Login or signup
36
ADVERTISING

Snack Attack

CEO credits the success of his cookie company to the attractiveness of the product.
Advertisement

Forget year-one projections. Richard Worth says that sometime last June his cookie company broke guesstimates for year five. R. W. Frookies had been peddling its "good-for-you" cookies just nine months. By December, Worth says, revenues topped $17 million. Profits were "substantial."

"It's been like riding a cyclone," he reflects. "By anybody's standards we had one hell of a year."

According to Worth, founder and chairman of the Englewood, N.J., company, 50% to 55% of major supermarkets nationwide now carry the fruit juice-sweetened Frookies; geographically, he says, they're sold in every state, as well as in Canada and France. Consolidated Biscuit Corp., Frookies' primary contract manufacturer, shipped about 1.5 million cases of the cookies in 1989, at times working around the clock to meet demand.

All that came without additional financing to supplement the $500,000 originally raised. The sales explosion also came with limited, although targeted, advertising -- coupon inserts in newspapers, and some radio. Mostly, Worth credits this year's phenomenal success to the spiral effect a hot product develops on its own.

"Among retailers, the word was out on the street that if you took in Frookies, you'd make money," says Worth. That was the case, he says, even with the company's reluctance to pay slotting fees, a kind of shelf-space cover charge that's becoming more and more common in the industry. Demonstrated success with consumers made other retailers more flexible about what they'd require to take on the product, says Worth. "For the most part, we weren't perceived as being a lot of work for them to succeed."

Furthermore, not paying slotting fees gave the company cash to spend on advertising, which led to more people buying cookies -- good for both the company and the stores. "It was a catch-22," he says. "A positive catch-22."

But doing about 11 times the volume anticipated was often hellish. "Our projections," Worth concedes, "were out to lunch." Managing inventories, training new employees, communicating with Consolidated, purchasing raw goods, coordinating deliveries -- all were difficult.

"We'd have major mass-merchandise orders all coming in at one time, and they'd throw everything off," he says. Deliveries at times took three and a half weeks instead of the promised two. But they barreled forward, taking every order and managing as best they could, because Worth had already made the decision to build Frookies into a big company.

To help solidify shelf space, turn the experimenter into the permanent buyer, and lay the groundwork for the next leap forward, Worth is expanding his management team. John Vinton, the former president of yogurt manufacturer Colombo Inc., served briefly as Frookies president; the founder of another high-fiber cookie company to which Frookies acquired the distribution rights is now the executive vice-president. The company has also signed on a New York City advertising firm to develop a campaign that will include television spots.

"Part of me would certainly have preferred to grow in an orderly fashion, like our business plan outlined," says Worth. "Unfortunately, the reality of the marketplace is that nobody's gonna let you just do your business plan without coming in and crushing you." -- Leslie Brokaw


THE COMPANY

R. W. Frookies Inc., Englewood Cliffs, N.J., a cookie company outsourcing manufacturing and distribution, handling only marketing in-house ("Cookie Monsters," February 1989, [Article link])

Experts' Concerns

* Distribution: Will retailers make shelf space for the new line, especially given the company's lack of major advertising and refusal to pay slotting fees?

* Product: Do consumers want a fruit-sweetened, "healthy" cookie?

Results to Date

1989 Actual Projected

Cases sold 1,500,000 139,000

Revenues $17,500,000 $1,600,000

Profit (loss) "substantial" ($132,000)

Last updated: Apr 1, 1990




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Comment and share features
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: