OMG!: Rebuilding After Their Co-Packer Went Sideways

A snack brand can do everything “right” and still get rocked by one thing going wrong at the wrong time. We sit down with Stephanie from OMG Pretzels to unpack how a family garlic pretzel recipe grew from two pans in her mom’s kitchen into a premium seasoned sourdough pretzel nuggets business selling through local retailers, distributors, and grocery accounts, and what it really takes to keep going when operations get messy.

We trace the build step-by-step: early bootstrapping with credit cards, landing that first crucial shelf space, moving into commercial kitchens, and expanding through a regional distributor while also growing wholesale with Faire and testing Amazon. Stephanie explains why packaging decisions matter in grocery retail, how premium pricing collides with legacy snack brands, and how co-packer selection can make or break your supply chain.

Then we get into the financing stack behind the growth: a bank line of credit that increases with revenue, an SBA term loan used to support larger production runs and expansion, plus pandemic-era EIDL and PPP support. Stephanie also shares what happened when a co-packer leadership change triggered long out-of-stocks and prepay terms, and how she rebuilt momentum with a new women-owned co-packer, tighter SKU focus, lower cost of goods, and a pivot toward in-person events and festivals for faster cash flow and brand awareness.

If you’re building a CPG brand, navigating working capital, or evaluating co-packers and retail readiness, this conversation is packed with hard-earned lessons. Subscribe for more founder financing stories, share this with a CPG friend, and leave a review with your biggest scaling challenge.

Connect with Keith on LinkedIn - https://www.linkedin.com/in/keithkohler1/

Transcript

Welcome And Guest Introduction

Keith Kohler 0:03

Hi everyone, it's Keith Kohler, your financing man with the latest episode of How I Financed It. And just as a reminder, what I do as your financing man is I help you get the right financing at the right time. That's Transaction Me. In addition, I meet you where you are and guide you along your financing journey, and that's Transformation Me. So transaction and transformation equals financing man. And for today's episode, I'm very lucky to have Stephanie from OMG Pretzels. And come on, who doesn't love pretzels? Pretzels is a part of all of our upbringing. It's at our favorite bars, it's at ballparts. It's a snack that we've all grown accustomed to and love. So I'm really excited to bring Stephanie from OMG Pretzels to the how I finance it stage. Welcome, Stephanie.

Stephanie Kriebel 1:03

Hi, Keith. Thanks for having me.

Keith Kohler 1:05

Yeah.

Stephanie Kriebel 1:05

Excited to be here.

Keith Kohler 1:07

I'm digging the product, the whole background because the pro whole product shots are there.

Stephanie Kriebel 1:14

Yeah, yep.

The Flavors And SKU Strategy

Stephanie Kriebel 1:15

It's a bit a bit of our history here. Um, well, second and third iteration of our product and packaging. The first one is long gone. Little clear bags with just black and white labels slapped on. So yeah. That's not good.

Keith Kohler 1:31

Sorry. So tell us what are the products you have today?

Stephanie Kriebel 1:35

Uh well, today, as we as we speak right now, we actually have done a bit of SKU rationalizing. And um, we have these first four right here in the front. We have our flagship product, which is our garlic. And by the way, for those people who don't know, OMG pretzels make seasoned sourdough pretzel nuggets that make you say OMG. Then we have our sweet and salty, which is cinnamon sugar. We have cheddar jalapeno because everything is better with jalapeno.

Keith Kohler 2:14

Yes, it is.

Stephanie Kriebel 2:15

And then we have our Chesapeake, and this one is really popular in the mid-Atlantic region. Think uh New Bay, out with the old and in with the new. We this is our proprietary blend.

Keith Kohler 2:30

Oh, bro.

Stephanie Kriebel 2:31

So those are our four all-the-time SKUs, then we have some seasonal ones that we um just switched to seasonal when we did the SKU rationalization. So we have four of those flavors. I can share those with you as well if you'd like. Yeah, let's hear it. Sure. Okay. So the plan is to bring our sweet and salty back uh between Valentine's Day and Mother's Day in 2027, and um do a little a fun little giveaway with for Mother's Day with in combination with that. And then our salty butterscotch, which uh grew in popularity at the holiday season last year. Um, we'll be coming back at the end of your holiday season again. We have our buffalo flavor, which uh will be back during football season. Yeah, that's a football season flavor for sure. And we have our lemon pepper flavor, which won two food industry awards in 2024, which will come back probably sometime during the season or during uh lemon season, which I think is at the beginning of the year. So we'll see.

Keith Kohler 3:47

Okay, yeah, the four forever Susan, four that you bring back throughout the year. Correct. Yeah, is that when you started with those eight flavors, or did you have different flavor profiles when omg started?

The Family Recipe Origin Story

Stephanie Kriebel 4:00

Well, when OMG started in 2014 officially, well, let me back up because really omg pretzels before it was officially OMG pretzels started as an after-school snack that my mom made for my siblings and I. And that was our garlic flavor. That's really how it got started. So, as we were growing up, we weren't allowed to have potato chips or any kind of snacks like that, but we were allowed to have pretzels, uh, considering we are from the suburbs of Philadelphia and the state of Pretzylvania. You know, it's uh, you know, a common snack for us. And so that was what we were allowed to eat um uh as a snack growing up. And so um, mom would serve the garlic pretzels also at family parties and take them as hostess gifts for her friends, and people started asking where they could buy them. And so, fast forward in 2014, OMG pretzels was born, two pans at a time in my mom's kitchen. And that was the garlic flavor.

Keith Kohler 5:04

Yeah, so everything was the garlic flavor and the originally being produced in mom's kitchen.

Stephanie Kriebel 5:09

Yep, it's the OG first one, and still our number one seller.

