"Smartfoods was a popcorn company, for God's sake," Martin says, shaking his head, "and here you had ex-CIA people and military contractors coming on board. I mean . . . " His voice trails off.
In fact, his nightmare was at least partly the product of an overactive imagination. The "military contractor" is actually an accountant with Pratt & Whitney Aircraft, a U.T. subsidiary that makes airplane engines. One of the original backers of Smartfoods, the man had been elected as a director at the first shareholders' meeting, when it was agreed that the initial group of investors should have a representative on the board. As for the "ex-CIA" person, it turns out that he was a communications specialist in the army -- and never worked for the CIA.
Yet there's no denying the depth of the anger and hurt that accompanied the breakup of the partnership. "I'm grateful to Smartfoods, and I'll tell you why," says Withey. "It finally opened my eyes to what business is all about. Here was this product we'd come up with -- a natural product, a fun product -- and it brought out the worst in everybody. We lost a real good friend because of it. We had all these outrageous demands made on us on our way out the door. But the worst -- the worst -- was when Ken went ahead and took my name off the bag, like I was no longer part of that company. Of all the hurts, I cried the hardest over that. Business or no business, that just wasn't right.'
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Joseph P. Pellegrino first met Andrew Martin and Ken Meyers in 1984. "We got involved with them on the Tug-N-Tie bag," says Pellegrino, who at the time was president of The Prince Co., a $200-million, family-owned pasta-maker, which has since been acquired by Borden Inc. "Ken was based in our factory for about a year, I believe, working out all the problems they were having with the technology, and we wound up using Tug-N-Tie on our 16-ounce bag of Dutch Maid noodles. The bag worked well, and Prince still uses it. I was very impressed with both Ken and Andrew. They seemed like a couple of characters, but I also thought they had a lot of integrity. And it took guts for them to come out with this new popcorn and stick it in a black bag. My own kids went crazy over it.'
About a year ago, Pellegrino says, Martin showed up at his office with another idea: pasta-based snack foods. At the time, Pellegrino assumed that Martin was developing the product for Smartfoods, where he was still a director. (Martin resigned from the board in September 1987.)
"I'd already been fooling around with pasta snacks," says Pellegrino, "selling them through our Christmas catalog, taking them to trade shows, that sort of thing. The products got great reception, but nobody had put anything like that on the market. When Andrew announced that he wanted to sell pasta snacks, I said great, we would too. I think that's when I found out about Hampton Hill.'
Briefly touching upon his departure as president of Smartfoods, Martin outlined the shape of the new company he and Withey were starting, Hampton Hill Inc. Capitalized with $450,000 in seed money, it would, Martin said, be a marketing-driven firm, not a manufacturing concern. And it would be committed to supporting social and environmental causes they deemed worthy -- committed up front, that is, with a percentage of gross revenues (not profits) earmarked for charity, so that consumers and charities alike could appreciate the connection. He and Pellegrino thereupon worked out a production deal making Prince the exclusive manufacturer of Hampton Hill's first products: a boxed macaroni dinner (Shells & Annie's Cheddar) and a cheese-flavored pasta chip (Zeuschips).
"It wasn't so much the causes that attracted me," says Pellegrino, who admits that saving the Brazilian rain forests is not his number-one charity. "It was the fact they wanted to do something. Certainly there aren't too many companies out there willing to commit a percentage of their revenues the way they do, and I admire them for it.'
From the outset, Hampton Hill targeted 2% of sales of Shells & Annie's Cheddar to a 4-H camp for needy children, with a like percentage of Zeuschips revenues going to an organization working on saving the rain forests, one of Withey's passions. Similarly, the company's latest product, a pasta chip called Good Idea, supports the Earth Island Institute, a militant environmentalist group. Each package carries a message, and the message, broadly speaking, is this: the planet is being raped; the needy are being ignored; we all have an obligation to do something; even buying snack food can help.
As for Smartfoods, Pellegrino thinks the going may get tough. "If I were Smartfoods, and I had the best [white cheddar-cheese] product -- which I believe they do -- I'd be careful. As I see it, the biggest barrier for Smartfoods won't be consumers; it'll be the supermarkets and distributors. Once you awaken the big guys, you can have problems dealing with the trade. Greed becomes a big player. The message they'll be hearing is, you can buy our product cheaper and make better margins on it.'
* * *
The Competitor
The year Smartfood was invented, The Bachman Co. was celebrating its centennial anniversary in the business, having been purveying its own line of snack foods since 1884. The company, based in Reading, Pa., had distribution mainly in East Coast markets from Maine to Delaware. When Smartfood appeared on the horizon, says Bachman director of marketing Karen Fidler, it didn't take long to recognize the new product's potential, or to desire a share of its market.
"We'd been making regular popcorn and [orange] cheese popcorn for a long time, and both lines were growing continually," says Fidler, "but it wasn't until Smartfood came on the market that the New England niche for white cheddar-cheese popcorn was created. Not that Smartfood's success surprised us. New England has always been a strong market for cheese snacks, and it tends to be upscale as well. But with their zany packaging and everything, they just took the market by storm. Consumers seemed to be having a love affair with it. Naturally, we felt that with our brand name we could compete against them well. So we had our R&D people develop a competitive product." The result was Bachman's own white cheddar-cheese coated Superior Premium Air Popped Pop Corn, introduced in October '87.
