Brett Canfield and Adam Smith make a formal go at creating and marketing a very cool new product.
By Mary Boone
The need for a daily java fix and fear of social repugnance (can you say: coffee breath?) led two Puget Sound graduates to start what’s now a flourishing new company.
Brett Canfield ’93 and Adam Smith ’93 were sharing the HOV-lane on their daily commute to jobs at Wizards of the Coast back in 1997 when they started talking about their mutual desire to go into business for themselves.
They drove. They talked. They sipped their lattes and sucked on Altoids. Then, bam! The light bulb went on: They could combine the jolt of caffeine with the icy freshness of peppermint.
So it was that ifive brands (named after the freeway on which their idea was hatched) and its first product, Penguin Caffeinated Peppermints, were born.
Canfield and Smith, who met in 1989 as freshmen in Register Hall and later pledged Sigma Alpha Epsilon fraternity together, quit their day jobs and set out to make their mint dream a reality. Night jobs paid the bills, Smith sold his car and the pair maxed out three credit cards to raise cash.
"It was a little humbling to go from being the national accounts manager at Wizards [of the Coast] and staying at the Helmsley Palace to six months later parking cars for a valet service," says Canfield.
The company’s first office was housed in Smith’s apartment: a computer, two cellular phones, a thermal-paper fax machine and two resin lawn chairs. But the primitive and cramped setup didn’t deter the duo’s enthusiasm.
By April 1998, their first shipment of Penguin Peppermints arrived at the company’s makeshift warehouse. "Brett had a great smelling apartment for awhile," explains Smith. They had $3,500 in sales that first month.
Now, less than two years later, the mints are distributed nationwide through retailers such as Seattle’s Best Coffee; Urban Outfitters; Hot Topic; Bed, Bath and Beyond; Dark Alleys; Tower Books and Records; and Eastern Mountain Sports. Monthly sales hover around $100,000.
The company moved into an office in Seattle’s Ballard neighborhood last August. Smith and Canfield say they’ll outgrow this space soon and predict sales will be $500,000 per month within two years.
"This all happened at a very good time," says Canfield, who calls himself "secretary of the minterior," a.k.a. president. "With the current popularity of cigars, spicy foods and coffee, it didn’t take us long to realize this is a good product category."
"Mints themselves can be pretty boring, much in the same way coffee was boring before Starbucks," says Smith, dubbed the "prime mintister," a.k.a. vice president.
"We went into this thinking we’re selling more than a tin of mints. We’re selling humor and a little bit of style," Smith adds.
From their funky job titles to their hip black, white and gold Penguin logo, it’s clear the Puget Sound grads are focused on fun. Don’t believe it? Check out their Web site (www.peppermints.com), where you can read quirky answers to even quirkier questions, such as:
• Why did you name the product Penguin? –Pam, Washington, D.C.
We decided on Penguin for several reasons. ?
1) They are cool flightless birds, and we haven’t met a person yet who doesn’t like penguins.
2) They connote imagery associated with mints, cool, arctic etc., without being overtly obvious.
3) We liked the colors.
4) It doesn’t sound like a problem that is solved by medicated pads.
• How powerful are these things? – Howie, Seattle
Three Penguins have about as much caffeine as one cola beverage. How powerful they are depends on how sensitive you are to caffeine. I usually have about three every hour. ... That seems to keep me awake and alert without the jitters and frequent trips to the bathroom.
• What’s up with all of these crazy words on the paper inside the tin? – Ted, Miami
Those are different species of Penguins. We decided the paper needed to be both functional and interesting. ... Only about one-eighth of the population knows what all those names mean.
In addition to entertaining surfers, the Web site has been a great marketing tool for Penguin Caffeinated Peppermints. Selling directly to consumers and small retailers over the Web has allowed the company to keep overhead, and consequently prices, low (retail $3 for a tin of 75 mints).
In just two years of entrepreneurship, Smith and Canfield have learned a good deal about the business world.
"Everything we did in the past two years was new to us," says Smith. "We made some mistakes, but we learned from them. We really learned to trust our judgment. Decisions that used to take us an hour-and-a-half to make, now take about 30 seconds. Our comfort level is much greater."
Smith and Canfield say their Puget Sound educations–and connections–have served them well in their business start-up.
Sara Phillips ’94 works as the company’s "executive mintress," a.k.a. office manager. Karen Cammack ’91 took photographic portraits of Smith and Canfield, and Amy Hall ’93 produced product shots for Penguin’s promotional kit. Matt Peterson ’92 put pen to paper to create text for future television and Web commercials.
The future of ifive brands will likely include expansion of its Penguin merchandise line (T-shirts are now available), diversification of its product line, and product segmentation (products you can buy online will be different from those you can buy retail). The pair predict they’ll grow from a staff of three to eight by the end of 2000.
"That would be another great thing we could get from Puget Sound," says Smith. "We’re going to need some top-notch employees, so we’d love more of them to come from the University."