Keith Kohler 5:14

I love it, yeah, because it's a funny thing when I think of pretzels growing up in Los Angeles, I knew them only in bags. And then when I went to school on the East Coast, then you'd see the pretzel stands, right? And the large yeah, like the ones you'd see at at fairs with it, you'd bite into the big chewy ones with mustard and everything. Yeah, yeah, that's that's actually what I remember more is the bagged ones.

Stephanie Kriebel 5:41

Uh-huh. Yeah. Well, it's interesting because um, while the business is uh headquartered here outside of Philadelphia, which is where I am right now. Um, I have been a resident of Northern California in a city called Gilroy for Oh, Gilroy, yeah, the garlic.

Keith Kohler 6:01

Gilroy is the garlic capital. How did you wind up in the garlic capital with garlic pretzels? Come on, Stephanie.

Stephanie Kriebel 6:09

Well, really, um I moved to San Francisco in 1996. Uh my a friend of mine from high school, who I had helped drive across country to LA, in fact, somewhere around 1990, uh called me up one day and said, I'm moving to San Francisco, you should come. And I

From Philly To Gilroy Garlic

Stephanie Kriebel 6:30

said, Okay, and off I went. And so Californian ever since. Uh, you know, when I I of course love Philadelphia being born and raised here, and of course, I'm you know a birds fan and Eagles fan. So, you know, that'll never change, but really my home is in California here in my heart. So, um, but anyway, so how'd I end up in Gilroy? Well, um after moving to San Francisco in 1996, I slowly made my way down this the uh San Francisco Bay Peninsula.

Keith Kohler 7:07

Yes, you did.

Stephanie Kriebel 7:08

Uh lived in a bunch of different places, and then um when I met my partner Steve in 2013, uh he um we were living in San Mateo, which is close to SFO, and then but he was commuting for his teaching job all the way down to Morgan Hill, which is just the the city north of Gilroy. And it was a minimum of an hour, hour and a half commute each way every day. He did that for 10 years.

Keith Kohler 7:41

Oh my god.

Stephanie Kriebel 7:42

So it was like, no, we need to make a change, and purely because I have the flexibility of working um both here on the East Coast and home on the West Coast for OMG pretzels, uh, you know, it was kind of a no-brainer because um it just wasn't healthy for him. So we ended up moving to Gilroy about three years ago. And funny thing, so when we moved there, there's lots of walking paths and biking. I'm a biker, uh, you know, so Steve. And so there was this parking lot. So we don't live far from the uh Gilroy High School, and there was this parking lot, this open lot. And when we went by there the first time, I'm like, boy, does this feel familiar? Right? Well, I finally figured it out because there's a park called Christmas Hill Park in Gilroy, which happens to be where the Gilroy Garlic Festival was held for years and years and years and years, which I went to many, many years ago. Okay, and that parking lot was where we parked, and that's how it all came flooding back, and so it was kind of fun to have that connection. Um, but yes, Gilroy is the garlic capital of the world, and it is also known as the southernmost city of the San Francisco Bay Area.

Keith Kohler 9:07

Oh, I didn't know that. I didn't know it would be still be considered the Bay Area.

Stephanie Kriebel 9:11

It is, it is, it's surprising because it's so far away. We're 30 minutes south of San Jose, we're 90 miles south of San Francisco. Wow, you know, but it is it's the very last city, and then um, then of course you have the central coast, so we're about 30 minutes northeast of Monterey and Carmel.

Keith Kohler 9:35

Oh, yeah.

First Retailer And Early Demand

Keith Kohler 9:37

So when you when you had this recipe as a kid, what made you decide, hey, this is a business, this is something we want to take out into the world?

Stephanie Kriebel 9:46

Well, I have to, you know, give my mom the credit for that because uh, like I said, she used to take serve them at family parties, the garlic flavor, and also give them as gifts to her friends. And that's when people started asking where they could buy them. And so in 2014, mom went to a local um corner store called Anna's, Anna's Corner Store. And Anna is a big promoter of local businesses. So Anna had taken an old Wawa, for those of you who know Wawa here on the East Coast, um, and converted it into her own corner store. It was she was known for her sandwiches and for, you know, her dad was really famous in the restaurant world because of his Caesar salad, and she even has his original wooden bowl and everything there. And but like I said, she was she's always been um a big supporter of local businesses and businesses that are just starting out. So she was the one that gave us our very first shelf space back in 2014 and still carries our pretzels today. And in fact, 90% of our original customers from 12 years ago still carries our pretzels today.

Keith Kohler 11:09

That tells you something.

Stephanie Kriebel 11:11

Yes, does. Yeah, considering all the iterations we've had now, because we've had a few.

Keith Kohler 11:19

So you sold to Annas, and then what came after that? Where where were your next sales and uh the customers you worked with?

Stephanie Kriebel 11:27

So um really it started out locally while mom was pounding the pavement here in um uh Plymouth meeting, actually, is where we are. I was in California, of course, helping virtually by doing, you know, my first career was in graphic design, marketing, flexible packaging. And so I was doing all those things from California virtually, and uh mom was here knocking, you know, going retailer to retailer. So we uh we're in a bunch of like delis and beer distributors, and our first grocery retailer was is well was and still is McCaffrey's Markets. So a small, nice um I think they have, I think they're on their ninth store now, but at the time they had seven, and they gave us our very first shelf space in grocery retail, and they still sell our pretzels today. So we're very excited about that.

Keith Kohler 12:31

What year was that when you first got into it?

Stephanie Kriebel 12:33

I was 20 uh I think 2015, around 2015-2016.

