Their side hustle blossomed into a lucrative snack business, with the potential to generate $500 million in revenue by 2024.

Pete Maldonado turned his biggest vice into a multimillion-dollar business.

A late-night poker game initiated the sequence of events, but this isn't a narrative about gambling.

In 2011, Rashid Ali became Maldonado's future business partner after meeting him at a friend's apartment in Chicago. Their conversation during a few betting rounds eventually shifted to discussing guilty pleasures.

Maldonado immediately thought of his favorite gas station snack, Slim Jims.

As a child, Maldonado would often ride his bike to the 7-Eleven on Long Island's New York and purchase a large quantity of beef jerky sticks, which he would consume before reaching his home.

Although he became a personal trainer in college, Maldonado continued to consume Slim Jims, which contain mechanically separated chicken and corn syrup, as his favorite gas station snack.

Ali was informed by him that he aimed to produce a "healthier" meat stick that contained high levels of protein, minimal calories, and had the same delightful taste as the snack that he cherished in his childhood.

At the time, Ali was a business operations consultant and thought the pitch was smart. A few weeks later, he and Maldonado launched Chomps, a "healthier" beef jerky, from Maldonado's condo in Chicago as a side hustle.

Chomps, a meat snack brand, has expanded nationwide and attracted health-conscious consumers to the $17 billion meat snacks market, selling over 350 million jerky sticks. Maldonado and Ali, both 43, remain as Chomps' co-founders and co-CEOs.

Chomps, which started as a side hustle, is now a company on track to generate nearly $500 million in sales in the upcoming year, thanks to the efforts of Maldonado and Ali.

Coming up with a 'healthier' jerky recipe

In 2012, after months of searching for the perfect jerky recipe, Maldonado and Ali discovered Chomps' base recipe at a small store in Greentop, Missouri.

A friend in Missouri sent them meat sticks made by Kevin Western, a Greentop local who creates the snacks for fun and sells them locally.

Western agreed to assist Maldonado and Ali in developing Chomps' initial recipe. He also disclosed that his family owns Western Smokehouse, a local smokehouse in Greentop, and can help manufacture the products on a larger scale.

"Ali explains that they aimed to use grass-fed beef and eliminate many ingredients commonly found in jerky, such as sugar and nitrates, which can pose manufacturing difficulties. Many manufacturers were unwilling to tackle these challenges, opting for the traditional approach. However, the Westerns collaborated with them to develop a recipe that closely resembles their current one."

The primary components of Chomps are grass-fed beef, water, celery powder, sea salt, and red pepper.

Chomps' first production run, packaging design, website development, and Facebook ad campaign were funded by the co-founders, who contributed approximately $6,500 of their own money.

"Maldonado reveals that they purchased a $99 Photoshop Elements subscription and taught themselves how to create packaging. However, the resulting packaging was of poor quality and had a cowhide print."

In December 2012, Maldonado and Ali launched Chomps' first product, the original beef jerky stick, on their website at a price point of about $2 a stick (now, the sticks cost about $2.49 each).

To their astonishment, the company began earning a profit "within a month," according to Maldonado, and all of the profits were used to invest in additional product and social media marketing efforts.

A side hustle turned instant success

For the first two years of Chomps' existence, Maldonado and Ali had full-time jobs while also managing the business in their free time.

In 2013, Maldonado relocated to Naples, Florida and worked as a real estate agent until his late 30s. Meanwhile, Ali remained in Chicago and continued consulting.

"As a consultant, Ali worked long hours, from 60 to 80 hours a week, and then switched over to Chomps after work. Looking back, Ali can't believe how long they were able to sustain this routine."

Chomps was initially viewed as a minor venture, but as Maldonado humorously remarks, "Chomps had different plans for us."

In 2013, Chomps' first full year in business, they sold approximately $50,000 worth of meat sticks. Their sales doubled the next year to $100,000, and they continued to increase thereafter.

