DES PLAINES, Ill. -- Phillip Roos is more than surprised at the amount of attention caused by co-branding. "I'm flabbergasted, but gratified," admits Roos, the 35-year-old president of Delicious/R.W. Frookie Co. here.
e billing with eight brands: Chiquita, Land 'O Lakes, Welch's, Musselman's (Knouse Foods), Skippy (CPC International), Heath (Leaf), Butterfinger and Raisinets (both Nestle).
Roos became president one year ago, a month after Delicious Cookie Co. merged with R. W. Frookie Co. He joined Delicious as vice president of marketing in 1992, just after the first co-branded cookies were produced. Company executives were looking for a new idea to follow the cookie craze that Delicious caused in the late 1980s with its Ninja Turtles license. That was another plateau in the brief but colorful history of Delicious. "It was a phenomenal success," recalls Roos. "It doubled the sales of the company. It doubled the distribution base. All of a sudden they were in 60% to 70% of the ACV nationally."
And then it was gone. "The only trouble with Ninja Turtles was that it went away after a year or two. But it actually had a longer run than most licenses," says Roos. So Delicious came up with the idea for the co-branded cookies, or "big brands," as Roos calls them, as a way to fill the void left when Ninja Turtles cooled off. Delicious is probably the first company to go all out in co-branding, he says. "Some companies tried it on one product before us, but we were the first to really turn it into a business. "There's a lot of clutter out there. So many new products, so much clutter. People tend to gravitate toward the familiar. If you can give them the familiar, trusted brand name with a little bit of a twist -- something new and interesting -- there's some strength to that," he says. Apparently there's a lot of strength to co-branding. Roos defines co-branding as taking one brand equity and combining it with another to form something new and stronger. "The sum," he says, "is greater than the addition of the parts." He lists three kinds of co-branding:
Endorsement: Relative prominence of host vs. the guest brand. For example, "Made With Chiquita Bananas."
"All the guest brand does is add a little bit of credibility," Roos says. "A Good Housekeeping Seal of Approval. But the host brand is really the story."
Pure Licensing: "The guest brand is the whole story." For example, Healthy Choice and Kellogg's breakfast cereal.
Pure Co-Branding: "There is relatively balanced prominence of the host vs. the guest brand. The guest brand is clearly more prominent on those packages, but the Delicious logo is relatively integrated into the proposition."
Delicious Cookie Co. was formed as a cooperative of about two dozen independent direct-store-delivery distributors of cookies and crackers. They joined together because they feared that "soft" cookies -- then growing in popularity -- would sweep aside their crispy cookies. So they successfully produced value lines of crispy cookies. "The original concept was to take wide variety through a full line of cookies and crackers and have quality about as good as the national brands, but at a much lower price. It would be nationally advertised, so they did a little TV advertising, some [freestanding inserts]. So you had really the first advertised national price brand. The name was the Delicious Cookie Co," says Roos. In March 1994, the cooperative owners sold out to R.W. Frookie Co. and a newly merged company, Delicious/R.W. Frookie, was formed.
Frookie was one the companies to start the healthy cookie snack trend, according to Roos. Its original concept was a good-for-you, fruit-juice-sweetened cookie.
Roos explains that Richard Worth, chairman, represents the visionary and creative part of the company. Meanwhile, Roos describes himself as the strategist and planner (due, no doubt, to his corporate training at Quaker Oats Co., working on the Gatorade and granola bar accounts). "There was great synergy in bringing [Delicious and Frookie] together. You were going against the same customer basically in a setting where scale can be very helpful. The product lines were essentially noncompetitive. So we were building scale without stepping over each other," he said. Roos explains that the category of cookies and snacks is very impulse-driven. So in-store marketing is a major focus. "We're trying to do things that will increase visibility and display activity. We'll probably invest a lot more dollars at the shelf than we would in mass advertising," he says. Indeed, Delicious, working closely with its distributors in the grocery channel, has allocated a significant share of the marketing spending to the local level. "We're going to do some things on a national basis, but our spending will skew quite a bit toward the local basis, customizing toward the store," explains Roos. "To that extent, we will be working very closely with our customers in all channels to customize programs to a customer's particular needs." For example, the company has used the Mighty Morphin Power Rangers license, acquired last summer, to its advantage in stores. It built some massive displays that were customized for different accounts. The promotion was tied into radio spots and newspaper advertising. "We did a similar thing with Ninja Turtles," he says. "We had them actually come to the store and make appearances. It was a great merchandising event and traffic builder for the store. We actually had too much traffic there when the characters appeared." Roos foresees more of this local promotion that ties into the retailer. "We have an escrow program where they get a certain percentage of every sales dollar," he says. "It goes into a local advertising/promotion fund that they can spread -- subject to some broad parameters -- in the best way possible to build their business. That, then, could be supplemented with money that we would spend out of a fund we have. So we could really put together some meaningful funds and have some big events locally. "One thing we're going to do is develop some turnkey promotional events that fit with our national strategy, but can be customized locally. We can develop the artwork and the structure of the deal. Our regional sales and marketing people can then work with the customer with what would be the best of the package tool kit of programs to do in their local market." Beyond local marketing in supermarkets, Roos has plans in the works to expand the business. Last year he built a broker network to focus on international business and nongrocery accounts in the mass merchant, club and drug store channels. Roos looks to build this up to a third of the business in a few years (it's now single digits). The company plans to launch several new products at the same time it's expanding into new markets and channels. "There's been a lot of activity in the healthy arena," says Roos. "Our plan is to come out with a lot of new products for Frookies. It's really the idea of being good-for-you, being fun and good-tasting as well. Products that are good for the whole family." In the Delicious line of cookies, Roos wants to increase the number of items from eight to 15 or 20 in the next few years. The plan calls for bringing in a few new co-branding partners, and to branch out into new categories. He lists opportunities in the health arena, adult-oriented products and using chocolate as a platform for new products. "You can take some of the names we have right now and some of the other ones we have in the works and introduce one shelf of products," he says. "The goal is to have section devoted to these items. We plan on going after that aggressively over the next year."
Those are big plans for a small, creative company with roots in the co-branding revolution. Its company "attitude" plays a part in its success. "We're not so chauvinistic about our brand name," explains Roos. "We are totally committed to the success of our partners. If you're Nabisco or Procter & Gamble and you've spent hundreds of millions of dollars to build a particular brand name, you're gong to be a little more reluctant to share the stage with other people. "We're not. We're smaller. We've got brand names in Frookie and Delicious that are growing in recognition, particularly in certain markets. But we see this as a partnership and we're willing to work with these people to meet their objectives as well as our own. "We feel that we've learned many lessons," he sums up. "The key ones are keeping the quality of the product, and treating with great respect the brand equity of the people you're working with."