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Purveyors of homemade chili on hot streak

CHARLESTON, W.Va. -- Angie and Dee Cowger have grown their homemade chili sauce business from a single location 21 years ago in Webster Springs to five restaurants and space on the shelves of 133 Kroger supermarkets, 264 Walmarts and 14 Sam's Clubs.

Now they're looking for entrepreneurs to franchise more Custard Stand restaurants. They're also winning shelf space in stores as far away as New York. And they have added a new product, chili soup with beef and beans.

The Custard Stand in Webster Springs, opened in 1991, was the Cowgers' only restaurant until they added a Custard Stand next to a Subway sandwich and salad shop in Flatwoods in 2009. Three franchised locations have since been added:

n An Oak Hill restaurant owned by Eddie & Stella Blake, operating as Brewer Enterprises;

n A Danville restaurant owned by Little General Stores, which is inside a Little General convenience store; and

n An Elkins restaurant owned by Jamie and Rochelle Carpenter, operating as RBC Enterprises.

"We get an email or Facebook request every month asking when we'll bring a restaurant to South Charleston," Angie Cowger said. "We simply can't do any more ourselves. We need a franchise person."

The Elkins restaurant opened in June. It is a stand-alone location with shiny red-and-white booths, stainless steel accents, a large patio deck and a drive through. It's the closest yet to the ideal Custard Stand look, Cowger said.

The Custard Stand is a family business so it's not surprising when Cowger explains the Elkins restaurant: "My brother put that franchise in, next to his dental office."

Cowger hopes to open another restaurant this year and four next year. She would like to strike deals that put Custard Stand under a roof with a national brand. She also would like to put more deals together with Little General and others, like Subway.

Meanwhile, the chili is being offered in more stores. Because it is distributed by Kroger's Mid-Atlantic Region warehouse in Roanoke, Va., Custard Stand Chili is sold in some Kroger stores in Tennessee and Virginia, as well as in most of Kroger's more than three-dozen stores in West Virginia.

The chili also is sold by Huntington-based Forth Food's 14 FoodFair grocery stores in West Virginia, Ohio and Kentucky and by Ohio-based Discount Drug Mart's 71 drugstores. This fall, the chili will be sold by Kings, which has 24 grocery stores in New Jersey and New York, and Balducci's, which has six supermarkets in New York, Connecticut, Maryland and Virginia.

The company takes orders on its website, www.custard

stand.com, but shipping west of the Mississippi River is expensive. Cowger would love for someone to figure out a better shipping system. Example: "Right now, we need dry ice and don't have it," she said.

Chili production has increased from about 400,000 pounds a year to about 800,000 pounds a year. Custard Stand is family owned and does not publicly report financial results, but Cowger said sales were up 28 percent from 2010 to 2011 and are up about 11 percent so far in 2012 compared to a year ago.

Custard Stand launched a chili soup last year, but the packaging was similar to the chili sauce containers and some consumers were confused. "You learn as you go," Cowger said.

The soup container has been redesigned and the soup has been relaunched.

"The flavor profile is different," she said of the soup. "Our hot-dog chili is mild and kind of sweet. The soup has a little heat to it with kidney beans, diced tomatoes and green chilies."

Cowger hopes the soup will provide the company with a more year-round business. "From May 1 to the end of September is our current season," when people are grilling hot dogs and spending lots of time outdoors, she explained.

"We want more stable employment for our employees and more stability for our manufacturing," she said. The company has 15 full- and part-time employees at Webster Springs and 15 at Flatwoods. Employment peaks at about 40 in the summer and drops to about 28 in the winter. The franchised restaurants at Danville, Oak Hill and Elkins each have 10 to 25 employees.

A more year-round business "would let us have better pricing," she added. "Consumers won't see a price reduction but will see price stability."

On the subject of pricing, Cowger said a small price increase is in the works "because the ground beef price isn't going to go down."

Custard Stand Hot Dog Chili is 100 percent ground beef which, combined with eight other ingredients and a slow-cook process, gives the chili its flavor.

Cowger doesn't miss many marketing opportunities. At Flatwoods, Custard Stand's logo and a picture of a hot dog are on the Days Hotel business cards. "You get one free hot dog a day by showing your Days Hotel room key at our restaurant," she said.

If you can't find the chili in your favorite grocery store, you can go to the company's website, www.custardstand.com, and print a request card to hand to your grocer.

The expansion into Kings and Balducci's supermarkets came because Custard Stand was one of five companies featured in the state Department of Agriculture's pavilion at the June 2012 Fancy Foods Show in Washington, D.C.

The state Department of Agriculture "has been awesome to us," Cowger said. The company just built a 40-foot by 100-foot warehouse in Webster Springs with loans from the department and BB&T Corp.

"We're prepared for a lot more production," she said.

Contact writer George Hohmann at business@dailymail.com or 304-348-4836.


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