Bootstrapping And Leaving The House

Stephanie Kriebel 12:41

So we started with the garlic in 2014, two pants at a time in mom's kitchen, and the production was done in mom's kitchen for the first two years. Sorry about that. That's all right, and um so the pretzel, the product was made in mom's kitchen, and then it was also packaged in mom's living room, and then we started, you know, bringing in friends, mom's friends to help with that, and uh just started to grow little by little. I would come on you know, holiday and help, and then um, and then go out with mom to find more retailers or go on appointments like with Score, um, who helped us to uh get started and really guided um my mom on you know how to set up the business and all of that. And uh because originally it was just a self-proprietor and then uh became an LLC in 2016. And so it was around 2016 when we left mom's house uh due to capacity and had to find a commercial kitchen. So, but in that first two years, we brought the sweet and salty um to market. And then in 20, it was between 2016 and 2017, we brought the next three flavors. So it was the the next one to come was the Chesapeake, then the cheddar jalapeno, and then the sweet and spicy. And those were our five um products that we um had until 2020, when we added more.

Keith Kohler 14:21

And then in that initial period, were you bootstrapping the business?

Stephanie Kriebel 14:26

Oh, we've always bootstrapped the business. So um we started out with using credit cards, and then as the business grew, um as we were able to source ingredients in larger quantities and find different suppliers, because we were doing all of our own blending of seasonings at the time. And um, so we we were sourcing all of our ingredients from restaurant, depot, Costco, you know, all the places that they kind of say, you know, you shouldn't. But what do you do when you don't know, right? You don't know what you don't know, and we just knew that we had a great product that people loved, and quite literally, that's how we got our name OMG pretzels, because we listened and watched what came out of people's mouths when they ate our pretzels, and still to this day is uh is what happens. So um, yeah, I don't know if I answered your question or not.

Keith Kohler 15:34

Yeah, interesting. So you outgrew the commercial kitchen at a certain point, right?

Stephanie Kriebel 15:39

Well, we outgrew moms and then went to a commercial kitchen.

Keith Kohler 15:43

Yeah.

Stephanie Kriebel 15:43

So in 2016, we started looking for our first commercial kitchen and we found one that we were at in a year. It was at a local American Legion, and what that did was it gave us the kitchen plus also a big room off the kitchen to be able to do all the packaging and uh you know, drawing of the product and everything, um, all at once, so that we didn't have to move things. And then uh we were there for a year, and then we were kind of that wasn't really working out so well for us. So um we ended up looking further and we found a local synagogue in King of Prussia, which is close by, and they um had a commercial kitchen. So we partnered with them, and they were a great partner to us right up until we left in November of 2020 during the pandemic.

Keith Kohler 16:40

Okay, so for four years, right? You were working in the kitchen. And then during that time, how did you expand uh your retail distribution or how did you sell your product other than McCaffrey's and some of the other independents?

Distributor Growth And Drop Ship

Stephanie Kriebel 16:58

So we ended up in 2016 partnering with a regional distributor, Dana Bella Foods, and who is still who we still work with today. They um they approached us about carrying our pretzels and had seen us in uh one of the stores we were in, and so we started working with them and they helped us to grow um further out into Pennsylvania, here in eastern Pennsylvania, into uh Philadelphia, and also New Jersey, which is their big footprint. So still targeting corner stores, deli's specialty food stores, mostly mom and pop's in independence, and also um getting us into places at the Jersey Shore, which is huge, um, summer traffic.

Keith Kohler 17:50

Okay.

Stephanie Kriebel 17:52

Yeah. And so they really helped us to expand our footprint in those years.

Keith Kohler 18:00

Now, this is an interesting thing because I think in our broader CPG discussion, a lot of times we hear UNFI, Kahy, big names like that. For this particular distributor, well, what has it been like to work with them? Do they have similar terms and conditions? Do they have different payment terms? How what's it kind of like?

Stephanie Kriebel 18:22

Well, it's been great because basically we've just been operating on a handshake. Um we uh, you know, they we sell to them and they kind of resell it, they put it in the stores for us. So that model works out for us. We know you know what we're gonna get every time. And they have a DSD model, I'd say some merchants they will merchandise for others, um, they won't. That depends on that relationship. And over the years, so we were also doing our own distribution and delivery. That ended up stopping, I don't know, it's been a few years, and over time we transferred our customer list to Dana Bella to service, if it was within their footprint, and um if not, then we moved our customer to a drop ship model, which we have a we have a huge dropship

COVID Surge Fulfillment And First Co-Packer

Stephanie Kriebel 19:32

program. Um, I should say that you know, if we fast forward to the pandemic, um at the beginning of the pandemic, so all this time I'm working, I was also a teacher in California. And yeah, so I was working full-time in my teaching position. I actually um started a career education program at the San Mateo Adult School where I worked. So I started out as an ESL teacher, substitute, and then slowly became, you know, a full-time teacher and started this program. And so it was all, you know, I was helping when I would come here and I would help in person, you know, on holidays and things like that. But then when the pandemic hit, of course, my job became a virtual job. And in May of 2020, I drove cross-country and to be here full-time to help because we started to get really busy. Everybody knows that during COVID, snacking went way up, it's you know, main meals. Uh, people are snacking three times a day at least. And so we got really busy. We were operating out of the synagogue, and quite literally, I started sourcing ingredients by the palette because we at this point in time we were sourcing our seasonings by the palette, but um, other things, you know, like oil, not so much. But as we got busier, I started sourcing everything by the palette quantity and was pulling on a pallet jack the pallets of ingredients in the front double doors of the synagogue into their big room off the kitchen.

Keith Kohler 21:34

We had a loading dock, a synagogue loading dock on the room.

Stephanie Kriebel 21:37

No loading dock, no loading dock. We've never had a loading dock in our facility, so I guess, but um, going in and out of the doors, like that's how that, yeah. That's it, you know. Uh, we would also transport product back and forth because we're fortunate where we're headquartered, which is still at mom's house, mom and dad's house. Where we started because over time we started working with a copacker, and I'll get to that in a minute. And but there they have a big back porch, and so that became our warehouse, and so we would do website fulfillment out of that, and um, you know, all of our drop ship would go out of there because we weren't yet using a 3PL, and it was only until last year. Wait, yeah, no, uh the end of 2024, I guess it would have been that we started working with a 3PL. So up until that time, we were doing all of our own fulfillment, and um I guess it was 2023 when we really turned all of our delivery business over to Dana Bella Foods.

