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Stars Take a Broader Interest in Building Brands

Popchips Inc. is creating a new social-media campaign, but Madison Avenue won't be devising it. Instead, the three-year-old snack-food maker has turned to actor and producer Ashton Kutcher.

Known for his avid use of Twitter, Mr. Kutcher will oversee the San Francisco-based company's social-marketing efforts, including helping to create content to promote the young brand on social-networking sites. However, he says he won't appear in Popchips ads.

As part of the arrangement, the 32-year-old actor, who is married to Demi Moore and created the MTV prank show "Punk'd,'' has bought a minority stake in Popchips, and has been named its president of pop culture. Terms weren't disclosed.

The company's deal with Mr. Kutcher shows the novel ways marketers are teaming up with Hollywood to use star power to promote their brands.

Beyond simply taking fees to endorse products and star in ads, celebrities increasingly are looking for broader agreements that offer a bigger piece of the action.

"Listen, I'm going to eat these chips anyway.…If I can, why not actually own a piece of the company," Mr. Kutcher says. "As my image is being leveraged, I am participating in the upside."

People in the endorsements business say the trend is being driven by the growing sophistication of consumers, who are becoming skeptical of celebrity pitchmen.

"The deeper relationship, that has more authentic layers to it, helps validate the relationship" in the eye of consumers, says Steven Lashever, co-head of the commercial-endorsement division at Creative Artists Agency, a Hollywood talent agency. These types of deals, says Mr. Lashever, are the "next wave of the merging of celebrities and brands."

In a similar deal earlier this year, Lady Gaga was named chief creative officer of Polaroid, recently acquired by a venture led by Gordon Brothers Brands LLC and Hilco Consumer Capital LP.

Not only will the pop star, known for her over-the-top outfits, appear in ads for the camera company, but Polaroid says she will help it develop new products. She also has a financial stake in the company, but a Polaroid spokeswoman wouldn't disclose details.

In another deal forged this year by CAA, actress Sarah Jessica Parker was named the chief creative officer of fashion brand Halston, also owned by Hilco.

In 2008, talk-show host Ellen DeGeneres took an estimated 15% stake in Halo Purely for Pets, a pet-food company owned by Pegasus Capital Advisors LLP.

As part of that deal, which was brokered by William Morris Endeavor, the comedienne is involved in many facets of the business, including helping to select new pet-food flavors.

Deeper alliances between Hollywood and Corporate America began to gain traction several years ago, when rap artist 50 Cent bought a stake in Energy Brands Inc., maker of the Glaceau line of waters, including Vitaminwater. The company was later sold to Coca-Cola Co.

So far, the alliances have largely involved smaller or start-up brands that in many cases don't have much money to invest in marketing or hiring big-name celebrities.

However, ad experts say they expect bigger corporations to strike such deals.

For Popchips, the pact with Mr. Kutcher is part of an effort to grab a bigger piece of the market for healthy snack foods, which market-research firm Mintel values at $30 billion a year.

Instead of frying its chips, Popchips applies heat and pressure to slices of potato to produce a "popped" chip.

"I can't image a better evangelist for our brand" Keith Belling, Popchips' chief executive, says of Mr. Kutcher.

"He is a pioneer in social media, and he has his own platform," Mr. Belling adds.

"I'm going to create new ways for consumers to connect to the product," says Mr. Kutcher who has more than five million followers on Twitter, more than Oprah Winfrey or President Barack Obama.

Popchips says it had about $19 million in sales last year, and expects to top $40 million this year. But it faces fierce competition, including from Frito-Lay, the snack giant owned by PepsiCo Inc., which has been aggressively pitching healthier snacks to consumers.

"It's a David and Goliath situation, and I think people like the underdog," Mr. Belling says.


Suzanne Vranica, The Wall Street Journal. June 28, 2010

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