Knack for Promoting Products Is Paying Off : Company, started in parents’ living room in 1978, earned $10,000 its first year; by 1991 sales reached $3.9 million.
To help put herself through college, Caroline Cotten Nakken waited on tables and did other odd part-time jobs.
One of them was promoting products for local companies in supermarkets. She became so good at it that in 1978, she started Sunshine Co. in her parents’ living room in La Puente.
It was a fun business from the beginning, Nakken said. She hired her friends as promoters and demonstrators while she managed Sunshine, which earned $10,000 during its first year--an impressive sum for a 22-year-old who had come from a family that always found it tough to make ends meet.
However, Nakken did not realize the seriousness of being a business owner until two years later, when three of the workers she hired to promote a nonalcoholic margarita mix didn’t show up for work. Furious food brokers berated Nakken for being unprofessional.
“They were condescending and mean,” she recalled. “By the time I got home, I was mad. I thought: How dare they talk to me that way.
“I made a pact to myself that not only was I going to do samplings in grocery stores but that I was going to have the biggest and the best company around.”
Her sister-in-law, Sandra Cotten, who pitched in occasionally as bookkeeper and staff assistant, became senior executive vice president-finance. Nakken also sought advice from marketing experts.
Besides developing her own list of part-time workers, Nakken tapped into a nationwide network of demonstrators--such as students, housewives and semi-retired people. Some promoters donned “Twinkie the Kid” and “Mr. Peanut” costumes to help pep up product sales.
By 1981, sales had reached $90,000 and Nakken moved her company from her parents’ living room to a 10-foot-by-11-foot office in Fountain Valley. She also incorporated her business under the name Sunshine Promotions Inc., or SPi. For their financial assistance when she started her business, Nakken distributed SPi shares among her parents and Cotten and retained nearly half of the company.
SPi was poised to grow rapidly by 1986 as food companies, including Kellogg Co. and General Mills Inc., stressed supermarket samplings as a method to entice consumers. As a result, companies such as Nakken’s were in demand.
Nakken then launched a program called “recipe rebate” to increase her client base. SPi offered food companies reduced fees by using ingredients from several manufacturers to make certain dishes; participating companies would split the promotion costs. For example, her staff created a Mexican-style dip from five brand products: Imo sour cream, Rosarita refried beans, Herdez salsa, Valley fresh chicken and Linsey olives. She soon expanded the number of dishes in her recipe rebate program, entered the Las Vegas market and by 1987, moved to a 10,000-square-foot facility in Anaheim.
Today, SPi employs 18 full-time and five part-time workers. It had 1991 sales of $3.9 million, which Nakken expects to increase slightly this year.
Looking back, Nakken and Cotten said it was tough building SPi. Banks continuously turned them down for loans, which required additional borrowing from relatives to permit expansion. Nakken, who married in 1986, continued to expand her business as she became the mother of four children. Cotten, too, juggled the demands of her job and her family, which includes two children.
“When we started, there were very few women in this industry,” Cotten recalled. “We have more barriers in the sense that it was hard being accepted as part of the ‘Old Boys Club’ and being taken seriously.”
While demonstration firms such as SPi seem to be having good fortune during this recession, James A. Smith, owner of a competitor, Demo Deluxe/IMG in Orange, foresees an industry shake-up.
“We could see 30% of the business go in the next two years,” said Smith, who promotes Maxwell House coffee, Jell-O and Post Grape Nuts.
“The groceries are charging more and more for demo fees and they’re passing this on to the manufacturers,” he said. “And the manufacturers would tend to have fewer demos as costs increase.”
To help run the growing company, Nakken’s husband, Allan, recently left a job as a marketing executive to become SPi’s executive vice president-marketing.
If your Orange County company has annual sales of less than $10 million, we would like to consider it for a future column. Call O.C. Enterprise at (714) 966-7871.
