April 21, 2008
Crunch time | Fort Fairfield is in the middle of Maine's potato country, but that doesn't mean it's easy breaking into the crowded snack chip market. Just ask Rhett Fox of Fox Family Potato Chips.
By Whit Richardson
Inside a small, weathered building with boarded up windows along Mapleton's main drag, Rhett Fox turns the handle of his potato chip fryer's mixer. But today, the trough where the potato chips should be frying in 350-degree corn and canola oil is empty.
In fact, besides a few russet potatoes in the hopper ready to be peeled, all the equipment in the building Fox Family Potato Chips calls home is spotless and silent. The large machines ˆ the peeler, fryer and bagger ˆ take up half the building's first floor. A portion of the ceiling had to be extended to accommodate the 12-foot bagger, which was built in the 1960s and salvaged from an old potato chip plant in Ohio. The small space ˆ a convenience store in its past life ˆ has wooden floors with chipped blue paint.
If Fox had his way, the machines would be whirring every day at Fox Family Potato Chips, peeling, frying and bagging potato chips to be sent out from Aroostook County to snack food enthusiasts in Maine and beyond.
It makes sense, at least on the surface, to make potato chips when you live in potato country. But Rhett Fox is discovering that it's not as easy as it sounds. This winter he's been producing roughly three to six pallets of potato chips a week, an amount that teeters on the edge of unprofitable. (A pallet consists of 42 cases, each of which contains a dozen 20-ounce bags of chips.) "With the overhead I've got right now it's not profitable making [three or four pallets a week]," he says. "It's like any business ˆ the more you make the less money it costs to do it."
Fox launched Fox Family Potato Chips in earnest in 2005 after a few years making small batches of chips in the back of his Mapleton convenience store and selling them at the counter. People liked them, and he began selling to stores in nearby Presque Isle and Caribou. In 2006, he was picked up by a New York-based distributor that now sells Fox Family Potato Chips throughout southern Maine, and in small quantities in New Hampshire, Massachusetts and New York. Four months ago, Fox sold his convenience store, which is across the street from his potato processing plant, to give the potato chip business his full attention.
Fox Family Potato Chips isn't the first to try making potato chips in potato country, according to Don Flannery, executive director of the Presque Isle-based Maine Potato Board. But none have succeeded so far, he says. Potato chip processors in Aroostook County face some tough challenges, he says, not the least of which is the distance to major population centers.
Fox realizes the challenges. And though he's struggling to keep his head above water, he's confident his business will succeed. This summer, or what he calls "historic chip season" because of all the picnics and barbeques, is "make or break time," he says, slouching in his chair near his potato chip-making machinery. After a moment, he takes that back. Even if the summer doesn't work out like he hopes, he's not ready to throw in the towel just yet. "We'll have to change the game plan," he says.
Taste of Maine
Rhett Fox grew up on a potato farm in Washburn, so it was only natural in 2001 when he began making potato chips during the slow periods of the day at his Mapleton convenience store, Trett's, which he purchased in 1997. He used a food processor, fried up the chips and put them out as samples for customers. People tried them, and liked them. After six months he began experimenting with seasoning, which led him to the three flavors he sells today: plain, salt and pepper, and hot barbeque.
Fox and his store employees began spending more time making potato chips, using a meat slicer to slice one chip at a time. "We were selling all we could make," Fox says.
The potato chip business could have remained a hobby. But in 2003, Fox's father was diagnosed with cancer. His father, a potato farmer who died the following year, had encouraged Fox in his potato chip venture, and his diagnosis gave Fox the "shot in the arm" he needed to take the plunge. "It was something he wanted to see me do," Fox says.
Fox Family was stepped up a notch in late 2004, when Fox poured $100,000 into upgrading the business. Using credit cards and a home equity line of credit, Fox bought packaging and equipment, including production machinery from a defunct potato chip processing plant in Ohio.
Setting up those machines in Maine was a challenge, though. "I had never set up a processing line," he says. "There was no blueprint. It was all trial and error."
