Popping up some new markets

Think it's tough to predict months in advance what movies the public will want to see? How about matching wits with hedge-fund speculators in the commodity markets?

Arthur Anderson, who spends his days doing both, now has decided to take on a really tough job.

Anderson, the president of a Reno company that's a big player in the movie popcorn business, looks to carve out a position for his Odell's brand on the shelves of the nation's grocers.

That's trickier than it looks.

While Odell's is well known to operators of movie theaters its popping oils and butter topping are used behind the concession counter of about 40 percent of the nation's screens the brand isn't one that most consumers recognize.

Retailers are slow to take on a product line unless consumer demand materializes fairly quickly. But consumer demand won't develop unless they have an opportunity to buy, taste, and return for more.

"We feel we have the best brand out there," says Anderson. "But it's easy to say that. We have to prove it."

So Odell's is engaging in a slow-but-steady campaign to win consumer loyalty.

A booth at a specialty foods trade show in San Francisco recently won high marks from grocery store buyers, and Odell's won shelf space for its home popcorn kit popcorn, oil, butter, and salt as well as its packages of seafood butter and ghee, a clarified butter often used in Indian cooking.

At the same time, Odell's sales team is getting samples into grocery shoppers' hands and mouths and working hard to introduce the consumer line through the company's Web site, popntop.com.

They position the company's popcorn kits as something special for families who've made big investments in home theaters. The seafood butter and ghee lines, meanwhile, target home gourmets.

It's no classroom exercise in brand-creation. Anderson hopes to build the retail channel to 50 percent of Odell's revenues, and he sees retail sales as a way that the company can escape the slow growth of the theater trade.

He's already made some headway into diversification since purchasing the company from his father six years ago.

When Anderson bought the company, theaters accounted for about 95 percent of its sales. Since then, he's widened the company's customer list to include venues such as sports arenas. Falcon Stadium in Atlanta, he proudly notes, recorded a four-fold increase in popcorn sales after converting to Odell's oils and topping.

But about 80 percent of the company's business still comes from theater chains.

"The theater business is a very static arena," Anderson says. "The growth potential is limited."

And it's a tough business to boot.

The company's six-employee headquarters location in west Reno warehouses only a small amount of merchandise as theater chains, arenas and now, retailers are served directly from packers around the country who can deliver products quickly.

But Anderson and his staff still need to contract for the oils that are the basic ingredient of many of Odell's products, and that puts the Reno businessman smack into the commodities pits, where he's matching wits with hedge funds and other big operators.

Adding a new twist: Rising demand for ethanol as a vehicle fuel puts pressure on grain prices, pushing the cost of popcorn oil upward.

On the other side of the business, sales can swing dramatically if theaters draw throngs to hit movies or suffer through a season of duds.

Even as most of the nation prepares for the awards of Oscars for last year's movies, Anderson and his staff are thinking about the schedule of films slated for this year. So far, he says, the summer blockbuster season looks like a great one for theater operators and popcorn suppliers alike.

The company has ridden the ups and downs of the movie industry since 1962, when "Lawrence of Arabia" was the year's biggest hit. Virgil Odell, a theater owner in Caldwell, Idaho, had learned that the military had developed a process to remove water and milk solids from butter and figured how to market the product to movie houses. The product required no refrigeration and was quickly embraced by theater owners who'd previously used creamery butter.

By 1968 and 1969 the years of "Charly" and "Midnight Cowboy" Odell's was rolling out a margarine-like product created from soybean oil and buttery flavoring. And movie-goers in 1987 snacked on popcorn cooked in Odell's canola oil rather than coconut oil as they watched "Three Men With A Baby."

In the meantime, Anderson's father who inherited the company when its founder died decided 21 years ago to move Odell's to Reno. He was drawn by the state's tax climate as well as entertainment possibilities that were more varied than those of small-town Idaho.