Keith Kohler 22:51

Wow, so that much time in this in the own fulfillment area, yeah, in the trenches.

Stephanie Kriebel 23:00

Now, um also we started the business, my parents were 70. And so the team of people that we had at the synagogue were all my parents' friends from church, and what happened was we immediately when the when COVID hit, our team became a high-risk group because of their and we were really fortunate because the synagogue, while uh everybody remembers that all the um you know religious places had to close to their membership. Yeah, the gathering places, the synagogues allowed us to continue to use the kitchen uh during that time, that that first period of time um at the beginning of COVID. And without that partnership, we would have been out of business then because you know we didn't have another way to do it. We were too big to go back to mom's house and do it from there. And um, so fast forward, and in um we started looking for a co-packer then because of you know the circumstances, and we were outgrowing the synagogue anyway. So um in November of 2020, we onboarded with our first co-packer, quite literally in four hours. Four hours, yep, we met with them, they ran did our RD while we waited in the conference room because of course we couldn't go into the co-packer because of COVID. So um, yeah, so they would make the product, bring it out, we would taste it, go back and forth, and that took about four hours to figure it out, and um so and that co-packer actually what I love to share about that how we found that co-packer was we were um so let me see. So I'm gonna talk about our packaging for a minute.

Keith Kohler 25:13

Okay.

Stephanie Kriebel 25:14

So way back at the beginning, we bought clear bags and put white labels with black, you know, our labels were just black and white um onto our packaging. And of course, um, at that time there were no nutritional requirements for us because we weren't yet at the volume where it became a requirement. So as we grew, probably 2016-2017 was when we first came out with our um the bags you see up here on the picture. That was our um first change in packaging where we went to actually a pre-printed pouch um and had a window, and each of the bags was white, but the logo and flavor were assigned the color that corresponded with the flavor inside. And the reason why you see more than five flavors up there is because when we went with that first co-packer, we added the three additional flavors to our lino. Right. So we went from having five, the garlic, sweet and salty, Chesapeake, cheddar jalapeno, sweet and spicy. We added the lemon pepper, salty butterscotch, and a sweet chili. And then it wasn't until 2023 that the buffalo was added to the lino. So that was the packaging, and that people loved it. Um, small retailers love windows, and one thing about our pretzels that sets us apart from others is that we do not skimp on our seasonings.

Keith Kohler 26:57

And we in terms of quality and amount, right?

Stephanie Kriebel 27:01

Quality and amount, right? And so it would at that time in that packaging, it would stick to the window. And you know, most of our customers love that, but as we started to try and branch out into grocery retail, Whole Foods, you know, places like that, uh, they didn't like that so much.

Keith Kohler 27:23

Really?

Stephanie Kriebel 27:23

I should say it no, no. In fact, I remember the very first time we went to our um local Whole Foods and it was I right after the hello. Oh, have you ever thought about changing your packaging? So that threw me off a little bit, but I just said, well, everybody loves our packaging because it was true. Uh anyway, but in 2020 also was when we went with uh got into our very first Wegmans.

Keith Kohler 27:58

Okay, I was about just to ask you that. Yeah, so Wegmans came out.

Stephanie Kriebel 28:02

Wegmans came out. Um we kind of had an inn because my nephew worked there. So he got us the yeah, he he got us the uh um meeting with the um grocery manager. We went presented and they brought us right in.

Keith Kohler 28:22

How many stores did you start with?

Stephanie Kriebel 28:25

Um with Wagmans, just one, and and to this day we're still only in three. So um we've had some challenges expanding through Wegmans that I can talk about. Um so we were in that one Wagmans, and probably purely because at the time it was still just us doing our own sales. I should I should say that in 2020, uh in November when we went with that first Copacker, we also launched on Fair for the first time. Okay, which was a good move for us. Um, that's what really started our dropship program and expanded our whole sale um across outside of just our tri-state area. So people started, we started getting more recognition and brand awareness and sales that way. And I like to talk about how I got the Co-Packer because um I started exploring digital packaging, and of course, at the time, because I understand it to be different now, you couldn't do a window in in digital. Um, I talked to a sales guy at EPAC. In fact, he came and met us at mom's living room, dining room table because that was our conference room. And I started talking to him like this about our needs, how we got to where we are, and you know what we're looking to do. And um he, you know, I talked to him. We were looking for a co-packer, and he says, Well, I got a guy, and he put us in touch with him, and that ended up being our co-packer. Now I never did work with e-pac, but I got the co-packer, I got the guy. So um, so yeah, so that that brings us to November of 2020. Oh, and then we launched on Amazon for the first time

Amazon Launch And Premium Pricing Reality

Stephanie Kriebel 30:32

at that time.

Keith Kohler 30:32

What was that like getting set up on Amazon?

Stephanie Kriebel 30:37

Well, for us it was easy because we ended we decided to work with a reseller. Oh, I see our initial launch on Amazon was with a reseller that aligned with the values that we had as a brand. And um, it was a consignment kind of setup though. And ultimately, while the relationship was a good one and got us recognition on Amazon, I'm not it wasn't in the long run, it really wasn't the right setup for us. Um, you know, one of the things we've always struggled with is because of the quality of our product, uh, our pricing has always been much higher than the category generally. Pretzels have a lot of legacy brands. Yeah, what's that?

Keith Kohler 31:29

Tons of them, yeah.