Fox began selling his chips to grocery and convenience stores in the area. By that time, his potato chips had already gained a local reputation, and the stores were very welcoming, he says. By 2006, Fox was selling roughly 40 cases a week to stores between Caribou and Mars Hill, and he had one part-time employee.
It was in late 2006 that the chips caught the eye of Frank Parker, president of So Clear Beverages in Rye, N.Y. So Clear had worked in Maine for roughly eight years, distributing spring water in private label bottles to clients in Boston and New York City, and was looking for other Maine products to pick up and distribute, says Andy Allen, vice president of So Clear. Fox's potato chips immediately impressed, Allen says. "We tasted the chip and it was the best chip, collectively, our company had ever tasted," Allen says. "So we jumped in the car and headed up to Mapleton and met with Rhett."
So Clear began distributing Fox Family Potato Chips using its existing network between Kittery and Bangor, while Fox continued to supply stores in central and southern Aroostook County. So Clear won't disclose the number of stores that carry Fox Family Potato Chips in Maine or in other states. All Allen will say is that the company started out very small, with one person selling and distributing the potato chips in Maine. But now there are 10-12 sales routes in Maine, three or four in New Hampshire and Massachusetts, and one or two in Connecticut and New York. Allen says the plan is to grow Fox Family potato chips into a strong regional player in the potato chip market, which was worth $6.3 billion in the United States in 2006, according to the Snack Food Association, an industry trade group in Arlington, Va.
Snack attack
Competition in the potato chip industry is fierce. One of the major barriers to Fox's further growth is slotting fees at grocery stores. Companies like Frito-Lay, a dominant brand that makes Lay's and Ruffles chips, have deeper pockets to buy shelf space at grocery stores. Meanwhile, the small fries can't always afford to get their product in front of consumers, Allen says. "Slotting fees are very, very difficult for manufacturers like Rhett to maneuver around," Allen says, adding that So Clear has been successful in getting Scarborough-based Hannaford Bros. Co. to carry Fox Family Potato Chips in several of its Maine stores. "This gives consumers the choice to try something different, and to have a potato chip that is unique and not like other potato chips they'll see in the marketplace."
Allen says he doesn't know how expensive slotting fees are, and won't disclose details of So Clear's deal with Hannaford to deliver to a handful of its stores.
A company like Fox Family is miniscule next to snack food behemoths like Frito-Lay, a subsidiary of PepsiCo. In 2006, when Fox sold roughly $100,000 of potato chips, Frito-Lay North America posted net revenue of $10.8 billion. (Fox says he hasn't tallied 2007 revenues yet.)
Getting the potato chips in front of potential consumers is important, but getting consumers to taste the chips is the real key, Allen says. "We find most people who try them really like them," he says. "The way we compete is to get consumers behind this product."
And while Frito-Lay is a constant player on grocery and convenience store shelves throughout the country, there is room for the regional potato chip producer, according to Chris Clark at the Snack Food Association. Companies like Wachusett Potato Chip Co. in Fitchburg, Mass., and Route 11 Potato Chips in Middletown, Va., have carved out a niche for themselves.
The Fox Family niche is one that Fox and Allen believe will grow. And though Parker, So Clear's president and the initial engine behind marketing and distributing Fox Family Potato Chips, died in March, Allen says So Clear is still committed to expanding Fox Family's distribution. "We believe the sky is the limit with this product," Allen says.
But Fox faces other challenges to the further growth of his company, one of which is financing. "I've tapped myself out," Fox says. He needs to invest in new packaging to more prominently display his three flavors ˆ right now it's just a different sticker for each flavor. His building needs upgrades to make the process more efficient. It takes two people two hours to clean the place after producing chips. "It's not a production-friendly building," Fox says. "You can't take a hose to this stuff."
It's not profitable to make only 150 or so cases of potato chips a week, Fox admits. But he's confident that the company could be successful with some luck and an infusion of cash. "Does it have the potential to be a profitable business? Hell yeah!"
