the team for as long as we can. I don't know what the future holds, but that's kind of the world. Speaker 2: It's funny you mentioned the social media piece because I remember like when you guys had announced it, I think the first thing Twitter and every platform was doing is like starting guessing numbers. Speaker 1: Yeah. Speaker 2: It has to be a hundred million, someone said 75 million, someone said half a billion. Speaker 1: People were just guessing numbers. Speaker 2: From what you can share, and obviously Hershey's a public company. This is going, it gets released. Speaker 1: Yeah, it got released. Speaker 2: So it got released. But from what you can share, From the economics of it, what did you have to scale to? What did you end up selling for? Whatever you can share would be awesome to also understand. And was it up to your expectations when you kind of started to get into that deal structure? Speaker 1: Yeah, so that's an interesting thing to think about because So whenever I got asked like, hey, would you sell it? Would you sell it? How much would you sell it? You know, I'd have talks with like my friends and stuff like, oh, would you ever sell it? And as the, when it started for like year one, year two, so we sold it right, right after, so our fifth birthday was September 9th again. And I started the conversation on September 11th. So it was basically, we'd just turned five, basically when the company was sold, you know, two months after that. And every year whenever someone asks me like, hey, well, I want you to sell it for like my number each year would go up of like this like threshold like I wouldn't sell it for anything less than this because of You know, me knowing just the cash flow and the revenue, I'm kind of like, why would I sell it for this? Because we're profitable and, you know, I'm going to make close to this anyway. So it's like, well, I'm not going to, you know, do that. So yeah, so the company got sold for $75.5 million. And that was a number that I was It was like right in line of what I expected the company to like honestly get sold for. And I think everyone has these like big moonshot like missions and there's some more details to the deal that I can't really disclose that it's to my best interest to continue to see the company scale right during this transitional period. I think a lot of people like think that you have to hit these like super specific numbers to hit these exits. And I had talked with some people that were saying that, you know, hey, companies don't even, you're not even, you know, you hit $10 million in revenue and you're thinking you're on top of the world, but like you're a blip on the radar to like these bigger brands. And I had heard all different numbers, whether it be you need to hit at least 10 million, you need to hit 50 million, 100 million before anyone will take you seriously. And I think with Sour Strips, it's really unique. So before we sold the company in the final year, we did over $30 million. With the company that, you know, I've always been public with like talking about scaling. So we did like eight and a half, then we did like 16 and a half, then we did like 25, then we broke over 30 before I sold it, which not only I'm super proud that myself and my team were able to do these numbers with like the size of the team we are, But with a company like this, it's not just about like your, like a multiple of your EBITDA or things like that. It's like, you look at this as, it's hard to put a super true value on this because, okay, yeah, you're profitable, all these things, like here's what you did, here's what maybe a multiple of whether it be your revenue or your bottom line would be, but how do you like, How do you calculate like the true value of a brand that's scaling like this that the runway is so drastic? Because if you were to buy it last year versus this, you know, in 2023 versus 2024, the price would be different, right? If you were to buy 2025, like we're going to continue to scale. So the deal was structured in a way that was a The amount of the 75 and a half was basically this like base amount of what the company was valued at the moment of in that time. And then there's some incentives for me as the owner to for the brand to continue to scale over the next couple years. So that'll be something that because it's like they couldn't put this like future value on the company at the current space. But it's like, hey, we have This client, this client, this client coming next year. And you know, and just as if you look at the, the, you know, the past is a great data point where, hey, if we've done X, Y, and Z over the past couple of years, like next year, we're planning on scaling again and planning on scaling again. So you need to kind of almost like bake in what the future of the brand can be and also how much like they can, you know, pour, pour fire on it. Because if, You know, if we're in 30,000 doors, right, and there's a little under probably 300,000 total doors you could get in with a product like this, you know, we're only scratching the surface of like what you can do. So like the runway is very vast. And it really also helps that we started with the Targets and the Walmarts and the HEB and it's almost then a trickle down, you know, from there, like you get into these mammoths and then ideally it's all the other, all the other, you know, companies are going to be like, hey, we, we want to have this, have this in there too. It's not like you're fighting to get to the, the bigger players. You kind of started with the bigger players. Really unique kind of situation. Speaker 2: Chew on This is sponsored by. If you want to build a profitable e-com brand these days, then you need retention. 