Mid-Day Squares Closes Round, Looks to U.S. Expansion

Looking to straddle the confection and nutritional bar categories, bar brand Mid-Day Squares announced this week the closing of a $4 million funding round that will allow the outspoken Canadian company to expand further into the U.S. market.

The round was led by Boulder Foods Group (BFG), with participation from Selva Ventures, Harlo Capital, and several angel investors including Mike Fata, the founder of Manitoba Harvest. The brand previously had raised $2 million in a 2019 round led by BFG in addition to a $2.8 million low interest loan by the Canadian government.

Mid-Day Squares, which produces a three-SKU line of refrigerated protein bars, currently sells its products in roughly 200 U.S. retailers, including Erewhon and Jimbo’s, and 1,300 Candian stores. The four-year-old company expects to have $10 million in revenue for 2021 with “a very visible path” to $100 million in revenue within the next three years, co-founder Nick Saltarelli said.

While the company’s first raise was to support the build out of its Montreal-based production plant, this funding will go towards marketing and sales expenses associated with moving further into the U.S. market, as well as the associated costs of producing larger volumes. Ideally, Saltarelli said, 20% to 30% of sales revenue will come from the U.S. by the end of 2021. As it grows, Mid-Day plans to work Eastward from the West Coast and a particular focus on the Southern California and Texas markets.

“We’re not rushed to be in as many doors as possible,” co-founder Jake Karls said. “I’d rather be in less doors and instead focused on turns…because that creates fast growth and interest from everywhere.”

From starting in Saltarelli’s condo kitchen, where he created the brand alongside his wife Lezlie Karls Saltarelli, tMid-Day has been able to quickly scale up to support more stores because it self-manufactures. The co-founders opened their own production facility in January 2020, having decided to make the investment after being rejected by over 26 co-manufacturers, Saltarelli said.

Part of the need to self-produce is because the bar uses limited ingredients and is not shelf stable, but also due to its texture and formulation — which draws from both protein bar production and chocolate confection production. The end result, Saltarelli added, is a bar that has the snap of a typical chocolate bar but the protein content of a nutrition bar.

Still, it’s not just the product that’s unusual. The team is committed to a methodology they’ve dubbed “millennial manufacturing,” where production employees feel as valued and connected to the company’s growth as operations, sales and marketing staff. Working with a co-packer, Saltarelli said, where production employees are treated like “second class citizens,” just wasn’t an option.

The desire to buck trends continues into marketing. Karls, a former party and pop-up store promoter, has crafted a marketing strategy that relies heavily on social media. But rather than following the playbook of other brands, which tend to use glossy product shots, Mid-Day Squares shows behind the scenes footage of “the good, the bad and the ugly” of running a brand, he said. The company has a full time videographer to document its efforts, lending a reality TV show vibe to the brand’s social media channels. For example, recent posts on the brand’s Instagram page have featured everything from Karls Saltarelli and Saltarelli talking about “business therapy” and divorce to videos entitled “Building a Brand By Giving Zero F*cks.”

“We really focus on getting people to feel that they are buying from their neighbor and the consumer knows who they’re buying from,” Karls said, “So that they go in the store and say ‘oh that’s Nick, Jake and Lezlie,” [because they’re not] going to go into the store and say ‘oh I want that healthy chocolate bar.’”