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Prior to its acquisition by TSG Consumer Partners in December 1988, Famous Amos was a poorly managed $6 million manufacturer and marketer of chocolate chip cookies. Margins were low due to manufacturing inefficiencies, high overhead and excessive freight cost. The products were available in less than 8% percent of grocery stores nationwide.
TSG Consumer Partners believed Famous Amos would be an attractive investment opportunity because the company had a high quality product and an excellent brand name with high consumer awareness. Additionally we identified substantial distribution and cost reduction opportunities.
In less than four years, together with management, we executed a turnaround of the company, successfully growing Famous Amos to a $75 million business. We recruited a new CEO, VP Sales and VP Operations. We focused the Company on "packaged goods" cookie sales and suspended non-core operations, including non-cookie products, as well as further franchise development (while opportunistically repurchasing existing franchises). We developed new cookie products and appointed new brokers and distributors.
Moreover, the Famous Amos brand was repositioned from gourmet to premium, pricing was lowered and new sizes were introduced. Packaging was improved, and we significantly expanded distribution in existing and new channels including clubs, mass merchandisers, drug and convenience stores, groceries, vending and foodservice outlets. Operational efficiencies were realized by co-packing product and rationalizing purchasing.
In 1992, Famous Amos was sold to President Baking, returning approximately 20 times our investment.
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Copyright © 2008 TSG Consumer Partners. All Rights Reserved.
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