Fox does have some new ideas in mind. One market he hasn't tapped yet is northern Aroostook County. If the summer doesn't pan out as he hopes, Fox says he'll focus on expanding distribution north with the hope that fellow residents of potato country will get behind a home-grown product like Fox Family Potato Chips.
In fact, besides a few russet potatoes in the hopper ready to be peeled, all the equipment in the building Fox Family Potato Chips calls home is spotless and silent. The large machines ˆ the peeler, fryer and bagger ˆ take up half the building's first floor. A portion of the ceiling had to be extended to accommodate the 12-foot bagger, which was built in the 1960s and salvaged from an old potato chip plant in Ohio. The small space ˆ a convenience store in its past life ˆ has wooden floors with chipped blue paint.
If Fox had his way, the machines would be whirring every day at Fox Family Potato Chips, peeling, frying and bagging potato chips to be sent out from Aroostook County to snack food enthusiasts in Maine and beyond.
It makes sense, at least on the surface, to make potato chips when you live in potato country. But Rhett Fox is discovering that it's not as easy as it sounds. This winter he's been producing roughly three to six pallets of potato chips a week, an amount that teeters on the edge of unprofitable. (A pallet consists of 42 cases, each of which contains a dozen 20-ounce bags of chips.) "With the overhead I've got right now it's not profitable making [three or four pallets a week]," he says. "It's like any business ˆ the more you make the less money it costs to do it."
Fox launched Fox Family Potato Chips in earnest in 2005 after a few years making small batches of chips in the back of his Mapleton convenience store and selling them at the counter. People liked them, and he began selling to stores in nearby Presque Isle and Caribou. In 2006, he was picked up by a New York-based distributor that now sells Fox Family Potato Chips throughout southern Maine, and in small quantities in New Hampshire, Massachusetts and New York. Four months ago, Fox sold his convenience store, which is across the street from his potato processing plant, to give the potato chip business his full attention.
Fox Family Potato Chips isn't the first to try making potato chips in potato country, according to Don Flannery, executive director of the Presque Isle-based Maine Potato Board. But none have succeeded so far, he says. Potato chip processors in Aroostook County face some tough challenges, he says, not the least of which is the distance to major population centers.
Fox realizes the challenges. And though he's struggling to keep his head above water, he's confident his business will succeed. This summer, or what he calls "historic chip season" because of all the picnics and barbeques, is "make or break time," he says, slouching in his chair near his potato chip-making machinery. After a moment, he takes that back. Even if the summer doesn't work out like he hopes, he's not ready to throw in the towel just yet. "We'll have to change the game plan," he says.
Taste of Maine
Rhett Fox grew up on a potato farm in Washburn, so it was only natural in 2001 when he began making potato chips during the slow periods of the day at his Mapleton convenience store, Trett's, which he purchased in 1997. He used a food processor, fried up the chips and put them out as samples for customers. People tried them, and liked them. After six months he began experimenting with seasoning, which led him to the three flavors he sells today: plain, salt and pepper, and hot barbeque.
Fox and his store employees began spending more time making potato chips, using a meat slicer to slice one chip at a time. "We were selling all we could make," Fox says.
The potato chip business could have remained a hobby. But in 2003, Fox's father was diagnosed with cancer. His father, a potato farmer who died the following year, had encouraged Fox in his potato chip venture, and his diagnosis gave Fox the "shot in the arm" he needed to take the plunge. "It was something he wanted to see me do," Fox says.
Fox Family was stepped up a notch in late 2004, when Fox poured $100,000 into upgrading the business. Using credit cards and a home equity line of credit, Fox bought packaging and equipment, including production machinery from a defunct potato chip processing plant in Ohio.
Setting up those machines in Maine was a challenge, though. "I had never set up a processing line," he says. "There was no blueprint. It was all trial and error."
Fox began selling his chips to grocery and convenience stores in the area. By that time, his potato chips had already gained a local reputation, and the stores were very welcoming, he says. By 2006, Fox was selling roughly 40 cases a week to stores between Caribou and Mars Hill, and he had one part-time employee.