Stephanie Kriebel 31:31

Yeah, tons of legacy brands, some that are a hundred years old or or more. And um, so you know, we've always been challenged being that boutique premium pretzel brand. And uh so the niche was you know, fair, independence, specialty food, independence, small chains, things like that, hotel markets.

Lines Of Credit SBA Loans PPP

Keith Kohler 32:02

So when you went to the Copacker and then you added these trade accounts, how did your financing requirements change? Were you still doing income from operations, or did you look to other sources as well?

Stephanie Kriebel 32:18

No, um, so initially, like I said, we started with credit cards and those in those early years, we were able to double our revenue pretty much year after year, close to it, and so all that money got put back into the business outside of what it took to support my parents. So I was a volunteer employee, as many people are when businesses start out, um, especially family businesses, and uh so that's how the reinvestment um happened as we started to grow, and uh it was 2019 when I officially made my first financial investment into the company and became a partner, and because we were growing at a pace where the you know the costs were you know increasing, and so we needed a bit of uh financial injection to uh keep going. And so I did that and um officially got involved in the business on paper, and then after that, I guess it was in oh oh oh let me back up because very early on we were able to get a line of credit with our banking partner, TD Bank. Oh, terrific, and so that initial line of credit I think was somewhere around $8,000 or $10,000. And I'm going way back to probably 2015, the first year of business, because the way TD Bank works is they base it on prior year revenue off your taxes. So we needed to have that in place before we could get the line of credit, and so we've been with TD Bank all these years, and that line of credit has increased uh mostly every year. We've been able to get an increase because our revenue has increased.

Keith Kohler 34:37

Perfect. That was fortunate that's been a big help. Oh, no doubt, because it's at bank rates and it's grown with you.

Stephanie Kriebel 34:47

Right, and we have that relationship with the bank too, which is really important.

Keith Kohler 34:54

Yeah, I think a lot of um what I've been saying, Stephanie, is yes, you started the business at a time where that was a lot uh more common and a lot easier to achieve to get that type of product. It's less common now uh that folks can walk into a bank. That said, it is still true that in select cases with when founders have some level of personal strength, could be equity and real estate, it could be deposits, it could be those things, there can be $25,000 credit lines, things like that that they can do at the bank level, even if the company is not making money, but just based on the quote unquote character of the individual and the financial profile. So I encourage everybody to continue to look at that. Uh it's not every bank that does it, and it's usually, you know, TD, that's unusual. A lot of times you we would see this in more community banks, not in quote unquote larger banner banks. But still, I'm glad that you got that, and it that that it proved helpful for you in those in those initial years.

Stephanie Kriebel 36:03

I also think that because my parents banked there, that um they already had the relationship, and so you know, it was a natural transition to add on the business banking.

Keith Kohler 36:17

I see.

Stephanie Kriebel 36:18

And then ultimately uh get the line of credit, and we have a great SBA um, you know, banker there. Now the line of credit has not been um you know backed by the SBA, it's all the conventional line. Yeah. Uh however, um we did end up actually working with you.

Keith Kohler 36:44

That's right.

Stephanie Kriebel 36:44

I want to say it was uh 2022-ish, 2023. It had to be that we got our first term seven uh seven a term loan with the SBA, and we worked with you to help us get that.

Keith Kohler 37:00

Yeah, and that was that 150k loan. And um, you know, the interesting thing, Stephanie, is that product has pretty much gone away. Um it was it was a great product and it made a lot of sense for your use case because it was when you were doing larger production runs, you were expanding and and growing. And so it was a good comp and and the interesting thing, it could live complementary or it could live in addition to the credit line that you have. You didn't have to have one or the other pay it off because of lean positions. So that product definitely served its purpose.

Stephanie Kriebel 37:37

Gotta love those lean positions, it's like playing chess.

Keith Kohler 37:45

Uh the chess players don't want to cooperate, unfortunately.

Stephanie Kriebel 37:51

Exactly. Exactly. But when they do want to play it in the sandbox together, that's exactly right. No, uh, and and um I want to back up too because we all also, because of the pandemic, we were the beneficiaries of an idle loan. Great, you know, that nice 30-year low interest loan keeps on giving. I'll tell you, when I go through our, you know, debt servicing and all our our accounting and everything, the one thing that I really love is that idle loan. You know, the payment is like steady and it's just gonna be there, and it's so small that it doesn't really like do anything. Um so that we were lucky to get one of those too. And then um, of course, the the um what do they call that?

Keith Kohler 38:44

The PPP, you know, PPP as well.

Stephanie Kriebel 38:48

Yeah, so we we were able, even though as um you know, partners in the business, we were still able to leverage that for ourselves as employees. Uh, it wasn't a lot, but it helped.

Keith Kohler 39:01

God, I'll tell you, at that time every bit helped, right?

Stephanie Kriebel 39:04

Yep. Yeah, and it kept us in business, you know. So we were able to go to this new Copacker, we got into our first Wagmans, we were gone on Fair and Amazon, and we're, you know, developing our um own website, brought those three new flavors to market, and so we kind of did that for the next few years, and then in 2023, um, what we started running into was as we got into grocery retail, the

SQF Requirements Rebrand And Automation

Stephanie Kriebel 39:40

requirements started becoming more. So, what I mean by that is SQF, uh quality assurance. Oh, I see all those things, all those things, yeah, all those things that the larger grocery retailers require. And uh the co-packer we had didn't have a lot of those in place. So we yeah, so we ended up and we were outgrowing them anyway, because really the first co-packer was um, I mean, they had they had quality control, the product was made well, that just you know, the certifications, right? So um, so that first co-packer though basically took our same operation and just did it with more people. So it's still hand packing, you know, and small batch. And so we started looking for oh, we also uh ended up bringing in our first broker uh in this period of time to help us scale, and we got into a grocery retailer that I don't want to mention, um, but because it ultimately did not end up working out because the price point was too high on the shelf, and we um we needed to start looking for a new copacker because uh we needed the SQF certification and all that stuff, right? Yeah, and so again, uh relationships and conversations are so important in this industry because you know, closed mouth doesn't get fed. You need to, you know, tell people what you're challenged with so that people can help. And the broker that we were working with happened to know a guy, just like the first one.

