When we think of functional foods, chocolate may not be the first thing that comes to mind. But with time, innovation, a shift in perspective and creative marketing, Mid-Day Squares is turning the concept of functional foods on its head. The Montreal, Canada-based chocolate company is not only redefining what it means to eat chocolate, but also how to run a successful food business that doesn’t take itself too seriously.
Xtalks spoke to Jake Karls, co-founder of Mid-Day Squares, to find out more about the company’s roots, philosophy, products and marketing.
Founding Mid-Day Squares as a Family Business
Like many modern food businesses, the concept of Mid-Day Squares came from a desire for something that wasn’t available on the market. In an attempt to help his chocolate addiction, Karls’ sister, Lezlie Karls, began experimenting in the kitchen by making her husband, Nick Saltarelli, a healthier version of a chocolate snack – and the rest was history.
Once they realized its potential, Karls quit her job in the fashion industry in New York City and Saltarelli sold out of his software business to focus on Mid-Day Squares in 2017. After receiving a report from a Canadian chocolate conglomerate that showed real chocolate (55 percent cocoa and above) was growing at 44
percent year-over-year, and that plant-based protein was growing at 36 percent year-over-year, it clicked in Saltarelli’s head. Mid-Day Squares ingeniously combined those two components and from there, a “new-age conglomerate” was formed.
With help from McGill University’s Food Science team, the couple transformed Mid-Day Squares from a homemade snack to a commercialized product within the first year of business. But something was still missing. In July 2018, they reached out to Karls and asked if he would join the team as a third partner.
The company needed “someone that’s going to build community, someone that’s going to make noise, someone that’s going to build the brand, build that aspect of the tribe,” Karls says. While at first, he was discouraged by the crowded nature of the chocolate space and content with his current work, he later decided to give it a shot. On August 15, 2018, Mid-Day Squares launched and the family business was off to the races.
A “New-Age Chocolate Conglomerate”
The company launched with its first flavor, Fudge YAH – the product that Karls made in her kitchen – which consisted of a chocolate top with a brownie-like superfood bottom. In addition to being a healthier, plant-based version of a chocolate bar, it also curbed hunger for three to four hours. That’s where the functionality aspect comes in. The protein, fiber and the fat ratios actually slow digestion.
“We became this afternoon snack that we wanted people to have, that 2:00 pm-er to get them to their next meal, but also enjoy the indulgence of chocolate,” Karls says. “And it was a white space. It was literally like an open space. And we went into that and we stocked it in the refrigerator.” Mid-Day Squares, Karls explains, must be refrigerated since they are made with real chocolate and other perishable ingredients.
Three years later, the company built its own fully-automated chocolate factory with production capabilities of up to 90,000 bars per day, up from only about 100 per day when it first started out. The factory was built out of necessity after reaching out to 26 co-packers and getting denied by all of them due to the complexity of the machinery required to make Mid-Day Squares.
In the US and Canada, about 40 percent of the company’s sales are direct-to-consumer (DTC) and the other 60 percent are through retail. But as a refrigerated chocolate snack, placement within retail settings presented a challenge. Karls emphasized that when Mid-Day Squares moved out of the dairy section alongside milk and eggs, sales increased 500 percent. Since then, the company has been working with individual retailers to ensure customers are able to find its products as easily as possible.
The product itself comes in three flavors: the original Fudge YAH, Almond CRUNCH and Peanut BUTTA, which all share the same chocolate top, but have a different type of bottom. They are 100 percent organic, made from real foods and free of preservatives, too. When asked what’s next for Mid-Day Squares, Karls says, “All the products that we’re going to create in the future are going to be chocolate snacks, but they’re going to have three components: real food, plant-based and some sort of functionality.”
Capitalizing on Social Media
When Karls joined the company, he suggested the idea of filming everything that other companies often hide. In order to win in retail, he thought, Mid-Day Squares had to be authentic and transparent with consumers, both in its products and on social media. When his partners agreed, Karls started filming everything, “the good, the bad, the ugly, everything in between, the whole nine yards.”
Since then, the company has documented thousands of videos detailing daily activities, drama, successes and human interactions with investors, buyers and everyone else. With its treasure chest of video content, the company is hoping to create a docuseries in the future. But in the meantime, Mid-Day Squares built a media empire within its company that has accumulated tens thousands of followers across multiple platforms.
“Our in-house team creates the content that shows this journey of how we’re building Mid-Day Squares, and how we’re growing it from zero to wherever this takes us,” Karls says. “But when I mean we’re showing everything, we’re showing everything, and it allows that consumer base to come so closely to us and be on this roller coaster, buckled in with us, holding our hands, feeling the emotion that we’re feeling. And I feel like that transparency, authenticity — not as buzz words, but as reality — allows us to break barriers. And I feel like no one in the food and beverage world has done that.”
The company uses social media platforms, including Instagram, LinkedIn and TikTok, and it also has its own podcast. The Mid-Day Squares team discusses several topics in the podcast, including raising money, online versus retail, building a community and entrepreneurship.
But regardless of the platform, the goal is to show that people can win unapologetically by being themselves by showing Mid-Day Squares’ 56 employees building a chocolate company being unapologetically themselves.
“For us, our goal is to show that being a bold, unapologetic brand can lead to really cool things,” Karls added. “And we just want to show the emotional aspect of it, of what actually goes into it. There is so much and everyone should know it.”
“People come for the chocolate but they stay for the story, and that’s what’s important.”