Edwin Perkins took inspiration from Jello to create a mail order empire. Oh Yeah! From a General Store to a major brand.
Dave Young:
Welcome to the Empire Builders podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well it’s us. But, we’re highlighting ads we’ve written and produced for our clients, so here’s one of those.
[BWS AD]
Dave Young:
Welcome to the Empire Builders podcast. I’m Dave Young, alongside Stephen Semple, and Stephen you, made my heart just go pitter-patter because you chose a brand for this week’s podcast that was invented and created in my home state of Nebraska.
Stephen Semple:
Yes, sir. Your home state of Nebraska.
Dave Young:
Not everybody really knows this. It’s a weird thing. I’m not even sure I knew it when I was a kid, right, but Kool-Aid, if you say, “Hey, Kool-Aid man,” that stuff was invented by a guy in Hastings, Nebraska. But, you probably know all the details, because you’re the one that goes out and finds the details. I just know that it was invented in Hastings, Nebraska. In fact, there’s a wing of the Hastings Nebraska Museum that’s full of Kool-Aid information.
Stephen Semple:
Yeah, dedicated to Kool-Aid, and there’s even a cool book you can get from them. You really know you’re special, I have with me here a Funko pop Kool-Aid man. Oh yeah.
Dave Young:
The whole toy thing. That’s a beautiful thing right there.
Stephen Semple:
Yeah, you know you’re a big deal when that happens. Right? Big, big deal. Kool-Aid goes way back. It was invented in 1927 by Edwin Perkins, and in 1953 the company was sold to General Foods. You’re a pretty big deal when General Foods comes along and buys you up. It’s really interesting how big Kool-Aid became selling these five and 10 cent packages of mix that you add water and sugar to. It’s really quite incredible.
Dave Young:
You had to bring your own sugar, and probably more expensive than the powder.
Stephen Semple:
Yeah, but it’s a cool story. Edwin Perkins was born in Louis, Iowa on January 8, 1889. He grew up in Henley, Nebraska and he helped out in the family general store. In the 1880s, if we go back to the 1880s, general stores were a lot more like dry goods and household items, and there was even often a Post Office attached to them. Usually the Post Office was kind of the social center for the community.
Dave Young:
Dude, in Nebraska, the Post Office in a lot of towns still is that.
Stephen Semple:
Still is that, is it?
Dave Young:
Of course.
Stephen Semple:
Wow.
Dave Young:
I mean, and I’m talking about the tiny towns, a thousand and under. That’s where you run into people. If you ever need to steal a car, go to a Post Office in a small town somewhere, there will be three or four cars out front with their engine running while they go in and get their mail.
Stephen Semple:
I just want to say that I don’t condone any of these things Dave’s suggesting.
Dave Young:
Maybe I should say, if you ever want to borrow somebody’s car, if you need to run over to the general store and pick up some Kool-Aid.
Stephen Semple:
This is the environment Edwin grew up in. The other thing that was interesting, the stores of the day, they didn’t advertise, but they often promoted products in the window. It was sort of seeing all of this that he grew up in. One day he decided to send away for Dr. JM Thornberg’s Mixing Guide, which was a guide for making toiletries and other items that he could sell. He started making these little products that they could sell in the general store, and he saved up his money, and one of his first business ventures was he bought a small printing press. He did these little small jobs, as well as made the labels for his products.
Stephen Semple:
When he graduated from high school, he borrowed a couple hundred bucks from his grandmother and bought a larger press that he set up in the back of the store. He did enough business to pay back the loan in a year. He even started a local newspaper, but it made no money at the newspaper. In 1914, he became the Postmaster. This is when things really got going for him, because as he got exposed to the mail business, he started a mail order business. He also moved the press into the back of the Post Office.
Dave Young:
Was this in Hastings or was this another town that he started in?
Stephen Semple:
This was in Hastings.
Dave Young:
This was in Hastings, okay.
Stephen Semple:
Yeah. He started to recruit boys and girls to sell products, and he did it on this trust system. He would send them the products through the mail, and they would get paid when it was sold.
Dave Young:
Hmm.
Stephen Semple:
Right? He used the Post Office to send this product. His first successful product was a tobacco cure called Nix-O-Tine Tobacco Remedy, which he advertised in the police gazette. Cigarettes were a real craze at this time, especially with soldiers returning from World War I. The soldiers were returning from World War I, and they had been smoking heavily when over in Europe fighting. In fact, and we’ll have it in the show notes, I have an ad that was run by the government that promoted smoking for soldiers.
Dave Young:
Oh, well sure. I guess, what, give them something to do.
Stephen Semple:
It’s crazy when we think about it. People were returning and having a hard time quitting smoking, and he created this product that helped for quitting smoking. He needed a better location for distribution, and actually, sorry Dave, when you said earlier was all this being done in Hastings, this was in Henley, and then as the product grew they moved to Hastings because he needed a place that was better distribution.
