Marketer thirsts for fruits of victory

January 28, 1995|By Kim Clark | Kim Clark,Sun Staff Writer

Mixed in with the 73,000 beer-swilling, chip-snacking football fans packed into Joe Robbie Stadium tomorrow, Robert Groth figures there will be about 2,000 enlightened sippers who will soothe their cheer-rasped throats with fruit shakes.

And since his company, Baltimore-based Flying Fruit Fantasy, gets 60 cents for every fruit shake sold, Mr. Groth figures he'll be a big winner no matter what the football score.

With the placement of three of his fruit shake machines at the Miami stadium just in time for the Super Bowl, Mr. Groth says his shakes are now being sold at 150 locations around the country -- up from less than 50 a year ago.

And it's all part of his game plan to sell his icy fruit shakes in thousands of cafeterias and snack bars across the country.

In fact, last April, Mr. Groth licensed worldwide rights to his shake -- a boxed mix of bananas, strawberries, pineapples and oranges, along with a smidgen of stabilizers, colorings and flavorings -- to Atlantic Beverage Co.

Baltimore-based Atlantic helped fund his expansion drive, and said that if he built a network of several thousand outlets in the next few years, Atlantic would buy the company outright.

"Everybody asks me: 'Bob, how can you give up the baby?' But I am learning and growing," said Mr. Groth, now that he is a director and stockholder of Atlantic Beverage.

Mr. Groth's learning curve has taken some unusual twists. In the late 1970s, he and his wife drove around to county fairs with blenders, ice and fruit to sell their fruit shakes.

Flying Fruit's first store -- a stall at Harborplace -- opened in 1980. The company quickly started building and franchising other stores.

But after being burned by a few costly failures, such as a six-figure loss on a stall at the now-defunct Leedmark store in Glen Burnie, Mr. Groth decided to switch to small self-service machines.

As the self-service sales started to take off, he made a five-year deal with Atlantic for the funding needed to build the company.

So far, Flying Fruit Fantasy has contributed only about 5 percent of the $20 million in revenues Atlantic has reported for the first three quarters in 1994.

And although Atlantic has reported a nine-month profit of $384,404, Flying Fruit Fantasy has been a money loser. But Atlantic Chairman Eric Becker has great hopes for the fruit shakes.

"There is nothing else out in the market like it. It isn't just sugar water, like a slushy," but has real fruit and vitamins, he said.

Atlantic's main business, delivering fruit juices, has become tough recently because of the increasing competition among juice companies.

"That's why we're looking at the niche areas," Mr. Becker said.

Right now, the fruit shake division "is small. But it has the potential of being as big" as the rest of Atlantic Beverage, he said.

Although company insiders are sweet on the fruit shake, outside investors seem to be taking a sour view. Atlantic's stock is trading at about half of its initial public offering price of $6.50. Atlantic Beverage's stock was being traded at $3.25 bid, and $3.625 asked in the Nasdaq market yesterday.

David Fondrie, whose Heartland Value Fund bought more than 150,000 shares of Atlantic Beverage's stock based on hopes for the fruit juices and shakes, sold most of the shares late last year for a loss.

"Their earnings were not in line with what we had expected," said the Milwaukee-based money manager.

But he isn't bitter about his loss. "The company has some nice products, like the Flying Fruit Fantasy" shakes, he said. "We'd look back [at investing again in the company] if something changed."

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