In this episode, we speak to Garry Smith about how COVID-19 has increased sales and how marketing groceries has become more data-driven over the years.
Intro: [00:00:00] Welcome to the LA Business Podcast, a form for business owners, senior executives, to share the experiences about the elements that drive their success. Your host is Robert Brill, CEO of Brillmedia.co an Inc 500 company. Delivering the power of hyper-local advertising. Robert writes for Forbes, Inc. and Ad trade publications.
Our goal is to bring you the stories about successes and failures of people who are making big things happen in marketing, entrepreneurship, and management.
Robert Brill: [00:00:36] Hey, everyone. Welcome to another episode of the Ellie business podcast today. Our guest is Garrett Smith, president of the American popcorn company.
Thanks for being here, Garrett.
Garret Smith: [00:00:47] Hi. Thank you. I’m happy to be here.
Robert Brill: [00:00:50] It’s a good time. It might be a good time to be a popcorn company. And if it is let us know why I figure people are staying home. You want some entertainment. Popcorn is the perfect, perfect thing to eat while you’re watching a movie.
How has the last few months been for American Popcorn Company?
Garret Smith: [00:01:07] Crazy, sales are up so dramatically it’s hard to describe. Our brand is Jolly Time and we’re nationally distributed even internationally. But, sales of microwave popcorn is about two thirds of our business. We also sell a lot of raw kernels in either a poly bag or a 30 ounce jar.
And then of course, a smaller part of our business is, movie theaters and institutional food service accounts. And of course that business disappeared as rapidly as the retail business increased. But to answer your question in the last four months, our microwave popcorn sales are up almost 40%. And our, sales of rock hurtle are up almost double a June.
We’re starting to see it slow a little bit, but, as long as because people are, this has changed. People’s lifestyles and people are, as life has slowed down, they’re staying home and that’s great for us.
Robert Brill: [00:02:21] Fantastic. And so, you know, on this podcast, Gary, we’re really interested to share with other business owners and senior executives and entrepreneurs, how companies grow in scale.
How, what have you, have you done anything special to seize this moment or, has it been a matter of you’re in the right place at the right time? Have you changed your marketing or your messaging?
Garret Smith: [00:02:43] No, no, we were clearly, we were the right business at the right time. I mean, there’s that there was nothing we did that influenced that.
Having said that to keep up with demand and we did for the most part, but we’ve worked our production people 12, 12, and a half hours a day for three months. And there’s a burnout factor there that , concerns me. We’re going to do it one more week and then we’re going to be caught up enough, we think that we can go back to what is more normal production hours are our employees have just been incredible.
I can’t not thank them enough. I mean, their commitment to us is just exceptional and they’ll be rewarded for it, but key going forward and what our marketing department is talking about now is, you know, with if with this one rapid sales increase, it’s pretty obvious that we, we have a lot of new users of Jolly Time popcorn and the key will be, how do we keep that new user who never tried this before in the loop, and keep them purchasing it popcorn. There there’s brands switching within a popcorn category, especially microwave popcorn, and we don’t need to get every sale, but we need to be in that rotation of brands that, that consumer’s willing to buy. We have great quality products, just not as many people know of us as, as some of our competitors.
Robert Brill: [00:04:20] So do you consider yourself a challenger brand to like another popcorn company?
Garret Smith: [00:04:27] Yeah, sure. Of course we are yeah, Orville Redenbacher is a ConAgra brand as is act two. Orville would be a national market leader, then Campbell Soups, the company. Owns the Pop Secret brand and then little old family owned, Jolly Time popcorn butts head against both of them, as well as house brands or private labels, that type of stuff.
Robert Brill: [00:04:56] Sure, which I imagine is becoming, you know, like craft beer and, this push towards. Like homemade and sort of that lifestyle brand. I think there’s a new threat from a variety of different, some very small competitors.
Garret Smith: [00:05:13] Absolutely. There is.
