SMARTFOOD RIDES POPCORN SEESAW

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Where, oh where, has Smartfood gone?

When Ken Meyers sold his company to Frito-Lay in 1989 for about $14 million, Smartfood white cheddar cheese popcorn was arguably America's hottest snack.

The premium-price, ready-to-eat popcorn took New England by storm and spawned competitors. The tasty, all-natural snack went from $500,000 in sales in its first year on the market in 1985 to about $18 million in 1988.

Why wouldn't Frito-Lay, the nation's mammoth snack marketer, go after such a gem to add a proven regional brand to its lineup of Doritos and Tostitos tortilla chips, Lay's and Ruffles potato chips and Fritos corn chips?

PepsiCo's snack unit could provide a national distribution system second to none and plenty of marketing advice-although the brand was doing quite well with Mr. Meyer's inventive guerrilla marketing techniques.

Buying Smartfoods (the company is Smartfoods, the brand, Smartfood) seemed like a smart move.

But Smartfood's planned national rollout fizzled. Mr. Meyers, Smartfoods co-founder, who remained president when it became a wholly owned Frito-Lay subsidiary, resigned in 1991 to form his own marketing company.

The brand has no ad support, is difficult to find and yet remains the top-selling, ready-to-eat popcorn. What happened?

"Smartfood is not a big thing unless it could become a $100 million brand. Small things tend to get lost," said Manny Goldman, analyst at PaineWebber, San Francisco.

The irony is that, despite little effort by Frito-Lay, Smartfood's sales this year will approach $40 million-just by putting the product on store shelves in about a dozen key markets. More amazingly, Smartfood is the No. 1 ready-to-eat popcorn in the estimated $134 million category, admittedly a declining one (down from $270 million in 1988) that has lost its pop with consumers and apparently Frito-Lay.

"Ready-to-eat popcorn is a small category and the premium segment is even smaller," said a Frito-Lay spokeswoman. ... That's not to say we haven't done well with Smartfood, but the category hasn't exploded. It was still a good acquisition."

Others, including Mr. Meyers, acknowledge Frito-Lay's brand focus has changed since the late 1980s under former Chairman Michael Jordan. Succeeding regimes, including PepsiCo veteran Roger Enrico, steered the company back to a core-brand focus.

Perhaps most of all, Smartfood's former success hinged on a marketing approach foreign to Frito-Lay.

"Our strategy historically is a little bit left of center," Mr. Meyers told Advertising Age in 1990. "Our notion of guerrilla marketing takes our product, our message, our show to the streets to get to the consumer face to face and surprise them, pleasantly, we hope."

Frito-Lay agreed Mr. Meyers could try his game plan on a national rollout, but it was a marketing mismatch. Labor-intensive and costly, in-your-face marketing was tough to execute nationally; and broadcast and print ads didn't work the same kind of relationship-building magic.

Plans called for a $10 million introductory campaign that would put the brand on the map. Mullen, Wenham, Mass., was replaced on the account in 1990 by what was then Levine, Huntley, Schmidt & Beaver, New York. After some creative differences between Mr. Meyers and Frito-Lay management, a national radio spot that parodied a samurai warrior produced outrage rather than sales. The spot was pulled and the campaign never fully recovered.

In markets where guerrilla tactics were deployed, the brand did very well and sales were said to have hit $60 million by the end of 1990, but later fell sharply.

"They turned away from the true brand essence; things changed, and the brand began to slide," recalled Mr. Meyers, now president of Silverback Creative, Wellesley, Mass. They tried to mainstream it more than it was meant to be. ..."

But Frito-Lay isn't giving up on Smartfood. The brand has no agency but does use DDB Needham Promotions, Dallas. The Frito-Lay spokeswoman said there will be more support in the future, perhaps even next year.

Who knows-maybe Mr. Meyers would be available for a consultation.

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