MarketExclusive.com - Seinfeld’s “Soup Nazi” Sells Stock
Whether The Original SoupMan’s (SOUP) brand launch and expansion was a result of the exposure the company got from the wildly popular Seinfeld show, or they were already in the works when the show aired its infamous ‘Soup Nazi’ episode back in 1995, is immaterial today. The company is now clearly leveraging mightily off the nationwide exposure that Seinfeld brought it.
The company itself, of course, is no laughing matter. With a market cap of $17.9 million, The Original SoupMan is still a microcap stock, but as original owner Al Yeganeh might put it, “Campbell Soup (CPB) was also once a small operation, too.”
A Little History
SOUP came into being roughly eight years ago when Yeganeh closed down his original Manhattan based Soup Kitchen International restaurant to begin developing the brand and explore franchise opportunities. In a move that has produced tremendous results to date, SOUP now has more than 500 distinct and co-branded outlets across the U.S. and Canada. In addition to the restaurants, a retail line of ‘heat-n-serve’ soups is also available from a number of national and regionally based food chains, including Safeway, A&P, Associated Food Stores, Fairway, Randall’s and Waldbaum’s to name just a few, as well as online at Amazon.com (AMZN).
Marketing like a Mega-Cap
In 2010, Yeganeh reopened the original restaurant at his original location and renamed it the Original Soup Man, in line with the firm’s existing branding program, then set about getting a stock listing to continue the company’s expansion.
The company came to market in February of 2011 and since then has worked feverishly to get itself branded and marketed properly. And despite original owner Al Yeganeh’s protestations at having been portrayed as the ‘Soup Nazi’ in the Seinfeld show, the company has co-opted one of the show’s more popular actors, Jason Alexander (“George Costanza”) to assist in its marketing effort.
Not satisfied with a unidirectional marketing strategy that relied exclusively on its Seinfeld legacy, company Chairman, Tim Gannon decided to enlist the services of several high profile sports stars to move the product.
Gannon, incidentally, was once voted Inc.Magazine’s Entrepreneur of the Year (1994) for his role in the creation of the Outback Steakhouse (OSI) chain. Gannon’s experience and expertise in that venture earned him the trust of basketball legend Shaquille O’Neal and former Major League Baseball all-star Reggie Jackson, both of whom have signed on to peddle the Original SoupMan brand.
As Chairman and a director of the company, Mr. Gannon’s pay package is worthy of mention. He will be paid exclusively with company shares according to an incentivized plan that sets out specific milestones for the company’s stock. For example, should the stock trade above $2 for more than 30 days, Gannon will receive 100,000 shares. Above $4 for more than 30 days, Gannon receives another 100,000 shares. And so on. For those lacking faith that this is a microcap built with a difference, we recommend you have yourself a gander at the 8K that spells it all out in black and white.
All three of the company’s superstars have an equity interest in the company, with Shaq’s image adorning two of SOUP’s leading products, Shaq-A-Roni ‘n Meatballs and Shaq ‘n Cheese, which SOUP is pushing as low sodium, low fat, healthy alternatives in its 360, integrated school lunch program.
The company has had great success thus far with the program in both schools and on college campuses across the country. In the greater New York area alone, SOUP now services the College of Staten Island, City University of New York and the entire New York City Public School system, with whom it has a contract to serve its Mexicali Beans as a lunch menu item to over one million students. SOUP’s agreement will shortly expand to include other vegetarian products.
Innovative Packaging and a Professional Sales Force
Part of the branding effort was to use Yeganeh’s image on the packaging. The domestic soup industry is a $6 billion annual slugfest and product differentiation is key to competing successfully against global heavyweights like Campbell’s, Heinz (HNZ) and Progresso, a division of General Mills (GIS).
SOUP has also developed a unique packaging system that it calls the Tetra Recart carton. The company claims it’s made of eco-friendly materials and is shelf-stable, maintaining the soup’s flavour ‘til it’s time to eat. It’s also BPA-free, allowing for safe use in the microwave.
Behind the scenes, too, the Original SoupMan has signed a sales contract with Advantage Sales and Marketing (ASM), one of the country’s largest firm’s, with 30,000 sales associates across North America and a client base of corporate powerhouses from across the retail spectrum, including Unilever, Johnson and Johnson, Mars, Inc., J.M. Smucker , amongst others.
The Numbers Add Up
Unlike a lot of microcaps, SOUP is a real company with a real product that gets bought and produces genuine revenues. For the last nine month period, the company sold $1,150,836 worth of soups, up 73% from the comparable nine month period in 2011, when they sold just $665,433 worth of goods.
With their recent expansion, however, they’re now situated in 3000 supermarkets countrywide, and that number is growing quickly.
As long as it continues, Chairman Gannon could be poised to collect on all his bonus compensation.
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