2016 Dairy Processor of the Year Wells Enterprises rebrands its Blue Bunny ice cream
Wells Enterprises, our 2016 Dairy Processor of the Year, overhauled its Blue Bunny ice cream brand. New marketing, new flavors and new products have led to higher sales.
The Wells Enterprises’ ice cream plant runs 20 hours a day, seven days a week. Because of this heavy-duty schedule, once a year the maintenance crew takes apart and rebuilds each piece of equipment.
The maintenance department is not the only division that tears things apart at this Iowa-based food manufacturer. The marketing department completed a major overhaul of the Blue Bunny ice cream brand this year.
The re-boot, begun two years ago, involved a deep dive into the history and purpose of the business. The company threw out what wasn’t working, kept what was and tweaked other parts. But the biggest achievements were bringing new products and new packaging to ice cream, a food category whose sales peaked in 1995.
It took hard work, but in the end Wells Enterprises achieved increased sales, higher satisfaction with customers and consumers, and expanded distribution. Dairy Foods has named the privately held and family-owned ice cream and novelty manufacturer the 2016 Dairy Processor of the Year for the following reasons:
- Re-branding of Blue Bunny ice cream
- Converting to innovative packaging
- Developing new products
- Investing in production facilities
- Serving the community
It’s a bold and gutsy decision for any company (but especially a family-owned one) to cast a critical eye on how it does business. Ego, hurt feelings and an attitude of “if it ain’t broke, don’t fix it” are some of the impediments to changing established practices.
If a company has been in business for 103 years, like Wells Enterprises, why should it need to change at all? Because President and CEO Michael C. Wells said he wants the company to be in business 100 years from now.
Mike’s great uncle, Fred H. Wells, started the dairy business in 1913. Later, Mike’s father Fred D. Wells (who, at age 89, calls his son every week) was chief operating officer while his cousin Fay served as CEO. Mike became CEO in 2007.
With annual sales of $1.028 billion in 2015, the company ranks No. 37 on the Dairy 100, this magazine’s list of the largest dairy processors in North America. Based in Le Mars, Iowa, it is the largest privately owned ice cream company on the Dairy 100.
Mike Wells calls himself a “huge” NASCAR fan who loves the competition and the races. To challenge himself, he trains for and participates in two or three triathlons a year. Wells is a doer. He wrote a personal purpose statement “to get up every day and do something that really needs to be done and to do it with passion and a commitment to excellence, making sure that what I do benefits others as much as it does myself.”
Three years ago, when the company celebrated its centennial year, Wells challenged his team to be better. The product was getting lost on the shelf. Frankly, the ice cream was better than the packaging or the marketing, Wells said.
The executive team asked some hard questions, including: What’s working? What’s not? And what do we have to do to make this work for the next 100 years?
They realized that “our brand was okay. But it was just okay,” Wells said. “We talk about it as the sea of sameness. We weren’t highly differentiated. The way I used to describe it was that our packaging and our brand identity isn’t a fair depiction of the great product that’s on the inside of the package.”
Vice President of Marketing Adam Baumgartner described it this way: “We got a little bit too serious” and consumers saw Blue Bunny as “industrial” and “rigid.”
It’s fair to ask why the company should even bother to change. Americans are eating less and less ice cream. According to the U.S. Department of Agriculture, annual per-capita consumption of regular ice cream has decreased over the last 25 years from 16 pounds to 13.1 pounds. In the total frozen dairy products category (regular and reduced-fat ice cream, sherbet and other frozen products) per-capita consumption was 29 pounds in 1991. By 2014, the figure was 22.8 pounds.
The answer to “Why change?” is that there is still demand for ice cream and novelties and Blue Bunny is a brand that retailers can sell and that consumers want.
In 2006, Wells Enterprises opened a new corporate headquarters that brought all departments under one roof. Previously, various departments had been scattered around Le Mars. IT was in a former roller rink and the finance group in a former warehouse.
