New Kind of Chip Pops on the Scene
Popchips Make Their Way Into the Snack Aisle
Keith Belling quit his job as a corporate lawyer at age 27 and spent the next 15 years running a series of businesses, including a restaurant chain and a website for small businesses.
In 2005, he set out to create a new snack with one of his former employees, and after four months, the pair stumbled upon a rice cake manufacturing plant outside of Los Angeles. Mr. Belling observed how a high-pressure cooking technique popped the rice like popcorn, and he realized that popping was the way to create a healthy chip that still had flavor.
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Alison Yin for The Wall Street Journal
Popchips co-founder Keith Belling, at the company's San Francisco office, wanted to create a healthy chip.
The pair bought the manufacturing plant for less than $10 million in October 2005. Their product, Popchips, hit store shelves in May 2007, initially just on the West Coast. Popchips—which sell for about $2.80 a bag—are now carried in 25,000 retail stores around the world, including the U.K. Mr. Belling is planning to bring them to France, Belgium, the Netherlands, as well as other countries.
To distinguish Popchips from the hundreds of other foods in the snack aisle, Mr. Belling focused on word-of-mouth and grass-roots marketing. Starting in New York and later in 15 other cities, he sent bags of Popchips to thousands of influential individuals, ranging from fashion designers to event planners. He also sent free Popchips to every employee at companies like Amazon.com Inc., AMZN -1.24% Nike Inc. NKE -0.83% and J. Crew Group Inc.
Such efforts gained the attention of celebrity investors like actor Ashton Kutcher, who wrote his first check to Popchips Inc. in 2010. Mr. Belling declines to say how much was invested. Other celebrity investors followed suit, including fashion model Heidi Klum, fitness trainer Jillian Michaels and Boston Red Sox baseball player David Ortiz.
But in May, the company stirred controversy when Mr. Kutcher appeared in brown face playing a Bollywood producer in ads for chili lime Popchips. The video went viral but drew criticism from tech entrepreneur Anil Dash, among others, for being racist. Popchips pulled the ad from its social-media channels the next day, and Mr. Belling issued an apology.
Annual sales at Popchips, which is based in San Francisco, have more than doubled over the past two years to roughly $93 million.
Now, he is collaborating with pop singer Katy Perry, who has also invested in the company, on her own line of sweet-and-salty Popchips called Katy's Kettle Corn, which launched last month.
Mr. Belling spoke to The Wall Street Journal about how he came up with the idea for Popchips and the lessons he learned from the ad controversy. Edited excerpts:
WSJ: What inspired you to dive into the snack food industry?
Mr. Belling: There's a deli around the corner from my office where I'd get a bag of chips with my sandwich, and I was hiding them under my sandwich because I was embarrassed. When I had this epiphany that I was hiding the potato chips from myself, I realized there was an opportunity there. I love fried chips, but they weren't good for you, and I didn't like the healthy options like rice chips. I thought that if I feel this way, then there are probably a lot of people who do. I felt like there had to be something better, so I just dove in headfirst.
WSJ: How did you come up with the idea to pop the chips instead of fry or bake them?
Mr. Belling: When I went to visit this rice cake plant, I hadn't realized how the rice cakes were made. As soon as I saw the molds of rice and how the heat pops it like popcorn, the light bulb went off. This is popped. This isn't baked or fried. Nobody had really marketed pop as this way to think about snacks other than popcorn.
WSJ: How did you raise the money to launch Popchips?
Mr. Belling: I was pretty lucky. I had some successful businesses before, so there were investors I already knew who said, 'If you're going to invest your own money, I'll go in with you.'
WSJ: What lessons did you learn from the public reaction to the Ashton Kutcher ad?
Mr. Belling: One of the lessons learned was the power of social media. A vocal minority has a chance to make a lot of noise. We learned to double-check what we're doing and make sure we're really thinking through how people might perceive things. We never expected that kind of reaction, and we would have never done anything to intentionally offend any group. It's really something we want to put behind us. Ashton's been a great partner and continues to be.
Write to Nicole Hong at nicole.hong@dowjones.com
