Identifying Market Niche Gives Small Business Entree.

DOES the world need a new, upscale breath mint?

Probably not.

But two Los Angeles entrepreneurs are capitalizing on the popularity of strong, trendy mints, with their "Hint Mint," sold in a sleek, curved tin resembling an elegant cigarette case.

So far, Harley Cross and Cooper Bates, actors turned small-business owners, have sold more than a million Hint Mint tins. They are competing head-on with the aggressively marketed "Altoids" brand for a bite of $288 million annual breath mint market.

"We don't just sell candy," said Cross. "We want people to see this product as an accessory, like a cool cell phone."

In fact, Hint Mint cases are becoming a collector's item. To encourage tin-collecting, the partners commissioned original art for the covers of two new tins.

People also use the sliding-top case for other things. Based on customer demand, the company is extending the length of the case a fraction of an inch so folks can use it to carry credit cards and a driver's license. The case is also curved slightly to fit nicely in the back pocket of tight jeans.

Cross and Bates are capitalizing on America's passion for new, strong tastes and products with aesthetic appeal, according to Virginia Postrel, a journalist who is writing a book called "Look and Feel," about aesthetics and consumer trends.

"People are interested in new, strong tastes that are stimulating and interesting," said Postrel. So, they are willing to pay $3 for a cool tin of breath mints, especially if they like the look and feel of the case.

"People feel bad about throwing away an Altoids tin, but how many paper clip holders do you need?" asked Postrel. "The Hint Mint tins are treated more like art objects."

The Hint Mint team is also taking advantage of the fact that the specialty food business is one of the easiest for entrepreneurs to break into, according to Robert G. Cooper, author of "Winning at New products,"

Marketing strategy

"Cooper said most small companies fail to launch new products because they don't do enough market research.

"You can do a focus group in your church, your coffee club or local school," said Cooper. He also suggests calling the marketing department of a nearby college and bringing in a group of students to do your research for credit. (A group of his students recently helped Guinness test whether or not North Americans would drink Guinness stout cold, rather than at room temperature. The cold ale wasn't well received among American beer drinkers, although it did catch on in Europe, he said.)

"You should visit stores," he advised. "Talk to the staff in a store, and you'll learn a heck of a lot. Then, visit the reference library because 75 percent of what you want to know is in the public domain."

He said Hint Mint founders Bates and Cross were fortunate in developing a successful product in an industry they knew absolutely nothing about.

"Domain knowledge is so critical," said Cooper. "People who launch products close to home have three times the success rate of those who don't know the industry."

Their lack of information actually forced them to do their homework before spending any of his money, Cross said.

"Cooper and I had no business experience," said Cross, who met Bates on a movie set years ago. "We thought we'd outsource it all but soon realized we'd have to do it ourselves if it was going to be done right."

Cross said he came up with the Hint Mint name in 1997, but found out he couldn't trademark the name without creating a real product to go with it. So, in 1999, he invested $70,000 in savings to develop and launch the sugarbased, gelatin-free mint. He and Bates contracted with a U.S. mint maker to perfect the smooth, round mints stamped with a mint leaf.

Then, they ordered 50,000 slide-top cases from a Chinese manufacturer. Their handpacked tins of 35 mints sell for $2.50 to $2.99 in upscale stores like Bristol Farms, Trader Joe's and Gelson's. Since launching the mints in early 2000, they've sold about $1.3 million worth of spearmint- and cinnamon-flavored mints.

The pair attributes their success to a relentless search for information. They made hundreds of cold calls, once reaching a manager who worked for the company that makes Altoids. They were surprised that he not only answered all of their questions about the mint business, but actually provided a list of candy distributors.

The candy industry, although dominated by big players, has plenty of room for smaller companies with novel ideas. In 1998, Americans consumed 7.3 billion pounds of candy with an estimated retail value of $23.5 billion, according to the Confectioners Association of America.

"It's a growing market as more and more people stop smoking and use mints to replace cigarettes or cover up their coffee breath," said Cross, whose mother baked the first batch of mints in her kitchen.

Upscale tastes

He said they are focusing sales efforts on the high end of the market, selling private label and branded mints in bookstores, bed and bath stores, and boutiques.

"Once you get into the low end of the market, you can't get back into the high end," he said. "We don't have any money to spend on advertising. But, there are lots of potential customers. We appeal to high school kids, young urban professionals and soccer moms who want something new."

This summer, they are busy developing a special red and green holiday two-pack and plan to release black licorice-flavored mints in time for Halloween.

Today, the company has 40 employees hand-packing and shrink-wrapping mints in a 4,000 square foot facility in downtown Los Angeles. The partners are projecting sales of $3 million this year.

"We were just a couple of guys on the phone," said Cross, who serves as president. "We called people and never, ever took no for an answer."

"When someone named Jim said 'no' four or five times, we'd just call back and ask for Bob instead of Jim," said Bates, the vice president of sales. The company is online at hintmint.com.

Keeping in Touch

Although 69 percent of the 300 small business owners polled recently by American Express said they planned to take a vacation this summer, they weren't going to be out of touch. Forty-one percent planned to take a cell phone, 19 percent planned to pack a laptop, 10 percent were going to bring a pager and 9 percent were bringing along a personal digital assistant.

Still, 14 percent vowed to be "gadget-free" while they were away from the office.

Jane Applegate is the author of "201 Great Ideas for Your Small Business," and is CEO of SBTV.com, a multimedia site providing smallbusiness resources.