BrownHEN interviewed Mark Fitzgerald, Brown '02, Co-Founder of Cool Foods, Inc., Scarborough, New York
1. Mark, please describe how you founded Cool Beans.
The founding of Cool Beans was really a happy accident. Our story is completely true! Our family was snowed in with limited rations, so I threw some cannellini beans and olive oil in the food processor. In so doing, I had unwittingly created the prototype for Cool Beans. Everyone in the family loved the dip, and we started serving it whenever we had company. It was my girlfriend at the time (now fiancée) who said we should bottle and sell it. My brother and I took her quite literally, and the rest is history.
2. What regulatory issues needed to be sorted out because you are in the food business?
Of course, you must be mindful of the FDA. It’s important to understand, however, that the FDA is not a policing body. It is incumbent upon the food producer to do his/her research and know what the labeling and processing requirements are for his product. The FDA usually only scrutinizes a product if a competitor brings it to the FDA’s attention. You will only arouse the attention of a competitor once you achieve a significant sales volume, say around $1 million annually.
3. Please tell us a bit more about Cool Beans.
Cool Beans is an “acidified food”, meaning that it is a low acid food (beans) to which an acid (lemon juice) has been added in order to achieve shelf stability. Acidified foods must be produced at a licenced acidified foods facility and must be registered with the FDA. Acidified foods must also be sanctioned by a “process authority”, such as Cornell University, through a “scheduled process”. Cool Beans is contracted manufactured, or “copacked”, which means that we contract a manufacturing facility to produce Cool Beans according to our specifications. The copacker must also conform to all the relevant regulatory bodies. Our product is also kosher, a distinction which obviously has its own requirements. We work with the rabbi who routinely services our copacker. Our product is not organic, but if it were, there would be another set of requirements for us to follow.
3. Please discuss your marketing strategy. Do you find it more fruitful (excuse the expression) to market to ultimate consumers or to retailers?
We must market to both retailers and the ultimate consumer, but with different strategies. The most important factor for the retailer is pricing. We try to offer the retailer an attractive price that will allow him to make his margin and keep his consumer happy. We also assure the retailer that we will effectively sell our product for the retailer through product demonstrations, promotions, PR, advertising, etc.
When marketing to the ultimate consumer, we try to position ourselves as a small, charming alternative to the major players. We can’t compete on price because of our size, so one way we compete is by offering a superior brand experience. Consumers enjoy hearing our story and knowing that Cool Beans is a product made by two young brothers. We disseminate our story through such inexpensive or free avenues as newspaper articles, our Web site, shelf talkers, product demos, and various online outlets such as MySpace and Facebook. Word-of-mouth is probably our most powerful marketing tool.
We also feel that we offer a high-quality product that offers consumers what they are looking for in food these days: the convergence of health, convenience, and taste. Cool Beans is ready to use in a variety of ways right out of the jar. It is made with natural ingredients and contains no saturated fat, trans fat, or cholesterol. It as also vegan, kosher, allergen-free, and gluten-free. Most important, it tastes great! Cool beans is delicious and creamy, which makes it a wonderful alternative to less healthy products such as mayonnaise, butter, and sour cream.
4. Do use wholesalers at all? If you don't at present, do you think you ever will?
We do not work with wholesale at present simply because we can’t afford to. We need to reduce our costs so we can sell through a distributor while maintaining a stable, reasonable price in the market. We will absolutely sell through distributors in the future. Packaged food is a volume business, and we can’t achieve the necessary volume by selling door-to-door. We need the infrastructure and leverage of large distributors.
5. How do you decide the various flavors?
We arrived at the three flavors largely through our own intuition and informal testing with family and friends. We were trying to capture a range of flavors, from sweet to spicy. So far, I think we have chosen wisely as the three flavors have sold fairly evenly. There’s really something for everyone.
6. How did you find a packer? How closely did you have to work with the packer?
We found a packer by reading the label of a barbecue sauce! We then submitted this packer to a GMP audit through an independent food laboratory. This lab determined that the facility had good manufacturing practices and was compatible with our product. We did look at other packers before settling on the one we use. Our food lab recommended some packers, and we also found a few through the Internet. The Northeast Center for Food Entrepreneurship at Cornell is a very useful resource. We work extremely closely with our packer. In fact we are always present at the production of our product, and we frequently speak with our packer about improving our process, finding better ingredients, procuring better ingredients. One of the advantages to working with a copacker when you are small is leveraging the copacker’s buying power.
7. Do you get much feedback from users? Is it helpful?
People certainly don’t hold back! Yes, we get a tremendous amount of feedback from consumers at the various demos and festivals that we do. Consumer feedback is invaluable to us since we can’t afford the market research and sensory testing that the major players can. We continually strive to make improvements to our product based on prevailing trends in consumer feedback. My advice is that you should throw out the anomalies, but take the trends very seriously. If people keep saying that your product is too this or too that, you should listen and make adjustments.
8. What are the top five qualities you would ascribe to an entrepreneur?
• Perseverance
• Naiveté
• Adaptability
• Vision
• Energy
9. Would you speak about fear as a motivation or hindrance toward accomplishment? How has that played a factor in your path, if any?
Fear is a huge motivation! I am constantly afraid that we will not effectively communicate our idea to a broad audience. I believe that Cool Beans is an excellent product, and I would love to see it in everyone’s pantry. I am afraid that the big companies will beat us, or that our inexperience or lack of funds will catch up to us. I am also afraid to fail and be in the difficult position of having to start again. I don’t want to be passed by peers who took safer routes. I am also afraid of working for someone else in a job I hate. All of this motivates me to work harder.
10. As you know, the entrepreneur’s path is filled with trials and errors, and also failures. What’s a valuable insight for entrepreneurs to keep in mind when they’re experiencing setbacks?
Every misstep is actually a step towards better execution and a better product. How else are you going to learn? How else are you going to improve? You simply won’t get everything perfect right out of the gate, so you had better be prepared to make adjustments.
11. What is the latest insight (about life, work, play) that you picked up and would like to share with BrownHEN?
If you own your own business, you will work harder than ever before, but it won’t feel like work.
The downside about running your own business is that your life can become very unbalanced. It’s important to make time for other interests. You will actually work better and have fresher ideas if you step away from your work from time to time.
12. Who are the three individuals who have influenced your development significantly?
Oh, this is a tough one. There are famous entrepreneurs, athletes, and artists that I admire and seek to emulate, but it’s the people closest to me who have influenced me the most. Can I pick five instead of three?
My parents have created an environment in which we have freedom but also responsibility (kind of like Brown!). My brothers and I were always allowed to choose our own path. We could do anything. We just had to work hard and conduct ourselves in an ethical fashion. We had to figure out how to do whatever it was that we wanted to do. After college, I wanted to try fasion modeling. My parents gave me their blessing, but I had to figure our how to get it done. It was a valuable lesson in becoming an entrepreneur.
My fiancée, Morgan, has a very entrepreneurial spirit and is constantly coming up with great ideas. She always encourages me to do more and believes that anything is possible. For Morgan, where there’s a will, there’s a way. She’s also the hardest worker I know, so when I’m feeling lazy, I think of how hard she works.
My brother and business partner, Matt, truly makes our business go. He’s the logistics man. Our business would collapse without him. That’s the truth. He’s taught me to be a more disciplined and efficient worker. He holds us to a very high standard and sets aggressive goals for our business.
My older brother, Sean, taught me the single most important lesson for the entrepreneur: never give up. He was a salesman, and he always got off the mat and kept hammering away. I think of him on every sales call.
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© BrownHEN.org – 2007
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