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Speaker 3: The one thing that you mentioned earlier was I wanted to sell to Hershey because I think that they're looking for their sour candy, right? What was the conversation you had with them that they had told you, like, this is why we see this as an opportunity for us and here's what we can do for the brand? What was like their expectation of, okay, after we acquire this, what did they want to do with it? Speaker 1: A comment that I would ask during it was kind of like, why do you want this brand, right? Because that was important to me. It wasn't just like, cool, where do I sign? You know, it was like, hey, what, why do y'all want this? And they say exactly what I what I thought is like, hey, you know, they have, they're crushing it in chocolate, obviously, but their sweets and salty category is is something that they're currently expanding with, you know, they, they bought You know, it was like they kind of dominated the popcorn category, right? And then they bought like one bars and they got into the protein space and they've bought some better for you gummies as well. And so all of their stuff, but their core is like their sugar portfolio, right? And even they were like, you know, hey, you know, Twizzlers and Jolly Ranch are iconic brands that are just, you know, been around for a long time, going to continue to be around for a long time. But, you know, When you think of like Jolly Rancher or Twizzler, you don't think of them as a sour brand. You think of them as they're, you know, Jolly Ranchers, like their flavors and their, you know, iconic, you know, iconic, all the different flavors and the hard candy. And then they expanded and they have sours and they have gummies and Twizzlers has a million different variations. But they're extensions of a core brand into a sour category. It's not a true sour brand that, you know, is like that's their heavy hitter. So they basically reiterated like what I said, what I thought about their interest was saying like, hey, we're looking to continue to expand our sweets category. Sweets and salty sweets specifically for this. And you know, hey, we don't, we don't have really have a dominating kind of like sour player in the game. And we love what you've done. And we, and we also like love what you've done with like the social media aspect of it. And, you know, we think we can continue to scale this, like the same direction that you've gone just at a faster pace and in a bigger way. It was kind of like the writing was on the wall. I mean, there's a lot of other big players, but you know all their brands, right? You know all their sour key components. And while it also maybe would have been cool to have a bunch of people reach out at the same time and be like, oh, you know, I could go alongside this other candy brand, I just felt like I felt like Hershey was such the right move because if anyone's going to really make sure that this brand succeeds, it's going to be them because they want to get in this space. The writing was on the wall of how quickly they could expand it. In the, let's see, you know, officially sold in, you know, November and just within this year, I mean, we have just so many new key accounts that we're going into. I mean, we'll add like stores like by the thousands by maybe even like No, yeah, it'd be like well in like early like low tens of thousands of just like in the second half of the year. I mean just and it was it was wild like we were already expanding so quickly but you know I've had so many of these like calls with you know the Hershey team who represents this client and Hershey team that all they do is this client and this client and this client. I have all these meetings and you know just like I thought is with Sour Strips it was always like Okay, we're in all these stores, all the other stores, it's just a waiting game. I didn't have like a sales team, right? I knew that, hey, you crush in Target, all the other grocery chains are gonna see this data, all the candy buyers, I know they walk around and see what other stores are having. I was like, it's only kind of a matter of time and it's been working out for us. But when we sold to Hershey, I was like, you know what's gonna happen is the brands who knew about us but hadn't made a decision are like, oh, this is a Hershey brand now. We need to get him in there and it's it's basically been like this like rapid fire. We're now just left and right and just the expansions are Beyond what I imagined it to be, and this is like just warming up in the first year of the acquisition, and we're scaling up to, you know, be an even crazier 2026. I mean, I go to Sweets and Snacks next week and, you know, have like, it'll be like the first expo I go to, and like my schedule's entirely full of like meetings with all these different retailers. And I'm like, man, I am official now. It's wild, man. Speaker 2: Now it's really cool to see that like I feel like a lot of the outside looking in perspective is like you get acquired and it is that like super, it's a power pack, it's that jetpack that you get of like hey like and I'm curious is it really like that where it's like all right they just get on calls and like you now have meetings with like things that would sometimes take months