Entrepreneurship and Startup and Small Business

Maker of singing coozie has deals with IU, Purdue, Iowa

July 16, 2011

A local startup hopes to score big with a musical drink holder called a Cantune.

Already, officials for Cooler Conversations LLC have signed licensing deals with Indiana and Purdue universities, the University of Iowa and the Indianapolis Motor Speedway.

coozies Cooler Conversations founders Tom Ferguson, left, and Mark Balog are seeking $250,000 in investments to build a manufacturing plant locally. (IBJ Photo/ Perry Reichanadter)

The idea for the Cantune was born during a Florida beach vacation in the spring of 2007, said company co-founder Mark Balog.

“We were pretending our coozies could talk and using them as megaphones … and we came up with this idea,” said Balog, who, along with his brother-in-law, Tom Ferguson, is the driving force behind the company.

The partners and other investors put up $150,000 out of personal savings and, after more than two years of research, launched a prototype in 2009. A patent is pending.

Since then, they’ve talked to dozens of marketers of college and professional sports teams, major events and large corporations. They’ve even taken samples of their products to tailgate parties at IU, Purdue and other college campuses.

The officials in the Indiana University licensing department were sold shortly after seeing the Cantune.

“It’s certainly unique, and we think it will stand out in the marketplace,” said Valerie Gill, IU director of licensing and trademarks.

The duo is already in talks with several other Big Ten schools and professional teams. But Ferguson thinks the corporate market could be even more lucrative than sports.

“The sky is the limit,” Ferguson said. “We think any company with a slogan, catch phrase or message they want to get out will be interested. Think of it—companies like Nationwide, Geico, Aflac, the automakers or whoever.”

The coozies are standard-issue bottle or can cooler sleeves made of soft foam. A chip similar to those found in musical greeting cards is planted at the bottom of the sleeve and triggers the client’s song or message when a drink is placed in the coozie.

The Cantune retails for $9.99 but will be discounted to clients placing large orders. Each licensing deal is different, but schools and professional sports teams usually demand a 10-percent to 15-percent royalty on the sale of such products. IU gets 10 percent of the revenue from the sale of its Cantune.

The product is made in China, but Balog and Ferguson hope to open a manufacturing plant and at least handle the printing and assembly locally.

Balog and Ferguson, who still have day jobs, said the company hasn’t yet made enough to cover its initial investment, but they think that could happen by early next year. They’re the only employees but are considering adding sales representatives.

Dave Moroknek, president of MainGate Inc., a locally based maker and seller of a wide range of novelty items for sports teams and corporations, thinks Cooler Conversations has a novel idea that might be difficult to sustain.

“The competition in the novelty sector is tremendous,” Moroknek said. “It’s really difficult to make a product that stands out.”

He also thinks the product’s retail price point is $4 or $5 too high.

One thing that might stand out in this crowded sector, Moroknek said, is the duo’s concept of imbedding an audio chip capable of recording custom messages.

“I think that concept could really add some marketability to it, and lead it into some new markets,” Moroknek said.

Ferguson, 56, has a long history in commercial real estate sales, working previously for Grubb & Ellis and now at locally based Premier Commercial Real Estate Services. Balog, 49, has a lengthy career in industrial sales, working for Roselle, Ill.-based RBI Bearing.

This isn’t the duo’s first foray in running a small business. They also ran a high-end auto restoration company, an automotive body shop and a small restaurant. Both attended St. Joseph’s College in Rensselaer.•

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