Robert Brill: [00:05:15] How do you market against an Orville or a Pop Secret? Like, it must be difficult. I think ingenuity and creativity plays a big factor in that.
Garret Smith: [00:05:27] Commitment and flexibility. I mean, we never take the eye off the ball. Popcorn is all we do.
And so we are just laser-focused all the time on just one category. That’s different than those large conglomerates obviously we’re also nimble and flexible. And when you’re approaching a grocery chain, whether it’s Vons or Ralph’s or whoever it might be. You know, we’ll present our idea for a good promotion, in store promotion.
Maybe it’s a display, maybe it’s a price point, but we’ll present our best ideas, but then they may say, well, could we do it this way? Or could we do it that way? We say yes. I mean, we just flat out say yes, and that helps us. And, and that’s that isn’t really marketing as much as just good sales relationships.
But as far as marketing Jolly Time has been consistently advertised for 95 years. We’re 106 year old company. And, of course marketing has changed so much. The last 5 to 10 years or put whatever time period you want, but we do some more traditional marketing, women’s service magazines.
Most of our more traditional type of marketing has switched either to in-store activities. And that might include a shelf talker, or like I said, a, we pay for a display, and then social and digital, we’re talking about a video for digital. A lot of our dollars are being shifted that direction.
You can get a lot more targeted. You don’t reach as many people, but you can really get targeted.
Robert Brill: [00:07:26] Yeah. I mean, I like what you said about the flexibility and being nimble. I mean, it really just means a lot to be a good partner and a good human being in the, in the course of, of making, campaigns and partnerships work.
Garret Smith: [00:07:43] Having said that though, the grocery business has become much more data driven than when I started 40 years ago or even 20 years. I mean the more sophisticated chains are taking the scan data. You know, everything goes through the scanner and they’re analyzing that and those consumers.
I can tell you for a fact that Kroger, which in your cases is Ralph, knows exactly who their best consumers are. We have to pay for it, but we can, we can get some information on our consumers, within their stores. And can target them with different vehicles. It really is a data driven business, but having said that, I mean, we are a family business relationships do count.
Robert Brill: [00:08:36] Are you using any of that data to injest into your business to make decisions about maybe who to target or where to target? Okay. So here’s the thing. My wife loves HTV so I’ve been back into the 15 and 30 second commercial game, like watching those on connected TV now for a couple of months.
And what I’ve really noticed. And we sold this into our clients, which is you see an ad on connected TV, like on rural core HGTV or something. And then you see a banner ad as a followup. That type of data targeting, I love seeing that. I saw that for a pet product, a brand called County day, County day, I think.
And I noticed it and I’m like, okay, that’s fascinating. Like, do you use, like, you can, there’s so much rich data you can use to like, identify your customers, your best customers, and to create lookalike models and to do that type of stuff. How, I mean, how’s that been ingested into your organization?
And how does that compare to like, what you do with television?
Garret Smith: [00:09:45] 20 years ago, we ran a lot of television commercials, but we haven’t run TV commercials in I don’t know, a long time, at least a decade. Well, all of your digital advertising is, very targeted and you know, I’m 65 years old, how that works. I really don’t know.
But, yes, there is. I mean, there’s reach and frequencies digitally just like there is on television or just like there is on magazine and it’s all very measured. Like I said, it’s, it’s, it’s much more targeted, so we’re not reaching as nearly as many people, but we hopefully we’re reaching them more effectively.
Robert Brill: [00:10:35] How do you nurture innovation within your organization?
It has to do with people ultimately, but like, you know, I’ve, I’ve worked, it’s done, I’ve worked on consulting gigs with some of the largest brands. You know, we’re a media buying shop. That’s what we do professionally for small and midsize, sometimes large businesses, but I’ve had the opportunity to work with some of the largest brands in the world, on a consulting level.