to even find out and see if you're gonna get in front of a buyer. Is it like just you kind of shortcut through all that now? Speaker 1: I'd say kind of because I don't know this for sure, but I would think that, especially we've been going for over five years, I think any candy buyer who is probably properly doing their job of analyzing the market should know that we exist. Like I would be dumbfounded. And I don't know if I'm being like ignorant of like how or maybe like, oh, yeah, we're so cool. But like, I mean, if you're a candy, because it kind of like when we went into HEB, right? HEB was someone where we got into like five locations the first like week, right? And then what happened was every store owner or every category Candy category leader of each store started seeing the data of these five stores are in and like, oh, like, oh, they're selling well, like I wanted my store and then it was like the regional buyers for like they own like they have like 10 stores they control. And then it was like we want it. And when we got to HB, it was I mean, Mona can tell you was like we would have these days where I'd be like, Another H-E-B. And like 10 minutes later, another H-E-B emailed us. We would get like 10, 15 in a day and it was just like nonstop because everyone would see the data. Oh yeah, I'd stalk it. I went in the back and there were like old system. I'm like loading in the docks. I'm like knocking on the thing, loading. Yeah, I wanted to learn all of it. So in my head, I was like, that's what's basically happened. We went with Target and Walmart and then we started getting approached by all these other retailers. And I'm assuming that if you're a candy buyer and you're analyzing the market, which I'm assuming they do, because they want to do the best in their category. I'm sure that's how they make bonuses and how they make, you know, scale. They want the company to do great, but they also want to look great at what they do. And, you know, it's kind of like the Target buyer that took a chance on us to bring it in. I'm sure their upper management was like, great job, like bringing in Sour Strips because they brought so much revenue to Target, right? In my mind, it was like just like a waiting game that I knew was going to happen. So I with the Hershey, it's a little different because They literally have like two to six people that like are for like every like account or even sometimes even more of that. So they're already having all these meetings, right? And so they can just quickly drop of like, hey, this is, you know, here's another brand we, you know, a brand we acquired, you know, and they're like, oh, I've heard about them. And just we've been able to like, I don't wanna say pull strings, but it's, it'll be, There's some retailers I got like calls right when I landed yesterday in New York of like, hey, their reset isn't till like March or April of next year, but they actually want to like pull you in early in like four weeks. And it's like, okay, like it's crazy. So I think it's like Sour Strips would have continued to grow and continued. I think we would have been a dominant player in the space regardless. But now it kind of It solidifies and you know selling the company is like a lot of people are like why why didn't you just keep building it but it's a lot easier for like founders to like understand of like like the world doesn't see the the stresses and like the what ifs and like be like hey all it takes is you know if all your eggs in this basket of this account like if and then more more um more competitors come in the space and copycats start coming and like there's just there's so many what ifs and you're dealing with all this whereas if When you get acquired, especially by a strategic one like Hershey, it almost kind of like concretes you in and now you're like, okay, now you're playing on a different level. And I just, with Sour Strips, I wanted it, like I said, to change my life and I wanted it to be a brand that was around forever and I think I was able to achieve all of those things. And I'm super proud of what myself and my team have done over the past five years where You know, I started Sour Strips like pretty early on in like the CPG boom in the influencer world. And I'm proud that I was the smaller influencer that went into this space against the giants and became one of the most successful ones. And I'm proud that I also like I did this with my team. It wasn't like this. I'm the face of it. I make these goofy videos and then I just have like a meeting once a week. It's like, I still make my goofy videos and I'm proud that I built this whole thing and continued to make the content in the same way and I was able to document it. That's why, you know, if you, if people had opinions of me now, I'd be like, go back five years. I'll show you when I launched the brand and watch every video from the past five years and you'll see exactly, exactly what I did to build this brand. And I, like I was in it. I mean, I was stocking the shelves. I was installing racks at my warehouse. Like I was, I was touring the warehouses to figure out which space I needed. I was the one making all these decisions. I didn't have anyone else making decisions for me, deciding what was the best move for the company. In the brand's like history was because I was like, I think this is the best thing to do for the company. Speaker 3: I love the way you talk about it. It's just like one big art project for you. Speaker 1: Yeah. Well, that's why it was, I