Mike and Jen's Hot Cocoa: The Taste that Takes You Back
- KLS
- 4 minutes ago
- 8 min read
For the 211th feature of our "Together Talks" campaign, we collaborated with Mike and Jen's Hot Cocoa and Founder and CEO, Dean Packingham. Mike and Jen's Hot Cocoa was started by a single dad and his two kids, Mike and Jen, in the kitchen of their home in Duluth, Minnesota. It has since grown to be Minnesota's favorite hot cocoa mix, doubling in size each year since 2012. Their goal is to take you back to a simpler time in life, with an all-natural hot cocoa mix with 5 simple ingredients. Their motto is "The Taste that Takes You Back".
"Together Talks" feature # 211: Mike and Jen's Hot Cocoa presented by KLS - Your Trusted Shipping Solutions In The USA
What separates you from your competition? What have been the biggest challenges? Goals for upcoming year + Next phase of the company?
What were your concerns to transition to starting your own business? How have you dealt with being the face of the company?
What have you learned since becoming an entrepreneur? What aspect of entrepreneurship do you appreciate the most? Share a decision that you made that was detrimental? What is your why?
Story of how it was created?
It actually goes back to 2012, which seems like a lifetime ago now. But it was essentially a happenstance situation.
My daughter at the time, Jen, was nine years old. She would come in from playing in the snow and always wanted hot cocoa, it was like clockwork. She’d come in, throw her snowy clothes in a pile, and ask for hot chocolate.
I was making it every single day and going through so much hot cocoa mix. One day, while waiting for the milk to heat up, I said, “Jen, we should make our own mix.”
I had looked at the back of the container of the one I bought and couldn’t believe some of the ingredients in there. Of course, she said, “Yeah!” And I told her, “We should make the best in the world.” She was nine, so of course she was excited.
And then I spent the next year of my life trying to perfect hot cocoa.
What separates you from your competition?
It’s interesting because it’s a bit of a sleeper category, a traditional product that’s been around forever without a lot of variation.
We came in with an all-natural mix that has just five ingredients. Perfecting those five was crucial for us.
We were competing with some of the big names on the shelves, and it’s tough as a more premium product to come in and compete against that.
What have been the biggest challenges?
There have been so many along the way. I’d say our initial difficulty was finding a co-packer. We started making it in my kitchen, then moved to a church kitchen, and later to a coffee shop after hours.
So, going from blending and packaging everything ourselves to deciding between using a co-packer or building our own facility was a huge step.
At the time, I was approaching my 50s, and the thought of hiring, finding a building, and going all in was intimidating.
So, we went the co-packer route, and just finding that initial co-packer was probably our first big challenge.
Can you reflect on a goal you set and accomplished?
Absolutely. For a while, we had an office at a co-working facility. On the wall, I put up all my dream retailers. At the far end, I listed Target and Costco.
The fact that we’ve now been in Costco for five years and Target for four still blows my mind. Those were dream retailers for us, and even now, I have to pinch myself.
Goals for upcoming year + Next phase of the company?
Our goal all along, because we’re self-funded, has been to grow only after thorough testing with a retailer.
When we work with retailers, we love that they like to test as much as we do. We never go in asking for everything at once; we want to be sure we can support them and perform well in retail.
We’re talking to a few retailer groups now and could be doing tests starting next summer.
We’re also requesting expansion with Target, right now we’re in 200 stores, and the goal is 400 to 500 next season.
So essentially, we’re focusing on growing with current partners and testing with new large retailers.
What were your concerns to transition to starting your own business?
I’m perhaps one of the most cautious people you’ll ever meet. Leaving a secure federal government job, which I could have ridden into retirement. I only had eight years left, so it was terrifying.
But I was nearing 50 and thought, if I don’t do this now, I never will.
It was really hard, but I wouldn’t have done it without my business partner, Amanda. She’s the financial genius behind everything we do. She knows every number and tests every assumption.
When I found out she loved spreadsheets, I said, “Do you want half the company and we’ll grow it together?”
That was like pouring fuel on a fire. Once we found a co-packer, she asked, “Do you believe we can do this?” And I did.
For someone so cautious, leaving that cushy government job shocked a lot of people, but I believed enough in it. That was the turning point.
How have you dealt with being the face of the company?
It’s interesting. We’re very lean since we’re self-funded, aside from some SBA support and grants.
We’ve learned a lot the hard way, doing almost everything ourselves. We’ve had great help from an entrepreneur fund in Northern Minnesota—they’ve sent people to train us, and I always recommend using local business support programs.
Learning everything ourselves has been tough but valuable. From logistics to warehousing, things that were foreign to us at first. We now understand every aspect.
