Banking on KC – Bob Ramm of Topsy's Popcorn
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Kelly Scanlon:
Welcome to Banking on KC. I'm your host, Kelly Scanlon. Thank you for joining us. With us on this episode is Bob Ramm, the owner and president of long-time popcorn company, Topsy's International. It's an iconic company headquartered right here in Kansas City and it's the oldest merchant on the Country Club Plaza. Welcome, Bob.
Bob Ramm:
Thank you.
Kelly Scanlon:
So glad to have you here. We just missed National Popcorn Day last week. I understand you gave away lots of free popcorn that day.
Bob Ramm:
We do. A person can come in, get free popcorn, no strings attached. They don't have to buy anything. It's just a thank you for all the great business we've had in the last year. A perfect day to do it, National Popcorn Day.
Kelly Scanlon:
It absolutely is. So you've got lots of lead time to get this on your calendar for next year to go on and visit Bob in one of the Topsy's stores to get the popcorn.
Let's talk about how it got started. I mentioned it's been around for a while, since 1948, I believe.
Bob Ramm:
Actually, the name Topsy's has been since 1948. The company actually started on the Plaza in 1929. The original name of the company was Patsy's. A woman by the name of Patsy operated the store and we're the oldest merchant on the plaza. She operated the store until about 1948, 1950, and then it became Topsy's.
Kelly Scanlon:
Okay. So I assume a new owner came in at that point, or was she still running it?
Bob Ramm:
Yes.
Kelly Scanlon:
A new owner came in.
Bob Ramm:
The new owner came in, A gentleman by the name of Jerry Berger.
Kelly Scanlon:
Okay. How did you get involved?
Bob Ramm:
I started at the company when I was 19, making popcorn for equivalent to about a buck and a half an hour. They paid me 50 cents for each batch of caramel corn I made, and if you were good, you could make three batches an hour. Some hours, maybe four, but you had the set up time and clean up time. So average that about a buck and a half an hour. That was 1970, so things were cheaper then, but it was pretty much at the bottom of the barrel.
Kelly Scanlon:
Now you're the president, CEO, owner. How did you get... Tell us about that evolution.
Bob Ramm:
It's a great made in America story. I mean, literally working my way from the bottom to the top of the company. The gentleman that I work for owned a franchise store in Brookside. His name's Leland Sher, an attorney in town. Great guy. I worked for him. He owned a couple other stores as well.
He came to me and said, "Bob, you ought to buy this store from us." Again, I was 19 at the time trying to go to school. I was going to Penn Valley at the time, and I said, "Leland, one little problem. I don't have any money. I'm working for you guys for a few bucks an hour." In those days, they made me the store manager and eventually I got up to maybe $2, 2.50 an hour or something. Said, "I'm making 2.50 an hour, $2 an hour. I can't afford to buy this store." He said, "We'll finance you. At the end of each Christmas season, you pay us $5,000 and you pay for the inventory and $100 a week until you get the thing paid off."
Two and a half years later, I was able to pay the store off. I think the original store was about $30,000 and it was a franchise store and I was a franchisee of Topsy's International.
I opened the second store when I was 21 at Ward Parkway from. 1967 to 1987, the company was a public held company. When the company became public, they weren't as interested in the franchise stores because they would only get a small piece of the revenue from the store. In those days, I think the franchise fee was 5% or something, and the stores probably, in those days, only did probably $100,000 a year worth of business. So 5% of 100,000 is 5,000 bucks. It's no big money really.
So they started opening company owned stores that were in snack bars in stores similar to like Walmart. They would operate a little snack bar up in front of the store where they sold hot dogs, caramel corn, and they had our popcorn machine and stuff like that. They had a great deal going with these stores because they paid what's called percentage rent. So the more money we did in sales, the more rent we would pay. But if it was kind of a not so good store, we wouldn't pay a lot in rent.
Well, the chains we were in was a chain in California called Zote's. There was a store chain called Jimco. It was kind of like the Sam's Club of the day. You had to have a card to get into the store and stuff like that. These stores made a lot of money because the store operators, for lack of a better term, didn't realize they were giving away a profit center. So even though the stores would do only a couple hundred dollars a day, $300 a day in those days in sales, they were bringing probably 150 to $200 a day in bottom line, because the rent was just percentage rent. Basically, we took the cream or the company did. That was before my time.
The company eventually grew to 500 stores. We had stores in Canada and in Mexico operating in these discount department stores. Very profitable company. It was public held, primarily Kansas City investors. It was sold on the Nasdaq Exchange over-the-counter.
Every once in a while, I'll get a call from somebody today that says, "I found an old stock certificate of Topsy's International from my grandmother," or something like that. "Is it worth anything today?"
Unfortunately, I have to tell them that that company is no longer in business and the stock certificate that they thought they had that was worth something is basically worthless.
