Extending Its Reach
October 14, 2011
For as much as ice cream is depicted as a “fun” food, the actual selling of it is anything but. The business of ice cream is hard work. The competitive landscape in the United States is dominated by two multinational conglomerates. Unilever, based in Rotterdam, Netherlands, sells Breyers and Ben & Jerry’s, while Nestlé, Vevey, Switzerland, owns Dreyer’s, Edy’s and Häagen-Dazs. Private-label brands as a whole are No. 1 and outsell the top branded product by a margin of two-to-one, according to Chicago-based SymphonyIRI Group.
To compete in this world, small, privately held dairy processors need to develop innovative new products, be creative in their marketing, manufacture efficiently and be responsive to all of their customers (retailers, private-label accounts and consumers).
Pierre’s Ice Cream Co., Cleveland, has followed that approach to success with its ice creams, sherbets, sorbets, frozen yogurts and novelties. Pierre’s, headed by CEO Shelley Roth, produces more than 235 products and flavors in various formats. That’s a far cry from the original three flavors (French vanilla, Swiss chocolate and strawberry) sold in pints by Alexander “Pierre” Basset, who founded the company in the 1930s.
The ice cream market as a whole has been slow. Sales at supermarkets, drugstores and mass merchants (excluding Walmart) increased a scant 1% to $4.01 billion in the 52 weeks ended Aug. 7, according to SymphonyIRI Group. Pierre’s Ice Cream eked out a small increase in dollar sales during that period, along with its Pierre-branded frozen yogurt, sherbet and sorbet products. Unit sales of ¡Hola Fruta! fruit sherbet, however, were particularly robust, increasing more than 20%.
Though based in Cleveland, Pierre’s is not a regional ice cream processor. New products, like ¡Hola Fruta! and Yovation frozen yogurt, extend Pierre’s reach nationally. Roth is directing the company’s growth throughout the United States and internationally.
Asked about her strengths as a leader, Roth answers with the words “recipes,” “creativity” and being “a good listener.” Roth keeps an eye on culinary trends and figures a way to apply them to dairy foods. She wanted to make an antioxidant product, so Pierre’s tried one with ice cream. The trouble was that it didn’t taste very good. Roth suggested an antioxidant sherbet, and ¡Hola Fruta! was born.
Yovation, a probiotic frozen yogurt, and Slender, a line of reduced-fat ice creams sweetened with sucralose, are two other products developed in response to market trends and consumer demands. The company also specializes in the manufacture of private-label lines.
Pierre’s does not have a formal, written process for developing new foods and flavors. Instead, Roth says, “We like to have fun with it. Inspiration and ideas can come from anywhere: fans, customers, employees.”
Case in point: Smooth Churned Ray’s Root Beer Float, named for Ray Kralik, the company’s lead flavor man. The 38-year veteran of the company suggested the flavor. After just three months on the shelf, Root Beer Float became one of the company’s most successful flavors of 2011. Kralik himself became a bit of a local celebrity, with a profile in The Cleveland Plain Dealer newspaper and interviews with local radio and television stations. For its in-store launch, a retail customer asked Kralik to serve samples of the flavor.
This year alone, Pierre’s added six Yovation flavors: black cherries & chocolate chunks, butter pecan, cappuccino, chocolate, Moose Tracks and vanilla (it also makes a vanilla-pomegranate-blueberry flavor). It changed the format to pints from quarts in 2010. ¡Hola Fruta! added a seventh flavor - black cherry lemon - to its line of pints.
The diversity of product, as well as offering new and innovative flavors, sets Pierre’s apart from other ice cream makers, Roth says.
“¡Hola Fruta! and Yovation Probiotic Frozen Yogurt are great examples. ¡Hola Fruta! really took sherbet to a whole new level and developed a loyal fan following as it opened new markets to us. Fans write to us from all over the country, from California all the way to Florida looking for ¡Hola Fruta!,” Roth says.
“Yovation is a better-for-you product (it features a probiotic culture) and has less fat and fewer calories than regular ice cream. It also offers frozen yogurt lovers more than the everyday vanillas, chocolates and strawberries,” she added.
“Regularly creating and introducing new products and flavors is what keeps people coming back to your freezer door wondering what they’ll see next. Our customers not only welcome new Pierre’s flavors to their store shelves, but trust us to work with them in creating new flavors for their own private labels knowing our reputation for unique, great-tasting and premium-quality products. Someone who purchases a container of Pierre’s ice cream or a pint of ¡Hola Fruta! or Yovation, or partners with us to create a product for their own private label, chooses Pierre’s because of that reputation for quality,” she says.
The new $9.2 million plant, which opened this summer (see related article on page 70), helps Pierre’s in serving private-label and foodservice accounts. “With the added capacity in our new facility, we anticipate growth in these channels,” Roth says.
Spreading the word
Pierre’s supports product sales and launches with social media, in-store specials, promotions, free-standing inserts, 30-second radio advertising and public relations. Yet selling comes down to two factors.
