The Pampered Chef, Ltd. History

Address:

350 S. Rte. 53
Addison, Illinois 60101
U.S.A.

Telephone: (630) 261-8900
Fax: (630) 261-8586

Private Company
Incorporated: 1980
Employees: 600
Sales: $300 million (1996 est.)
SICs: 5999 Miscellaneous Retail Stores, Not Elsewhere Classified

Company Perspectives:

Our Mission: We are committed to providing opportunities for individuals to develop their God-given talents and skills to their fullest potential for the benefit of themselves, their families, our customers, and the company. We are dedicated to enhancing the quality of family life by providing quality kitchen products supported by service and information for our consultants and customers.

Company History:

Classified among Inc. magazine's 500 fastest-growing privately-held businesses, The Pampered Chef, Ltd. is one of America's top direct-selling organizations. Over the course of its less than two decades in business, the operation has grown from a one-woman show in a suburban Chicago kitchen to a staff of 600 in a 200,000-plus square-foot headquarters building with sales of over $200 million. The Pampered Chef's army of over 25,000 "kitchen consultants" across the United States sells a line of about 150 professional-quality kitchen tools through more than 30,000 at-home "kitchen shows" every week. The stunning growth of "The Kitchen Store That Comes to Your Door" mirrors two important trends of the 1980s and early 1990s: the proliferation of home-based businesses and "cocooning."

Founded in 1980

The Pampered Chef was founded in 1980 by Doris Christopher, who like many women in her generation sought to balance a vital professional career with a fulfilling home life. Having interrupted her career as a home economics teacher with the University of Illinois Cooperative Extension Service to raise her two daughters from birth to school age in the late 1970s, the 35-year-old Christopher found herself at a crossroads. As she described it in an April 1996 interview for the Chicago Tribune, Christopher began to seek "a part-time job that would allow me to be a mom too." Quickly narrowing her focus to self-employment opportunities that capitalized on her interests and experience in the kitchen, she investigated catering and retail sales of cooking utensils. But she eliminated both these options because catering demanded long, odd hours, and retailing required a high capital investment. Husband Jay urged her to launch a party-plan, direct-selling operation á la Tupperware, but Doris balked, recalling in a November 1996 Success piece that "I thought home parties were a waste of time, that perhaps the products were overpriced."

But with the continuing support of her spouse, who reminded her that her business could be set up in any way she wished, Christopher began to realize that her cooking and teaching expertise was perfectly suited to the demonstration techniques often used in direct selling, and that there was an untapped market for professional-quality, multi-use kitchen gadgets. Armed with this core concept and a $3,000 cash-out from a life insurance policy, the mom-turned-entrepreneur bought a dozen each of about 70 kitchen gadgets from Chicago's wholesale Merchandise Mart. The Pampered Chef would not require one more dime of additional financing over the course of its first decade-and-a-half in business, funding all its growth from cash flow.

Christopher set her home-selling events apart from their predecessors by calling them "kitchen shows" and naming her sales representatives "kitchen consultants." She scheduled her first kitchen show for October 1980, avoiding what she called the "silly games" that characterized other home selling parties and opting instead for an entertaining evening of cooking demonstrations, eating the fruits of the demo, and some low-pressure selling. That first night's recipe was leavened with trepidation: Christopher later recalled that "during the entire drive to my first show, I vowed that I would never, ever do this again. My stomach was in knots. Of course, on the drive home, I knew differently."

Exponential Growth in 1980s and Early 1990s

This modest beginning belied the phenomenal growth to come; Christopher sold $10,000 worth of kitchen gadgets in her first quarter in business. She brought in a friend as a part-time sales representative in May 1981, and had recruited a total of 12 kitchen consultants by the end of the year. Sales passed $200,000 by 1983, and more than doubled in 1984. Warehousing of the burgeoning business's products outgrew the Christopher family's household basement that year, when TPC's headquarters were moved to a 2,500 square-foot building. By 1987, the business generated by the company's more than 200 sales representatives demanded a full-time purchasing, warehousing, and distribution staff. Husband Jay quit his job as a marketing executive that year to join his wife's company as executive vice-president of operations. By the end of the decade, TPC boasted 700 kitchen consultants. Coverage in nationally-circulated magazines in the early 1990s brought another wave of consultants on board, and by 1993 the company had sales representatives in all fifty states.

