The Pita Principle

"Waste not, want not" might well be the mission statement of Mark and Stacy Andrus as they build their snack-food company

The first clue to the bootstrapping mind-set at Stacy's Pita Chip Co. is the factory's exterior signage.

There isn't any.

Well, actually, out at the end of the driveway there is a thin wooden slat with letters not much larger than those on the company's snack-chip bags. And there's a sheet of paper taped to a side door, identifying the brown-brick warehouse as the home of Stacy's Pita Chip Co. That's all Mark and Stacy Andrus, the founders and co-CEOs of the company based in Randolph, Mass., are willing to devote to labeling the space they rent from a local contracting company.

Inside, Stacy's is spotless but utilitarian. There's no lobby: walk in the door, take a few more steps to the right, and you're standing outside the Andruses' tiny offices. You'll notice immediately that the founders didn't waste money decorating, either. Their work space features white cinder-block walls, a beige tile floor, folding tables, and decor stuck somewhere between Late College and Early Yard Sale. And if Stacy Andrus's straight-backed wooden desk chair looks as if it came from somebody's cast-off dining-room set, that's because it did -- her aunt's.

The spartan surroundings reflect the CEOs' absolute dedication to making every penny count, both by design and by necessity. Both Andruses were once headed for careers in the helping professions -- Mark as a psychologist and Stacy as a social worker -- careers they dumped to bake pita chips. Mark, 36, still owes more than $100,000 in student loans for his advanced degrees in psychology. He and Stacy, who is also 36, owe about $370,000 in bank and federal business loans. They drive old cars, wear sweatshirts and jeans to work, and pay themselves what they call scavenger-level salaries. " Everything goes into the business," says Stacy. While she considers herself a natural risk taker and adventurer -- outside work, she's training for a 350-mile bike ride to raise money for a charity -- neither she nor Mark wants to run up any more debt. So equipping, promoting, and growing their business on the cheap continues to take creative footwork.

But all those efforts have finally paid off. With sales in 37 states, Stacy's hit $1.3 million in revenues last year -- more than double 1999's revenues. For the first time, thanks largely to deals with big chains like Stop & Shop and Shaw's supermarkets, as well as a private-labeling arrangement with Trader Joe's, Stacy's is profitable.

" Everything goes into the business."

Both native New Englanders, Stacy and Mark grew up in families of doctors, psychologists, and social workers. As undergrads both separately studied psychology; for graduate work, both separately went off to California. They met in the early 1990s through Stacy's brother, David, who was also studying psychology. Mark -- quiet, reserved, given to thinking carefully before he talks -- received a doctorate in psychology. Stacy -- lively, outgoing, a quick speaker with a ready laugh -- earned a master's in social work. They seemed set for a lifetime of private practice, except for one thing. Secretly, both longed to cook.

The Andruses, it turned out, were both lifelong foodies. In college they'd worked part-time in restaurants -- Stacy as a waitress and manager, Mark as a bartender and waiter. And they realized something else: they no longer wanted to work for anybody else. Says Mark, "I had the sense I could do my own business and not spend a lot of money."

So the pair returned to New England, planning to open a bistro specializing in the fresh California-style fare they'd come to love. "There weren't a lot of smiling faces," Mark says of their families' reaction to their plan. Instead of a bistro, the debt-laden Andruses settled on buying a pushcart from which they sold hot dogs, sausages, and chili at local festivals and events. Eventually they graduated to Boston's Financial District, where they abandoned their fair fare in favor of "Stacy's D'Lites," handmade pita-wrap sandwiches. They figured that roll-ups -- in combinations like roast beef and cheddar with roasted-red-pepper dressing, or chopped vegetables with crumbled bacon and feta cheese -- would go over better with the downtown crowd.

They figured right. On their first day they sold out of what they had, not expecting the turnout they got. When they got the system down, they routinely made and sold 200 fresh sandwiches in two hours. But those folks waiting in line -- sometimes stretching to 30 or 40 people -- created a new problem. Even when the Andruses hired several helpers, they couldn't roll up those made-to-order sandwiches fast enough. "Invariably, the last people in line would trickle away, so we wanted to do something to get them to wait," Mark says.

What he did not only created the company's loss leader but was in keeping with the pair's frugal mind-set: he neatly recycled each day's leftovers. Every night, he took the extra pita bread, dusted it with cinnamon sugar or parmesan and garlic, chopped it into wedges, and baked it. The next day he and Stacy handed out chips to the people waiting in line. Soon customers showed up specifically asking for the crispy, low-fat chips.

At that point, late in 1996, the Andruses faced a decision: stick with making sandwiches or switch to snacks? The pushcart had promise, thanks to the couple's location in Boston's business district: financiers were already offering to help them franchise the sandwich carts. "They were eating there every day, and they saw those lines," Stacy says of the potential investors. But after poring over trade journals, quizzing industry brokers, and talking to other snack makers, the Andruses decided they could mass-produce and store their pita treats and sell them nationwide. "We thought we could get bigger faster with the chips," says Stacy.