Keith Kohler 41:51

I got a guy, you know, and your refrain, Stephanie.

Stephanie Kriebel 41:56

Well, I don't know, maybe it has something to do with being in Philly, too.

Keith Kohler 42:00

That's right.

Stephanie Kriebel 42:02

Anyway, the uh this guy though that he knew he had worked with about a decade prior in another um uh company. So he reached out to him, and lo and behold, we go over. We have this copker also in New Jersey, and uh we go, we uh but this time, you know, we're like, okay, this is gonna be great, four hours onboarding.

Keith Kohler 42:31

I was about to say you're gonna get four hours again, huh?

Stephanie Kriebel 42:34

Try 14 months, 14 months. So, yeah, and what ended up happening was we didn't plan for it to be that long, and we ended up without a stops and you know, having to navigate all that because we ran out of product, ran out of season, you know, and all that. And because at the same time as we onboarded, part of the reason why it took so long is because we decided to reformulate our product to a um cleaner label better for you uh product. So we went to an authentically aged sourdough for a nugget, and also um formulated out all of the MSG GMOs um in our seasoning blends to the product that we have today, which is in the bags. We also rebranded, got new packaging, going on, got rid of the window that none of the large retailers liked. Uh, that was very intentional because um we went the we went from the white bag with the real window to the colorful bag with the faux window. But are you take any nugget out of the bag and line it up with one of these, and it's true to size?

Keith Kohler 43:55

That's unusual.

Stephanie Kriebel 43:57

Yeah, that was really important to us. So um Um and we get compliments on our packaging all the time. It it pops off the shelf. We've been successful in Gift Gourmet space. Um you know, and so um in 2023, that's why it took 14 months.

Keith Kohler 44:17

Wow. Okay.

Stephanie Kriebel 44:21

And not only that, but we went from hand packing to automation.

Keith Kohler 44:26

Automation now too. Okay.

Stephanie Kriebel 44:28

Yeah, automation, uh roll stock, uh film, forming the bag on the production line. So uh form fill line. And uh things were really great for the first two years. We were able to increase our business. Uh we got into two more Wegmans, woo woo, which we're in now, three. Uh, and uh, but our goal this year is to expand throughout Wegmans. And I'll talk about that a little bit later after we um I get to the next part of our story, but um yeah, and so all this financing we got helped support you know, these macrodos all the rebrand everything, right?

Keith Kohler 45:18

Hopefully, and then you were at higher volume, and hopefully there were efficiencies there and uh cost.

Stephanie Kriebel 45:24

There were um at the same, you know, the same time it was a turnkey relationship, so we were like okay, we no longer have to worry about sourcing our own materials and ingredients, they're gonna do it for us, and we're just gonna pay one finished good price.

Keith Kohler 45:44

Um it was almost like having a line of credit through your co-packer, and like I said this upfront cost right.

Stephanie Kriebel 45:57

Um the challenge became the net terms we were able to negotiate and the um the volume that we had to produce, the minimum order of volume, and the fact that we had nine SKUs at this point in time. So I'll just say right now we are a 500 just over $500,000 revenue company, 12 years. So we have been trying to push past that million-dollar mark for a while, but we keep running

Out Of Stocks Prepay Terms Near Collapse

Stephanie Kriebel 46:40

into challenges, and um, so this relationship was going to help us do that. And for the first couple years, we were able to grow our business, and then um, in the third year, the Copacker had a leadership change, and everything just went yeah, Psycho.

Keith Kohler 47:01

That was last year to be a thing, huh?

Stephanie Kriebel 47:04

Yes, that was last year, and uh according to them, due to equipment upgrades and things like that, we literally were able to run free production order production runs with them all year. So we were out of stock of our top sellers the majority of last year. We and we also got into Ingalls Markets last year.

Keith Kohler 47:30

I know Ingalls.

Stephanie Kriebel 47:31

So that was our that had been our biggest client to date. We um, oh, and I should say in 2020, 2023 or 2024, we also brought a line extension of three ounce bags. Um, so we had six and a half ounce pouches, and we were working with a convenience broker, and they told us they would be able to sell our six and a half ounce bag in convenience, and it turned out that it wasn't working, so you know we tried it with a three-ounce line extension, and that ended up being a complete disaster, and money sucked. Let's just say that. We don't have that line anymore, and as I said, we are down to four skews, you know. Um, so 2025 nearly put us out of business. Um, with that change, with that change with the Copacker, we also were put on pre-pay terms, and that made it very difficult for us to stay, maintain um you know, our cash flow.

Keith Kohler 48:44

And for sure, it was a massive change, right?

Stephanie Kriebel 48:48

Right, because that for each for each production run, we were talking anywhere between 40 and 60,000, and not having our top sellers all the time. We were left with just our slower sellers, which then didn't bring in enough revenue.

Keith Kohler 49:07

Well, it's a perfect storm all at once, huh?

Stephanie Kriebel 49:10

Perfect storm all at once. We were in some convenience chains, we ended up getting discontinued due to out of stocks. We then got discontinued um recently from Ingalls um for out of stock and just slow sales. We're hoping to get back in, you know, after Memorial Day. We have a great broker who's um working on that for us, and you know, so it was really tough. Last year, I took a real hit on my confidence, and um, you know, we had a really great relationship with this Copacker, really built up trust the first couple of years, and then to be told time and time again that our production run wasn't ready, it'll be ready next week. Oh, next week comes, it's not ready. Oh, you know, and just be dragged along like that all year. And then finally, the last production run of the year, when they did produce our top sellers, they ended up shipping it all to Ingalls instead. Meanwhile, all of our other customers had been waiting months and months and months, and so you know, uh, could have been a customer service nightmare. But back in January of last year, because this is, you know, how did I finance it? I did end up getting another term loan through Lendistree. Okay, which helped at the time, but didn't last long enough.

