Entrepreneurship and Retail and Wholesalers and Small Business

'Peanut King' diversifies to keep 52-year-old company thriving

April 20, 2009

He's called The Peanut King, but these days Richard Green, president of the Indianapolis-based Richard Green Co., offers a lot more than just goobers.

His company, founded in 1957, is a mini-conglomerate of sorts, selling pretty much anything necessary for work in the food-concessions business. From a nondescript cluster of buildings on South Meridian Street, the eight-employee company sells wares ranging from popcorn poppers and snow cone machines to popcorn oil and snow cone syrup.

The Richard Green Co. also roasts about 20 kinds of nuts, in 300-pound batches, for clients all over the state. Customers include everyone from churches, which use them for fund raising, to Fort Wayne's DeBrand Fine Chocolates, to the Indianapolis Motor Speedway, which offers the company's snack mixes for use in its 140 suites and corporate hospitality tents.

"They've got real high quality and accurate and timely deliveries," said Randy Clark, food and beverage director at the IMS. "It's very important to us that we get a very high-quality product for our guests. And their pricing is reasonable."

Industry experts say the scale of the firm's diversification is practically unheard of in the concessions industry. Green and his son, 43-year-old company Vice President Rick Green, say it's the key to their longevity.

That, plus long hours and paying close attention to the winds of economic change.

"We've got about 10 businesses in one here," the elder Green said. "When we started, all we had was peanut vending machines. If we'd just stuck to that, we wouldn't be in business."

Green, 75, earned his fortune (and his Peanut King moniker) more than half a century ago, when, at the age of 15, he hitchhiked to Indianapolis from his Tennessee home with only $4 in his pocket.

After a tour in the Army during the Korean War, he returned to Indianapolis and worked at a 7-Up bottling plant. He spent $15 to purchase his first vending machine—a small glass globe that dispensed a handful of shelled peanuts for a penny.

The cash it generated seemed so promising that, at 22, Green decided to develop his own peanut vending machine business. He naively approached the old American Fletcher National Bank for seed money, where none other than Harry L. Binder (who would one day become president of the bank, but at the time was a lowly loan officer) told him in no uncertain terms to keep his day job.

"I thought I could go in there and get $20,000 just because I had a good idea," Green recalled. "It didn't work."

Instead, he and his wife, Millie, persevered on their own dime. Within three years, they operated some 9,000 machines in a territory covering seven states. They started roasting their own nuts to keep up with demand.

Green decided to charge a nickel for each handful of peanuts instead of the industry-standard penny. People weren't put off by the 500-percent markup. Quite the opposite, in fact.

"Anywhere I put a nickel machine, it would outsell a penny 10-to-one," he recalled. "And it had exactly the same product in it. I went to all-nickel machines, and that's really why we were such a success."

Green figures the markup worked because, then as now, people usually carried far more nickels in their pockets than pennies. Thus, a nickel unit was actually more accessible and user-friendly.

Beyond peanuts

Richard Green Co. has since traveled far from its nut-intensive roots. The vending business was abandoned long ago. It was a timely move, since the unhygienic-seeming "handful of peanuts" machines aren't exactly a common sight anymore.

Today, Green and his son produce proprietary brands of popcorn popping oil, snow cone syrups, cotton candy sugar, and popcorn salt. They also manufacture a line of company-designed portable sinks used by clients ranging from the service industry to emergency organizations (a hospital in New Orleans ordered 100 after Hurricane Katrina). The company also sells and services various brands of concession equipment and markets used restaurant gear.

Green reckons about 60 percent of the company's business comes from its surprisingly elaborate and extensive Web site.

The company also has become a de-facto consulting firm for people interested in entering the food concessions business. That, national experts say, is a pretty large group. Especially now.

"I don't want to say this industry is recession-proof, but the facts show that we're well-positioned to do well during times like this," said Dave Schlabach, executive director of the National Independent Concessionaires Association in Tampa, Fla.

"There are more people out there looking to enter this field. They're either out of work or interested in taking the initiative into their own hands. This is one industry that can be a good one in hard times."

Rick Green reports that these days he talks to at least one person a week who wants to find out how to get started. He always makes time, mostly out of a sense of enlightened self-interest. If newcomers are successful, they could become longtime customers. It's happened before.

"It's a little aggravating, but we still do it because you never know," he said. "It's proved over time to work. But it doesn't work for all of them."

It's worked for Richard Green Co. customer Danny Soots, who last September availed himself of Green-supplied restaurant gear and advice to open Divine Barbeque at 3017 Kentucky Ave. He's in the process of increasing the size of his operation to market his pulled pork sandwiches to convenience stores.

"That was Richard Green's idea," said Soots, 51. "I figured we might as well take it and run with it. He's helped us out quite a bit."

Not that everybody takes the Peanut King's advice. Back in the day, he helped more than a few newcomers enter the peanut vending business. His tips were pretty straightforward—keep the machines squeaky clean and throw away any old, leftover nuts when you refilled them. People who didn't want to bother with cleanliness or balked at throwing away musty peanuts generally didn't last.

Profitable snack

According to the Greens, when it comes to profitability it's hard to beat popcorn, snow cones and cotton candy. All of those items sell for a couple of dollars per serving, yet require only about a nickel's worth of ingredients to make. That's the sort of information they pass on to potential customers.

"In 30 minutes, we can give a guy more pointers on how to make money than he can learn on his own in two or three years," Rick Green said. "And that's what we do. We want them to make money. We don't want to sell them something just to get it out of our place. We sell them the right mix for what they want to do. That's why we've been successful."

Problem is, while some are willing to accept the Greens' free advice, they're less interested in buying their wares. Rick says he's developed a way to spot such folks. They're the ones busily scribbling in notebooks.

"I'll spend an hour or two with them, explaining and showing them equipment, and telling what works and what doesn't, and I never see them again," he said. "I think they just come in and get the information and then go online and buy things."

The Greens, to put it diplomatically, don't appeal to the penny-pinching crowd. The company's products, be it a bottle of snow cone syrup or an industrial corn popper, are more expensive than items available at, say, Sam's Club or Costco. But according to the Greens, it all comes out in the wash.

"You've got 5 cents in a snow cone that sells for a dollar and a half to $3," Richard Green said. "If I gave you the product, you wouldn't save much. So it doesn't make sense to go somewhere else to save a tenth of a penny on a snow cone and get something that doesn't taste good. You've got to have a product that tastes good when you're in that type of business."

The Greens plan to stay in the business for the foreseeable future. A future that these days looks fairly bright.

"Here's the main reason why concessions and restaurants and stuff like that is always good," Rick said. "I don't care if you can't pay your mortgage or put gas in your car. If you want a bag of popcorn, you're going to buy it. If you want a snow cone, you're going to buy it. I don't care if you don't have any money. You'll find a dollar or two somewhere, because it makes you feel good."

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