The World's Oldest Start-Up

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The concept
Ritthaler first envisioned yuca as the root of all earnings a decade ago, when a Venezuelan agronomist told him he'd found a way to triple the yields of this Central and South American food staple, which is a starch that's also used in textiles and food processing. His interest grew when he learned that most of the world's yuca is grown on small plots of land. He crunched some numbers. "I put it on paper. It pointed off the charts," he says.

The opportunity beckoned so brightly that Ritthaler decided to try his hand at a start-up. At various times during his career at Gulf & Western he'd occupied each of the four corner offices on the 37th floor of the company headquarters building, in Manhattan, and at one point he headed the largest corporate staff, some 130 employees. He sat in on annual business plan meetings for every division of the conglomerate, participated in acquisitions, and even served on the board of Cinema International Corp., a joint venture between Paramount and Universal. After leaving G&W, in the 1980s, Ritthaler managed overseas businesses divested from the conglomerate, some of which he and a couple of partners later bought. They ranged from auto-parts stores to industrial-hardware manufacturers and distributors. Still, he had virtually no start-up experience when, in 1988, he began growing yuca after purchasing a 300-acre farm in Venezuela. "Most of my corporate career I was a staff person," he says. "Now, when you're starting to create something, it's a good feeling."

The whole enterprise, Ritthaler admits with a laugh, "kind of took on a life of its own." He soon realized that farming yuca, even with the promise of higher yields, would leave him growing a perishable commodity that would be subject to price fluctuations, and that he'd be forever at the mercy of processors. Then, in 1990, he tasted a locally made yuca chip, and the path to profits seemed clear. He would take yuca from the field to the consumer by processing it as a healthful gourmet snack chip he could sell at a premium price. And Ritthaler's ace in the hole, his point of difference from other snack-food manufacturers, the key competitive advantage he would gain by vertical integration: a better-tasting chip.

The path to profits may be clear to Ritthaler, but the road hasn't been easy. There have been the other businesses to run. Additional farmland to acquire in Venezuela. Buildings to erect. Seedlings to germinate. Laborers to hire. And bad luck to endure. In June 1997, not long after Ritthaler got his processing plant fired up, a real fire broke out in the flour mill. That set him back nearly a year. Delays in well drilling and importing irrigation equipment proved disastrous when a crippling drought affected his crop last spring before his installation of irrigation, which to date has cost about $300,000.

As he stood by his trade show booth in October, watching hand after hand reach for his five flavors of yuca chips, Ritthaler was hoping to finally roll out his product in the United States in early 1999. Tropic's has been sold in a few outlets in south Florida since last June. The chips are available in five flavors: Original, Picante 'n' Cream Cheese, Sour Cream 'n' Onion, Garlic 'n' Cilantro, and Original Barbecue. Visitors to the Tropic's booth almost universally applauded the black package, which suggests the upscale nature of the chips: the package photograph shows them in a Waterford crystal bowl against a Caribbean sunset. And most people seemed to like their taste and crunch. Not only are Tropic's chips thicker than traditional potato chips, and therefore better for dipping, they're considerably less greasy. Yuca chips absorb less oil than potato chips, allowing the company to proclaim that its chips contain "40% less fat than regular potato chips ." Also higher in fiber than potato chips, Tropic's chips have no preservatives, no artificial color, and no cholesterol, enabling Ritthaler to position them as all-natural. And switching to a more expensive kind of sunflower oil, he says, will extend the product's shelf life from four months to six.

"I like it. I think it's an excellent product," said John Jarvis, president of Jarvis Sales Co., in Aurora, Colo., an independent snack food broker, after he'd just sampled the chips. "This yuca chip is different. We'd look at it as something new we're coming out with. Take a look at the bag. Look at the colors. This is class. That's going to help." Like dozens of tasters who had sampled the chips before him, Jarvis handed his trade-show badge to the vice president of sales and marketing at Tropic's, Robert Anderson, who scanned it into a device that captured Jarvis as an interested lead.

Comments like those only reinforce Ritthaler's abundant faith in his product, a characteristic entrepreneurial zeal that has fueled him during Act I of his start-up journey: creating a tasty niche product in an attractive package. "I know it will sell," Ritthaler says. "I wouldn't be this far if I didn't. I'll do a taste test with any potato chip in the United States. I'd be very surprised if I didn't win."

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