S Sales of the company’s flagship prproduc product, which account for almost all of i its revenue, have surged 30 300 percent during the past twot years to finish 2015 at $176.9 million, acco according to data from m market researcher IRI. Euromonitor Internationalternational r ranks Skinnypop fourth in the overallveral popcorn market—which includes Orville Redenbacher’s from Conagra Foods and Pop Secret from Diamond Foods— and No. 2 in the faster-growing ready-to-eat segment, where it trails only Smartfood, the longtime leader produced by Pepsico’s Frito-lay, the world’s largest snack company. Skinnypop and Smartfood are profiting as consumers move away from microwave popcorn, which now trails the ready-to-eat variety.
After acquiring Skinnypop, Amplify ramped up marketing and increased distribution with retailers looking to boost their healthy salty- snack offerings. Ennis also credits the brand’s success to new cooking techniques and packaging innovations that help precooked popcorn stay fresh on store shelves. It doesn’t hurt that the name Skinnypop implies it’s a diet food without explicitly saying so. “Popcorn got cleaned up,” says Kara Nielsen, a culinary-trend analyst for Sterling-rice Group, a branding company. Consumers were craving an alternative to giant tubes of fluorescent popcorn flavored with fake butter and sweet, tooth-rotting caramel corn. “It went from being an indulgent treat to being an everyday snack that isn’t bad for you,” she says.
Popcorn’s still a relatively small piece of the U.S. salty-snack market, dwarfed by sales of potato and tortilla chips and nuts, according to data from Euromonitor. Overall, popcorn sales were about $2.9 billion last year, compared with a combined $15.3 billion for tortilla and potato chips. But popcorn’s been the fastestgrowing salty snack each of the past three years, leading more companies to focus on the category. Conagra, which makes two of the largest microwave brands, joined forces with reality-tv star Bethenny Frankel in 2014 on a Skinnygirl brand, in a direct pitch at weight-conscious female consumers. Annie’s Homegrown, an organic label owned by General Mills that’s best known for its macaroni and cheese, released a popcorn earlier this year; and Inventure Foods, the makers of Boulder Canyon potato chips, recently debuted Real Thin Pop. Steve Sklar, who runs the snack division at Inventure, says his company’s popcorn has less fat than Skinnypop. Real Thin Pop varieties are cooked in olive, coconut, and avocado oil. “Anybody can do a different flavor,” he says, “but not everybody has the technology to use different oils.”
One reason competition is heating up is that Skinnypop has demonstrated that consumers will pay a premium for clean popcorn. At Walmart.com, a 12-pack of 4.4-oz. bags of Skinnypop costs about $50, while a carton with twenty-five 1-oz. boxes of Cracker Jack, Conagra’s long-popular caramel corn, can be had for $15.88.
Ennis says he isn’t overly concerned about the growing number of competitors. Angie’s Boom Chicka Pop and Popcorn Indiana, two rivals battling for clean-popcorn consumers, had a combined $107.7 million in sales last year, while Amplify’s were $183.9 million. The Texas company also has a big head start on late-arriving food giants who might try to jump into the market. “The land grab is over,” Ennis says. Amplify is expanding beyond popcorn. On May 2, it announced an agreement to buy Boundless Nutrition, an Austin company that makes snack bars and cookies and had sales of about $7 million last year. Amplify also has its eyes on a bigger piece of the salty-snack market, and it’s once again gunning for FritoLay. The company started distributing its Paqui (rhymes with “hockey”) tortilla chips across the U.S. this year. The gluten-free, non-gmo chips are flavored with organic cheddar cheese. Ennis calls it a “better-for-you Dorito.”
U.S. popcorn sales Microwave Ready-to-eat Skinnypop becomes the No. 2 readyto-eat brand, after Smartfood “Consumers love the simplicity of popcorn. They want to know what they’re eating.” —— CEO Tom Ennis, Amplify Snack Brands The bottom line Sales of Amplify Snack Brands’ Skinnypop have grown 300 percent in the past two years, propelling it to No. 4 in the popcorn market.
Ill., provides administrative services including payroll, accounting, and IT to 750 dental practices, “not a team of senior and junior consultants” that could “cost several hundred thousand dollars a week.”
Midsize companies such as Heartland, which has about $1.1 billion in annual revenue, often require consulting help—on everything from digital marketing to expanding overseas—but they don’t want the teams that big consulting firms often assign or the hefty expense of hiring them. Many are turning to companies like Los Angeles-based BTG, which allow them to choose from a range of independent consultants, typically for about onethird to one-half what a Big Three consulting firm would charge.
Founded nine years ago, BTG contracts 5,000 consultants and professionals around the world. Most have MBAS and years of experience working or consulting in various industries. When a client needs help, BTG assesses the scope of the project and offers a choice of a few potential consultants with suitable backgrounds. Most projects require a single person or a small team. And because they’re self-employed, BTG’S consultants don’t come with the overhead costs of those employed by a large company. “Clients hire only the person or people they need for the time they want, and we provide access to talent that can be hard for midsize companies to get,” says BTG’S co-founder and chief executive officer, Jody Greenstone Miller.