Kelly Scanlon:
They eventually went bankrupt, right?
Bob Ramm:
The company did. Here's what happened. The original founder, Jerry Burger, sold his stock to a group of local investors that they had other inspirations for the company. They financed health spa memberships. So if somebody bought a membership at Bally and they paid $1,500 for it, Topsy's or they changed the name to TFC International at the time, would finance it. But they would buy down the mortgage, if you want to call it that. They would give Bally's $1,000 for the note, for lack of a better term, and the people would sign for 1500. So immediately, Topsy's made a 33% return on their money at that point.
But unfortunately, the chains, the fitness centers that they did business with went out of business. So when they went out of business, the people didn't have to pay on their note anymore. If they didn't have to pay on their note, that's what bankrupt the company.
In the interim, they sold the popcorn division off to a couple guys that worked for the company. They took over the popcorn division and they took on a big note. They basically split the company up. So their 500 stores went to zero, which left them with basically the 12 Kansas City franchise area stores. That was the division that I ended up taking control. At the time, I think I had maybe three or four stores at the time. Again, operating as a franchisee, I was kind of the likely person to take over because I had the bulk of the franchise stores.
Kelly Scanlon:
So what's the extent of the company today? Are all the stores located in Kansas City or do you have a customer base outside of Kansas City?
Bob Ramm:
We do have a customer base that buys popcorn from us. I mean, we've built a very unique business in that somebody from Kansas City, let's say, would send a can of popcorn to somebody in California. We capture that person's name because we send them the popcorn obviously.
So next year, then we send that person a catalog and they say, "Oh, that was that good popcorn company from Kansas City. They make good popcorn." They'll say, "Well, we have somebody in Oregon that we'd like to send a can of popcorn to." So the person in Kansas City is still sending the people in California, but the people in California are sending a can to Oregon, and then that person in Oregon is sending one to somebody in Alabama or somewhere like that.
So over the years, I have 20,000 customers that are from all parts of the United States that you can trace them back sometimes back to the original Kansas City. But we do a real good mail order business. This year I think we sent over 50,000 cans, people outside of Kansas City.
Kelly Scanlon:
So your sales have grown every year. What do you think accounts for that? There's a lot more competition now for specialty food items. What do you think is attributable to your year-over-year growth?
Bob Ramm:
I think we make a good product. I attempt to make the best product I can make. I'm still using the original recipes that the company started with in 1929. They're really very simple recipes.
They may cost a little bit more to manufacture. In food, there's a lot of tricks you can play to people kind of at times eat with their eyes. If it looks good, it tastes good, but we don't use any taste enhancers and stuff like that. I mean, many of the products have just three or four basic ingredients. Like the caramel corn, there's four basic ingredients in the product. So again, if you make a quality product, I think the people will come.
Over the years, of course, we've had to raise the price to keep the quality, but it's always been my position to keep the product standard high.
Kelly Scanlon:
What's your most popular flavor?
Bob Ramm:
I think caramel corn is because we offer that in every one of our can combinations or something.
One of the things that's unique to our company is our cinnamon popcorn. There's a lot of popcorn companies across the United States. Very few of them make cinnamon popcorn or a very good cinnamon popcorn, and part of that's the manufacturing process. I've invented over the years machines that make the product. When I started at the company, I started, like I said, at about a buck and a half an hour making caramel corn by hand. I figured out a couple years later that not everybody can make popcorn by hand, and after a while you get pretty tired of making it.
So we invented machines to manufacture the corn to make as good a quality corn as we can make, better than actually making it by hand. By keeping the standards up, I think that's led to our success. So you sell a good product at a fair price, you'll have people knocking down the door.
Kelly Scanlon:
Yeah, that cinnamon popcorn is something else. My favorite flavor is a combo. It's to take a piece of the cheese and a piece of the cinnamon together. I love that combination.
Bob Ramm:
The reason that works is-
Kelly Scanlon:
Why?
Bob Ramm:
It's the taste buds in your mouth, for lack of a better term, the conflict between the sweet and the sour or spicy, for lack of a better term. That's what gets that going good together. That's why we sell fresh limeades too. That's why limeades are so good. You take a lime which is more bitter or stronger than lemon and mix it with a sweet sugary base, and the two conflicting flavors like caramel and cheese or cheese and cinnamon like that, conflicting flavors really set off your taste buds of something.
Kelly Scanlon:
Oh, it's addictive though. I mean all of a sudden you realize, oh my gosh, I've eaten half this tin of popcorn without thinking as you're watching television or something.
You're a seasonal business, and I've read that you do about 200% of your sales between Halloween and New Year's, all the way through December. How many pounds of popcorn do you make during that period?
Bob Ramm:
Clarify that a little bit. We make 200% of our profit.
Kelly Scanlon:
Okay. 200% of profit.