The motivation to build the headquarters was to have “the camaraderie, have that hallway conversation, have the ease of doing business all in the same building and, at the same time, be able to bring R&D into it, which we had never done before,” Wells said.
To make the changes the executive team envisioned would require a cooperative effort from operations, marketing and research and development. It helped that the various teams worked in the same building.
Now at some companies, marketing and production don’t always play well together because their objectives can be in conflict. The hard numbers of manufacturing clash with the warm and fuzzies of marketing. The plant wants to manufacture product as efficiently as possible. Marketing wants to create a story around the brand and can’t understand why manufacturing issues should get in their way. This is where management has to lead, communicate the business plan and get all parties to buy into it.
Understanding the brand
The re-branding started with a trip through the company’s archives to understand the heritage of Blue Bunny. In 1935, Wells held a contest to name its ice cream. A man won $25 for suggesting the name Blue Bunny (along with what became the original drawing of the bunny character) because his son loved the blue Easter bunny in a department store window.
Conversations with consumers led the company to realize that the Blue Bunny brand stands for being “the most playful ice cream in the world,” Baumgartner said. Working with consultants, the ice cream manufacturer developed new positioning and a new identity. They created a mascot (the rabbit known as Blu) and a new logo that incorporates a stylized letter “B” with rabbit ears.
“We’ve really touched on and sparked the emotions of the consumer. It brings back nostalgia. It really helps people identify what a great product is on the inside, like good packaging on the outside,” Baumgartner said.
Wells Enterprises also wanted to meet the needs of its retailer customers and spur incremental volume. “If the categories aren’t growing, we are not doing our part,” Baumgartner said.
The ice cream maker achieved that with new products and new packaging. The change to transparent, BPA-free recyclable containers came about from conversations with retailers and with consumers. Consumers seek transparency from corporations in their business practices and quite literally in packaging.
“Transparency reflects the pride that we as a brand and as a company take. It reflects the fact that we have nothing to hide and that’s who we are trying to be as a brand,” Baumgartner added. “What we’ve done, especially in packaged ice cream, is change the game very dramatically” with see-through plastic cartons. “It was a big investment and a big piece of our strategy into this relaunch this year. But it is really resonating well with consumers. What they said they wanted, we’re delivering. People want to see the food they’re eating.”
Wells Enterprises isn’t the first ice cream company to use clear containers. Economy sizes of ice cream traditionally have been filled in clear pails. More recently, gelato brands have used clear pints. But no company has endeavored to do ice cream in 48-ounce sizes, Wells said. The reason became obvious after they tried to fill the containers.
The plant had to redesign the fillers that deposit ice cream, inclusions and ribbons in a precise pattern. The product had to look great when seen through the package. There could be no visible air voids.
Written style guides detail how a filled package should appear, which includes swirls on the top of the ice cream. Wells said if packages don’t meet the specifications, line operators shut down production and readjust the nozzles.
“It was difficult. It was harder than it looked. But we have been extremely happy with the rebranding,” Wells said. “We spent a good six months just figuring out how to fill that package so that it looked really good.”
Those on the manufacturing side “weren’t all that impressed” with the idea of clear packaging, Wells said. “But at the same time, they understood that our mandate was not to just find a new package or to go from 56 to 48 ounces. Our mandate was to go change the face of the premium ice cream category, to basically create a new category, to create premium plus, if you will, both in the product experience and in the packaging.”
Results, and then some
At last, the presentation was as good as the ice cream. By all measures, the decision to re-brand was a success. Consumers have responded “overwhelmingly positively” to the package, the new brand identity and the positioning, Wells said. “Customers (retailers) have been excited because it’s created some new excitement in the category.”
A funny (and unexpected) thing happened when the rebranded ice cream hit the freezer case. Consumers are considering Blue Bunny ice cream to be a more premium brand.
“Consumers are not necessarily seeing it as where we used to be,” Baumgartner said. “We used to be classified in the segment that we call ‘premium.’ Now we’re starting to be viewed at a higher level, almost on par with super-premium.”
This perception is based on the visual appeal of the ice cream and the packaging and has nothing to do with industry terms like butterfat and overrun, Wells said.