feel like I almost had this like cheat code because like I said, like it is like I built a candy brand for candy lovers, but it was built by a candy lover. Right. And I think that's like this cheat code that a lot of people don't have. Speaker 2: Yeah. I'm curious, you obviously, you know, two pieces here. One is, I think the world you live in is also having a moment with ghosts, also in an acquisition. You see poppy recently. Texas is also a breeding ground, right? I mean, you have the blooms of the world, super coffees of the world. It's incredible to see brands grow. What do you kind of get to also see with the exposure you have within your own circle and how important that network is? Because I feel like the other piece of this is like, you have incredible brands that are building. But they don't have a network that kind of accelerates the learning of like who to talk to or maybe even who to be like, hey, I'm just gonna like run this idea by or run this like you talked about like, hey, with your friends, you talk about what's the number you'd sell at this and that like, How important or did that play a part at all, which is having that network, having that exposure, being able to, you know, even work with someone on the go side with Dan and Ryan, they're like, are those good pieces that kind of helped accelerate some of the thought processes? And if not, just curious, like, how do you look at kind of the climate for CPG as well? Speaker 1: Yeah, absolutely. I mean, firstly, with the huge congrats to Ghost, it was so, when that came out, I didn't know anything about that. I didn't get like, which I guess obviously I shouldn't have, but like when it announced, I was like, what? And because I was, I was like balls deep in my acquisition at the time and I hadn't talked to them. Speaker 2: And I figured timing wise. Speaker 1: And I remember like, I mean, when I called them, I was like, Hey guys, congrats on the sale. By the way, tomorrow, you might see something very similar and they're like, what? Like, and it was just this crazy full circle moment that like we I mean, I've been with go since day one. And I remember when I was in Australia with them, we're like walking to the gym across like the The water and I remember like telling them about About this idea. I had to start Sour Strips and they're like, oh, that's cool, man And they're like they're like one day we should like do a collab together and like, you know, if it blows up We should like do a collab together. I was like, that'd be cool I'm like just this full circle of like then everyone got acquired kind of the same time and then I'm even friends with the the owner of the the other owners of Alani and so like Katie and Hayden, so it's It's just like all this happening at the same time was like awesome Almost wild to see like all the people you know and everyone getting acquired at the same time. But the relationships were key. I mean, I would have if I had never, I think a lot of it it's like the people you surround yourself with, but it's like also the people you put yourself around, right? Like if I had never decided to move to Texas, To go more into like the social media thing because of my buddies like Christian and everyone that's been in, you know, in Texas, like Alphalete, you know, that would have, my life would have been completely different. I would have never met my wife. I would have never started, who knows, I would have started Sour Strips. And even Christian's getting into 3D energy drinks. Yeah, that was the, yeah, he's relaunching it real soon. Like, I know he's doing the whole rebrand. But him starting 3D was the, It was the aha moment for me to go, man, there's a guy who, cause I was like, when you're in fitness, you do clothing. That's what you do. Okay. You, you, you do bicep curls and you make clothing. That's, that's like what you have to do. When he did the 3d, I was like, man, okay. He's the energy drink guy. And then, okay. He gets brought, every time we're at expos talking for people for eight hours, like everyone brings them energy drinks. Everyone brings me candy. I'm the candy guy. Like in my videos, I'm, I'm just, I'm known for loving sour candy. And I was like, What if I started a candy brand? So he like inspired me to do that. And people you're around is so important. I even remember like weeks before I even launched the brand, I had the original logo. The Sour Strips was like shifted a little bit over and there was a bunch of like dead space. There's like white in between it. And I was like, hey Christian, wait, like the box looks sick. He's like. I think you should tweak the logo. I was like, no, no, I'm talking about the box, man. I'm not asking your opinion on the logo. Like, no, the logo is like, it's all fine. I was like, I really, what if you did the, like, I think you should just like fill this gap. All right, let me go look at the computer. And then I readjusted it and it changed in such a better way. And even early on, I was inspired by all the guys at Ghost and seeing what they've done. And there's a lot of brand elements that I pulled just from like, I love the direction that they took and being kind of like the edgier kind of like energy drink brand. And it was just this cool full circle thing to be surrounded by so many people just doing dope shit. And the network is, it's like grown so much. It's kind of like when I was doing YouTube and clothing and I was successful at making videos in respects to like not comparison maybe a lot of other