FunkyChunky with Ryan Kuo, Owner, feature 105 of Together Talks

"Together Talks" feature 105: FunkyChunky presented by KLS, freight company

Some Background on Funky Chunky

For today's edition of "Together Talks" campaign, KLS had the chance to interview FunkyChunky and Owner, Ryan Kuo. FunkyChunky® luxury chocolate snacks look as good as they taste. Popcorn, pretzel twists and other gourmet ingredients are thickly drizzled with a combination of dark chocolate and a proprietary blend of milk and white chocolates and then broken into pieces giving them a “funky chunky” abstract look.

The line consists of FunkyChunky Popcorn, FunkyChunky Candy Cane Popcorn, FunkyChunky Pretzels, FunkyChunky Peanut Butter Pretzels, FunkyChunky Caramel Corn, FunkyChunky Chocolate, FunkyChunky Candy Bars, FunkyChunky Chip-Zel-Pop and their newest product line, FixMix. All are OU Dairy certified kosher.

Beginning ownership

The beginning of FunkyChunky was in the mid 1990's. For over 30 year years it was ran by the same family. When the founder passed away over a decade ago, it was then sold. This is where Ryan became introduced to the company. At the time he worked for a private equity firm who acquired FunkyChunky. Ryan spent a few years working with the company as they tried to expand it, until ultimately the head of the PE decided he wanted to sell it. Ryan always knew he wanted to work for himself, he had just never found the opportunity. He was able to raise some money from investors and bought FunkyChunky.

Ryan explained how vast the snacking market is in the US as it is hard to quantify specific competition. In short, popcorn space, corporate gifting, fundraising, and snacking in general are all industries that have overlapping competition for FunkyChunky. Ryan explained how they are at the level of building awareness and trying to focus on that versus market share at this moment. He explained it as impulse buying versus switching all together. Their current position is trying to fit a need for consumers that is not being met and over time they will grow to a level that obtaining market share is the next logical step of growth.

Ryan explained what makes FunkyChunky so unique, "We are a different type of snack. Most are Salty plus sweet/savory or indulgent. We combine the both to be the best of the two. The final product is more like a bark, that is where the funky comes from and the hunks of pieces you pull out is our chunky. Ryan also talked about how important branding and packaging matters in the CPG space, but it comes down to one important quality, "It has to taste good. It doesn't matter how good something looks, if it doesn't taste good the product can't grow." FunkyChunky is focusing on quality and taste which is spearheaded by their 6 core flavors with additional seasonal items and their cafe line. Ryan also believes they excel by providing different sizes and price points. Also the products are mostly resealable, but Ryan said they like to say they rarely get resealed!

When to implement

Ryan previously was a strategy and operations guy before entering the role of Owner. He credited a mind shift a few months in to owning it realizing that he would have to lead the time to grow their way out. His flexibility of mind as he described it allowed him to see the bigger picture for the company. Ryan credited the 5 years of working alongside FunkyChunky as beneficial prior to taking over leading. He said while there was some downside, overall it was overwhelming positively an advantage. It allowed him to know the history of the company, financials, background, customers, and story. This incredible insider knowledge gave him a great head start he believes when he took over the reins.

Ryan started in the Army serving before transitioning to Fortune 500 companies in corporate America. He saw individuals doing things in a GM role or running businesses with big picture type of roles that he believed he would succeed in. Incredibly he shared that the jobs he obtained throughout his career were never existing roles, but always created for him. Ryan credits his ability to touch every function of a business over his career which gave him knowledge of how a business operates. He felt he got to a point where he needed to take his experience and knowledge and test it out. Working with FunkyChunky was his initial foray into this type of decision making role. When the opportunity to buy it presented itself, Ryan told us his previous boss tried to dissuade him from it, "It was a crisis of confidence. It takes immense amount of courage to start or buy a company."

Ultimately Ryan bet on himself and acquired FunkyChunky. He had a 3 phase strategy when acquiring, first was to prove they could get to break even as a company. They succeeded in the first year. Ryan mentioned how the entire team felt good about delivering on that goal and celebrating together. He reflected that the 2nd year they ended up being a bit overconfident and not as disciplined with execution. The shifting mindset from the first year as hungry and determined slightly fell off. That has led to them really getting back to their roots, being detail focused.

Challenges

Being a small business the ability to grow and scale, but doing it efficiently. Finances are under everything requiring the cash flow to execute their plants is essential. Prior to Covid the business was small. In 2021, they doubled. They grew again in both 2022 and 2023. Ryan believes that they are no longer at the size where they need to provide proof of concept. There is a track record of growth, proven demand, and knowing who their customers are. FunkyChunky is at the stage of scaling operations of not constantly in chaos mode.

Ryan shared that his favorite aspect is leading people and helping guide them to achieving a goal. He continued, "As a team, when we achieving something it is very satisfying. Knowing I can make decisions without somebody hanging over your shoulder allows us to become faster and quicker with our implementation." He mentioned how important it is to balance the ability to move quickly while also listening to the suggestions of the team members to view other opinions. Ryan said when a decision is made though everyone has to be pushing in the same direction in order to execute it.

Running a business is extremely stressful and Ryan doesn't believe he will ever feel like he could breathe. There is always a level of paranoia that accompanies owning a small business, but being comfortable is when something will happen. Ryan told us how it is important to be ok living in that stress, but necessary to find balance to not get distracted or burnt out. He credits his time in the Army as the greatest thing that happened to him professionally as it allowed him to compartmentalize. No one can function to their highest level always being in the stress box, but functioning within that real is necessary.

Laser-Focus

Ryan explained that the company is going through investment foundation mode, focusing on getting their cost structure right. Line by line they are evaluating what processes can be improved on. He stated the importance of looking wholistically and negotiate all facets of running a business to find any area to make the company leaner and more efficient. He also wants the company to continue focusing on their brand awareness staying on their upward trajectory to becoming a recognizable national brand. Their focus is continuing to develop the right partners and agencies to have the right messaging for each product to maximize their exposure to consumers.

While the company is already national, they aren't a big company. They reach each corner of the country, but Ryan and his team have visions of increasing the accessibility of FunkyChunky nationwide. He shared with us how cool it is when he is in the airport talking business or walking through a store wearing merch and someone stops him to explain how much they love the product. FunkyChunky is synonymous with sweet & salty snacks and increasing their exposure is the next level they hope to reach.

We asked Ryan to reflect on a moment in time that brought him the most joy, he shared, "When we first started operations to where it is today. I remember I was in Minneapolis visiting our plant, end of the night I was having a beer in the hotel bar and it was the night the NBA shut down due to Covid. The next few days everything stopped. It looked like our business might be done. We saw some traction right away with eCom, we pivoted and went all in on that." He told us that without that move, they business wouldn't exist today. It changed their entire trajectory overnight. He said his team keeps that period of time in mind whenever they encounter adversity, "The worst thing in the world could happen and you can still find a route to succeed. Maintain optimism."

Piece of Advice

The conversation with Ryan ended with him sharing his piece of advice.

"Where you are is not where you’re going to land.

Things change.

Did I think I was going to get into gourmet chocolate covered popcorn, had no idea.

Opportunities will arise that you’ll have no way to forecast or project. Prepare yourself knowing an opportunity will come and have the courage to take a shot at some point.  Whether this works or doesn’t, I won’t regret the decision I made."

In Closing

KLS wants to thank Ryan Kuo, Owner, of Funky Chunky for today's "Together Talks" feature. Follow along for their journey with their social handles below!

Instagram / LinkedIn /  Facebook / Twitter / YouTube

Klimson Logistics Solutions - Together Talks with FunkyChunky feature 105