While direct, demonstrative selling has proven a powerful marketing method for TPC, its sourcing of unique and useful kitchen tools was also vitally important. In 1995 Christopher told Inc. magazine's Robert A. Mamis that "People I knew didn't like to cook, because it wasn't easy for them. Part of me said, 'Maybe I can never convert them.' But another part said, 'They're using knives that aren't sharp and forks with missing tines. If they had the right tools, it would be fun."' But finding the right tools wasn't easy for the average cook; they were expensive rarities in retail stores, and even if a budding chef found them, she'd likely have an even harder time figuring out how to use and care for them properly.

Christopher sought to fill this market void with a line of high-quality, multi-purpose wares. She assembled an array of about 150 products ranging from peelers and juicers to bakeware and cookware, about one-third of which were exclusive to TPC. Although TPC often has a hand in the development and refinement of the products it carries--making them more ergonomic or combining several functions in a single tool, for example--it does not manufacture them. Many are emblazoned with their makers' names and marks, then packaged in TPC boxes with the marketer's use-and-care information. Believing that the origin of the utensils was far less important to her customers than knowing how to use them, Christopher created an in-house test kitchen to develop simple yet innovative recipes and menus that used TPC products. While many of the company's gadgets have more than one use--the "Bar-B-Boss," for example, incorporated a bottle-opener, fork, and knife in one grill tool--TPC's creatively-written recipes often require more than one TPC tool. Something as simple as a tray of crudités can call for three separate TPC tools: a v-shaped cutter, lemon zester, and "garnisher" (a wavy cutter). A plan for a whole meal might specify more than a dozen different products. When compiled in a company cookbook and used in kitchen shows, these recipes became powerful selling tools.

Years of trial and error resulted in fairly simple pricing and commission plans. Christopher arrives at an individual item's retail price by multiplying its wholesale cost by two. An initial investment of $100 buys a new kitchen consultant a set of about two dozen kitchen gadgets to use in demonstrations. As new utensils are introduced (two or three times each year), sales reps are required to purchase samples for demonstration purposes. Christopher "keeps faith" with her sales reps by keeping all new introductions--even obvious dogs--on the line for at least one year.

Following recipes written with TPC tools in mind, kitchen consultants guide kitchen show attendees in the use and care of the equipment. The consultants--99 percent of them women--start out earning a 20 percent commission on gross sales and earn an extra 2 percent after exceeding $15,000 in sales. The chief executive who had started out seeking a part-time job didn't expect her recruits to commit to a 40-hour (or more) week; instead, she required a meager $200 bimonthly sales quota. On top of commissions, incentives for prolific sellers included all-expenses-paid family vacations to Disney World. TPC literature emphasized that a career in direct sales "is considered by many to be a ground-floor opportunity with no glass ceiling."

The Mid-1990s and Beyond

That assertion was perhaps best exemplified by Doris Christopher herself, for what started out as a part-time job had turned into the chief executiveship of a multi-million-dollar nationwide venture by the mid-1990s. Although the founder has commented only half-jokingly that she might not have launched TPC had she known what she was getting into, the effort has made her a millionaire many times over. When growth began to spiral out of the entrepreneur's control, she was compelled to hire outsiders with expertise in the management of large, growing businesses.

Aside from her millions, The Pampered Chef has also earned Christopher national recognition. In 1992 the School of Human Resources and Family Studies Home Economics Alumni Association at her alma mater, the University of Illinois, recognized her with an Award of Merit. Ernst & Young, Inc., and Merrill Lynch named her a regional National Entrepreneur of the Year in 1994, and Inc. gave her a tongue-in-cheek MBA--a "Master of Bootstrapping Administration"--in 1995.

TPC's charitable activities were in keeping with the company's food orientation. Launched in 1991, its "Round-Up from the Heart" promotion set aside $1 for every kitchen show hosted by its representatives between September 1 and December 31 of each year, and encourages customers to round their orders up to the nearest dollar. The firm donated these extra funds--a total of over $1.3 million in its first five years&mdashø Second Harvest food banks across the country.

Americans spent increasing amounts of their free time, not to mention disposable income, on entertaining at home in the late 1980s and early 1990s. Kitchens were recognized as the "heart and hearth" of the household. Many categories of consumer goods--including cookware--were buoyed by this strong and ongoing trend known as "nesting" or "cocooning." Given retail analysts' predictions that this homeward movement would continue for decades, The Pampered Chef appeared poised to build on its success. Although Christopher had grown rather tight-lipped about her privately-owned company's financial status by the early 1990s, she did reveal that she expected the firm to generate $300 million in revenues in 1996. Furthermore, the businesswoman predicted that "a billion dollars isn't far in our future."

The Pampered Chef, Ltd. History

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