Two and a half years ago, Nick Loeb—the fiancé of Modern Family star Sofia Vergara —launched the fried-onion topping Onion Crunch. Now, he’s launching an equity crowdfunding campaign to bring more crispy condiments to the masses.
Today, Loeb kicked off a six-month equity crowdfunding campaign to fund his Crunchy Condiment Company. Loeb hopes to make $1 million dollars in the campaign, with plans to roll out Pickle and Ketchup Crunch in 2014.
“This campaign is not only to bring in more investors, but also more customers," says Loeb.
Crunchy onions are hardly a common condiment in the U.S., and crunchy pickle and ketchup are unheard of. Loeb, however, developed a taste for crunchy toppings at a young age.
“It comes from my childhood, being overseas and having hot dogs in Denmark and Sweden with crunchy onions on top and really loving it. Then, coming back and not knowing why I couldn’t get fried onions like this in the U.S.” says Loeb. “It’s analogous to Nutella. I had Nutella in Europe, and now many Americans love it at home. I think fried onion is more American than hazelnut spread.”
Can crunchy onions be the next Nutella? Both of the European treats certainly have one thing in common – great press.
Since the launch of Crunchy Condiments Company in 2011, Loeb has paid close attention to PR and social media. From in-store demonstrations and samples, to out-of-store marketing, Onion Crunch has appeared everywhere from The New York Times to an upcoming piece on Fox News online.
Loeb’s relationship with Vergara has been another driver of attention. “She’s tweeted about it, she’s been in Star magazine, People magazine eating Onion Crunch, utilizing it on her hot dog or whatever it is she likes to eat Onion Crunch on,” says Loeb. Vergara's tweets, which reach 5.5 million followers, pack a promotional punch well beyond most startups' reach.
Loeb's decision to launch an equity crowdfunding campaign was born out of a desire not only to raise money, but to give people the opportunity to own a piece of his company.
“We’ll have more spokespeople for our brand,” he says. “People who actually put capital into something have a sense of ownership and pride.”
Unlike donation-based crowdfunding, where backers receive non-monetary rewards for their investment, those who back an equity crowdfunding campaign receive a stake in the company. It used to be that only accredited investors – those making $200,000 a year or have more than $1 million in assets – could participate in equity crowdfunding, but the Jumpstart Our Business Startups Act (JOBS Act) passed in April of last year opened it up to unaccredited. After a long wait, the SEC handed down rules on equity crowdfunding this past October.
While Loeb was attracted to equity crowdfunding because it gave him a chance to promote the product to potential customers, Loeb also found himself in an awkward stage in the investing game. “Within the food and consumer product space in the U.S. there is a sort of financial gap between the stage which we’re at and the stage which most VCs invest in,” says Loeb. “Today, if you look at most VCs or private equity firms, they want at least $10 million in sales before you get there… We’re too far along for an angel investor, so we’re in this funny middle ground.”
As more people are talking about Crunchy Condiments, Loeb hopes to continue to expand the company’s offerings. Onion Crunch is already sold at stores nationwide, including 2,500 Walmarts. In January, Pickle Crunch, reminiscent of southern bar food favorite, fried pickles, will hit the market. Down the line, Loeb hopes to expand to five veggie offerings-- a fried tomato Ketchup Crunch is in the works, with discussion of potential Crunchy Jalapenos and Potatoes. Someday, Crunchy Condiments may even venture into the dessert world.
For now, however, Loeb is trying to spread the word. “The next two years, 2014 and 2015, for us is really developing in the condiment category,” he says.