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Caffeinated peppermints seemed like an obvious combination to Adam Smith and Brett Canfield one groggy morning in 1997, when they schlepped to work sans their morning coffee.

"The proverbial light bulb shone over our heads, and we immediately quit our jobs to do it," says Mr. Smith, 28, who developed Penguin Original Caffeinated Peppermints.

Although the entrepreneurs eschew titles, Mr. Smith fulfills the role of VP-marketing for Ifive Brands, the candy's marketer. Mr. Canfield acts as VP-sales.

They met as students at the University of Puget Sound and worked together in the marketing and sales departments of Wizards of the Coast, marketer of trading-card game "Magic, the Gathering."

For Penguin, Mr. Smith says he relied on creativity in place of an advertising budget. Packaging and logos were designed to complement Penguin, a name chosen for the bird's irreverent, humorous and "cool" nature.

The product is distributed in coffee houses, record shops, bookstores and other cultural emporiums where the eye-catching countertop displays have little competition.

The only advertising continues to be its Web site URL ( printed on every tin. Consumers who go to the site are encouraged to write in and relate their minty experiences. An early word-of-mouth campaign fueled a viral marketing response.

The candies "were a little hard to find, which made people talk about them more, and demand just kept snowballing," Mr. Smith says.

Ifive claims less than 10% share of the mints category. Since its launch in April 1998 with 50,000 tins, Penguin sales have increased exponentially, topping the $1 million mark by yearend 1999. Sales for 2000 are expected to reach $2 million, according to Ifive.

Still, the company doesn't want to become too mainstream.

"We believe distribution is a big part of marketing, and where people experience the brand affects how they feel about it," Mr. Smith says.

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