TikTok has helped @xo.marshmallow, the world’s first marshmallow cafe in Chicago, take off. The social media site recently shared an economic impact report showcasing the impact it has on small businesses, especially in the food & beverage industry, with SMB usage of TikTok contributing $6.5B to the industry in 2023.

Co-founders Kat and Lindzi started XO Marshmallow in 2016 as a one-time pop-up shop and it has since become a TikTok sensation, with over 480K followers who enjoy Lindzi’s satisfying ASMR videos and behind-the-scenes content.

Since joining TikTok Shop in April 2023, XO Marshmallow has seen between 30–50% monthly growth and is forecasted to reach $1 million in sales on the platform alone. Now, with a thriving marshmallow cafe in the heart of Chicago and e-commerce driving 80% of sales, Lindzi has cemented herself as a premiere gourmet marshmallow maker worldwide.

We reached out to Lindzi Shanks, co-founder, XO Marshmallow to learn more about XO Marshmallow's success.

Liz Parker: How did Kat and Lindzi come up with the idea for XO Marshmallow?

Lindzi Shanks: Looking for a great holiday gift for her family, Kat stumbled upon a recipe for marshmallows during her last year of law school. Her family loved them and at her graduation she began to experiment with flavors. She realized she did not want to pursue a degree in law and was looking for her next opportunity. On the other side of Chicago, Lindzi was having a very similar experience. She had just graduated with her Master’s in Psychology—realizing she no longer wanted to pursue a PhD and decided to open a clothing store instead. Lindzi posted to social media that she was hiring for a holiday popup shop and Kat applied. In her interview, Kat mentioned she made marshmallows. Lindzi made coffee mugs and thought the combination would be successful. It was! At the end of the popup, the mug and marshmallow combo was the best selling item and they decided to become business partners. XO Marshmallow was born and the rest is a sweet history. 

LP: How did TikTok help XO Marshmallow with its success?

LS: Our café first opened in 2017, three years before we got on TikTok. The café took off from the moment we opened, with lots of media attention and lines out the door. We had a few products go viral more than once through success with other platforms. We got on TikTok in March of 2020 during the pandemic and saw almost instant success on the app. While our café was closed, TikTok helped us focus our attention on our online business and gave us a whole new audience to connect with.

LP: How did XO Marshmallow grow its TikTok following and leverage it to help increase business?

LS: Even before TikTok, community has always been at the center of what we do. We are very focused on our customers and creating products and content that they want to see. TikTok allows us to really connect with those customers even deeper to create a community of active followers that we call Troop XO. We use the ability to answer comments on TikTok with direct videos to provide educational videos about our product or humorous commentary about the misconceptions about marshmallows (i.e. we are NOT a slime company). We also use LIVE to engage with our audience in real time, showing them the behind the scenes process of our business. Most of our videos and our LIVEs are focused on marshmallow pouring, cutting, piping, etc.—which is really just what we are doing at work that day. Our followers see the authenticity and the real people behind the product they are buying and it makes them more connected to the brand.

LP: How can TikTok have an impact on small businesses?

From the TikTok Economic Report: In a few short years, having access to TikTok has gone from a novelty to a necessity for many U.S. small businesses. Entrepreneurs depend on the revenue TikTok generates, the jobs it supports, and the growth it fuels. TikTok delivers a unique value to their businesses and communities that allow them to succeed in their industries.

LP: What other strategies did XO Marshmallow use to increase their business? 

LS: Like any business owner worth their salt, we never put all of our eggs into one basket, so to speak. We use other social platforms too, from Instagram to Facebook to YouTube Shorts. We find that different content works well on different platforms. For example, anything related to our physical café location performs better on Instagram. Humorous tales of customer service experiences does better on Facebook and YouTube. Behind the scenes does better on TikTok. It’s all about finding your audience on the platform they are on. We also invest in PR and are very active with our newsletter subscriber list. 

LP: Does XO Marshmallows have any new flavors, and/or is it planning on releasing any more this year?

LS: Of course! We release a new limited marshmallow each month as part of our Marshmallow of the Month Club. We also have a monthly fluff flavor and seasonal limited flavors. Both our Halloween and Holiday Advent Calendars are returning this year—Halloween for the second year and Holiday for the sixth! Those are always full of brand-new limited flavors that are exclusive to the advent.