Bob Ramm:
Percent of our profit, which means if you're pretty good at math, means the company loses money every month of the year thereafter that period of time.
At first, I really hated that. I said, "Boy, this is bad." I mean, not good. Later, I learned anybody can sell popcorn in November and December and make money. The question is, can you sell enough popcorn in November and December that you're still in business by the next October?
We will make a million pounds of popcorn between October and Christmas, December 25th. Converts to about 100,000 cans, but we sell a lot of bags of popcorn as well.
We have a plant that we have to subsidize our stores with. The plant works from 7:00 in the morning to 10 o'clock at night, six days a week, and occasionally we run on a Sunday on a volunteer basis. Some of the staff likes the overtime money or something. So we make a lot of popcorn during that period.
Kelly Scanlon:
Yeah, so it's all manufactured right here in Kansas City?
Bob Ramm:
Yes.
Kelly Scanlon:
Okay. Tell us about your tins. You mentioned your tins. They're almost as iconic as the popcorn. If I remember right, Topsy's invented the process of painting on tins. I know there are others out there that do it now, but you were the first, right?
Bob Ramm:
The company was. Again, it was before my time. It was probably in '68, '69. I started in '70. One of our competitors, they would actually hand paint on the cans. The cans themselves are why they're such a weird... The large can is six and a half gallons. Why did anybody come up with six and a half gallons? Because originally that can would hold 50 pounds of popcorn oil. In those days, it was lard basically. The restaurants used lard to fry their french fries with and stuff like that. Now it's a finer grade of oil than lard. So that's where the size.
So what we would do is in the competition, again, they started it painting. They would have people paint like a Santa Claus or a winter scene on the outside of the can. We tried to do that and we did not do a very good job at it, to be honest with you. So we figured out how to print on metal. The original company that printed the cans was a company out of Bryan, Ohio. The name of the company was Ohio Art. Their claim to fame was they made the Etch A Sketch toy. In those days, the Etch A Sketch toy was made out of metal. Again, we're going back to the sixties.
We told them what we wanted to do and they figured out how to print on metal. So that developed the initial printed can design.
Kelly Scanlon:
You started at Topsy's when you're 19, so it sounds like you've spent your whole career there, but you've had your fingers in other ventures as well. So tell us about some of those and some of the biggest lessons that you've learned.
Bob Ramm:
Well, I have done a lot of other businesses. I enjoy business. Some people have that knack and some don't.
I've owned businesses that sold cinnamon rolls. We had a cinnamon roll company. I had a couple partners that I was the operating partner, for lack of a better term. Owned a company that rebuilt locomotive engines, trains, believe it or not. That was an interesting story, made money on that business.
Actually, what I needed was a popcorn machine that I could build into the counter in one of my stores in Springfield, Missouri. I had this guy that was a great mechanic, worked at a locomotive repair company, and he could build anything out of metal.
His name's Dave Winn. I said, "Dave, I need a machine that will lift itself out of the counter automatically and dump itself over." I went to engineering firms and they wanted like $35,000 to do the prints. Again, we're talking about that time, it was probably in the eighties. They were going to do prints for $35,000 and couldn't guarantee me that the machine would even work. Dave was able to make the machine on a couple weekends and it worked, and then we made a finer machine out of stainless steel. He made it out of metal just to see if the concept would work or something. Prototype is a better word for it.
So Dave and I became good friends, and eventually I backed him in a company. He started his own company with rebuilding locomotives, and that company's still in business today. Dave and I were in business for many years together. Obviously, I was the financial partner and he was the on-hands guy.
In fact, Country Club Bank helped me with the loan with that, and coming from popcorn to rebuilding locomotives...
Kelly Scanlon:
It's a stretch.
Bob Ramm:
Well, it was a stretch. Country Club Bank was very understanding and helpful in that situation for me.
Kelly Scanlon:
What are some of the lessons that you have learned throughout these different ventures that you've been involved with that maybe some of our entrepreneurial listeners can get some insights about?
Bob Ramm:
Business can be tough. Every business I've been involved with, from vending machines to locomotives, to cinnamon roll shops, I even own a hair salon with my daughter. Oftentimes, they start off slow. The secret in business is to don't make the same mistake over and over and over again.
With Topsy's, for a while, I had a theft problem in our stores and I developed a program... Or actually a girl in our office figured out a program that if somebody steals $20 from one of our stores, I can tell you whether that $20 was two tens, four or fives or a $20 bill, or I guess a combination of ones.
Every business has its own challenges, and the secret is to figure out how to be better in that business. Somewhat treat your customers as you would want to be treated. I mean, business can be tough. You just have to work your way through it and ask the right questions.
Kelly Scanlon:
So it's okay to make mistakes, but don't let that defeat you. But you got to learn from them and not repeat them.
