Venture: an Oprah endorsement - blessing or curse?
Chicago's pondering life without Oprah--or at least without her show--as Oprah wraps up her talk show this week after 25 years. She'll also be shutting down an economic engine.
Over the years, Oprah's shared her Favorite Things - usually food - and plucked hundreds of businesses out of obscurity.
So Venture headed out to west suburban Geneva to meet some brownie bakers whose lives and business got caught up with Oprah.
Here, at the Moveable Feast bakery, it smells like heaven. Owner Matt Lennert says when you get a couple of hundreds of pounds of his fudgey brownies baking, the smell is intoxicating.
The neighborhood must love those intoxicating smells from Matt and Kim Lennert's shop in Geneva.
That's where the couple runs their café and catering business.
A while back, the business transformed from storefront café to a national mail order food company - in the span of about a month. Matt tells the story:
LENNERT: We were catering for Oprah and she tried these brownies that we make and she fell in love with them. It was quite a while passed by, maybe a year and a half - and then one day a producer called and said they wanted to put us on favorite things.
BOODHOO: So did you think at the time, when you got the call - and said - hey we want to put the fudgey brownies on the show - did you think yay, or did you think yikes - this might be a bad thing?
LENNERT: We definitely thought both. We were of course really excited. But we were concerned - we wanted to make sure could sort of insulate our existing customers - we had heard horror stories from some business who had been featured and they weren't ready for it and they weren't able to handle the volume.
The Lennerts had 10 workers. They were making brownies in small batches, stirring by hand about 20 pounds at a time. They knew they would have to be ready to make hundreds - it actually turned out to be thousands of pounds - of fudgey brownies.
LENNERT: Well, we're a really small business. We're in an old house, kind of a quaint little historic neighborhood. And, we at the time we sold the brownies on a plate, in our shop. So we had to actually come up with a whole retail package so we could offer the whole shipping and fulfillment side. We didn't have a commerce web site so we had to put that in place, and then call centers to take orders. And all of those things had to happen in a really short period of time.
BOODHOO: So this was back in 2005. What kind of impact did it have on your business back then?
LENNERT: Back then it was immediate. The phones starting ringing, literally immediately. We brought a TV in the kitchen to watch it, and we had champagne and it was great. But they said our name and literally, the phones literally starting ringing off the hook.
BOODHOO: Now that it's been five years. What kind of effect has it had?
LENNERT: We had the immediate boost in sales for the first year, and then the year after that too. Um in the long term it's been exposing so many people to our business, has been the huge value to us.
At the peak in 2006 Moveable Feast had 50 employees, including at call centers and doing shipping. Business has calmed down some since then and a smaller staff is back to baking brownies in the café kitchen.
But Matt Lennert says mail order customers are still adding about 10 percent to the company's sales.
Going from a neighborhood café to a nation-wide mail-order business is risky. It takes planning and, according to economist Craig Garthwaite, a savvy business strategy.
That's what he teaches at Northwestern University's Kellogg School of Management. We met up to talk strategy at the Pastoral Artisan Cheese, Bread and Wine in Lakeview.
Garthwaite is a big fan of their cheese. So is Oprah--it's made O magazine's Favorite Things list two years running.
GARTHWAITE: The benefit to being on Oprah is that it's for a small business in particular is that it is an advertising buy that they could never do on their own.
That's an opportunity, Garthwaite says, and a critical juncture of success or failure.
GARTHWAITE: I think it's hard to understand the increase in demand that we're talking about. Garretts Popcorn in Chicago was featured in 2002, and they had a 100,000 hits on their web site the day they were featured on the show, and their December sales increased 100 percent from the year before. That type of increase in demand is really hard for a small business to adjust to. Even the largest companies. Yum Brands owns KFC, Pizza Hut, Taco Bell, this is a huge American company, to be candid, they underestimated the amount of demand that they would have. And as a result, they ended the program early. Well, a lot of people were upset by that. They went to use their coupon at the store, they were told they can't have the chicken, and there's a class action lawsuit against Yum brands about this right now.
GARTHWAITE: Make sure you have the ability to have a large number of hits on your website. Make sure you have more than two or three phone numbers um and make sure you have the inventory to satisfy people, because you don't want the people coming to your store and being perpetually unable to get the product what they want. BOODHOO: From the Oprah opportunity, which I guess, that window's closing a little bit.
GARTHWAITE: Oprah is a multi-spot celebrity. She has her cable network, she has her TV show, it's not just her name, she also has this monthly magazine. So if the Favorite Things list exists there, it's not going to have the same reach that it has on the daily talk show, but it's certainly going to have a lot of impact on businesses going forward.
And now for our Windy Indicator - where we pick an unlikely place to gauge Chicago’s economy.
Like how many people are stopping in for a car wash? Looking Good Hand Car Wash near Cellular Field is a throwback to the days before robotic brushes soaped and rinsed off your chariot. Here, actual human beings spray and scrub.
But when reporter Ashley Gross was there, they had time between cars to just hang out.
CHARLES RUCINSKI: What’s actually killing us is all the rain.
Manager Charles Rucinski says the rainiest April in 50 years kept customers away.
RUCINSKI: They figure why wash the car if it’s raining, they might as well wait, you know?
But, he says, people also just don’t want to spend money these days. He says regulars used to come two or three times a week, and now maybe just twice a month. Rucinski says it’s a big change from nine years ago when he got hired:
RUCINSKI: when I first started working here, I was actually a washer and after a while you end up going home wanting to just sit in a bathtub and relax. And now it’s a lot slower.
He says now they’re lucky if they wash 100 cars on a Saturday. Till a few years ago, they’d sometimes do double that.
And people must be more tolerant of stinky cars these days. Rucinski says they stopped carrying most air fresheners because no one was buying them.
Next week, our Windy Indicator gets its chakras balanced.