A new chip on the block: the Alaska Chip Co. celebrates its one-year anniversary with a new chip flavor.

A successful small business is built with hard work, a sound business plan and a little good fortune. That premise is well known by Ralph and Darcy Carney, owners of the Alaska Chip Co., who are celebrating their one-year anniversary by introducing a new chip flavor-sour cream and chives.

Long before opening the doors of their uniquely Alaska operation in 2003, they had invested countless hours learning why previous local potato chip ventures hadn't made the grade. That included a lot of experimenting using potatoes from Ben Vanderweele's farm in Palmer, developing a product with a unique appeal, researching manufacturing processes, and putting together a business plan with a local market focus.

Where does the good fortune come in? That happened in July 2003 when the first batch of Alaska Thunder Chips hit store shelves in Anchorage. These all natural, kettle-cooked chips made from Matanuska Valley potatoes created an immediate positive reaction from local consumers. Now, a year later, increased demand has made it possible for the Alaska Chip Co. to increase production, expand distribution and look at new flavors.

Today, Alaska Chip company products are found in a broad variety of outlets, including Carrs, Fred Meyer, Natural Pantry, New Sagaya, Brown Jug, Blockbuster Video and the Snowgoose Restaurant, as well as in locations at Ted Stevens Anchorage International Airport, downtown gift shops, the Alaska Railroad and other premium locations.

The popularity of these locally made chips also has created markets outside Anchorage. Consumers are snapping them up in Fairbanks, Kenai, the Mat-Su Valley, Dutch Harbor and Valdez.

These tasty chips have even found their way to Washington D.C. as a featured item at the annual Ted Stevens Alaska Barbecue. "Senator Stevens is a tireless promoter of all things Alaskan," Ralph said. "We've heard that the barbecue flavor is a big hit around the office."

The Carneys have always been quick to state that they haven't made all this headway by themselves. "We have been fortunate to have good design help for our packages, excellent reception from local retailers, and consumers who support Alaska companies," said Ralph.

Taking this good fortune to the next level is one of Alaska Chip Co.'s main priorities in 2004. "That's why we teamed up with Jan's Distributing Inc.," Darcy said. "They're helping us approach Sam's Club and Wal Mart, and working with us on some pretty exciting new market segments in Alaska, like convenience store chains and independent retailers."

Currently, the Carneys are looking at a number of opportunities for their chips, including gourmet caterers, dells and lodges, and vending machines. They even expect to provide product to a sub shop in Seattle and are looking for a distributor in the Northwestern U.S. area.

"Lots of companies are interested in our product," Ralph continued, "but we're being realistic about growth. Each new bag represents a significant financial investment up front."

"We try to grow at a pace that doesn't bum us out," Darcy added. "Sometimes success can be an enemy. It call ruin you before you get on solid ground. We try to manage growth in a positive way."

"If you try to run too fast down a steep hill and you get going ton fast, you can fall on your face and go rolling

down the hill," added Ralph. "It's important to make sure your legs keep up with what your body is trying to do or you'll find your face in the mud."

The growth of Alaska Chip Co. products may be on a fast track, but the Carneys are keeping very good balance. "We fry as many potatoes as we can sell," Ralph said, "and right now that's about 6,000 bags a month, but we have good capacity for growth."

Why has this food-manufacturing venture shown success in the last year? Ralph and Darcy believe it's the fact that these chips are made locally. "I think it's great that Alaska people have a product that's grown and manufactured right here at home," Ralph said. "That's why we use Alaskan grown potatoes. Not only are we supporting our local economy, but we think the Alaska mystique will help sell the product in markets outside the state."

Currently, Alaska Chip Co. produces three flavors of chips in 5-ounce bags: Matanuska Thunder Chips, a lightly salted kettle chip, Denali Grizzly Chips, a barbecue flavored kettle chip, and Chilkoot Chips, a sour cream and chives-flavored chip. Sea salt and vinegar, and jalapeno are in the planning stages.

In a key move toward product diversity, the company has entered the institutional market with a line of 1-ounce packages that are expected to prove popular in the snack and vending machine segments.

"Making a good product and promoting its Alaskan-made benefits has become a very strong business advantage for us," Ralph said. "We aren't the only ones showing that Alaskan-made products can compete with the national brands. Just look at Matanuska Maid. They've been around more than 65 years. They're a household word. Ten years from now, I want Alaska Chip Co. to still be around. I want people in the state of Alaska to think of us as the chip of choice."