More than one-quarter of BTG’S clients are businesses with revenue of $1 billion or less—and that share’s been steadily growing. “We market mostly to big companies, but midsize firms are finding us, either through word of mouth or through the investment community,” Miller says. BTG gets a cut of each project fee; revenue has grown 50 percent annually for the past five years and is on track to surpass $40 million in 2016, she says.
Heartland’s Greenstein told BTG he needed a senior consultant who understood the administrative outsourcing his company handles. He also sought someone who’d work closely with his five-person staff and help them broaden their problemsolving skills. “I’m a huge fan of Mckinsey and the work they do, but I didn’t need a big team off in the corner working by itself or the overhead costs that go with hiring them,” Greenstein says. “With BTG’S model, when we need an extra day or two to think things through or to clean up data, we can afford to take that time.”
The consultant he hired through BTG, Christian Frank, was, like Greenstein, a former Mckinsey employee, and had experience in health-care and administrative outsourcing. He’d also been an executive at IBM and at ADP, a provider of administrative services to global companies, and he’d run his own startup.
Heartland is already acting on Frank’s recommendations. With smaller clients, “you’re much closer to the ultimate decision-makers than at large corporations,” the consultant says. “Sometimes everyone agrees with an idea you’ve helped formulate, and then, instead of being sent through seven different management layers for approval, it’s put into action the next week.” Frank is now starting a second consulting project at the company aimed at lowering costs and improving quality in operations.
Other midsize companies use both traditional consulting firms and BTG. At Broadridge Financial Solutions, which has $3 billion in annual revenue and provides investor communications and technology to financial institutions, Chief Operating Officer Tim Gokey hired consultants from big companies including Boston Consulting Group to carry out due diligence on acquisitions, plot strategy, and handle projects that require a lot of data analysis. They could get a lot done quickly, didn’t need his supervision, and also had access to extensive research from their firms, he says.
Gokey taps BTG for projects requiring a single consultant who can help him and his managers map a strategy. Six years ago, soon after he arrived at Broadridge, based in Lake Success, N.Y., Gokey hired a consultant through BTG to help him reshape marketing. He liked the consultant’s work so much, after six months he hired her as his full-time chief marketing officer. BTG’S extensive network is cost- effective, Gokey says, “and sometimes we can even recruit from it.” �Carol Hymowitz
The bottom line With 5,000 consultants on tap, Business Talent Group has seen revenue grow 50 percent annually for the past five years.
mechanically and cosmetically,” says Bloch, who was a partner at venture capital firm Greylock Partners.
Traditional chains such as Carmax have helped improve the used-car buying experience. But many consumers still dread walking onto a dealer’s lot. Vroom and other used-car e-tailers say they remove the hassle and hard sell. All offer haggle-free pricing, free delivery, and returns within a limited period.
Americans buy 40 million preowned vehicles a year, yet Carmax, one of the largest players, has just 2 percent of the market. With plenty of room to grow, Vroom has raised more than $250 million in equity and debt from investors including General Catalyst Partners, Catterton, and John Elway, the former quarterback who’s now general manager of the Denver Broncos, the 2015 Super Bowl champions. In 2015 investors poured more than $900 million into used-car e-tailers globally, almost double the amount from the prior year, according to CB Insights.
Vroom is betting it can win over consumers by combining traditional dealership service with the robust selection online shoppers have come to expect. The company specializes in accidentfree, low-mileage cars. It’s hard to find anything on its website manufactured before 2013. There are more than 35 brands—including, recently, an Aston Martin and a few Teslas.
Vroom developed its own logistics software to keep tabs on its inventory of as many as 4,000 vehicles. Bloch says the program helps the company’s facilities in Dallas and Houston, where vehicles are inspected and prepped for sale, work as smoothly as a factory assembly line. Buyers get a 90-day warranty, seven days to return the car for a full refund, and one year of roadside assistance. Bloch says his prices are 8 percent lower on average than those of other dealers. After clicking “Buy,” a customer typically receives her car in less than a week.
Vroom’s two facilities process a few hundred cars a day, using algorithms to figure out which vehicles should be loaded onto which truck to be delivered where. The company farms out half the deliveries, but in the next 12 months, Bloch plans to bring the whole operation in-house, so Vroom can move to 24-hour delivery. Of course, that means buying trucks, hiring drivers, and adding facilities, including one opening this year in Indianapolis.
Because its fixed costs are higher than most e-tailers’ and its prices are cheaper than those offered by traditional dealers, Vroom will need to move a lot of metal very efficiently to make money. The company says it sold tens of thousands of cars last year, generating about $900 million in revenue. Getting the cars out the door quickly is key, because their value depreciates every day they sit unsold. The longer it takes, says Bloomberg Intelligence analyst Kevin Tynan, the less Vroom makes and the less cash it has to buy more inventory or build out operations. Bloch declined to specify a timeline to profitability, saying the company is focused on investing in growth.
In April, another flood hit Houston. At 6 a.m. on a Monday morning, about two dozen Vroom employees braved the rains to move vehicles to higher ground. To identify the most high-risk cars and their locations, the workers consulted newly tweaked software. This time, Vroom lost only about a dozen vehicles. �Jing Cao
Sales of certified pre-owned vehicles 1Q ’11 1Q ’16
700k 550k 400k The bottom line Unlike rival marketplaces for used cars, Vroom buys and inspects all of the vehicles it lists for sale on its website.
Edited by Cristina Lindblad Bloomberg.com