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IN BOX MAY 22, 2000


Guiltless Gourmet Responds to "Crunch Time"

What really went wrong with the low-fat tortilla-chip maker?

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The article on Guiltless Gourmet ("Crunch Time," Apr. 20) does not fairly portray our efforts to manage the company through difficult times. The impression the article creates, that Guiltless Gourmet was caught off guard and led by an inexperienced management team, is hardly the case. In fact, soon after I joined the company, in 1994, we recruited a new management team with combined experience of over 50 years in the food industry and added experienced snack-food sales professionals.

But rebuilding the management team was only part of the challenge. The entire production process, including cooking, packaging, and logistics had to be reengineered from the ground up. We conducted extensive consumer research to help our product meet, and ultimately exceed, the flavor offered by Baked Tostitos. We redesigned our packaging to better communicate the brand's positioning and improve in-store visibility. We redefined our go-to-market strategy to create partnerships with snack-food distributors. We did develop and launch new products, but the tremendous pressure for shelf space made it impractical to expand our product offerings with limited resources.

Our owners have had numerous opportunities to make management changes. However, we have the right talent, great product, and a powerful vision for meeting the needs of today's health-oriented consumers, so they have stood by us.

In hindsight, our narrow product line did not allow us to fully exploit our brand and its unique positioning. Had there been a manufacturer capable of producing our product, we could have outsourced sooner, possibly creating the resources to more effectively market the brand. Yes, Guiltless Gourmet revenues have crumbled, and I assume full responsibility for the company's performance, but I do not accept the implication that we stood by and watched the grass grow as Frito-Lay Inc. beat a path to the checkstands.

MICHAEL SCHALL
President/CEO
Guiltless Gourmet Inc.
Austin, Tex.


Thanks for the mention in "Crunch Time." I would like to point out, however, some facts your analyst failed to realize. The idea that the plant was built "willy-nilly" is absurd. At the time the plant was being developed, there was no one doing baked chips on the planet! We begged anyone to help us, including so-called "consultants," and they had no idea what to do because we invented the process. I imagine if we had $300 million to develop the process like Frito-Lay spent, it wouldn't have been so "willy-nilly." Thank God food consultant Tracy Carlson wasn't around when Edison invented the lightbulb; no telling what she would have said about that process!

Also, I was constantly seeking advice from the professionals, John Koerner and John Oudt. Based on their experience, you would think they knew just where to go. As for Koerner's criticism, he was jealous of the fact that someone could grow a company faster than he did with Barq's Root Beer.

DOUG FOREMAN
Foreman Foods
Austin, Tex.


While I trust Austin, Tex., business interests have or will be contacting you about the reference to their "dusty vistas," thank you for adding a little chuckle to my otherwise dull evening as I read your article on Guiltless Gourmet's move from "balmy" Los Angeles. Here in "swampy" Houston, we consider Austin's vistas to be nothing short of spectacular. Austin is perhaps Texas' best offering and nowhere near dusty.

ROGER H. HORD
West Houston Assn.
Houston





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