It was in late 2006 that the chips caught the eye of Frank Parker, president of So Clear Beverages in Rye, N.Y. So Clear had worked in Maine for roughly eight years, distributing spring water in private label bottles to clients in Boston and New York City, and was looking for other Maine products to pick up and distribute, says Andy Allen, vice president of So Clear. Fox's potato chips immediately impressed, Allen says. "We tasted the chip and it was the best chip, collectively, our company had ever tasted," Allen says. "So we jumped in the car and headed up to Mapleton and met with Rhett."
So Clear began distributing Fox Family Potato Chips using its existing network between Kittery and Bangor, while Fox continued to supply stores in central and southern Aroostook County. So Clear won't disclose the number of stores that carry Fox Family Potato Chips in Maine or in other states. All Allen will say is that the company started out very small, with one person selling and distributing the potato chips in Maine. But now there are 10-12 sales routes in Maine, three or four in New Hampshire and Massachusetts, and one or two in Connecticut and New York. Allen says the plan is to grow Fox Family potato chips into a strong regional player in the potato chip market, which was worth $6.3 billion in the United States in 2006, according to the Snack Food Association, an industry trade group in Arlington, Va.
Snack attack
Competition in the potato chip industry is fierce. One of the major barriers to Fox's further growth is slotting fees at grocery stores. Companies like Frito-Lay, a dominant brand that makes Lay's and Ruffles chips, have deeper pockets to buy shelf space at grocery stores. Meanwhile, the small fries can't always afford to get their product in front of consumers, Allen says. "Slotting fees are very, very difficult for manufacturers like Rhett to maneuver around," Allen says, adding that So Clear has been successful in getting Scarborough-based Hannaford Bros. Co. to carry Fox Family Potato Chips in several of its Maine stores. "This gives consumers the choice to try something different, and to have a potato chip that is unique and not like other potato chips they'll see in the marketplace."
Allen says he doesn't know how expensive slotting fees are, and won't disclose details of So Clear's deal with Hannaford to deliver to a handful of its stores.
A company like Fox Family is miniscule next to snack food behemoths like Frito-Lay, a subsidiary of PepsiCo. In 2006, when Fox sold roughly $100,000 of potato chips, Frito-Lay North America posted net revenue of $10.8 billion. (Fox says he hasn't tallied 2007 revenues yet.)
Getting the potato chips in front of potential consumers is important, but getting consumers to taste the chips is the real key, Allen says. "We find most people who try them really like them," he says. "The way we compete is to get consumers behind this product."
And while Frito-Lay is a constant player on grocery and convenience store shelves throughout the country, there is room for the regional potato chip producer, according to Chris Clark at the Snack Food Association. Companies like Wachusett Potato Chip Co. in Fitchburg, Mass., and Route 11 Potato Chips in Middletown, Va., have carved out a niche for themselves.
The Fox Family niche is one that Fox and Allen believe will grow. And though Parker, So Clear's president and the initial engine behind marketing and distributing Fox Family Potato Chips, died in March, Allen says So Clear is still committed to expanding Fox Family's distribution. "We believe the sky is the limit with this product," Allen says.
But Fox faces other challenges to the further growth of his company, one of which is financing. "I've tapped myself out," Fox says. He needs to invest in new packaging to more prominently display his three flavors ˆ right now it's just a different sticker for each flavor. His building needs upgrades to make the process more efficient. It takes two people two hours to clean the place after producing chips. "It's not a production-friendly building," Fox says. "You can't take a hose to this stuff."
It's not profitable to make only 150 or so cases of potato chips a week, Fox admits. But he's confident that the company could be successful with some luck and an infusion of cash. "Does it have the potential to be a profitable business? Hell yeah!"
Fox does have some new ideas in mind. One market he hasn't tapped yet is northern Aroostook County. If the summer doesn't pan out as he hopes, Fox says he'll focus on expanding distribution north with the hope that fellow residents of potato country will get behind a home-grown product like Fox Family Potato Chips.
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