“Price and quality are what move ice cream,” says vice president of sales Frank Elliott.
CEO Roth adds a third quality: “You have to present yourself well.” To be successful, an ice cream processor has to create exciting brands and flavors, she says.
Elliott manages a sales force of 18 and a direct-store-delivery business that makes deliveries as often as three times a week for some customers. Four telemarketers call on restaurants, foodservice accounts and supermarkets and follow up on leads.
It helps that the company has name recognition. Pierre’s has been entwined in the fabric of Cleveland for 80 years, supporting local events and charities.
“We like to participate in special events where we can coupon and have people experience our new products in a fun forum,” says Matt Thornicroft, assistant marketing and communications manager.
Pierre’s participates with a local radio station in its annual “free lunch” promotion in downtown Cleveland, with dessert coming from Pierre’s.
“We are also the presenting sponsor of a local event called Ice Cream Weekend held at Lake Metroparks Farmpark,” says vice president of marketing Laura Hindulak. Visitors learn about ice cream making, “from farm to cone,” and sample Pierre’s ice cream. Another annual event is the Juvenile Diabetes Research Foundation Walk to Cure Diabetes event at the Cleveland Metroparks Zoo. Pierre’s promotes its sugar-free ice creams at the walk.
Promotional ice cream parties, given away by Pierre’s or in partnership with radio stations, are another way the ice cream processor takes new flavors to market.
“We give them enough ice cream for about 25 people, so they can host their own party or share with their families,” Hindulak says. “We supply them with everything they need, including ice cream soda hats, scoopers and coupons to continue the fun.”
The Pierre’s Sweet Rewards program is a UPC collection program created as a fundraising option for non-profit organizations. Pierre’s donates cash, based upon how many UPCs a group collects. The company also donates to the Cleveland Foodbank. Pierre’s partners with local colleges by providing students with curriculum material and case study assignments about Pierre’s and the dairy foods industry. For example, student-created advertisements decorate the lobby of the corporate headquarters.
Concession stands in Progressive Field, the home of Major League Baseball’s Cleveland Indians, sell Pierre’s frosted cups (a smoothie product), novelties and ice cream cones.
Pierre’s has been on Facebook for nearly two years and created separate pages for Pierre’s, ¡Hola Fruta! and Yovation.
“We view Facebook as a window into our company that you wouldn’t otherwise have access to if you are not a fan,” Hindulak says. “We try to make it a casual, open forum for our fans. Customers can talk to us directly, post photos, share opinions, recipes and talk about ice cream in general. We post photos of initial runs of limited-edition flavors, alert customers to online coupons, upcoming FSIs. We also provide sneak peeks at new flavors.”
“We had a lot of fun announcing black cherry lemon ¡Hola Fruta! and posting photos of ‘Top Secret New Flavor Meetings’ to build up excitement and to give our Facebook fans information they wouldn’t get without being a fan,” Hindulak says.
Fans also could follow the construction of the new plant because Pierre’s posted photo updates on Facebook.
A loyal management team
Sol Roth was running Royal Ice Cream Co. when he acquired Pierre’s in 1960 (see accompanying article, “Who Was Pierre?”). Shelley Roth was in her early 20s and working in the recording industry in New York. At the request of her father, she moved back to her hometown to join Pierre’s in 1979, and became chief executive officer in 1991. Sol died in 2005. Her brother, a doctor, decided not to join the business. Roth’s husband, Bruce Schwartz, works outside of the dairy processing industry.
While Pierre’s cannot be considered a family business, long-time employees describe the company as has having a family feel. Many on the management team have worked at Pierre’s for 20 years and more. Half of Pierre’s 85-person workforce has 10 or more years of service. Roth’s mother drops in at the plant every now and then, and still gets a thrill from eating just-filled ice cream pints, Roth says.
Early on, Shelley tried to get her father to modernize business equipment, but an early use of computers and punch cards ended badly. She persevered. Even today, she reads computer and technology magazines, looking for ideas that staff can implement.
She recalls that her father had “an ear” for the equipment and could tell if a piece of machinery was running properly, based on its hum. The soft-spoken Roth herself is comfortable in the plant, as well as the boardroom. One morning, before a meeting with private-label clients, Roth had been in the factory. When she met a visitor, she was still dressed in lab coat and hair net.
“We work very hard to be as efficient as possible while working with our vendors and suppliers to proactively explore what other efficiencies we can incorporate into our business. This allows us to continue to manufacture a high-quality ice cream at a reasonable price for our customers,” Roth says.
Like other dairy food processors, Pierre’s is dealing with rising ingredient, packaging and fuel prices this year.
“The uncertainty of the commodity markets adds to the concern,” Roth says. “Earning and keeping shelf space is always a factor in the ice cream category, which is why we put a lot of effort in creating new products across all of our product lines, products that are unique to Pierre’s.”