Keith Kohler 50:48

In terms of amount that you were looking for?

Stephanie Kriebel 50:51

We no, we got 150,000. It just didn't um it didn't wasn't enough to try and keep the company going, you know, from a cash flow perspective. Um, because we had to keep producing, but we were producing our, you know, we were we were running on fumes essentially. So we had to make uh some really hard choices, and I brought in an ops specialist to help get us out of the situation, help us find a new copacker. We did. Um, part of what I want to say is, you know, uh honesty is really the best policy because when I talk about the trust that was broken with this copacker that we loved for the first two years, and I'm not saying everything was 100% perfect, nothing ever is, but I gave them an A rating, 90%, you know, which is really good. And when they just dragged us along like that, finally I just said, you know, shame on you for not telling us we should go or helping us find a temporary co-packer while you were going through these challenges, you know, um, because it really hurt us, really, really hurt us. So anyway, we found a new copacker, a women-owned copacker, just like us.

New Co-Packer Leaner SKUs Lower COGS

Stephanie Kriebel 52:28

And um, we did our first production run with them at the beginning of this year, yeah, after a few months, yeah. Yeah, so I mean, we didn't have a strong end of the year. Our revenue, we took a large, really big loss last year, revenue-wise. And um, so it was it was out, we've been profitable every year. Um, one year I think we broke even, but um, and not much of a profit, but you know, our sales had gone up. And then last year, just you know, just like that. And um so I brought this person in to help me get out of it. I really needed it because my confidence and trust level just went down the toilet, and I can imagine I was so stressed out from it all that it paralyzed me. And um, so I'm really grateful to this person that came and helped. And uh, you know, so in that process, though, of course, now we go back to sourcing all of our own ingredients, our own materials. We had to get new bags done. We reduced so our operational efficiencies. We ended up reducing the ounce size of our six and a half ounce to five and a half ounce. We also, when we redid our packaging, we moved all of our attributes. We have them on the back still, but we moved them to the front so now people can see them. We're uh and we um also like I said, we uh we put so we had oh gosh, I forgot about that. We had a whole problem with our sweet chili that had been repackaged in the wrong bags at that previous Co-Packer, and that was a disaster that happened too. And that didn't get repacked for six months after they were notified of it. So that was our sweet chili. We ended up getting rid of that. The sales just didn't warrant it, and then um we that's why those other four SKUs were put on seasonal. So now through our operational efficiencies, we've been able to lower our cost of goods and and sourcing our own supplies. We didn't have any transparency into the actual costs with that former co-packer, so that's another red flag. Um, you know, there's different schools of thought. Some copackers share, some don't, you know. Um, there's there's good and bad to both, you know, turnkey and sourcing your own, and they all have their pain points. So um, but in the meantime, our line of credit got maxed out, our credit cards got maxed out, you know. Uh I didn't know how to talk to investors because I thought who the heck would want to invest in a company that's in this trouble here, you know, and it turns out that there is a way I learned from uh the SFA mentorship program, which I participated in as a mentor. Another presenter talked about that very thing and how you know you acknowledge the problem, but how did you get out of it? And so how we got out of it is why I'm still sitting here today.

Keith Kohler 56:01

Well, I'm glad to hear I mean it's really quite a journey, Stephanie, when you think about it, right? It's um you manage through some gnarly issues, and it's hard, it's one thing when it one comes, but when several come at once, right? And I think what you've demonstrated and what you've related to me is the importance of relationships, the importance of telling the truth and facing it whether good or bad or painful or everywhere in between. Right? I think happily at in your journey, many good people did show up at the right time, uh, whether on production or helping you build the business. And it seems like now you know you went really went through it in 25, and yet it feels like 26 the energy is back to being positive and towards uh towards growing again, right?

Stephanie Kriebel 57:01

Yes.

Keith Kohler 57:02

And yeah, you know, again, happily you started like a lot of founders, got the credit cards, but you did get that bank financing, which was critical. And again, that was a function of your time. Um, pre-pandemic, that was a thing. Lots of people could do bank credit lines, and thank God you got that. And happily, what we worked on when that product existed, and then the subsequent one as well. And now it feels like, and again, you said just now you kind of found a way to with an investor to to work with that.

Stephanie Kriebel 57:36

No, no, we don't have an investor. I I learned how to talk to an investor when you go through that time.

Keith Kohler 57:42

So you will be ready when that time comes. And hopefully, exactly. Yeah, now that again manufacturing's in place, you've certainly earned your street cred with everything else that's gone on, and probably you have the right SKUs, and now it's time to grow again, right? And yes, this is the next chapter.

Stephanie Kriebel 58:04

Yes, this is the next chapter to uh I'm looking for a strategic partner with um you know financial um resources and also expertise to uh come in and help me grow the company uh to exit. So that's that's the goal. Well, let's call that in.

Keith Kohler 58:27

Yeah, get in.

Stephanie Kriebel 58:30

Yeah.

Keith Kohler 58:31

And um, yeah, I think there are many companies of your size that have gotten to a certain point. It's funny, I can I'm trying to, I'll I'll try to call some of them to mind because I as you know, I work with companies of all sizes, right? And sometimes they get to this point. And then I wonder

Pride Lessons And Founder Advice

Keith Kohler 58:50

what I can do on that. So you've given me a good homework assignment. Um Stephanie, thanks for joining today and and for sharing your story, which is a wide-ranging story. Do you want to acknowledge mom and what she did in that kitchen to feed family and friends and provide joy with hey, it all started with pretzels and that that one particular flavor profile. And I have a tradition at how I financed it in ending our time together with two questions. So I'm gonna start with the first one. Okay. First one is what are you most proud of?