Wells Enterprises expanded distribution and consumers are buying more ice cream. Ice cream sales (measured by dollars and by units) have increased more than 8% in the 52-week period ended Sept. 4, 2016, according to Information Resources Inc., the Chicago research firm. As for novelties, unit sales rose 3% and dollar sales increased 5.3%. Ice cream and novelties have outperformed their respective categories, according to IRI.
“We were able to expand items carried and grow our volume in existing customers, and expand our distribution footprint as a result of bringing new innovation to the category,” Wells said. “So we both grew points of distribution as well as grew in what we call our carrot patch, our backyard.”
Baumgartner said the purchase frequency has increased. The targeted shopper (mothers with children at home) is buying ice cream more often, and she is adding new flavors to her basket.
At 48-ounces, the new package is 8 ounces lighter than the previous iteration. Wells makes no apologies for the downsizing. He said the company is following the industry trend that has seen the standard half-gallon package decrease over time to 56 ounces and now to 48 ounces.
“We conformed as a norm” to the package size while giving something back in the way of the quality of the ingredients, he said. “We didn’t go to clean label but I would say we cleaned the label up. There are fewer but higher-quality ingredients on our labels where possible.”
“How we make it is as important as what we make it with. So for us, how quickly it gets frozen and the care at which it’s handled along the way deliver a higher-quality product as well. We’ve invested heavily into those kinds of processes to ensure that consistency at the consumer level.”
Wells pointed to another result of the changeover to transparent packaging.
“We think it’s somewhat of a barrier of entry for others because it’s really hard to do,” he said.
A matter of taste
Certainly, packaging is part of the success of the rebranding, but the product itself has something to do with the success, too. The sensory work and improvements the company made to each SKU are paying off, Baumgartner said.
New products are the lifeblood of any food manufacturer. New and seasonal Blue Bunny offerings include flavors such as mocha, cherry and chocolate, salted caramel and fudge brownie. New novelty products are the Big Swirl, a large vanilla ice cream cone dipped in milk chocolate, and the Funwich, a stick novelty made with vanilla ice cream sandwiched between chocolate chip cookies and dipped in milk chocolate.
The ice cream maker also reformulated its banana split ice cream. After asking consumers about the sensory experience they expect from the flavor, the R&D department developed multiple prototypes. Consumers tasted these versions against the competitive set.
After months of development work, “we had a whole new flavor profile,” Baumgartner said. “We added different inclusions. We changed the types of revels. This is one of our best performing SKUs because we listened. We reacted.”
Wells Enterprises has streamlined its product development. It is spending more time “on the front end of ideation and innovation than ever before and we believe it’s really paying off on the back side. I have never been more excited about having a well-developed pipeline of innovation that takes us well into the future,” Baumgartner said.
The ice cream maker spends more time with its retail customers, too. There is more “involvement and integration to help us understand how we can activate our brand within their stores, and making sure we know what they get excited about as well. That’s really paying great dividends,” Baumgartner said.
Having gone through the marketing analysis and rebranding, Baumgartner said “the biggest takeaway is that our job can’t be to continue to do the same” cones, bars and sandwiches. The company has to “own the fun. We have to live that through our portfolio” and “deliver fun and play in new and different ways that the category hasn’t seen.”
In late October when Dairy Foods visited Le Mars, the company was getting ready to launch products for 2017, activating 2018 plans and planning for 2019. It is spending more time developing three- and five-year strategies than previously, Baumgartner said.
Ice cream production
The company makes packaged ice cream, frozen dairy and nondairy novelties, and ice cream cakes. Besides manufacturing the Blue Bunny brand, Wells is the licensee for Weight Watchers frozen novelties and packages several private label accounts.
Wells Enterprises makes ice cream in two plants in Le Mars, known as North and South. The South plant comprises 1 million square feet. (An additional 6,000 square feet will be completed in 2017.) It employs 979 associates (1,200 during peak season) who work on 39 production lines. Two more lines will be added next year.
