“A fresh start” for Chubby Snacks
SAN DIEGO For several months, the creators of Chubby Snacks wondered how to make peanut butter and jelly sandwiches more quickly. Due to an excess of demand for the brand’s frozen handhelds, the company was forced to stop operating online for the majority of the previous year and expand into other grocery shops around the nation.
Presenting the Chubb-O-Matic, a completely automated peanut butter and jelly maker that will boost production significantly while lowering cost of goods sold.
According to Chubby Snacks co-founder and CEO Dillon Ceglio, “it allows us to go from 120,000 units per month to over 2 million units per month” (Food Business News). “We could almost reach 30 million sandwiches annually in 2024.”
The machines are kept in a 5,400-square-foot area that is specifically designated for them in a Colorado manufacturing plant. “The bread is produced within 24 hours prior to being put into production, which increases the malleability of the bread, helps keep the crimp closed, and ultimately provides a better product for the consumer,” Mr. Ceglio said of Chubby Snacks’ new bread supplier, a local bakery that delivers fresh loaves every day.
The range of crustless sandwiches from Chubby Snacks is marketed as “a premium yet practical choice for nostalgic, health-conscious consumers on the go.” It consists of organic wheat bread stuffed with jams that have been thickened and sweetened with chia seeds, as well as peanut butter or almond butter. Compared to the industry leader, Smucker’s Uncrustables, which brings in over $600 million annually, a sandwich has less sugar, less calories, and more protein and fiber. The first direct-to-consumer brand Chubby Snacks appeared in the early pandemic months.
“Every sandwich was made by hand when we first launched, exactly like you would make them in your own kitchen,” Mr. Ceglio stated. “It was obviously not scalable or sustainable, therefore the objective was to regularly examine our production process to identify areas where we might maximize output relative to input. We repeatedly performed that. We chuckle and refer to ourselves as the Albert Einsteins of peanut butter and jelly production because, in all honesty, we really did attempt a hundred various approaches to see how we might produce the greatest number of sandwiches for the least amount of money and labor.
The brand moved from producing its products independently in a Los Angeles commercial kitchen to collaborating with a Midwest contract manufacturer last year. But as Mr. Ceglio noted, “that was not at all profitable and very unsustainable.”
He continued, “We always understood it was a means to an end and that the objective was to become automated. It required some time to persuade investors to take a chance on us in order to be able to buy automation and put it into practice because we were a bootstrapped business without much experience in the food and beverage industry.
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An investor “decided to take the risk on us and gave us $1.5 million to put down on the machine” towards the end of last year, according to Mr. Ceglio. The manufacturing machinery went into production early this year, and in October, the Chubb-O-Matic—as the inventors have called it—was installed. In order to thicken the nut butter in the new production process, a little adjustment to the recipes was necessary; cocoa butter was added.
“We could have been in 2,500 doors before the machine went live,” Mr. Ceglio stated. We had grown to about 2,200 before the machine, but we were forced to discontinue our direct-to-consumer and Amazon businesses. We’ve been hamstrung by our incapacity to make enough sandwiches for everyone.
In recent years, Chubby Snacks has expanded into more Kroger brands, such as Fred Meyer, QFC, Ralphs, Smiths, and Fry’s, in addition to H-E-B and a few Target stores. The business is also expanding into corporate offices, college campuses, and the locker rooms of professional sports teams. It is also making inroads into the convenience channel. Additionally, Foxtrot, Fresh Thyme, Central Market, Giant, ShopRite, and a few Whole Foods Market locations sell the brand’s sandwiches.
“Ideally, we can turn on another machine within six months because we built the machine to be copy-and-paste-able,” Mr. Ceglio stated. That would therefore be extremely beneficial to us in the future as we aim to expand. We may invest more in a second machine the more product we can transport.
“We get to turn back on our direct-to-consumer business and are a few weeks out from turning on our Amazon business for the first time,” Mr. Ceglio said, noting that automated production has now started. The company also just released its first-ever marketing campaign, which featured a humorous commercial showcasing the food as a healthful, “hangry”-disrupting snack.
Mr. Ceglio declared, “This is a new beginning for the company.” “The ad is a great conversation starter for both investors and consumers. We want to demonstrate to our customers that we’re all invested in growing the brand.