Stephanie Kriebel 59:26

I'm most proud of my mom and working with her in this business. And uh, you know, I need to acknowledge my dad too, because he's been a big part of it. Um, and just how we learned it along the way. We didn't we didn't have CPG advisors for a lot of the time. I don't even think we knew we were a CPG company for many of those early years, like, you know, and we were we didn't know about the opportunities, for example, like the Food Finance Institute, which I am now working with to help stabilize the company and um you know get to that next chapter.

Keith Kohler 1:00:15

Sure.

Stephanie Kriebel 1:00:16

You know, uh we didn't know about the accelerators and you know, all those tools, those those programs available at you know, in those early days.

Keith Kohler 1:00:28

So and then the second thing is what would Stephanie today tell Stephanie in 2014 when you were just getting started?

Stephanie Kriebel 1:00:47

I don't know, half the time I think don't do it. And then the other half of me is the entrepreneur, and I'm just like, I'm a risk taker, and you know, this is not my first business, it's my first product business, but you know, not my first business. So I'm aware of the you know, um school of hard knocks, right? And both of my parents were have are lifelong entrepreneurs, and you know, so it's in my DNA. Uh so I would just go back and try and show the 2014 Stephanie um all the things we learned about now that we didn't know then. Yeah. And on how to, if I had to, if I had the opportunity to go and do it all over again, which I sort of do right now, um, is uh you know, um get involved in the CPG world earlier, you know, take advantage of the accelerators and the programs that are out there system that are right around us, yeah.

Keith Kohler 1:02:00

Happily there are many of those things. Um, experts, yeah. And it's uh it's kind of like about being visible and being out there, right? And and you have to go out into the world and get them. Um, they are available, but they're it's really from the founder to go to them.

Stephanie Kriebel 1:02:20

Right, right. When we were here as a local regional brand, and most of my time was spent at my other job, you know.

Keith Kohler 1:02:28

Yeah, it wasn't easy. You didn't have that time necessarily, right?

Stephanie Kriebel 1:02:32

Yeah. Oh, the knowledge I didn't even know.

Keith Kohler 1:02:36

Yeah, and now you're here now, and it seems like next chapter is about to be written with a lot of experience, a lot of ups and downs, and I think probably you would say a lot of clarity, a lot of understanding about the direction that it can go, the the retailers, the co-packers, all those things. You've lived enough of it to know, hey, this is what we're doing going forward.

Stephanie Kriebel 1:03:02

Mm-hmm. Yep, we have our plan. We actually uh pivoted to um, can I tell another

Pivot To Events Shopify And Closing

Stephanie Kriebel 1:03:10

quick story? And then we're yeah. So it back in August when we had those three-ounce bags, and we ended up with a lot of them that we just couldn't sell because the price was too high, they wouldn't move off the shelf, and um we couldn't get a better price from the co-packer. So I ended up I decided to do a free giveaway in Anna's Corner Store parking lot to our community instead of selling them to a discounter. I wanted to do it as a thank you because you know, 12 years in business, you know, we've been a I it's it's an achievement to be we're still a valid brand here despite the challenges. Uh, we've had many successes. And so she agreed that to do it, and she helped push it out on her social media. We were limping along in our social media, and what happened was over the course of like the three or four hours I was there giving away these pretzels, about 85% of the people that came by had never heard of us. So for me, it was a big aha moment about brand awareness because it in our local in our backyard, 85% of people still don't know about us, even though we've been sold around here at many places for a long time.

Keith Kohler 1:04:35

It shows you the opportunity, doesn't it?

Stephanie Kriebel 1:04:36

Yeah, yeah. And so this year we decided to pivot. Since we're having so much trouble penetrating the larger re grocery retailers, um, because we don't have the money to um promote, you know, properly support promotion to get product off the shelf right now. You know, we decided to pivot and we are leaning hard into doing in-person events and festivals. So that's how we ended up at the Philadelphia Flower Show in February. 10 straight days of 12-hour selling, and it was fantastic. We had been trying to get in there for a couple of years. Um, you know, we had immediate sales cycle and immediate ROI, cash in the bank, and so we are leaning into that heavily, especially me, because I'm gonna be each and every one. We have a small team of people, my friends now, who help out and are our event staff. And so, you know, we'll be able to do multiple events at the same time and really growing our brand awareness that way. We are moving our website to Shopify finally. We hired a younger Gen Z team member to be our social media guy, actually, with a grant I won in a pitch competition last August.

Keith Kohler 1:05:59

Fantastic.

Stephanie Kriebel 1:06:00

And so yeah, so all these things are coming together to um help us to you know get back on steady footing. And we've seen an uptick from these efforts in our website sales and also um our wholesale customers are growing. So um hopefully all that translates to then the larger retailers at some point.

Keith Kohler 1:06:27

That's the direction the energy is taking you. Yeah, this is the year, this is the decision year, you know, year and it'll set you up for whatever's next, whether it's the growth or leading to some type of exit or transition, whatever it is. It's on its way. And so I'm really glad to hear that, Stephanie. And again, yours is a story of certainly of resilience and um sticking to it, even when it got hard. And so really just glad that you could stop by the How I Financed It stage and share your insights and and all the benefits of your experience with our viewers and our listeners. So, really again wanted to thank you for coming with us today. So, for everyone else, this it concludes this episode of How I Financed It. This is Stephanie and Keith signing off.

Stephanie Kriebel 1:07:18

Bye.

Keith Kohler 1:07:19

Bye now. Thanks, Keith. Thank you so much for joining me on this episode of How I Financed It. I encourage you to reach out to me on LinkedIn at Keith Kohler1, and I look forward to connecting there.