And what I find interesting. It’s so hard for some companies to swing a massive shift to make one simple change. Are you able to nurture, how are you able to nurture talent within your organization? Going back to that idea of being nimble.
Garret Smith: [00:11:15] That’s a great question. And innovation is so critical to our success or even being, well, the way I got to give credit to other people, for this process, but we do have an innovation process and we meet at least a monthly with updates and we’ve got a long list of projects that are in, different stages.
It could be packaging innovation. It could be a new flavor of microwave popcorn. It’s a whole variety of things. It could be a completely new product, and we have a step by step process and that includes research. I mean, it’s a never ending process.
And, and honestly, if we’re not introducing new ideas and new products, we’re going to get left behind and we can’t afford to get left behind and stay in business because I can assure you that our larger competitors are innovating as well.
Robert Brill: [00:12:23] How do you measure the success when you have a new flavor or a new product or some sort of new thing that you’re looking at?
How do you measure? Like how far down the line you go and you say, okay, we’ve hit a benchmark. This is good. There’s there’s something here. Or alternatively, ‘ah man we’re not getting the sales we want’. Like, what’s the metric they say, okay, stop, abandon, move onto the next project.
Garret Smith: [00:12:45] Well, it’s sales. I mean what we haven’t done very well, to be honest with you in the past that I think we’re going to be better at going forward is doing some consumer research before we introduced the product.
It could include name, could include packaging, could include the product itself. I mean, it’s probably all of those things because when you introduce a new grocery product, the grocery chains charge what they call a slotting allowance, which is an upfront fee for a little bit of real estate on their shelves.
And it costs a lot of money to introduce a product nationally. And so we don’t want to make a lot of mistakes and we have in the past, but at the same time, if you’re not showing new products, you will get left behind. So there’s a balance there.
Robert Brill: [00:13:42] What new things are we testing in the next few months or in the next year that we can be on the lookout for?
Garret Smith: [00:13:49] Well, if I told you, I’d have to shoot you. Well they’re are new flavors in the works. Actually we were going to introduce a new flavor of this summer, but with, while all that’s going on and our surge in business, plus the grocery account, they’re so busy stocking shelves because their business is good.
Kind of the new item presentations have just been put on hold. Not only by us, but also by our customers until things kind of settled down. Things are starting to settle down. And I think things will, they’ll never go back to normal, but we will be making new item presentations, however, in our case, we’re still so busy just trying to keep up, with the increased demand that it’s not the right time for us to introduce a new product because I’m not sure we can make it. Like I said, we’re working some of our people as much as 12 hour days, but that’ll change. And, and, I anticipate that this fall versus a year, this new product that we have ready will, will be introduced.
And then there’s, you know, we sell a lot of Jolly Time in just two pound polyethylene bags. It’s a very simple product, generally sits on the bottom shelf of a popcorn section. And, we’re talking about ways to, it’s not a very fancy package, so let’s put real blunt, but so we’re talking about other type of packages that might be more attractive.
But of course that always increases costs and the cost ultimately has to be paid by the consumer. And, you know, so there’s risk in that, but there is a lot of discussion around packaging of raw popcorn as well.
Robert Brill: [00:15:52] So let’s talk about that, right? Like how, you know, many years ago I worked on. This might be a bad analogy and I don’t mean it to be offensive, but I’ll frame it because as a consumer, I’m really interested in as a business person, I’m interested that I worked on, gasoline, 76 brands, ConocoPhillips, et cetera. And you know, when we, when we, we went to market, the marketing was really about everything, except that, I mean, the product was differentiated.
But as a consumer, like, I don’t know the difference between one gasoline and the other, and I’m not a car person, either. But when I think about Popcorn, like what’s the differentiated factor, what’s the key factor that when a consumer makes a decision. Jolly Time, it’s top secret. What do you think is the key factor that makes a difference in the brand that they choose?
Is it the marketing? Is it the packaging? Is it the taste or feel of the product? Like what’s the thing that makes a difference for the consumer?
