The Story Behind Stacy's Pita Chips

Stacy Madison shares her story from sandwich cart to snack empire and offers advice to budding businesspeople.
May 11, 2012

Think back to 1996. Did you ever walk around downtown Boston during lunch hour? If so, I’m willing to bet you saw an enormous line of people standing in front of a sandwich food cart. Behind that cart stood Stacy Madison, a Boston native with a background in social work who’d recently grown sick of the nine-to-five and followed her passion for food.

As the cart grew in popularity and the line nearly out of control, Madison and her then-husband Mark Andrus, got creative. They took leftover pita bread from the day before, (all their cart sandwiches were made with pita bread) chopped it up, baked it and handed it out to waiting customers.

Customers went crazy for these pita chips. In 1998, Madison and Andrus closed the cart business and, under the name Stacy’s Pita Chip Company, started wholesaling chips to local retailers.

The plan worked so well that by 2006 Stacy’s was selling nearly $65 million in pita chips per year, employing more than 300 people (including contractors) and was on the receiving end of purchasing offers. PepsiCo won that bid and now operates the company out of its original Randolph, Mass.–based factory.

I caught up with Madison to get the inside scoop on her wildly successful chip venture.

How did you get the word out about your pita chips?
At first we would walk into local grocery stores with a bag of chips and ask them to sell for us. Mark and I also went to a lot of industry trade shows. We couldn’t afford booths early on, so we’d just walk the floors and hand out our product. We also did a lot of farmers markets and charity events where we would walk around with flavor ideas and package change ideas and just ask customers on the spot what they thought. It helped us focus our efforts on what customers wanted to buy.

What challenges did you face early on?
We had to figure out how to actually make the chips for a mass audience. Originally, we were making them in an oven with four racks. They were slow baked and we couldn’t just crank up the heat or they’d burn. We found a woman who owned a pretzel company who had a rack oven and we rented space from her for a while, but that still wasn’t enough. Eventually, we bought a conveyor oven and then a machine that would help us cut the bread into squares.

What did you do for funding at this point?
We had the money we’d stocked up from the food cart and from my credit card—something I don’t recommend. When we needed more capital, I went to the bank and was granted a $60,000 loan, but less than a year later I went back and asked for a $500,000 loan. The bank said no, so we lowered the amount to $300,000 and our parents kicked in some money, too.

As your company grew, did you hire sales staff around the country?
No, we had sales managers who managed a network of food brokers who’d sell to grocers. But most of our employees were people at the factory in Randolph.

When PepsiCo acquired Stacy’s, did you stay on?
Nope. I took my kids (twins, now 8 years old) and traveled around Europe for six months. We’ve done a lot of traveling over the last five years. Recently, I’ve gone to work with Fireman Capital Partners, a private equity group.

What do you see in your professional future?
I would like to start another company someday. I’m not sure in what industry or what product it will sell, but I want to do it for my kids. Back when they were little, I loved bringing them into work and having them see what it was all about. I want them to see that again. I want to show them that they can start their own business someday. 

What advice can you give to small business owners just starting out?
Don’t be afraid to ask for help from others in your industry.

Persevere and never sacrifice quality. Do one thing and do it right. People told us we should do a hummus or a salsa, but we knew it would never work. Those are other businesses. I recommend focusing on your core product.

Make sure you price high at the outset to accommodate costs of everything from manufacturing to hiring. You can always lower your costs.

Photo credit: Stacy Madison