Five years ago, two big-city businessmen visited Dale Humphrey, mayor of a small town called Popcorn, Ind. (pop. about 50). They had just the kernel of an idea for a business--gourmet popcorn--and visited the town on a whim. Humphrey charmed them with stories about his neighbors, passionate farmers who lived and breathed to harvest corn. Inspired, the two entrepreneurs started selling online and opened up a small shop in Manhattan, getting most of their product from the good people of Popcorn.
The little company grossed just $1 million that first year, but its founders, Warren Struhl and Richard Demb, had big dreams. Their first shop attracted the attention of Isiah Thomas, head coach of the New York Knicks. Renamed Dale and Thomas Popcorn, after the mayor and the Indiana University hoops legend, the company expects to score $50 million in sales this year and has ambitions "to do to popcorn what Starbucks did to coffee," Thomas says.
To do that, Dale and Thomas is trying to re-create the magic that the coach felt in 2003, when he walked into Struhl and Demb's shop (then called Popcorn, Indiana). He was on his way to Madison Square Garden and stopped in for a snack. His first bite took him back to his childhood in Chicago. "I remember thinking, I have to be a part of this," Thomas says. "All of my fond memories come from everyone sitting around, telling stories and sharing a bowl of popcorn."
Until then, the company made most of its money selling tins of popcorn on the Web, but you can't eat a bowl with your kids online. "It's something people share," says co-founder Demb. "Popcorn is a snack food with a real emotional connection." Thomas' investment bankrolled a steady expansion--the company has opened up 12 stores over the past four years--while it has perfected its slightly hokey, down-home Midwestern look. Wooden barrels offer free samples in the front of the store, and big pots gleaming in the back remind customers that every kernel is popped on the premises.
Thomas brought name recognition and start-up money, but in February the really big money was added to the lineup. Investment bank Goldman Sachs announced that it would put an undisclosed amount into Dale and Thomas to back the company's plans to roll out up to 400 additional stores over the next three years.
What does Wall Street see in the company? The same thing that transformed Starbucks and Cold Stone Creamery from local favorites into global brands--a knack for taking an ordinary but well-liked food and tarting it up into a premium product. Dale and Thomas sells more than 100 popcorn flavors, from Chocolate Chunk N' Caramel to Sweet Georgia Pecan, and each bowl can by customized with "pop-ins"--sweets like fudge or jelly beans that customers can add to their popcorn. A regular- size bag with the works costs about $6. "Popcorn is a commodity," Struhl says. "We made it into an experience."
But no matter what you mix it with, it's still just popcorn, a food that Americans typically eat at home or at the movies, not in stores. "The long-term challenges will be keeping the idea fresh and keeping down the price," says Harry Balzer of the NPD Group. Other major popcorn retailers, like the Popcorn Factory, have grown by selling online, so Dale and Thomas is driving blind, without a trail blazed by another company. Even the business's CEO admits that its rocket-fueled expansion may be a bumpy ride. "When you move this quickly, you make mistakes," Struhl says.
The biggest challenge may be going national without losing the spirit of the small town that got the company started. The folks back in Popcorn are watching.