clothing brands, but like with Ever4d I was really proud of like what I was able to build it up to. And I remember always I'd go to events and everyone would always be talking to people who were really, really successful. No one ever talked to me about the clothing or they'd be like, oh yeah, cool videos, man. But I wasn't the business guy, right? And it was so wild when I started Sour Strips. And when it started really taking off, just the amount of people that all of a sudden, I almost gained all of this respect. They're like, dude, Sour Strips. That was the business candy guy. And then now that I've sold it, I get just DMs from all these people and I'm like, I was like, man, I've been cool this whole time, guys. I didn't have to sell the company to do this. But now it's, I mean, I guess I've put in the reps, I guess, of building this brand. And then exiting is something that not a ton of people do. And so it's been an interesting dynamic of now how the conversations, when people talk to me, because I look at myself as this, I like, and my wife will always like rag on me for it because she hypes me up, but I'll like, I like downplay. I'm just like, I'm a goofy guy. I made a candy brand. I make my weird videos. I, you know, try to be funny all the time. And then Taylor's like, you know, like, Maxx, like, what you built is crazy. She's like, like, this idea. I know it's, I was like, yeah, but I just, I just really like Katie and I, you know, made the cool thing. And she's like, no, no, no. Like, you built this company that like people, people don't do this. Like, this is like crazy what you've built. I'm like, I mean, I mean, I guess. But it's like, I almost, I have this like imposter syndrome of, of like, I'm like, oh, I know all the work that went into it, but I'm just like, well, that's just what I had to do to get it to this point. I look at a lot of other business people online. I'm always like, I'm not like that person. I don't carry myself and talk like that. I'm like, do I need to start doing that to be perceived as a business success in the world? I don't know. I like to show people that you can just be passionate about what you're doing and hopefully you find success because you're just passionate about the things that you're creating. And now it's quite a different landscape. But I know I went kind of all over the place on that, but I absolutely think that the people around you and the people you connect with are just so crucial. I mean, I even remember And a lot of times you also have to like blur out a lot of the noise because I had people when I started the brand that were, I actually talked with like the people at like Congo who are half owners of like Alani, right? We know Prime and all that. I remember talking to Trey on the phone and had this idea about Sour Strips. He's a business wizard, right? I mean, clearly, he's done all these brands. I remember telling him about this idea and stuff. He's like, well, distributors need to hit this margin and so you need to make the candy for this price and you have to sell it at this price. I was like, damn, that's way cheaper than I can actually do it for. I'm about to sell it for this. It's not going to work, man. Like it's like you have to sell, you're going to have to have like super low margin. Like you have to, you have to do X, Y, and Z. And I was like, yeah, I'm going to try it anyway. And I was like, you have to, you have to sell it at this price. You have to make it this price. I was like, I can't. So I'm just going to try it. I'm just going to try to do this. And we ended up like, you know, I, I talk a lot about how Sour Strips kind of like, you know, created this like premium category in the space where, you know, I had to sell it for more money than other brands because I couldn't compete on price or else I would have never been able to scale the company. We've been profitable since day one, but we only continued to get more profitable as we had economies of scale and as we were doing that, but it took like, again, we were always making money, but for the first one to three years, I was not balling out. Cash was coming in, but it wasn't flowing. As soon as it in, it was out. It was in and out. Counts got low. But again, my, you know, employees don't see all that, but I was just thinking of like, okay, I'm a candy lover. Would I, would I pay an extra dollar for a, what I think is a better candy? Even if when I was back in college, maybe I wasn't, you know, you know, I was budgeting my money a little bit. I was like, would I pay an extra dollar for an extra candy? I think I would. So I think a lot of people would too. Like, you know, and we're not gonna be for everyone, but I think we can sell a lot of candy and Be more expensive. It wasn't this tactic I had. It was just like I couldn't sell it for cheaper. I couldn't do it. I wouldn't have been able to scale the brand. I wouldn't have been able to hire a team. I wouldn't have been able to go into retail. The history, it's a wild story, man. Speaker 2: I know we're gonna wrap up soon. I have one question just from the lens of you look at the day after the wire hits. Yeah, right and like besides getting dude a private flight Which was sick? What's what's financial freedom really look like now like I know it's there's this there's this overarching blanket You can throw which is like my family's fine. I have generational wealth bubble up but like what is the next day, right? like how is it just like is the ability to buy anything and go do