By Sharon Fisher
Eric Torres-Garcia’s two-year-old startup is, well, the bomb. He’s the guy who invented Cocoa Bombs, the warm and sweet treat that’s sweeping the nation, and which came in second in the Trailmix competition during this year’s Boise Entrepreneur Week.
So what is a Cocoa Bomb?
President and founder Torres-Garcia, 25, got the idea for Cocoa Bombs in 2019, when he was working in a gelato shop in Italy and also experienced Kinder Joy, a chocolate egg popular in Europe that contained a toy. “I started playing around with the concept of hollow with things on the inside,” he said.
It was winter, so one of the things Torres-Garcia started playing with – inspired by “bath bombs” – was a hollow chocolate ball with hot chocolate and marshmallows inside it, which turned into hot chocolate when you poured hot milk on it. “Everything clicked at once,” he said. “I had the prototype in my head, so I spent like $20 on stuff from Walmart and the dollar store, and got a really good prototype after a couple of failed attempts.”
Torres-Garcia posted his efforts to Instagram and Facebook – as one does – and while he got a lot of attention, that never really converted to sales, so he deleted it all. Then he created a website, CocoaBombs.com, and posted a video of a Cocoa Bomb in action to TikTok, with a Mariah Carey Christmas song as the backdrop.
That did it.
“I started going viral,” Torres-Garcia said. “I got my first order, my second, and had $7,000 in sales the first day. I had hundreds of orders all over the country. Thousands.”
There was only one problem. “I had only ever made one,” Torres-Garcia said. “It’s not what I thought was going to happen. ‘What the heck am I going to do?’ It got overwhelming, and I had to put a stop to it.”
Building a company
First, Torres-Garcia told everyone he was sold out. Then he went to the Boise State University entrepreneurship program, got an attorney, filed a trademark, and started looking for a place where he could produce Cocoa Bombs at scale.
Torres-Garcia couldn’t find such a place in Boise, so he went back to his hometown of Blackfoot. Meanwhile, it was now 2020. “I had this enormous wave of demand we could not meet,” from America’s largest retailers. He met with a developer in Blackfoot, Cannon Builders, which was creating a new industrial park. They didn’t have the kind of space he was looking for, with floor drains and washable walls. But they agreed to meet with him, and he’s now in a 7,000-square-foot facility.
“We negotiated some leasing terms, and they built the facility we needed through a lease agreement, until we’re ready to take the next step and purchase the building,” Torres-Garcia said. “Some might call it extreme luck. I like to call it a miracle.”
Next, Torres-Garcia needed to secure the raw materials – chocolate, marshmallows, and flavoring, as well as the packaging he needed. Unlike some of his competition, all of his raw materials, except for the cacao beans themselves, are U.S.-made. “We work with a domestic version of Belgian chocolate,” he said. The plastic comes from Idaho, the boxes come from Salt Lake City, and everything else comes from California, he said.
Funding the company
So how did Torres-Garcia pay for all this? “We pitched it to a couple of investors,” he said. “Some were interested, but I did not want to give up control of the company very quickly.”
One factor that helped was, because Cocoa Bombs were so popular, retailers were willing to front Torres-Garcia the money to make them. “Every single one of our orders so far as come out on ‘pay in advance’ terms,” he said. “Some put in orders in June and July for this Christmas.” And some of those orders were really big – 5,000 and 10,000 units, he said, which gave him the ability to build them at scale. “When you do the math, we wholesale at 50% of retail. Those size of orders, paid in advance, gives us a lot of the funding we need to purchase more materials, at higher volumes and better prices.”
Torres-Garcia’s newer accounts – “a very large chain within the next couple of weeks” – will use the more standard net terms, where they pay him later, but that’s okay. “Now that we have cash flow, reserves, money in our bank account, we’ll be able to switch over to those kind of payment terms,” he said.
There was one investor Torres-Garcia accepted. “My parents took a big risk giving me the funds I needed to get the packaging, chocolate workers, and raw materials I needed to start production,” he said. He wouldn’t say how much they loaned him, but said it was in the six figures. “They had no idea how great a company it would be,” he said. He expects to be able to pay the entire amount back by the end of the season, but he’s going to be talking with them about it because he wants to share his success with them, he said.
How’s the 2021 season going?
So far, 2021 looks even more successful than 2020, though Torres-Garcia didn’t want to reveal exact revenues. “We had bought materials, which I thought would last us the entire season, from October to January,” he said. “We went through it in four weeks. Last month, we did a little over $100,000 in revenue. November, we’re looking at maybe twice that. We can’t make them fast enough. We sold out of a lot of flavors for the season. We were going to introduce peppermint in December. It’s gone.”
If you’ve looked at Cocoa Bombs at all, it’s easy to see that Torres-Garcia isn’t the only person who’s making them. “It’s hard to say, when it comes to patenting,” he said. He’s been working with organizations such as the Small Business Development Center and TechHelp. “We’ve spoken with all of them about the patent. It’s something we’re still kind of figuring out,” though he did trademark the term Cocoa Bombs.
But Torres-Garcia isn’t worrying about the intellectual property part so much. “At the end of the day, we have so much business coming in that I wouldn’t want to monopolize the entire market,” he said. “Last year, a lot of people were making these things to get by and make a holiday for themselves and their friends and family.” In particular, he wouldn’t be trying to go after small manufacturers. “It’s more the big companies we’re keeping an eye on.”
In fact, Torres-Garcia published a book on how people can make their own Cocoa Bombs at home. Last year, his company got a lot of press, including in the Washington Post, and a London publishing company saw the article and reached out to him to write a book that’s now sold internationally and is available at retailers ranging from Amazon to Walmart. The book has 40 recipes for white, dark, and milk chocolate Cocoa Bombs, with different flavors, and he gets royalties on every copy that’s sold.
So what’s next?
Currently, the company has about six full-time employees, two part-time employees, and was planning on bringing on three or for more in November.
Beyond that, Torres-Garcia hasn’t really thought. “I would like to continue to grow the company, whether that’s through Cocoa Bombs or acquisitions,” he said. For example, he said he is starting to look at other companies, such as company owners getting ready to retire or that are looking to grow.
And after that? “I don’t know what my exit strategy is,” Torres-Garcia said. “I’m having a lot of fun doing this.”
Sharon Fisher is a digital nomad who writes about entrepreneurship.