Membership in professional associations keeps Pierre’s up-to-date on business and regulatory issues as well as consumer and culinary trends. Pierre’s memberships include Associated Grocery Manufacturers’ Representatives, International Dairy Foods Association, International Ice Cream Association, MidTown Cleveland and Women’s Business Enterprise. It is also a member of Ohio Proud, a marketing program of the Ohio Department of Agriculture that promotes food and agricultural products that are made and grown in Ohio.
MidTown Cleveland is a 501 (c) 3 economic development corporation serving a two-square-mile area between downtown and University Circle, to the east. Executive director James Haviland called Pierre’s “a key MidTown stakeholder” for the past 80 years.
“Their $9.2 million expansion on Euclid Avenue along the Health-Tech Corridor is a significant investment in the area. Pierre’s Ice Cream joins other MidTown businesses who have chosen to remain in Cleveland, citing accessibility to major highways, access to a trained workforce and commitment to putting Cleveland on the map with a quality ice cream product.”
The road ahead
Pierre’s has plans to introduce its brand and products into new markets, says Frank Elliott, the vice president of sales. “We intend to focus on pursuing additional private-label and export business. Pierre’s is able to customize recipes to precise specification to suit any need,” he says.
The company has exported to accounts in Aruba, Puerto Rico, South Korea and Pakistan.
“Our customers are really what drive us,” Roth says. “People are paying a lot more attention to what they are spending nowadays. Enjoying ice creams and frozen desserts is all about the experience, and we want people who enjoy Pierre’s to have the best experience possible. We want them to feel that what Pierre’s makes, we make just for them.”
Without layers of management that larger companies have, Pierre’s can quickly turn ideas into action. Co-workers say Roth is knowledgeable in every aspect of the business. Roth says Pierre’s continued focus will be on developing “delicious, new and quality products” for current and future customers.
“Innovation is really important, especially considering all the competition that exists in the category. Interest in better-for-you products like Pierre’s Slender no-sugar-added reduced-fat ice cream, ¡Hola Fruta! pure fruit sherbet and Yovation probiotic frozen yogurt continues to grow,” Roth says.
Pierre’s competes not only against other brands of ice cream, but generally against other dessert choices.
“The million dollar question always is: What’s for dessert? We want them to choose Pierre’s,” Roth says.
With a track record of creating new flavors and new products, it looks like Pierre’s has the answers. N
Hundreds of Products, Flavors
Pierre’s Ice Cream Co. manufactures more than 235 products and flavors. Ice creams fall into Premium (the top of the line), Homestyle (a mid-priced line) and Royal (a value line). Products are certified kosher by the Orthodox Union (and the sorbet is pareve, meaning it can be consumed with both meat and dairy meals). Among the brands and products are:
• Pierre’s Premium Ice Cream
• Pierre’s Frozen Yogurt
• Pierre’s Homestyle
• Pierre’s Slender No Sugar Added Reduced Fat Ice Cream
• Pierre’s Smooth Churned Light Ice Cream
• Pierre’s Pure Fruit Sherbet
• Pierre’s Sorbet
• ¡Hola Fruta! Pure Fruit Sherbet
• Yovation Probiotic Frozen Yogurt
• Pierre’s Frosted Smoothies
• Pierre’s Frosted Chocolate Malt
• Super Scoop
Pierre’s also sells a variety of frozen novelties (sticks, sandwiches and slide-ups, made by a third party) for retail and bulk sale. Select flavors are available in 3-gallon bulk cans for foodservice customers. N
Who Was Pierre?
Pierre’s Ice Cream Co. started in Cleveland as a corner ice cream shop in 1932, where Alexander “Pierre” Basset sold freshly made ice creams by the cone and cup, or hand-packed for take home. Basset supplied restaurants, country clubs and gourmet markets. Pierre’s soon outgrew its small space on Euclid Avenue, expanding numerous times into larger and more efficient manufacturing facilities. Yet Pierre’s always remained within three miles of its original location at 82nd Street and Euclid Avenue, in the heart of Cleveland. The company moved to St. Clair Avenue, then to East 60th Street and Hough Avenue in 1960. The Hough Avenue plant was shared with another small ice cream maker, Royal Ice Cream Co., owned by Sol Roth. Royal’s history was similar to Pierre’s: a small ice cream shop with a commitment to quality.
In 1960, Royal Ice Cream acquired Pierre’s Ice Cream Co. Royal then began showcasing the Pierre’s brand and special recipes, and devoted all of its resources to expanding the line and building the Pierre’s name. The next direction for Pierre’s was expansion into half-gallon packages, broader distribution beyond Cuyahoga County and the creation of unique and popular flavors for sale in retail stores, as well as ice cream parlors.
In 1967, Pierre’s/Royal acquired the Harwill Ice Cream Co. at East 65th Street and Carnegie Avenue. It consolidated all operations to that one plant and expanded the facility several times before out-growing it. Pierre’s moved into its new state-of-the-art distribution center and office headquarters at East 65th and Euclid Avenue in 1995, just one mile west of its original shop. The most recent expansion was the addition of a $9.2 million, 35,000-square-foot, state-of-the-art manufacturing facility, which opened on June 13.