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Date: July 29, 1992

Title: Top 20/ New York Style Bagel Chips

Many entrepreneurs have one of two dreams. One is to make a bundle by taking their company public; the other to sell it for a small fortune to a giant corporation. Warren Wilson has done the latter. He and his wife Sara in May sold their Skillman company, New York Style Bagel Chip (1991 sales: $18 million) to the Foods Group of RJR Nabisco, for a price believed to be about $20 million. The Wilsons are staying on with the company until the end of December to teach Nabisco executives the ropes of the bagel chip business. The couple will then return to selling funnel cake mixes and snack foods, where they first started, and get back to doing what they like best: being entrepreneurs.

Though New York Style Bagel Chip Company was the Wilsons” most successful business, it was not their first. Warren learned his first lessons about running a business literally on the streets. While still in school, he and his brother Glen borrowed their grandmother”s funnel cake recipe and started selling the dessert at street fairs in Philadelphia, Allentown and New York City. Their parents, and even the grandmother, got involved with gusto. Says Warren: “That”s where my disciplining began–trying to feed masses of people, dealing with untrained teenagers, bringing in refrigerated trucks from New Jersey, and setting up tents. People would line up five deep for the funnel cakes.”

So successful were these stints that the Wilsons soon set up a funnel cake operation at the Paramus mall. “Even though it was the same product, it was worlds apart,” says Warren. “In the street fairs, we sometimes made money, and sometimes we didn”t, depending on the weather and the location. In the mall, our customers were wealthy Northern New Jersey people. It was just too good to be true.”

Warren had another bit of good fortune while working at the mall: he met Sara, his future wife, who was working in another store in the mall. They got married, and she joined him in the business. Along the way, Warren discovered it was more convenient to make funnel cakes by putting the batter in a squeeze bottle. After experimenting with different types of bottles and nozzles, he patented his invention, and the funnel cake bottle was soon a hot seller.

Sara, meanwhile, prompted Warren to get into other snack foods and they tried several options, including a gourmet crouton crunch, which never quite took off. Then in the early 1980s they hit paydirt. They discovered that deli owners in Northern New Jersey were turning stale bagels into bagel chips. The Wilsons were anxious to begin marketing the new snack, but they lost valuable time trying to work out an arrangement with a bakery to produce the bagel chips for them. Finally they decided to open their own factory to make bagel chips, which they named New York Style Bagel Chips. But in the meantime, a competitor, Burns & Ricker in Paterson, was already in the field.

The battle of the bagel chips became as exciting as a game of chess. Burns & Ricker signed up with a national food distributor, but New York Style Bagel Chip began to recruit local deli brokers to act as its agents. The Wilsons also offered aggressive price discounts on their products. The strategy paid off–sales of New York Style Bagel Chip began to skyrocket, going from little more than a million dollars in 1986 to $16 million in 1990. Inc. magazine twice named New York Style Bagel Chip one of the fastest-growing firms in the country.

The success began to attract the attention of food giants. Several companies approached the Wilsons to buy New York Style Bagel Chip Company, including Nabisco. Warren and Sara felt most comfortable with the Nabisco deal, and on May 1 sold the assets and the brand name of New York Style Bagel Chip.

These days, the Wilsons are helping Nabisco to make bagel chips a part of its Canadian division. After December, they want to promote snack food banks, large plastic containers filled with snacks, and Sara is eager to tap into the health food market. Neither Warren nor Sara plans to retire soon, and the couple will continue running their other companies, the Snack Food Factory and the Funnel Cake Factory. After New York Style Bagel Chip that should be a piece of funnel cake. s