Sometimes the best opportunities just fall into place. Costco actually reached out to us, which I didn’t think happened in CPG. Of course, we said yes.
I’ve also learned not to be afraid to part ways with partners who aren’t the right fit. I get personally attached, but as Amanda says, keeping a relationship that doesn’t work helps no one.
What have you learned since becoming an entrepreneur?
Believe the customer.
It took me nearly 10 years and hundreds of iterations of the mix to realize people genuinely loved it. Friends and family are always nice, but after about a decade, I learned to trust the feedback from real customers.
We did about 30,000 live samples the year before COVID, and seeing people’s faces when they tried it, that’s when I knew.
There was one woman, about 90 years old, who at first refused a sample. Later she came back, tried it, smiled, and said, “It brings me back to being a little girl. Thank you.”
That’s why I do this.
What aspect of entrepreneurship do you appreciate the most?
I’ve come to appreciate the co-packing process. We now work with an incredible blending and packaging company that’s as invested in us as we are in them.
They’re absolutely fantastic in every way, and they’ve never let us down.
Share a decision that you made that was detrimental?
We overproduced right before COVID because we had to make production decisions in the spring for the next season.
That was frightening. But thankfully, our product’s shelf life helped. After an initial lull, demand skyrocketed, so it ended up not being as bad as we feared.
We’ve had packaging errors and other missteps, but each one reminds us that you can recover. What feels like the end never really is, you regroup and keep moving forward.
Do you remember the moment you felt this product had traction?
Yes, when we did our first wholesale market show in Minneapolis.
At the time, we were in about 15 or 16 local stores. After the show, we got connected with a rep group out of the Minneapolis Mart, and within a year we went from a dozen stores to about 300.
And then getting into Costco, that was incredible. Truly mind-blowing.
What is your why?
I still love what I’m doing. People sometimes ask if I’d sell the company, but that’s not on my mind. I’m enjoying it too much.
Amanda, my business partner and best friend, feels the same way. As long as we both love doing this, we’ll keep it going.
We recently had a retailer replace a major legacy brand with ours, that was unbelievable. It fuels me to keep making Mike and Jen’s one of the top premium hot cocoa mixes out there.
How has your children's outlook on the company grown over the last thirteen years?
Essentially, it’s, “Dad, I’m out,” or, “I still need more product!” They’re both super proud.
My favorite memory was when Jen was in middle school. Her teacher asked the class to share something interesting about themselves, and Jen said, “I own my own business.”
The teacher smiled and asked what it was. Jen said, “Mike and Jen’s.” The teacher’s jaw dropped and said, “That’s my favorite hot cocoa! I can’t believe you’re Jen!”
Jen felt like a little celebrity that day.
My son Mike is now a middle school teacher, and he supplies cocoa to his fellow teachers. They’re both very proud, even if they don’t get to attend events as much as before.
What moment did you feel your most pride or joy with the company?
Walking into the first store with my kids and seeing our product on the shelf, it was surreal.
And more recently, seeing our product moved to eye level and expanded in Target, our home-state retailer in Minnesota, that was incredibly emotional.
Dream Retailer?
My next dream retailer would be Delta Airlines.
We were so close to being picked up just before COVID, but everything went into disarray. They had considered us for first class and long-haul flights since our mix only requires water, it has whole milk powder in it, so it’s rich and creamy.
Piece of Advice
Everyone has strengths and weaknesses. I have a major weakness with finances. When I started, I had a huge box where I threw all my paperwork because I didn’t like dealing with it.
When my friend Amanda saw it, she asked, “What is this huge box of paperwork?” I told her, “That’s the cocoa business.”
She said, “Would you mind if I organized it?” And that’s how she came on board.
She complements every weakness I have, and we never compete in each other’s areas. We’re total opposites on the Myers-Briggs test, which works perfectly.
So my advice: find someone who’s not too much like you but complements your skills. You’ll cover all the bases and stay out of each other’s way.
Community Callout
Eric Faust - Duluth Coffee Company He was the person who gave us kitchen space. He called me down, heard that I was considering, stopping the company because I couldn't find kitchen space. He called me down to his coffee shop, handed me the key to his business, and said, "Anytime, when we're closed, you can use this. I'm going to set up a space where you can store your stuff. And I'm not charging you, you're not paying me. And I'm just paying it forward. I want you to do that to somebody someday." He was a catalyst for continuing to grow.
Chad Curran - National Bank of Commerce He was the only banker that believed in us enough to start working with us.
In Closing
KLS wants to thank Mike and Jen's Hot Cocoa and Founder and CEO, Dean Packingham, for today's "Together Talks" feature. Follow along for their journey with their social handles below!