Success

How this 24-year-old created a low-sugar gummy bear company now bringing in $40 million a year

SmartSweets

By the age of 21, Tara Bosch had developed an unhealthy relationship with food, especially candy. But the experience led her to build a confectionery company now set to bring in 50 million Canadian dollars (about $37.59 million) this year.

Growing up in Vancouver, British Columbia, Bosch would eat 5-cent penny candy like Starbursts and Skittles that she bought from the local convenience store almost every day. And during her teen years, she held jobs at McDonald's and Domino's, which didn't help matters.

But when Bosch hit her 20s, she became more health-conscious and feared her love of sweets was harmful. She tried to eat less sugar but that only led her to crave candy even more, particularly one of her favorite sweets — sour gummy worms.

"It was a perpetual cycle, where I would have candy then feel like crap and then mentally restrict myself from it again," Bosch tells CNBC Make It.

Sick of the cycle and with a nudge from her grandmother (who also had a sweet tooth and many weight-related health issues) Bosch set out to create a "healthier" alternative gummy bear without the excess sugar and artificial ingredients.

Bosch eventually dropped out of college to pursue her dream, and now, four years after the company's official launch, her Vancouver-based low-sugar candy company SmartSweets has five different gummy products ranging from Peach Rings to Sweet Fish and is on track to hit well over CA$50 million in revenue this year. And at 24, Bosch is the boss, leading a team of 39 employees in both Canada and the U.S.

Tara Bosch and her grandmother, Johanna
Tara Bosch, CEO and founder of SmartSweets

A little Amazon and a whole lot of Google

"I think the trickiest thing about [gummy] candy is that 99% of it is sugar. So when you want to remove it, you basically have to start from scratch and recreate the product," Bosch says.

Bosch started testing gummy recipes in June 2015 in the kitchen of her basement apartment with a heavy-duty gummy bear mold she bought off Amazon for CA$90 ($68).

The gummy bear mold Bosch bought from Amazon in 2015
SmartSweets

During her summer break from her sophomore year in college, Bosch spent every moment she had googling gummy recipes and researching alternative ingredients. Some days, she says she would spend up to 16 hours a day on her computer researching.

"I was looking at food journals on finding alternative bulking agents that could replace things like corn syrup and what ingredients were being used in existing products in the world that could provide the feel and deliciousness of sugar without using actual sugar," she says.

Bosch eventually stumbled on stevia leaf extract, which comes from the South American stevia plant and is in the sweetener Splenda. The extract is known as a high-intensity sweetener because it's up to 200 to 350 times as sweet as sugar but doesn't have any calories. A tablespoon (about 12 grams) of sugar has about 50 calories, and a typical serving size of traditional gummy bears (about 15 pieces) has about 19 grams of sugar. Stevia also "generally will not raise blood sugar levels," according to the FDA.

Tara Bosch in the kitchen testing out recipes
SmartSweets

To create the candy, Bosch combined the stevia extract with tapioca, a starch often used in puddings as a thickening agent, and chicory root to help create that gummy-like feel, among other ingredients for color and flavor.

After three months and more than 200 iterations on her recipe, Bosch finally had a batch of gummy bears that had the texture, flavor and mouthfeel of traditional gummies but contained less sugar.

"I was surprised how well they tasted," she says.

Picture of Tara Bosch's first batch of gummy bears
Tara Bosch

Bosch brought samples of the batch to her peers at a start-up incubator she had recently joined and got great feedback, she says. Some even told her low-sugar gummy bears tasted better than the original.

Bosch says that's when she knew in her gut that she had to go all in on her business. So in August 2015, two weeks before she was supposed to start her junior year of college, she dropped out of school and fully committed to launching her company, originally called Stevi-Sweets.

"I felt like if I really wanted to bring this [product] from a kitchen to people's pantry, I really needed to be fully dedicated," Bosch says. With the full support of her mother and grandmother, Bosch moved into a cheaper apartment and devoted herself to making her first gummy bear product.

First packaging of SmartSweets on store shelves
SmartSweets

Landing the first retailer

Bosch had CA$15,000 (around $11,400) she had saved from working part-time jobs over the years, but to fund her first manufacturing run, she needed CA$105,000 ($79,800). But it was difficult for a then-21-year-old with a limited credit history to get such a big loan. It took some maneuvering and the help of mentors at her incubator program — founded by HootSuite CEO Ryan Holmes — to secure the money. Mentors at Hootsuite also helped her find the right manufacturers.