Bob Ramm:
You'll make mistakes every day. We still make mistakes every day in the popcorn business, and I've done it for 53 years. We're making a mistake as I speak right now, I bet you we're making a mistake. Just don't make the same mistake over and over again. It will kill you. You have to learn from your mistakes.
Kelly Scanlon:
What are some of the things that you think... You mentioned other competition out there. What are some of the things that make Topsy's the one that people turn to though for those kinds of celebrations and comfort?
Bob Ramm:
Well, the unique thing to the company, and this has always been the $64,000 question that I have not been able to solve, and somebody maybe smarter than I will will.
We sell a lot of cans of popcorn at Christmas. During the year, we sell a lot of popcorn. We're at both the Chiefs and the Royal Stadium that we're subcontractors for Aramark and the Kansas City Chiefs and the Kansas City Royals. We sell a lot of popcorn. Don't get the wrong idea, but we don't sell a lot of cans of popcorn.
I relate it to turkeys. How often do you have the whole bird turkey? Thanksgiving or Christmas or both? But during the year, you probably don't cook many turkeys, but you have a lot of turkey sandwiches. So that's the $64,000 question. I think that also is what made the business continue year after year after year.
Think of all the chains that you don't see anymore, but because we're real hot, real busy during the holiday season, I don't think you burn out on it. Again, remember I mentioned that I was in the cinnamon roll business. The cinnamon roll business was kind of a flash in the pan. People ate cinnamon rolls until they were sick to their stomach over cinnamon rolls or something. The popcorn can business again is a holiday, primarily holiday business. We sell popcorn cans during the year, birthdays, graduations, parties get well and stuff like that. Lot of hospital gifts, things like that. But the bulk of the business is November and December.
So I think that's really what's made the business last as long as it has because it's a seasonal thing. It's tradition at Christmas and comes around once a year. We kick butt during those times and the rest of the year we do all right. So that's been the unique thing of the business. It's hard to plan for that. Like I said, I have to make a million pounds of popcorn between Halloween and Christmas.
Kelly Scanlon:
A lot of popcorn. Where does Topsy's go from here?
Bob Ramm:
Where does it go from here? I think we expand past Kansas City. In business, you have to change with the times. We used to be primarily in shopping malls like Metcalf South. Where is Metcalf South today.
Kelly Scanlon:
Right. Ward Parkway, yeah.
Bob Ramm:
Ward Parkway. Although Ward Parkway still is a center, a viable center. It's not really a mall. One of our best stores is at Metro North. Where's Metro North today? It's gone.
The mall business is a different business. We still have a store at Independence. We have a store at Oak Park, and we have outdoor centers like the Plaza that do well. We moved at Metcalf across the street, and that store does real well, actually better than it did in the mall. So we're looking at expanding past the Kansas City area. We're starting a wholesale business and offering our products year round.
We do sell a tub of popcorn, about a one gallon tub in the grocery stores in Kansas City and some of the outlying markets that do very well with them and sell about 100,000 cans or tubs in those markets as well. These stores are dying for us to come up with a product they can sell year round.
So we invested a lot of money in a bagging machine to make a nice product, and so we're going to be offering Topsy's popcorn in many of the grocery store chains throughout the year. I don't think it will impact our store business very much, but again, the exposure. So that would give us... For instance, Hy-Vee has 265 stores. They would like us in all 265.
Kelly Scanlon:
Up in Iowa and-
Bob Ramm:
In Iowa, and even as far away as South Dakota. So to answer your question, where does Topsy's go from here? I think that's the logical next step. We got a great brand. I think we have a great product and a good following, and I think a gradual expansion from Kansas City makes some sense. So that's the direction I hope to move the company.
Kelly Scanlon:
Well, Bob, it's been wonderful having you as a guest today to learn about the history all the way up to potential expansion and your involvement in so much of that. Really appreciate you sharing your story today.
Bob Ramm:
Thank you very much.
Collin Thompson:
This is Collin Thompson, Vice President of Corporate Banking at Country Club Bank. Thank you to Bob Ramm for being our guest on this episode of Banking on KC. Bob embodies the American dream, or as he refers to it, a true made in America success story. At the age of 19, he started at Topsy's creating caramel popcorn by hand, making a modest 50 cents a batch, before working his way up to become the owner of the company.
Bob's story echoes the journey of my grandfather and former Country Club Bank Chairman Byron Thompson. As a young man, Byron left St. Joseph Missouri for Kansas City, where his entrepreneurial spirit and hard work eventually led him to the helm of Country Club Bank. Those entrepreneurial roots still guide Country Club Bank. We understand entrepreneurs and want to help create more made in America success stories like Bob's and Byron's.
Give us a call if we can help you grow your business and realize your dream. In the meantime, keep dreaming and achieving. Thanks for tuning in this week. We're banking on you, Kansas City. Country Club Bank, member FDIC.