Tara Bosch says food startups should try natural grocery before mass retail

Tara Bosch has a very unglamorous message for food founders who think the dream is mass retail on day one: try natural grocery first. On How I Built This, the SmartSweets founder told a gourmet marshmallow company that the friendlier aisle may beat the biggest aisle, at least until the brand can prove people actually want to buy marshmallows like they buy snacks.

That lands because Bosch isn’t giving LinkedIn fortune cookie advice from a ring light. She built SmartSweets from kitchen experiments into a low-sugar candy brand that sold a majority stake for a reported $360 million, then came back with Snackish, a high-protein chip brand inspired, apparently, by her five-year-old daughter’s allegiance to a yellow chip bag. Cute origin story. Serious operator.

The caller, Lindsay Shanks of XO Marshmallow, had the kind of problem that sounds like success until you have to pay for it. Her company is doing just under $5 million in revenue, about 90 percent direct-to-consumer, and wants to move into grocery without wrecking the high-margin online business. Also, she self-manufactures marshmallows in 10,000 square feet outside Chicago because, naturally, there is no magical co-manufacturer waiting around to make artisanal fluff squares at scale.

having that accessibility when she’s in her grocery shop and pulling them off shelf, I see them as living together in unison and serving very different functions versus cannibalizing one or the other, especially at this stage in growth.

The anti mass-retail fantasy

Bosch’s real point wasn’t just, yes, go into stores. It was, don’t confuse retail distribution with retail survival. Mass retail can make a brand look real very quickly, right up until velocities disappoint, promo budgets evaporate, and the buyer starts treating your dream like a spreadsheet with flavor dust on it.

I always found that the natural channel was more forgiving from an early stage startup in terms of giving the end caps, giving the merchandising opportunities, not being as dollar and cents from the beginning

This is good advice, with a giant asterisk shaped like a pallet. Natural grocery isn’t charity. The shelf is still expensive. The consumer can be picky. The velocity requirements may be softer, but they are not imaginary. Still, for a young grocery retail brand trying to teach people a new habit, lower-pressure learning can be worth more than a splashy national launch that turns into a clearance-bin autopsy.

XO Marshmallow’s challenge is extra strange because marshmallows are usually tied to use cases: campfires, hot chocolate, Easter baskets, the occasional emotional collapse involving Rice Krispies. Bosch clocked the bigger prize immediately. The brand isn’t just competing with Jet-Puffed. It has to make marshmallows feel like something you can eat on a random Wednesday without needing a tent, a cocoa mug, or a childhood memory.

one of the key insights with SmartSweets that we identified was creating the permissibility to eating candy every day in the same way with marshmallows.

The shelf won’t save a fuzzy proposition

Bosch kept circling the same unsexy religion: know the emotional job before you buy the distribution. With the swimwear caller, Vivi’s Vacation, she pushed customer calls. With the experience-box founder, Romanticize Collective, she pushed the same thing. Call the humans. Ask why they bought it. Ask why they came back. Ask why they didn’t tell a friend.

I always found such great nuggets in picking up the phone and calling the customers.

That’s the connective tissue here. Natural grocery is not a hack. It is a less punishing classroom. If your packaging can’t explain the point in three seconds, if your product doesn’t create a repeatable craving, if your manufacturing can’t survive success, then the retailer is just a very expensive place to discover that your brand was mostly vibes.

Bosch’s claim is credible because it has scars on it. It is also self-serving in the most founder-y way possible, since every successful CPG founder eventually turns their own path into a map. Fine. Some maps are still useful. For XO Marshmallow, the lesson is blunt: don’t sprint toward the biggest shelf. Earn the smaller one, learn fast, then make the campfire snack into an everyday habit.