Garret Smith: [00:16:55] That’s a great question. I think it varies by consumer to be honest with you. But having said that, people eat only good tasting products. And so if you don’t get that right, you don’t have a chance.
And, in the case of popcorn, also, you have a performance of the product. How many of the kernels pop, and so, in a bag of microwave popcorn, it isn’t as much as how many unpopped kernels that are in the bottom of the bag. The more important thing is making sure that that bag pops absolutely full because if you only get it to two thirds or three quarters popped bag, well, probably something’s wrong with either the popcorn, which is not likely, or the bag didn’t vent properly or something along those lines.
So, it is hard to differentiate sometimes, we try to do it with flavors to answer your question. Everybody’s got good, everybody’s got good popping hybrids. And, and they vary from company to company, but they’re all good hybrids. But yeah, I mean our most popular flavor that’s been around for 23 years is a, is a sub brand called Blasto Butter.
And when we designed that product, Remember the 20 well, 25 years ago, there was a hard candy called mega warheads was very sour candy, and you put it in your mouth and your face just caved in. So the way we describe, we were working with a food scientist at the time and the way we described what we wanted for this product that we wanted an up front explosion of butter.
That it would almost make your face cave in and Blasto Butter is a very powerful name and it better deliver. And it does. It’s in the category called movie theater, style butter. But what makes it different than our competitors is that run blast of butter. And, and so we’re doing things like that.
We also have a product that’s available in LA, called simply pop, and it is a clean ingredients, microwave popcorn. ANd clean ingredient means it’s popcorn, it’s Palm oil, it’s clarified butter, which is butter with no moisture in it, and it’s sea salt. All things, you can understand, all things, things that are clean in people’s mind, and that product is delicious and we’re doing very, very well with that.
But then we have some extreme products, like a, we have a blazing cheese and, then we have a marshmallow flavor, I don’t think in your area, but you know, so we have these extremes as well, but what’s kinda interesting about, especially microwave popcorn sales, 80% of the sales are a butter flavor.
Maybe it’s a movie theater flavor. Maybe it’s a more standard butter. Maybe it’s a low fat butter, but it’s still butter. And that’s the way Americans like popcorn. I mentioned earlier, we do have an international business that isn’t necessarily true in internationally. As a matter of fact, we have a product called the big cheese and that’s another heavy oil, big flavor product.
And especially in the middle East and parts of Europe, that product just flies. American consumers are a little bit different. We consume way more popcorn than anybody else per capita, but we’re very loyal to butter.
Robert Brill: [00:20:53] I imagine, you know, I remember growing up, I would go to my grandma’s place and she would have, I don’t know what kind of device, but like the device, I would make popcorn.
And I’m quite confident the brand that she used was Orville Redenbacher. So like putting my marketer hat on thinking, do you, do you, I imagine creating a lifelong customer starts with the parents making popcorn for their kids.
Is that a critical part of your marketing? Or do you work with you normally target like adults?
Garret Smith: [00:21:27] Well, I’ll tell you why we target mom with kids in the household, especially 5 to 12, those are the heaviest consumers of popcorn, whether it’s microwave or they’re doing it themselves on the stove or in a popper, unlike cereal, where kids make a lot of the decisions. Mom still makes the decision on the popcorn and she might buy Blasto Butter for Johnny and a low fat product for herself. But she’s the one that is making the decision when she’s shopping. And like I said, we target moms because with kids in the household, they consume more popcorn. Those households consume more popcorn than anybody. The other nice thing about popcorn though, is 70% of the country eats popcorn.
It’s very widely. Very popular. And so, you know, you can make a mistake in your targeting and still be okay.
Robert Brill: [00:22:37] If I want to buy, like, the best flavors that are consumed in the middle East, in Los Angeles, or like Europe, or, I don’t know, other parts of the world, do I have the ability to do that?
