You can't fight the big guys if you're an entrepreneur.
CUSTOMER
LEE SALO
Buyer and merchandiser for Raleys Inc., a $1.2-billion supermarket chain with 53 stores in northern California and Nevada
Would I carry it? I don't know. I'd want to have the first introduction from the company and not the distributor, because the distributor doesn't have enough knowledge. There'd have to be advertising in every geographic area where we have a store -- radio would be prime, along with coupons in the papers. There'd have to be money budgeted in each quarter for both those things, as well as in-store promotions. We don't like stand-up racks in the aisles -- we like to keep the aisles nice and wide for our customers.
I go by gut instinct. And my instincts say that Frookies is the wrong name, although I see its merit in the natural-foods market. I think it's priced too high. It's probably not as good as the products from Nature's Warehouse, another juice-sweetened cookie that we sell at $1.79 for eight ounces, compared with Frookies' $1.99 for six and a half to seven ounces.
FINANCIER
BILL MULLIGAN
General partner, Primus Venture Partners, Cleveland, a $105-million venture fund that has recently invested in consumer food products
The concept itself is intriguing. He's identified and is attempting to capitalize on a growing interest in healthful foods. And I haven't seen much that's been done with that trend in the cookie section. I wouldn't say it's actually a health-oriented product. The package says each Frookie is "the good for you cookie." I would take exception to that. It claims to have "no cholesterol." Well, a lot of cookies have no cholesterol. It delivers no more than 0.63 grams of dietary fiber; that's very, very low. And the calorie content is relatively high -- 45 calories per cookie -- so it's certainly not a diet treat by any means. I don't see it as a health food; I see it as a healthier junk food. That may ultimately force the company to position it a little differently.
I like the packaging, though. I think the name is good. And I think the pricing is very good. Keeping in line with Oreo will enable consumers to look at Frookie as a trade-off, a way to at least avoid some things, like sugar, without stepping up in price.
The way they're financing the business -- selling equity to the people they need to do business -- sounds, on one hand, very creative and low cost. But I think it will become very cumbersome. Worth is looking for follow-on financing right now, and I think that these people he's dragging around behind him are going to be an anchor. If we were to walk into this deal and see he had locked up relationships with a baker, professional organizations, and distributors -- who are literally the lifeblood here -- we'd be concerned.
In the event you have problems in the company and you have to do another round of financing, you suddenly have a number of people with different points of view on what created the problems and how they ought to be treated. Severance becomes tougher. What happens if a distributor in a key marketplace falls flat on his face -- yet he's a shareholder? You don't have the same degree of flexibility that you have if he's not a shareholder.
We always find with early-stage companies that things change daily -- suppliers change, customers change, methods of distribution change -- and for good reason: you become smarter in the business as you go along. Given that, I'd worry about being locked into so many things on day one.
I don't think Frookies is going to make it if Worth intends to sit back and merely be a marketing organization. Instead, he should focus on a few accounts -- like Kroger, which he has -- and not try to blow out a national program for 20 different supermarkets. Demonstrate the ability to sell in enough quantity to justify your position on the cookie aisle. Confirm that this product is in demand by the customer, that it can capitalize on this growing interest in healthful foods, and that its taste is at least not a barrier. Get that done in a couple of cases, and then you can take that success story and get positioned on the cookie aisle. If Worth makes some of those changes, I think he's got a good shot.
COMPETITOR
JOSEPH SIMRANY
Vice-president of marketing, Sunshine Biscuits Inc., Woodbridge, N.J., third-largest cookie manufacturer in the United States
I'm always amazed. Everyone wants to get into the cookie business -- Frito-Lay (Grandma's Cookies) and Procter & Gamble have tried -- and everyone is a marketing expert.
In Worth's favor, he makes a decent-tasting cookie, which appears to be made with excellent ingredients. Conceptually, he is going in the right direction. I say that because that is the direction we're going, and we got there first. People are concerned about the things they are giving to their children, so a year ago we eliminated all coconut oil from our products, and we are in the process of eliminating all saturated fats. Frookies may have thought it would have the field to itself, but it doesn't.
