Some crayons belong in kids' mouths

The drinks sold by Crayons Inc. in Bellevue are 30 percent fruit juice, but the company is 99 percent marketing.

The four-employee Bellevue firm went through 17 rounds of market research to determine what product to sell with its Crayons trademark, how to package it and to whom it should be marketed.

The answer: Sell fruit juice in skinny cans with bright colors to young kids and anyone else who digs that motif.

Since hitting grocery shelves last spring, Crayons Fruit Juice Drinks have spread to more than 2,000 grocery stores nationwide. Locally, they're available for about $1.40 a can at Whole Foods and QFC. Crayons is also available at Top Food & Drug, Nature's Pantry and some other independent stores throughout the metro area.

Co-founder Duncan Seay knows why they're catching on.

"The Crayons brand and the look of the can — handheld, friendly, interactive, sexy, cool, hip — gets the product pulled off the shelf," Seay said. "The nutritional piece gets it put into the basket. Last but not least, the repeat purchase is because of the taste."

Maybe it's all that marketing research.

In 2003, Seay bought the Crayons trademark for use with food and beverages from someone who had been tinkering with using it with juices on the East Coast.

The crayons trademark is not the same as Crayola, a company that sells a popular brand of the colorful writing instruments known as crayons.

Coincidentally, another local company — Advanced H2O on Mercer Island — uses the Crayola brand name for a bottled-water line called Crayola Color Coolerz.

Like many local drink companies, from Jones Soda to Dry Soda, Crayons does not make its beverages here. The canned juices are produced in Wisconsin and a smaller line of bottled fruit juices is produced in Northern California.

Crayons CEO Ron Lloyd, who has worked on Kool-Aid, Crystal Light, Tang, Napa Valley wines and other drinks, joined the company in 2005.

He moved Crayons' headquarters from San Francisco to Bellevue and helped it focus on all that market research, which cost more than $250,000.

The research helped determine the juice flavors — Redder than Ever Fruit Punch, Kiwi Strawberry, Outrageous Orange Mango, Tickled Pink Lemonade and Wild Watermelon & Berries.

It also guided Crayons' nutritional profile, which the company markets as more healthful than most juices.

Each 8-ounce can has 3 grams of fiber, 90 calories and is fortified with vitamins and calcium. The drinks have no high-fructose corn syrup and no artificial sweeteners, coloring or preservatives.

Seay, who lives in San Francisco, says the company has raised a significant amount of capital from venture firms and others. A regulatory filing says Crayons raised $10 million this summer.

So far, Crayons is not profitable. But the company has entered new stores and posted sales at three times the rates it projected. It also has other products in the works.

Eventually, Crayons probably will be sold, said Seay, a former investment banker and CPA who has worked with other natural-food companies that took the same path.

"History would dictate that investors want a way of getting their money out, which will mean an IPO or sale down the road," he said.

— Melissa Allison

REI's chief executive , Sally Jewell, reportedly told an audience at the University of Montana in Missoula this week the retailer's toughest competition comes not from other stores, but from TVs, video games and the Internet.

Jewell, according to a story on www.missoulian.com, said American children spend more time inside in front of a screen than they do outside playing — a problem when you sell hiking, camping and cycling gear.

Jewell noted that one of REI's solutions is to promote outdoor recreation and conservation in communities where it does business.

Along those lines, Kent-based REI announced this week it's giving $100,000 to the Bikes Belong Foundation, a Boulder, Colo., nonprofit dedicated to getting people to ride bikes.

Today, REI will open a newly remodeled store in Boulder featuring environmentally friendly materials. It plans to make decisions about future "green" building design and construction based on the store's performance. — AM

A new ice-cream company run by a Seattle bartender and two local chefs began selling an eclectic mix of flavors at the Ballard Farmers Market in mid-July. Empire Ice Cream flavors vary according to the produce the owners buy each week, and they've included carrot habanero sorbet and brown sugar peach ice cream.

Each batch — made with Italiana gelato machines at a catering kitchen in lower Queen Anne — makes about a dozen 8-ounce containers, which cost $4, or three for $10, said co-founder Tom Durchman.

The bartender and chefs, whose company is called The Epicurean Empire, plan to stop selling ice cream at the market in late October to focus on finding investors, improving packaging and maybe selling to a restaurant or two. — MA

Columbia Sportswear of Portland hopes to attract a new breed of customer by introducing a line of coats and accessories aimed at dogs. RC Pet Products of Vancouver, B.C., will design, manufacture and market the line under a licensing agreement with Columbia. The new canine products are expected to debut in the third quarter of 2008, with suggested retail prices of $49.99 to $104.99 for coats, and $12.99 to $21.99 for accessories. — AM

Cutter & Buck has signed a five-year agreement with professional golfer Stuart Appleby, who will wear and endorse its apparel at PGA Tour events. Appleby also will work with Cutter & Buck to help drive brand awareness and develop products from a player's perspective, the Seattle sportswear company said in a statement. — AM

Further debunking the false rumor Starbucks does not support U.S. troops, the Seattle company has donated more than 100,000 pounds of coffee beans to the International Red Cross for soldiers in Afghanistan, Iraq and Kuwait. Some employees also pool the free pound of coffee they get each week and send care packages to soldiers, said spokesman Brandon Borrman.

A false rumor begun in 2004 still makes the e-mail rounds, saying Starbucks does not support the war or anyone in it. Meanwhile, Starbucks is working to send another batch of coffee for the Red Cross to distribute to soldiers. — MA

Grist.org, an online environmental magazine based in Seattle, has come out with its first book, "Wake Up and Smell the Planet: The Non-Pompous, Non-Preachy Grist Guide to Greening Your Day." The 208-page book, published by Skipstone, a division of Mountaineers Books, offers advice on how to make everyday decisions that are environmentally friendly. It answers such questions as, is it OK to shave with a disposable razor? It's available at bookstores and on Amazon .com. — AM

Bellevue-based Expedia.com is expanding its partnership with financial-services giant Citi to offer a new branded credit card. The Citi PremierPass/Expedia.com card will allow users to earn points for purchases, eligible travel booked on Expedia.com and miles flown on any airline. Nearly a year ago, the online travel agency and Citi introduced the ThankYou Rewards Network on Expedia, which more than 1 million people have joined. — AM

Deschutes Brewery of Bend, Ore., will wheel its wares through several Seattle neighborhoods this month in a traveling Oktoberfest complete with a big beer barrel on wheels. Proceeds will be donated to nonprofits including the Puget Soundkeeper Alliance and Gilda's Club Seattle. For a schedule, check www.neighborhoodhops.com. — MA

Retail Report appears Fridays. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com