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To Make Dough, Try a New Mix

October 07, 1998|KAREN E. KLEIN

When Scott Samet and Douglas Chu, both 30, opened their company, they thought they had found the perfect niche: healthy snack items sold in bulk to moviegoers. But over the years, they have had to reinvent the business more than once to stay profitable and keep expanding. They made a turnaround from healthy snacks to candy and are now also selling packaged cookie-dough treats to markets and video stores. They have learned to follow trends, spend money and take some risks to be successful. Samet was interviewed by freelance writer Karen E. Klein.

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We originally focused on selling healthier snack items like dried fruit, trail mix and yogurt pretzels. We figured out there was this niche that wasn't being filled because nobody really was supplying healthier alternatives to movie theaters.

The company turned a profit in its second year, but it wasn't enough to allow us to grow. We had a hunch that our sales velocity would increase if we got into more mainstream items. The healthy items were selling, but they didn't appeal to kids and kids are a large part of concession purchasing. It made sense to start experimenting with candy in 1995 because we had all our bulk suppliers and our theater customers lined up already.

We quickly found that the bulk candy sold better than our healthier stuff. We still sell the alternative items, but we are glad we followed the market, even though it was down an avenue where we didn't expect to go.

I think that part of being an entrepreneur is always looking over your shoulder and running scared, in a way. You have to always keep innovating, moving, developing new ideas.

One of the items we sold in bulk was chocolate-coated cookie dough. It was a solid mover, but we started to realize that we could make a far superior product by putting more dough in each piece. We decided to develop our own brand, package it and market it in the theater candy case.

We had to dig into our reserves to finance this project because we hired packaging experts, a chocolate company and a cookie-dough manufacturer to work with us. But we had a vision that this was a great-tasting item that would appeal to a wide demographic range. And it was unique, so it really drove us to push it into the marketplace with a lot of confidence.

I think entrepreneurs are sometimes fearful of venturing into new territory especially when there's financial cost involved. But in this case, the new item we were developing was right up our alley. It wasn't like we were starting to make cosmetics in Europe. It definitely helps to stick with natural tie-ins.

We've spent all of this year reformulating the recipe, designing the packaging and getting the product to market. We call the new products Cookie Dough Bites and Brownie Dough Bites. We put it in individual movie-theater boxes because we wanted to increase our customer base again and a lot of venues don't carry bulk candy. The individual packaging allowed us to access more theaters and video rental stores. We are rolling into 3,400 corporate-owned Blockbuster stores next month. We also designed a bagged version that we're going to use to sell to supermarkets and convenience stores.

This new focus has meant that my partner and myself are working extra hard. And we've gone from three employees last year at this time to five. So it's cost us something, but we know we can't afford to stagnate or we'll wind up dwindling away.

Karen E. Klein will be featured at The Times' Small Business Strategies Conference Oct. 17-18 at the Los Angeles Convention Center. If your business can provide a lesson to other entrepreneurs, contact Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or send e-mail to kklein6349@aol.com. Include your name, address and telephone number.

* MORE SMALL BUSINESS: C6-10

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

At a Glance

Company: Taste of Nature Inc.

Owners: Scott Samet and Douglas Chu

Nature of business: Makes and sells candy and snacks

Location: 400 S. Beverly Drive, Suite 214, Beverly Hills 90212

Founded: 1992

Employees: 5

Annual revenue: $2.5 million

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