After paying thousands of dollars in slotting fees, and spending hours doling out dressing samples, Famous Fixins scored both distribution and public awareness. But, growing anxious amid their impending success, Bauer and Simon nearly exhausted their loan. "We wanted to grow our business quicker than it was generating profit," says Bauer. "So we met with a securities attorney and started the process of taking the company public to raise capital."
Since NASDAQ requires a company to meet certain revenue and asset levels to do an IPO, Famous Fixins went public in September 1998 by merging with a trading shell, a public company with stock that no longer trades because the business is inoperative. But going public provided more than a solution for staying afloat while growing-it also afforded Bauer and Simon an incentive to offer prospective celebrity partners.
A change of focus also catalyzed growth. "We decided to come out with products we could approach supermarkets with," says Bauer. "Products we knew they'd be able to sell so we wouldn't have to pay these exorbitant slotting fees." Olympia Dukakis, whose dressing is now in 2,000 supermarkets nationwide, garnered interest-but not many fans compare to sports fans. "Now you have [New York Yankees] Derek Jeter on a box [of Jeter's cereal]," says Bauer, "and a buyer in New York knows that's going to sell. I mean, Derek Jeter's a brand within himself."
Trying to get a toehold in the largest category in the food industry using little advertising beyond that of the players' good names (and faces), Famous Fixins has launched a line of 10 cereals featuring the greatest of the greats. The Chicago Cubs' Sammy Sosa, members of the New York Mets, and the San Francisco Giants' Barry Bonds have all been featured. Supermarkets like it because not only are the mostly seasonal boxes collectors' items, packed with goodies like official Major League Baseball cards and chances to be a ball boy or win a jersey, but part-if not all-of players' proceeds go to charity. Famous Fixins requires it, and the players are all for it. "[At press time] Derek Jeter was about to sign a $120 million contract," says Bauer. "Do you think he needs to make a couple hundred thousand dollars on a cereal?" Of course not. But what players and teams do like is getting signage in atypical places like supermarkets.
PLB, Famous Fixins' biggest competitor, also donates profits to charity and allows athletes to take an active role in creating the packaging. But what it can't offer that Bauer and Simon can are shares in the company. That ability paired with Famous Fixins already amazing list of partners, has led to two more exciting partnerships: a three-year deal with teen pop sensation Britney Spears for a line of candy/novelty products inked in late February, and one with Rookie of the Year race-car driver Tony Stewart for car-shaped, Altoid-like mints.
As far as competition goes, Simon only sees good in it, because it makes supermarkets more receptive. "There are 50 states with hundreds of cities," he says. "There are enough teams to go around." And don't think grocery chains are loyal to brands. "Loyalty? Nah, definitely not," remarks Simon with a hint of sarcasm. Whoever has the winning team on their box gets the slot.
Unfortunately, watching games, races-and now the Billboard 100, probably-has more of an effect on Simon than before. "It's no longer sports-it's business," he says. "Sitting at the Mets' game-six playoff against the Braves-you just live and die by these 11 guys every week." Being on the ball, and going online (www.famousfixins.com) in spring 1999, however, have taken sales from $500,000 in 1998 to $3 million in 1999. Next on the agenda: more national products and being recognized as a viable company in the eyes of Wall Street and financial communities.
When asked if he still sees himself running Famous Fixins in five years, Bauer responds, "Definitely. But I see it as a $10 stock."