Landing the first retailer for her gummies, however, would take persistence.

One of Bosch's first targets was a local retailer called Choices Market. She cold-called and emailed so frequently that the store manager finally set up a meeting with Bosch.

"I felt like I wanted to throw up walking in. I was so nervous," Bosch remembers.

But despite a stomach full of knots and a shaky voice, Bosch says she felt excited about the opportunity and quickly convinced the store to sell her original "Fruity gummy bears" product for CA$3.29 ($2.50) a bag at three locations.

After receiving her first "yes" — the rest is history, she says.

Her products quickly caught the attention of health-conscious consumers and Bosch soon struck deals with Bed Bath & Beyond and Popeye's Supplements (a national supplement retailer in Canada). Then Whole Foods Canada called and her products were stocked in 700 stores across the country within the first six months she was in business.

Around December of 2015 Bosch changed the name of company to "SmartSweets" (a few early investors thought that "Stevi-Smarts" sounded unappealing to consumers) and she started creating a second product, "Sour gummy bears," her favorite flavor, which sold for CA$3.99 ($3.00) for 1.8 ounce bag.

In its first year, SmartSweets generated more CA$2 million ($1.52 million) in sales through local stores in Canada.

Then, in 2017, not long after an appearance on Canada's version of "Shark Tank" called "Dragons' Den," Whole Foods in the U.S. called. In March 2018 her products came to the States and eventually to all of Whole Foods' 450 locations in the U.S. and Canada with the suggested retail price of $3.29.

She also developed three additional products including "Sweet Fish" (her take on Swedish Fish), "Sour Blast Buddies" (her take on Sour Patch Kids) and "Peach Rings," all of which retail for $3.29 a bag.

"By the end of the year, we'll be in 20,000 doors [new locations] across the U.S. and in Canada," Bosch says.

While Bosch won't disclose the current valuation of SmartSweets, she says the company has raised more than CA$6 million ($4.5 million) since 2015. Additionally, it's in the mist of working on deals with other major retailers including Target and Kroger for later this year, according to Bosch. Target and Kroger confirmed the deals.

Revenues for SmartSweets are on track to more than triple from last year's CA$15.6 million ($11.69 million) to more than CA$50 million (nearly $37.59 million) in 2019, according to Bosch.

She has also hired over the last two years two industry veterans to help her scale the company: Cindy Bokitch, a former Starbucks and Lululemon executive, is now SmartSweet's chief operating officer, and Michael Parisi, a former marketing executive at BarkThins and PopChips, is senior vice president of sales and marketing for the company.

Consumers do have some gripes with SmartSweets products: Though some Amazon reviews for Smartsweets say the products taste great, other buyers say the texture is not identical to traditional gummy bears. One reviewer also noted that the high fiber content "will give you [a] bubble belly if you eat too many," but it's not "gastric distress" like with sugar alcohols. And many complain that the candy is too pricey.

With regard to the bubble belly, SmartSweets recommends eating no more than two bags a day due to the gummies' high fiber content. As for the price, SmartSweets says it uses the highest-quality ingredients and a specialized manufacturing process, which drives up the price. However, the company has been working on reducing its retail price as it continues to grow.

The life of a founder

Bosch's dedication to SmartSweets has meant her 20s have been filled with nonstop work. She says at times she works up to 16 hour days and rarely takes off weekends or holidays (especially early on). And while Bosch admits she has limited time to hang out with friends and family, she doesn't look at it as a sacrifice and doesn't feel like she missed out on her college years.

"I think of it as intentional living. Mainly from an energy perspective and a time perspective. I just wouldn't have the time to have a boyfriend or go on trips or things like that," she says. "But this is an active choice."

Launching a company at such a young age has taught her to believe that anything is possible in life.

"Growing up, I wasn't that smart or athletic and I didn't have any particular talents," she says. "But what I did always have was an innate sense of urgency, resourcefulness and the ability to make something happen once I decided in my head that I wanted to. SmartSweets was the first time that I realized the power of all those three things combined," she says.

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