Pop Stars
TOP OF THE POP
BY FRANCESCA DI MEGLIO
A bowl of popcorn has the power to bring people together.
It is this image— one of family and friends sitting around a table, passing a bowl of popcorn back and forth—that inspired Richard Demb and Warren Struhl to build a popcorn empire. In the five years since they first discussed the idea, Demb and Struhl have opened 13 stores and counting. Dale and Thomas Popcorn was named after former Popcorn, Indiana mayor Dale Humphrey and basketball legend Isiah Thomas.
They have now built an internet popcorn business and launched two labels, Popcorn Indiana and Lily, which are sold in outlets such as Safeway and Walgreens.
The concept was a simple one.
Drawing upon people’s emotional connection with the salty (or sweet) snack and their experience in the popcorn-crazy Midwest, Demb and Struhl wanted to fill a niche that was largely ignored. No company before them had thought of having entire stores built around this one food item. “[When] you think of popcorn, you think of movies, carnivals, watching TV with family and everyone sticking their hand in a communal bowl,” Demb says. “You really don’t have that sharing, emotional, fun element to any other snack.”
Before opening the first store in Manhattan’s Upper West Side (which is what ultimately drew Thomas’ attention, leading him to make a financial investment), Demb researched the popcorn preferences of different regions around the US. That’s when he came across the small town of Popcorn, which is a 90-minute drive from Indianapolis. There, he and Struhl met Humphrey, who showed them the beauty and history of the farm community. The business partners were convinced that Popcorn represented the kind of nostalgia for small-town America that they wanted to evoke in their stores. With photos from their trip in hand, they worked with professional designers to create a look that is cozy and country, yet altogether hip. With wooden crates forming clean lines, and crisp murals of corn fields and the blue sky on the walls, the stores pay homage to the town of Popcorn—while the company name pays homage to Humphrey, who helped the company find inspiration.
At the Dale and Thomas Popcorn stores, visitors can actually see the product being popped and prepared. Stores have recently opened in Florida, suburban New Jersey and Boston, and the company is also scouting other locations. The newer stores, replete with tasting bowls of popcorn, are designed to be gathering places, complete with a large-screen TV and separate areas for parties and events.
While the ambiance might attract customers, the product is what retains them. The Popcorn Indiana label, which is available in supermarkets and specialty stores, includes flavor combinations such as butter toffee and walnut crunch, and chocolate chunk and caramel. If these flavors sound gourmet, they should. Dale and Thomas employs Chef Ed Doyle, a graduate of the Culinary Institute of America, who creates new recipes and does the talk show circuit. He’s given a lesson on spicing up popcorn at home on Today, and the company has recently been featured on “The O List,” CNBC, CNN, “Time” and in Cosmopolitan.
Wall Street has taken notice of Dale and Thomas, particularly the way the company comes at consumers from multiple directions: the internet, supermarket shelves and branded stores. In fact, investment bank Goldman Sachs recently made a significant investment in Dale and Thomas. The company reportedly expects to reach $50 million in sales in 2007, and analysts are predicting that the franchise will go the distance in the way that Cold Stone Creamery has. But Demb believes Dale and Thomas has even more potential. Popcorn not only has a long shelf life, but it can also be shipped around the country.
Still, competition, at least in the online side of the business, is fierce. Popcorn Factory has already made a name for itself, sending tins of popcorn between friends, family members and colleagues. Although its flavors are different, the concept is similar. But Dale and Thomas also ships tins of popcorn and offers special packages for holidays. In addition, the company stores have been a success, despite the fact that popcorn is traditionally either made at home or purchased at a movie theater or stadium.
Moving forward, Dale and Thomas will continue to tout its product’s all-natural ingredients (no hydrogenated oils or trans fat) and respond to market research and customer feedback. Demb says consumers from all over the country offer suggestions in person at the individual stores or by emailing corporate headquarters.
By observing the trends in these communications, the company is able to determine what direction to take.
For instance, an overwhelming demand for kettle corn on the website led to the offering of that flavor as a six-pack sampler. Also, requests for movie theater-flavored popcorn convinced the group to create such a flavor for the wholesale arm of the company. This newly produced popcorn is part of the Lily line, and Demb says it takes movie popcorn to the next level. The latest flavor, says Demb, is like nothing on the market: kettle-cooked popcorn topped with real butter. (Real butter is expensive and difficult to work with for commercial foods.)
In the near future, Demb says consumers will find it easier to score a bag of the company’s popcorn in local supermarkets. More Dale and Thomas shops will start appearing across the country, including the Midwest, where the seeds for the company were first planted. A New
Jersey store scheduled to open in the summer may even include factory tours. Dale and Thomas will also run an online marketing campaign. Here consumers will be able to sample the product for just the cost of shipping—the idea is to get people to try the product and get hooked. It’s part of Demb and Struhl’s master plan to pop the competition. And if there’s a kernel of truth to what Demb—and Wall Street— have to say, then the completion of the empire may only be a matter of time.
RICHARD DEMB’S BUSINESS DOs
BE PASSIONATE ABOUT YOUR WORK.
“If you’re excited, if you believe in your business, you’re going to spend time on it. Your passion is going to quickly rub off on the people with whom you talk—partners, investors or customers.”
THERE’S ALWAYS ROOM TO IMPROVE.
When Demb and his partner first started out, people told them popcorn was so readily available that no one would want their product. But using all-natural ingredients, uniquely dressing the popcorn and taking a three-pronged approach (branded stores, wholesale and online business) set them apart from the pack.
DO YOUR HOMEWORK.
Demb spent a lot of time researching trends in popcorn. (Northeasterners prefer chocolate chunk and caramel flavors, and in the summer they crave something more spicy and savory.) Knowing this kind of info helps Dale and Thomas come up with an effective business strategy and decide which products are right for different regions.
RESPOND TO CONSUMERS.
Dale and Thomas retail stores make it easy for Demb and his team to see what sells and what doesn’t. But reading customers’ mail and email offers a window into their minds. While some customers have whacky ideas—papaya-flavored popcorn—Demb knows that customers are his greatest resource.