Dave Young:
Well, yeah, he had to go to the big town.
Stephen Semple:
He had to go to the big town. Then much of the family joined him. Then in 1921, he wanted to expand his products, so Edwin went to St. Louis where he spent several months learning how to make new products; beauty products, food products, package goods, things along that line. He planned on creating all these products and sell them through distributors. Originally, he did it under the Onor-Maid, Onor-Maid name really terrible
Dave Young:
Honor made.
Stephen Semple:
Except O-N-O-R dash M-A-I-D. Anyway, but one of the most popular products was this liquid concentrated fruit drink called Fruit Smack, where you just would take this and you would add sugar and water. Sound familiar?
Dave Young:
Yeah, yeah, add sugar and water.
Stephen Semple:
Yeah. But, the problem was, it was being sent by mail, so it was heavy and expensive and broke. Now, Edwin was a big fan of Jell-o. He looked over at Jell-o, and that was the inspiration for the creating of Kool-Aid. They basically took this idea of Fruit Smack and made a powdered version of it, which is Kool-Aid. This was introduced in 1927. It’s kind of interesting that he saw another product and took inspiration from that product, and he did this a couple more times through his career.
Stephen Semple:
In 1927, they’re introducing Kool-Aid, and at that time, grocery stores were becoming popular. Grocery stores were kind of replacing the old general store. Grocery stores did things a little bit differently. They bought from a wholesaler. Edwin decided he wanted to distribute Kool-Aid to grocery stores through wholesalers. The first thing you need to do is you need to convince a broker. There’s the wholesaler, and then there’s the broker. The broker’s the person who goes into the store and says, “Hey, here’s the products that you should sell of the wholesaler’s.” Got to convince a wholesaler to carry it, and a broker to promote it to the grocery store.
Dave Young:
You’re like two or three layers removed from your customers now.
Stephen Semple:
Yeah, yeah. What he did for these brokers and jobbers, what he did is he created these sales sheets and manuals to help them sell the product. That’s where most people would stop. It’d be like today saying, “Hey, I got the product into Walmart. I got the product into Costco.”
Dave Young:
We got our distribution channels, and let’s let that take care of it. Right?
Stephen Semple:
Let’s stop and let the good times roll. But, Edwin knew for this to be successful, he needed to get consumers to buy it.
Dave Young:
You got to get them asking for it. Right?
Stephen Semple:
Yes. He used his experience from the general stores. Remember, general stores did this great job of displaying things. He knew shelf space was valuable, so what he did is he started creating these really attractive displays. He actually called them the self-selling silent salespeople. He started creating these packages that would go in the store and be really attractive on the shelf space. Then in 1931, he even started advertising to the consumer directly, because to your point, Dave, if I could get somebody walking in and asking for it, it’s more likely to be stocked.
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Empire Builders Ad]
Dave Young:
Let’s pick up our story where we left off, and trust me, you haven’t missed a thing.
Stephen Semple:
At this time, they moved to Chicago because Chicago was really coming up as being the center of the food industry, and they incorporated as the Perkins Product Company. One of the other things that he did at this time was he started to advertise on radio. If we remember, radio at that time was shows. Right? It was a whole show.
Dave Young:
Right, yeah, it would be the Kool-Aid hour.
Stephen Semple:
Correct, so he created a kids show on radio, and they were the sponsor for that show. Then they started advertising in newspapers and magazines. They created these creative in-store promotions doing cross promotions with cookie companies, where they’d create these big displays where it was like, “Buy your cookies and your Kool-Aid,” awesome things that go together.
Dave Young:
Yeah.
Stephen Semple:
Because what kids need is more sugar. Right?
Dave Young:
Absolutely.
Stephen Semple:
Then he noticed what Cracker Jack was doing, where they put the little trinkets in.
Dave Young:
Yeah.
Stephen Semple:
Yeah. Boy, did they ever discover premiums. First, they did balloons, and then they did free comics, and then they did aviation hats, and they did whistles. Here’s the incredible thing is, remember I was mentioning the book that you can get at the Hastings Museum, the Kool-Aid book.
Dave Young:
Yeah, right.
Stephen Semple:
They have a whole section on trinkets, and it just goes on and on and on, unbelievable number of trinkets. It’s actually unknown how many trinkets they did. We don’t think about Kool-Aid as being an innovative company, but think about all the innovations that they did here. They went from Fruit Smack to a powder form, to suddenly realizing, wait a minute, we want to sell through grocery stores. To do that, what we knew is we need to help out the brokers and jobbers, so they created these, for the day, very innovative counter displays.
Dave Young:
Doing more to help those channels-
Stephen Semple:
Yes.