Chomps' early success has contributed to the growing popularity of various diets, including paleo, Whole30, and keto, which emphasize consuming whole foods like fresh vegetables, meat, and fish while avoiding ultra-processed foods.

He and Ali marketed Chomps as a low-carb, sugar-free snack suitable for healthier lifestyles, including language such as "Whole 30 approved" on its packaging.

In its first four years, Chomps sold snacks directly to consumers via its website and to select CrossFit gyms, specialty stores, and doctor's offices across the U.S.

In 2013, Chomps began introducing new flavors, beginning with jalapeno beef. Currently, the company offers a variety of meat stick flavors, including taco-seasoned beef, pepperoni-seasoned turkey, and Italian-seasoned beef.

"Maldonado explains that they often ran out of product on their website because it sold out so quickly. They would contact customers and offer to send the product after it was restocked or to refund their money."

The phone call from Trader Joe's that changed everything

In 2016, a phone call changed the course of Maldonado and Ali's careers and the trajectory of Chomps.

Chomps' original beef sticks were desired to be sold in all Trader Joe's stores across the U.S.

"Rashid and I were approached by executives at Trader Joe's who had been recommended Chomps by one of their daughters who was doing the Whole 30 diet."

At the time, Maldonado and Ali were running Chomps as a side hustle and felt unprepared but ecstatic to fulfill a big order of a million meat sticks placed by Trader Joe's in over 400 stores.

"Ali remarks that rapid growth can cause infrastructure to explode, necessitating a complete change in business thinking and forcing the company to adapt."

Maldonado states that Chomps could produce up to 10,000 pounds of meat per month, but the Trader Joe's order required 120,000 pounds within weeks. To meet this demand, Maldonado and Ali rented extra storage space in Chicago and hired temporary workers to inspect the products before shipping them to Trader Joe's.

In July 2016, Chomps began selling meat sticks in Trader Joe's, its first national retailer. Maldonado left his real estate career to focus on expanding Chomps full-time in Naples, while Ali waited until 2018 to quit consulting and join Chomps in Chicago when it opened an office and hired its first employee.

"People questioned whether I wanted to make a living selling meat snacks, but we were determined and confident in our success."

Building a jerky empire

After Trader Joe's began selling Chomps sticks, other stores such as Whole Foods, Target, and Walmart soon followed suit.

The business experienced a significant increase in retail sales from $45 million in 2020 to nearly $250 million in 2023.

According to Maldonado and Ali, Chomps' success can be largely attributed to its dedication to attracting a consumer group that may feel excluded by its rivals: women.

"According to Maldonado, the meat snacks market is heavily male-dominated, and other companies are targeting younger male customers. However, a brand study conducted in 2018 revealed that over 70% of our customer base is female, which was not anticipated by Rashid and I."

The strongest demographic for Chomps, according to him, are women aged 25 to 45, who are particularly receptive to the snack's low sugar content and diet certifications.

To enhance its customer relationship, Chomps revamped its packaging to attract a female audience: vibrant colors, prominent "zero sugar" label, and a captivating slogan in the center ("All flavor, no filler").

In 2021, Chomps secured their first funding round, an $80 million minority investment, from private equity firm Stride Consumer Partners, which helped the business expand.

Chomps now has two offices, one in Naples and one in Chicago, with a total of 78 employees.

Despite Chomps being in operation for over a decade, Ali and Maldonado still consider it a startup and remain cautious about its recent achievements.

Ali says that Pete and I still run the business as if it's worth $100,000, which involves being cautious about hiring and expanding production too quickly. Currently, Chomps is available in both the U.S. and Canada.

"Ali describes running a snack business as a house of cards, with the potential for anything to happen at any moment. This creates a healthy amount of stress to ensure the business continues to move forward under pressure."

Maldonado has a more optimistic outlook on the future of Chomps. He says, 'This whole thing has become so much bigger than we ever imagined, and it's given us a newfound passion for the business.' Especially after getting older and becoming married with kids, he and Rashid are even more determined to make a positive impact on snacking for families like theirs.

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