LesserEvil offers up deliverance from fat

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In the conference room/warehouse of startup healthy snack marketer LesserEvil Snack Co. in Bronxville, N.Y., former Snapple Chief Marketing Officer Michael Sands, the company's co-founder, is often seen packing boxes for shipment with one or both of his two employees. That is, of course, if the trash has already been taken out.

Despite the backing of high-profile silent partners-actor Gene Hackman, and his wife Betsy, along with TheStreet.com founder and CNBC commentator James Cramer-Mr. Sands' entrepreneurial venture seems a million miles from the corporate ladder he recently stepped off.

"I told [former Cadbury Schweppes' President-Innovation and Business Development] Michael Weinstein, `I'm going to get humble."' And he has. He now flies JetBlue and stays "wherever's cheapest," preferably a hotel under $100 a night.

true startup

After all, he said, despite its seemingly deep-pocketed backers, "this is a true startup. A company is not going to make it by throwing all kinds of money at it."

Mr. Sands and his small team worked the production lines alongside co-packers for LesserEvil's first run in November, donning the hair netting like Laverne & Shirley, he said, to "make sure we understand every process." Mr. Sands' corporate background and reputation (AA, Nov. 17, 2003) have come in handy, though, to help him get the best packaging consultants and R&D companies to outsource to and to instill confidence in retail partners. Little tricks of the trade, including investing in longer-shelf-life foil packaging and color-coding boxes to make flavors easier to spot in dark warehouses and for non-English-speaking workers are also a result of his long brand-building tenure.

Mr. Sands was brought on to the LesserEvil project by the Hackmans and Mr. Cramer, longtime friends, who had an idea to capitalize on what he calls a "real, unmet need" among upscale baby boomers for healthy, convenient versions of snacks for which they are willing to pay a premium. Especially, he said, if marketed as a fun, experiential, lifestyle brand. For example, packages quip that consumers can reach the company via old-school (its 800-number), new school (e-mail) or dark ages (by writing a letter).

no fame game

The fame of its backers is not going to be trotted out in the style of Newman's Own, Mr. Sands said, but will be put to use in strategic ways, such as featuring Mr. Hackman's voice in radio ads.

The initial line of four low-fat, sugar-free popcorn varieties including KettleCorn, SinNamon, Bee Nutty and SanteFe are made with gourmet ingredients and without preservatives and trans-fatty acids. Initial distribution will focus on GNC stores and Balducci's in the New York metro area, although Mr. Sands and his team are also busy fulfilling mail orders for gourmet shops across the country.

LesserEvil is in the process of signing on distributors for its planned expansion to natural grocery stores like Whole Foods and Wild Oats and vitamin stores, as well as gourmet and specialty shops across the East Coast over the next six months and to the West Coast in March.

Despite its supposed niche gourmet push, however, industry analysts note the difficulty in growing a successful snack business in the face of fierce competitor Frito-Lay, which itself is angling to get its better-for-you and organic varieties into health outlets big and small.

"The sleeping giant has woken up to efforts in the healthy snack arena in recent years," said Matt Patsky, portfolio manager for Winslow Management Co., a division of Boston-based investment bank Adams Harkness.

"Small snack marketers get [Frito's] attention when they break above $50 million," he said. "They end up getting their wrath if they get to $100 million."

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