Dave Young:
Promote them. Right? It’s this two part thing. It’s starting to use those channels, but then giving them the tools that they need to promote you in the stores, and then sneaking around behind them and advertising direct to the public to get people to ask for it.
Stephen Semple:
Yeah. Then these cross promotions, and then went on the radio, and the newspaper, and then did the freemiums.
Dave Young:
Yeah.
Stephen Semple:
Right?
Dave Young:
You get little kids asking you to buy something just so they can find out what the new toy is.
Stephen Semple:
Yeah.
Dave Young:
Who learned that lesson? McDonald’s.
Stephen Semple:
Probably learned it from Kool-Aid.
Dave Young:
Exactly, yeah.
Stephen Semple:
Kool-Aid learned it from Cracker Jack.
Dave Young:
Uh-huh.
Stephen Semple:
But, what I felt remarkable as I was looking at this company was really the amount of innovation and experimentation that they did in their marketing. It was never ending. They were constantly trying different premiums, and different store displays, and different styles of advertising, and really saw a new trend that would jump on it. Because we look at Kool-Aid and we think, Kool-Aid. Again, for me, it was one I got really fascinated at because of all of these different steps that they had gone through. There was a number of different products that they experimented with as well. They had Kool-Aid ice cream at one point. Of course, that didn’t go anywhere. There was a whole bunch of other things that they also went down. There was Kool-Aid pop at a certain point. They were constantly, constantly innovating and experimenting, and they’d be willing to try something. If it didn’t work, bending it, try this other thing. But always, always being really innovative in how they approach their sales and marketing.
Dave Young:
I think what’s really cool, too, is there are touch points both in the experience that we’ve all had drinking Kool-Aid as a child, and the experience of watching some of this crazy, over the top advertising and marketing as it went on. I remember fighting with my sisters over who got to drink out of the little plastic Kool-Aid cup.
Stephen Semple:
Right.
Dave Young:
We had a couple of them, but there were four kids.
Stephen Semple:
Right.
Dave Young:
Right. We might have had one of the pictures too, because those were other premiums. I think you could send away for them by saving box tops, and things like that. It was brilliant. Then the Kool-Aid man comes crashing through. I remember that ad. I always liked that they had the pitcher, right. The Kool-Aid man was that crazy-ass pitcher of Kool-Aid that comes busting through a wall.
Stephen Semple:
Yes.
Dave Young:
Right, and yet, I don’t know if it was in that ad or previous ones, the face on him is always just a pitcher that’s got a lot of condensation on it and you just draw that face on.
Stephen Semple:
I think what we’ll do is we’re going to do a future podcast just on the Kool-Aid man, because the Kool-Aid man came after Perkins sold the company. There’s a whole bunch of stuff around the Kool-Aid man that’s really interesting. But Dave, you also brought up an interesting point here. On these premiums, yes, what they were, were collect X number, send it in and you get this thing, was often the way it was done. What’s really interesting when you use those types of premiums, what it also creates is this habit use. Right? Like, you got to do 10 pitchers of it and you get it. Well, by the time you’ve done 10 pitchers, it becomes the habit of the thing that you do around the household.
Dave Young:
Absolutely. I look at the experience too. Right? We want our own kids to experience something that we had as a child, and Kool-Aid fits that so well. Even if you offer for the sugar free, you’re going to give your kids something that you enjoyed as a kid. I was sitting in a class last week, and one of the people there was talking about how to create a great brand. He’s like, “Well, if we wanted to copy Coke, right, we take the color, the dun dun dun,” he’s naming a bunch of different things, but he never once mentioned the experience that you go back to. Right? You can probably think of the first time, maybe not the first time you drank Coca-Cola, but you can think of the first time it fizzed up your nose. There’s these experiences that get attached to products like this, that happen when we’re so young. I think that’s probably why General Foods thought, “You know what? This would be a good one to own.”
Stephen Semple:
Well, and think about the recall that you had of talking about fighting over the Kool-Aid cup, because you wanted to drink the Kool-Aid out of the Kool-Aid cup. Just think about, there’s a tactile experience, there’s a desire experience. How involved are you with Kool-Aid at that point?
Dave Young:
We had way bigger cups, right?
Stephen Semple:
It is interesting, your observation on this. People forget that brands that we love and connect with, there is this emotional experience or involvement that we have with it that goes beyond just, “Oh, I’ll copy the logo.” Branding is the experience and the emotion that we have with the company. The brand, which is the visual elements and whatnot, they’re just the anchor. That’s all they are.
Dave Young:
Yeah, absolutely. Yeah.
Stephen Semple:
Right? The brand is the meat to the dog. The branding is the bell.
Dave Young:
Yeah.
That’s what we forget. Just copying, “Oh, it’s red. No, it’s this,” you’re not grounding an emotional experience. You’re just copying something, and you’re not Coke.
Dave Young:
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