by Mark Friedman on Monday, Apr. 11, 2005 12:00 am
The North Little Rock cookie manufacturer has quietly picked up several national accounts to bake cookies under retailers' private labels. Some of the high-profile accounts include the Trader Joe's grocery store chain and Target Corp. of Minneapolis.
And those low-visibility products have allowed Brent & Sam's to thrive while several other Arkansas commercial bakeries have turned off their ovens.
This year, Brent Bumpers, the majority owner of Brent & Sam's Cookies Inc., is projecting the company's private-label accounts will be half or slightly more of its total sales — a figure he wouldn't disclose.
While Bumpers handles the day-to-day operations, his family is also involved. Bumpers' mother and father, Betty and former U.S. Sen. Dale Bumpers, own 10 percent of the company, and Brent's brother, Bill, owns 15 percent. The co-president, Mark Hoskyn, who is not related to the Bumpers clan, owns 7 percent of the business.
Last year, grocery stores sold $3.9 billion worth of cookies, according to the Private Label Manufactures Associa-tion. Of those, 12.7 percent of them were private-label brands, which was up less than 1 percent from 2003, the PLMA said.
Brent Bumpers declined to release sales figures for Brent & Sam's, but he said the approximately 10 accounts he has with retailers are worth between $200,000 to $600,000 each. Based on revenue from the private label accounts, Brent & Sam's could have sales of $4 million to $12 million in 2005. And he said sales have more than doubled since 2000, when private-label cookies were about 10 percent of sales.
"I don't like to give out revenue numbers because it sounds like you're bragging or ... you're a lot smaller than people thought," he said.
Bumpers said his goal is not to be the next Nabisco or Keebler.
"I just want a share of the high-end niche," said the 52-year-old Bumpers, who tested and developed all of 50-60 different types of cookies baked at the plant.
In the early 1980s, Bumpers and Sam DeWitt spent countless late-night hours in front of the oven in a friend's pizza restaurant. Their objective: to develop the perfect cookie.
Both Bumpers and DeWitt had full-time jobs, Bumpers as an Assistant U.S. Attorney and DeWitt with Southwest-ern Bell Telephone Co.
When the two lifelong friends finally agreed on the perfect chocolate chip cookie recipe, they started selling them around Little Rock. With each delivery, the cookies sold out quickly. In 1986, DeWitt quit his job and ran the business full-time.
The first year's sales were $39,000. But DeWitt and Bumpers didn't have a clue how to market the cookies, Bumpers said.
"We used to drive around Arkansas on weekends trying to sell," he said. "We thought we could make money just selling cookies in Arkansas, which is laughable in hindsight."
While the company teetered on the verge of bankruptcy, Bumpers and DeWitt stuck with it because customers gave the cookies rave reviews.
Having a famous last name also might have helped initial sales. But Dale Bumpers said it was the quality of the cookies that propelled repeat customers.
"If you knew how many hours they spent developing that cookie ... nobody can take that away from them," Dale Bumpers said. "They did it on their own."
After about three years in business, Bumpers and DeWitt started attending the National Association for the Specialty Food Trade Inc. shows.
"We realized we weren't going anywhere selling cookies in Arkansas," Bumpers said.
As a result of the food shows, Brent & Sam's started landing orders from small specialty food stores.
In addition to gathering orders at the food show, Bumpers met the owner of the Popcorn Factory of Chicago in the late 1980s. The Popcorn Factory also sold cookies, but Bumpers said the cookies weren't memorable.
Bumpers started flooding the Popcorn Factory with samples and "pleading and begging" for the store to sell Brent & Sam's cookies. The Popcorn Factory agreed.
In the early 1990s, the Popcorn Factory decided to start selling cookies under it own label.
"At some point I realized that that was a possible marketing niche for us was to make cookies under other names," Bumpers said.
Brent & Sam's won that account. At the time, it was worth about $20,000 to $50,000 annually. Brent & Sam's still has the account with the Popcorn Factory and today it is worth between $300,000 to $400,000, Bumpers said.
Over the years, Brent & Sam's collected other accounts for upscale department stores, such as Saks Fifth Avenue. But those accounts didn't generate high sales because the cookies were sold only during the holiday season.
Bumpers said over the years, Brent & Sam's saw sales growth of between 10 to 25 percent each year.
In 1996, DeWitt sold his portion of the company to Bumpers.
Private Label Boom
While Brent & Sam's cookies was building its customer base, a change was taking place in the grocery industry. Grocery stores and other retailers were looking at developing their private-label brands as a source of growth, said Barbara Hulit, vice president and director of the Boston Consulting Group Inc.
At one time, she said, consumers chose private labels because they were typically cheaper than name brands.
"What we're seeing now is that as the economy has strengthened, private label sales continue to go up," Hulit said. "And consumers will say if they have had a good experience there's no need to go back [to name brands]."
Between 1996 and 2003, grocery retailers gained five share points of the combined manufacturer and retailer profit pool, Hulit said in a report called "Private Label: Threat to Manufacturers, Opportunity for Retailers." She said despite in-tense competition, retailers snatched up more than 50 percent of the overall profit growth.
"Private label probably played a role in that success, as retailers that support private label tend to have higher profit margins," Hulit wrote.
George Anderson, editor of the retail news Web site Retail Wire, said he sees more retailers trying to boost their private-label offerings so they can differentiate themselves from their competition.
"When it's done right, it's a great draw for the consumers; it builds the image for the store and it builds profitability to boot," Anderson said.
Bumpers said shortly after the bakery's 2001 move into its 32,000-SF warehouse in North Little Rock, which was expanded to 44,000 SF within weeks, he got a call from the upscale supermarket chain Harris Teeter of Matthews, N.C. The chain was looking for a cookie baker.
Bumpers said Brent & Sam's could do it. But when the store's officials visited the plant, they found 40 things that needed to be changed before they awarded Brent & Sam's the account.
For one thing, the cookies were dropped by hand and Brent & Sam's didn't have a method for making the 1-ounce cookies that Harris Teeter wanted, Bumpers said.
"Even at that point we didn't know how the big boys ran cookie factories," he said. "We had no recall procedures in place."
Bumpers then hired a quality assurance officer from Jackson Cookie Co. in North Little Rock for Brent & Sam's so he could monitor and track shipments.
After landing the Harris Teeter account, "It seemed like once we got our foot in the door in the supermarket, private-label deals sort of started snowballing from there," Bumpers said.
Another sales representative called Bumpers in 2002 and said his client happened to be looking at developing a gourmet line of cookies. The client was Target.
"I remember quickly jumping on a plane and flying to Minneapolis," Bumpers said.
After sampling several of the Brent & Sam's cookies, the Target buyer awarded the account to Brent & Sam's.
Bumpers said each private-label recipe is slightly different, from each other and from the Brent & Sam's brand. The bakery's profit margin for private-label cookies is "a little bit lower" than for the Brent & Sam's brand.
In some of the store accounts, Brent & Sam's can be sold along side the private label cookies, but that's usually not the case, Bumpers said. The retail price for a 7-ounce box of Brent & Sam's is between $2.49 and $3.99. The private label brand cookies sell for 10-25 percent less.
"I'd rather be selling Brent & Sam's than the private label, but you get better merchandising when it's under (the store's) label," Bumpers said. "They take better care of it; they push it harder and promote it better."
Bumpers said he's learned to live with the fact that the private label brands might sell more than the Brent & Sam's line.
"The money spends just the same whether it's for Brent & Sam's or for their brand," he said. "The private-label industry is booming. We're happy to get in on that, too."
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