Or am I just like out of luck and I’m all that I can only buy what’s in the stores, in my area.
Garret Smith: [00:22:58] No, well online you can buy anything you want from us. The same cheese product we have domestically, it just doesn’t sell as well within the United States, as it does in other parts of the world. The only product that we have, some little tweaks in formulations, occasionally but consumers couldn’t notice the difference in the taste. There’s only one product. I think that we offer internationally that we don’t offer domestically, and that’s a sugar flavor, microwave popcorn. And that product was made specifically for Germany, Germans, think of popcorn as a child’s food, something you would get at a fair or a carnival, and it’s often sweet.
And so we have developed a sugar flavor, microwave popcorn with a really attractive vanilla smell as it’s popping. And it does pretty well in, especially with Germany.
Robert Brill: [00:24:04] Is there any other flavor? What’s the most outrageous flavor you’ve ever developed?
Garret Smith: [00:24:12] Oh God, it’s outrageous and it didn’t work, but Sassy Salsa, there’s one. A low fat caramel apple was one. I’m naming all these failures over the years.
Robert Brill: [00:24:31] That was good, especially the caramel apple.
Garret Smith: [00:24:35] They’re good products, but when you only captured 20% of the sales out of the section, it’s hard to keep it on the shelf. The best product we discontinued was Jalapeno Butter.
Oh my God. That was good. But I like jalapenos. But eventually what ends up happening is, chain a drops it in, replaces it with something else, whether it’s our product or a competitor’s product and chain B did it. And then chain C did it and you just end up not having enough distribution to make it worthwhile.
And, that’s, it’s painful. I hate to do it, but you do have to purge poor selling items, but I, I, you know, we’ve had more, Chipotle. That was another one that failed. So we’ve tried a lot of things and like I said, what, back in those days, we were doing the upfront consumer research that we have to start doing better now.
Robert Brill: [00:25:42] What’s your cycle to bring a product to market? Like how long does it take you guys to bring a product to market? Like, is it like, yeah, I mean, like, is it six months? A year? A couple of years.
Garret Smith: [00:25:55] A year we can do most anything in a year. Occasionally it’s different than that, but labor’s in microwave popcorn or no popcorn pops in 450 degrees.
That’s really hot. And a lot of flavors burn up. You just don’t take it. It’s a flavor going into the end of the bag, but once it’s popped, it kind of disappears. And so, there’s a lot of research that goes into flavors, but we can, our goal is to come out with a new product, within the microwave segment every year. We don’t always do it, but, that’s kind of our goal.
Robert Brill: [00:26:35] So for the next year, as we look forward, continue with the sales up upswing that you guys have benefited from. I’m sure the whole category has done really well, which is fantastic.
Garret Smith: [00:26:49] Yeah. Well, here’s my prediction. I mean, it, I mean, this is going to be with us for obviously months, not maybe a year or two.
Robert Brill: [00:27:00] Right.
Garret Smith: [00:27:00] And, this whole thing has changed people’s lifestyles and they have rediscovered baking. They’ve rediscovered cooking in general and they’ve rediscovered, popping popcorn.
And so as long as people are going to stay home more, which I believe they are. I know California is opening up as it is Iowa, but people’s lifestyles have slowed and that’s good for home consumption of popcorn. Bingeing Netflix goes very well with Jolly Time popcorn. And so, this is all going to settle down and it will plateau out, but it will plateau out at a much higher level than we where at previously.
Robert Brill: [00:27:43] Can we talk about data for a moment
Garret Smith: [00:27:46] About beta
Robert Brill: [00:27:47] Data?
Garret Smith: [00:27:48] Oh data, sure of course.
Robert Brill: [00:27:50] What, you know, we talked earlier about, you know, I’m like, okay, like how, like I’m thinking about this. If I’m in your shoes, how do I identify your best customers and your best constables are going to come from the grocery store. And you mentioned that you buy some of that data, but it’s very expensive.