anything really you know is that feeling actually different from what you thought it would be? How's like the moment post that day? Speaker 1: Well I mean right after I sold I put an order for three Bugattis obviously you know it's like Mr. Deeds when he gets everyone you know Corvettes it's like I got everyone at Alphaland Bugattis. No and like I know you joked about the dude in the private jet but that was like the first as soon as I sold I was like I was like, my friends are always, everyone always can't go to this trip or that trip. I was like, I want to do a sick trip snowboarding. I want to go to Vail. I want to get a private jet. So all my friends like, and I'll do it cool. I'll take my dog. So I was like, and I was like, so I was texting all my friends. I was like, look, I'm getting a plane. I'm getting a dope spot. Y'all just have to show up. Like I want you to just to come and enjoy this. So that was like super cool that I got to do that. You know, outside of all the taking care of everyone like kind of around me and like the security, it's interesting. I was doing well before the acquisition and I still was like not like balling out maybe as much as I could have balled out when I would look at like the internet and be like, man, these guys are either have 700 times more money than me or they're just very poor with their money. Like I was like, cause I ain't buying an ounce of like what these people are buying. And I was like, and I think I'm doing really, really well. Like I see my bank account. So I've always been someone who's like been, I think frugal in certain aspects and then on things that I really care about, you kind of go lavish on, right? And for me, it's kind of experiences. Money is an interesting thing. It's an interesting topic. I'm obsessed with learning and talking about money, but I know it's like you have to do it in kind of a way. I don't want to come off any type of way. I look at financial freedom as You can do the things you want to do and you don't have to stress about like the pricing of it and it even like the day-to-day I joke I joke my wife all the time I was like you know what I think luxury is I was like when I open my fridge and I have like all the the energy like the protein drinks that I want all the snacks that I want like stocked up that when I was like in college like there's no way I could have Like, oh, I need to get one protein bar at a time. Now I buy five boxes and I can have one of each of the flavor and I can pick which one I want. I was like, that's luxury to me. But no, I mean, I think money just kind of amplifies the person that you are. And I think if you're a doucher when you don't have money, you're going to be a doucher when you have a bunch of money, right? And so I think now I just want to like, I just want to do cool stuff. I mean, we're, we're, we're building a really cool house. That'll be, that'll be something that I'm spending this money on will be this house that there's like, but I'm like doing it because I'm like, I want to have these experiences for the life that I want to live in five to 10 years with my, my, my family and my kids and have, you know, all the parties there. And so, Yeah, I don't know. I mean, I haven't really bought anything. I bought a truck. I bought a Raptor. I bought a Raptor R, so that's super cool. And then, you know, I've been losing a bunch of money in the stock market, so that's fun. But other than that, it's kind of, I don't know. Speaker 2: Yeah, that's cool. Speaker 3: I love what you said, money amplifies who you are. Speaker 1: Yeah, for sure. So, I mean, like I was annoying before money and I'm definitely annoying With the post sale money. Speaker 3: I mean, you've done what everybody aims to do. So congratulations on that. One thing that you want viewers and listeners to take back and I don't know if it's, you know, implement their business or maybe it's just like changing the way that they think about things. What would be one thing you want to leave the viewers with? Speaker 1: I always love the like, Paralysis by analysis type of thing is like throughout my entire journey of Sour Strips, like I said, with like the call about the pricing and you should take advice from a lot of places, maybe from a lot of people who know the space, know what they're into, but you shouldn't take every piece of advice as to like, this is concrete what you have to do. And throughout the history of Sour Strips, there's probably a ton of decisions that I made that People with a whole lot of experience would have been like, that was, I would have never done that. I would have never done that. But every decision led me to this moment in time. And I think you have to just trust your gut more than you maybe think. And I think a lot of people will analyze data and reports and all this. But I think at the end of the day, A lot of Sour Strips was built in the successes, were built on decisions that I made of just, I go, I think we should do this. Like, I think we should, I think this is the move. It wasn't about what does it cost? What is the profit of this going to be? What is the ROI on this? It was like, I think either whether this would be cool or this is something that I really want to do or I think this will work. And I think the more and more you trust your gut, I think you'll be pleasantly surprised. Speaker 2: Chew on that. Speaker 3: If you want more from us, follow us on Twitter, follow us on Instagram, follow us on TikTok, and check out the website, ChewOnThis.io.