CHICAGO (AdAge.com) -- An independent Chicago agency has pushed the trend of ad shops creating their own products a step beyond candles and shaving creams by building its own beverage brand and selling it to a major Pepsi bottler.
Schafer Condon Carter, a 20-year-old agency based in the Windy City's West Loop neighborhood, has created and sold its brand in one of the most crowded, competitive and complex categories in consumer marketing. Dubbed "Hogwash," the product is a low-calorie, low-carbohydrate juice drink for kids with a taste profile reminiscent of Hawaiian Punch.
Schafer confirmed it has sold the brand, but declined to disclose the buyer, saying only that it was a "major bottling operation" that had been a manufacturing and distribution partner. But Ad Age has learned that the buyer is Wis-Pak, a large coalition of Pepsi bottlers based primarily in the Upper Midwest. A Wis-Pak spokeswoman later confirmed the deal.
Schafer CEO Tim Condon declined to comment for this story, but said in a statement, "It's unique that, as an agency, we are inventing and building brands that are thriving in difficult market conditions while competing against category giants like Coke and Pepsi. I'm very, very proud of our accomplishments because there is, perhaps, no tougher, more crowded category to compete in."
Hogwash was developed by West Loop Beverage, a brand-incubator unit the agency launched in tandem with one of its former clients, Leo Novosel, who worked with the agency as VP-Sales and Marketing at Canfield Beverage Co. up until that company was sold to what is now the Dr Pepper Snapple Group.
Finding an opening
West Loop's analysis of the beverage sector quickly homed in on a gap in a congested industry filled with no shortage of copycat, redundant products. In an era when parents are increasingly concerned about their kids' exposure to sugary sodas and drinks, there was a dearth of low-calorie juice drinks on shelves. Enter Hogwash. At 29 calories per 8 oz. serving and made with real sugar instead of high-fructose corn syrup, the brand quickly got the attention of bottlers, who saw little competition in the category. After two years of trial, and with sales up 90% this year, Wis-Pak bought the brand, which comes in flavors such as "Piggleberry Punch."
"It's doing great for us," said Steve Stielow, sales manager at Lakeside Bottling Co., in Sheboygan Falls, Wisc., one of 54 local Wis-Pak members carrying the brand. "Sales are up, and we'll take up on anything these days."
In an interview last year, Mr. Condon noted that the credibility the agency was garnering by successfully building its own brand was an asset in new business. And, coincidence or not, Schafer has fared well in that arena lately. Earlier this year, the 60-person agency was named agency of record for Buffets Inc., a casual-dining chain that includes brands such as Ryan's Steakhouse and Old Country Buffet.
Other agencies that have successfully launched products include: Mother, which has created flasks, candles and gourmet sausages; Anomaly, which collaborated with Target stores on a shaving cream; and Bernstein-Rein shares employees and office space with the Beauty Brands retail chain, which was started by agency founder Bob Bernstein. Another busy brand-incubating shop is Rockfish Interactive, which won Ad Age's 2009 Small Agency of the Year award in part because of its success launching a coffee brand, a job-listings site and a church-management application, among others.