Do you, I mean, what, what is your data infrastructure look like? Are you capturing people who visit your website? Are you looking, are you working with data partners from like MasterCard or Visa who are try and, you know, or Catalina on these transactions. This is such a big opportunities for the whole category and specifically for you, there’s such a big opportunity.
So many more people are discovering and buying your popcorn. How do you form a relationship with those people beyond the consumption? So that three years from now, you can go back and say, Hey, you remember us Jolly Time we’re the best.
Garret Smith: [00:28:42] You’re asking the right question and that’s what we’re working our ass off on, but the truth is it’s really hard.
The only way we can really get firsthand knowledge of who’s our consumers. And I’m not talking by name, but is from the grocery themselves because the data that we buy is not consumer specific it’s market share. It’s how well this item sells. It’s you know, what percent of the stores have. Do you have distribution yet?
What’s the average price point. And we use that data to, to communicate to the customer as far as communicating to, to the consumer specifically, to what you’re talking about, we’d have to, we’d have to buy information from a willing grocer. And some grocers sell that information and some grocers do not, but if they do we can use, just use a Kroger or Ralphs as an example, they have programs where perhaps we can target a coupon, a digital coupon directly to, someone who has purchased Tolly time for the first time.
In the last year or something like that. And we do do stuff like that. It’s expensive, but it’s like, but you’re asking the right question. So, as I said earlier, we have a lot of new consumers because of the increased consumption. How do we keep them?
Robert Brill: [00:30:20] Yeah. I imagine site visitation data is going to be valuable is continuing to be valuable for you.
Any email address that you might collect, but the challenge is people are gonna, like, there’s so many products that a consumer will buy on a day to day basis. We’re not going to give our email addresses to every kind of, it makes the product. But that’s such a valuable connection to the consumer.
And through
Garret Smith: [00:30:45] our website and our marketing PR department, we’ve got a band club. A hundred thousand people or something, and that have, for whatever reason, proven themselves relatively loyal to Jolly Time Popcorn, you know, one thing to talk about marketing. Here’s something that is very unique to us within our category anyway, is that we have, almost always some type of, consumer offer on our packages.
As an example, over the last eight to 10 years, we have given away with proofs of purchase of Jolly Time Popcorn, 800,000 reusable, grocery bags, and a consumer asked to send it then three proofs of purchase and we’ll send them a reusable grocery bag, but it’s got our logo on it and she’s carrying it into the grocery store and it isn’t just reusable grocery bag.
We used to have a relationship with WeightWatchers on our low fat products, which we call healthy pop. Well, for a long time, several years we offered a free subscription to wait, watch your magazine, with proofs of purchase of microwave popcorn. This winter we’ll have for the fourth consecutive year, we’ll have a tie in with Red Box and inside our carton of microwave, popcorn will be a code that you can punch into a red box and get a free movie route.
Rnd this year we’re adding a discount on streaming because they’re getting into streaming. Obviously the Red Box model, might turn into blockbuster someday. Right now they’re still doing very well, but anyway, I mean, movies and popcorn go together.
And so that’s, that’s been a really good tie-in. And so through those offers, we are able to capture names and addresses and, and then we, we do target them and we ask them questions, you know, it’s not a real sophisticated database, but they’re loyal users. So they’re good people to ask questions about and we do.
Robert Brill: [00:33:09] Very good Garrett Smith. Thank you so much for being on the show today. Really appreciate it.
Garret Smith: [00:33:15] My pleasure. It was fun.
Robert Brill: [00:33:17] Thank you for listening to this episode of the LA Business Podcast. If you like what we’re doing on this podcast, please consider subscribing on Apple or Google play, leaving a five star review and sharing with your friends.
If you have any questions, comments, or recommendations for a guest you’d like to hear on this podcast, please email me [email protected]
Thank you. Have a fantastic day.
