Wisdom in a Scoop
Three Lessons from a 13-year old ice cream business in the time of COVID
By Logan Yonavjak, SMNYC Board Member
Jennie Dundas, a former child actress, founded Blue Marble Ice Cream, a BCorp, 13 years ago in a quest to bring quality artisanal ice cream to NYC. She has been running it as a boutique business ever since.
Over the years, Jennie has seen many competitors come and go. I wanted to better understand what had kept her mostly profitable all of these years. Especially now, with COVID-19, and so many businesses suffering, I thought some of her lessons learned may be helpful for other small businesses.
Her secrets are three-fold: pricing, adaptability, and sticking to her mission.
Secret #1: Pricing pints
The approach taken by most ice cream companies is to take on investor capital, often VC-backed, and then grow as quickly as possible — mostly through the sale of pints. All too often, these companies fall into the trap of charging less to increase volume, hoping they will make it up later. This model requires a stable market, depends on continuous growth, and leaves no room for curve balls.
Fractures in this approach become apparent when a competitor innovates or outspends, or during market contractions. To quote Warren Buffett, in times of an unpredicted economic downturn, “The tide goes out and you see who isn’t wearing swim trunks.”
The problem is: artisan ice cream is an expensive product to make and ship, which makes it unlike other CPG products that can better afford the fast growth approach. Blue Marble doesn’t compromise on high-quality ingredients or formula cheats, like adding high air volume, which also makes it difficult to cut prices.
Jennie didn’t always escape the temptation of high growth. After expanding from one scoop shop to three, plus five seasonal outdoor locations, and aggressively building up wholesale and events divisions, she stopped to consider if slowing down might be prudent. A few years ago she was given a grant from the Land O’ Lakes Dairy Accelerator Program.
After flying out for a few educational sessions, Jennie and her COO had an “aha” moment. Until this point, they still had one foot in fast growth. They knew they were spending more than they could afford on marketing in order to keep expanding throughout the US. Through the accelerator, they realized this was a losing proposition.
Immediately, Jennie pulled product out of markets in Texas, New England, the southeast and the midwest. She cut ties with her national distributor and discontinued doing trade shows. Instead, she focused on where the cost of every sale was more manageable, and where people knew and loved her brand: the NY Metro area.
“The difference year over year from 2018 to 2019 was immediate; we turned profitable instantaneously,” says Jennie.
Secret #2: Staying nimble
When COVID hit, two of Jennie’s main channels went dry overnight: wholesale to restaurants, and her events business. She quickly focused on keeping up with the demand for pints in the NY Metro region, which were suddenly exploding, and her scoop shop, where, for the first time in 10 years, she jumped back behind the counter. She has also seen a sharp uptick in her online business, which is marketed through Goldbelly.
“We converted our 1000 SQ ice cream and coffee shop into a walk-up window selling pints, pre-scooped mini-cups, bags of coffee, and beautiful, locally-manufactured facemasks.” Her customer base has responded enthusiastically, showing up every day to show support. “We innovated quickly. I don’t know what everyone else is going to do, but I’ll keep pivoting and innovating because this is a company I believe in, and that my investors believe in,” says Jennie.
Secret #3: Staying dedicated to the mission and stakeholders
What gets Jennie up in the morning is not just making delicious ice cream, but taking care of those who connect to her business — the farmers, producers, distributors, and others — that keep the whole supply chain running. “It’s all about the dairy farmers, sustainable sugar producers, cocoa cooperatives, all the people who have committed their lives to sustainable ag,” Jennie explains.
Jennie also attributes a lot of her success to finding mostly aligned investors that aren’t pushing her to grow as fast as possible. Although she’s had her share of pressure from investors to grow quickly, the more she’s seen competitors succumbing to bankruptcy or forced closure (Three Twins Ice Cream, Trickling Springs Creamery, Phin & Phebes, Steves, and now Ample Hills Creamery), the more empowered she feels to stay the mission-driven course.
“I see the reality of costs and risks every day. It’s easy to go online and see companies with tens or hundreds of thousands of social media followers — but I don’t measure success that way,” explains Jennie, “our future is as bright as ever, I believe, in part, because of our more cautious approach to growth.”
Where you spend your money matters — if you’re in the NY Metro area, or willing to splurge on nationwide home delivery through Goldbelly — consider a pint or a scoop of Blue Marble Ice Cream.
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