The smaller North plant has 13 production lines in 153,292 square feet. Here, 380 employees make packaged ice cream and frozen novelties.
A $50 million investment plan accommodates production needs and employee needs. Upon completion, there will be expanded locker rooms, break rooms and employee parking lots. Two production lines were added in 2015 and two more this year. Additional lines are under consideration.
To become more efficient, the company invests in automation. But that hasn’t totally eliminated jobs. “It’s an amazing thing about automation. It doesn’t run itself. We’ve had a lot of equipment and we got a lot of people running it,” Wells said.
Because Wells Enterprises claims to operate the world’s largest ice cream plant, Le Mars proclaims itself “the ice cream capital of the world.” Wells provides more than jobs in its plant. It supports employment at other businesses. Driving from the company’s hilltop headquarters to the ice cream facility, one passes a pallet-building business, a cold storage warehouse and a trucking company that support Wells Enterprises. A bakery that makes cones and wafers for Wells and other customers moved to Le Mars.
Blue Bunny ice cream is a national brand. By segment, it is the No. 3 brand and manufacturer in the retail category, Wells said, adding that the company has much higher concentration in ACV (all-commodity volume) in the Central, Southeast and Southwest United States. The East and West Coasts represent opportunities.
“I think we’ve got around a five share, nationally,” Wells said. “Our understanding is that we’re the No. 1 brand and No. 1 supplier to the foodservice category nationally. On the mobile vending side, we’re a clear No. 1 and have been for a number of years.”
He said Wells Enterprises has been able to grow in vending and foodservice because it has improved the level of service and delivers consistent quality and safe food.
“Making a safe, quality food has become a priority, especially in the foodservice side,” he said.
Wells called the company’s growth “opportunistic and strategic.” He is realistic about the hard work involved in growing sales.
“Retail is a long, slow, expensive grind to grow because you got to pull it through the consumer and invest heavily there. You got to push it off the shelf with breakthrough innovation. And then you have to break through the clutter and the competition of some very strong national and regional players.”
The reason for being
The company’s Statement of Fundamentals consists of its purpose for existing, its vision and a set of beliefs. The framed document hangs in Wells’ office and throughout the headquarters building. The Vision is to be the most admired ice cream company in America. Wells described how he came to write the company’s purpose: “To bring joy to everyday life because of the love of ice cream.”
“I Googled ice cream. Why do people eat ice cream? And the No. 1 answer was because it makes them happy. I went to my executive team and said, ‘I know this sounds kind of hokey but I think we exist to make people happy.’”
One of the Beliefs is: “We believe it’s not just what we do but how we do it. It differentiates it.”
How the company does it, Wells explained, is rooted in the culture.
“We have really created a culture of ‘Do something we love to do with people we love to do it with,’” he said.
All employees are invited to taste-test new flavors. Those who work “behind the scenes have an opportunity to have some impact on what’s going to happen. We’re all consumers at heart,” Wells said.
Another stated belief is “there is a great value in being goal- and performance-oriented through individual responsibility and accountability.” No organization can exist without that, Wells said.
“What I bring to this leadership position is starting with the end in mind. If you know what you want the end to look like, you can reverse engineer to the beginning. I try and lead the organization that way,” he said. “If we’re a performance-driven organization with personal accountability and goals, when we meet or exceed those goals, we can celebrate. We can talk about how we got there and how great that is, and who’s benefited from it.”
Wells Enterprises wanted to share its centennial celebration with a meaningful organization, Wells said. The company selected Make-A-Wish and committed to funding a hundred wishes. Since 2013, Wells Enterprises has continued to fund additional wishes every year.
When Wells talks about the company’s involvement with the Foundation, his eyes light up. The values of the ice cream company align with those of the charitable organization.
Make-A-Wish and Wells Enterprises are “very like-minded,” he said. “The things that drive them, why they get up every day and what they do benefits people. They bring joy. Part of their statement is bringing joy to those families that they serve.”
“Every company looks for a cause partner that really emulates their values and is just an extension of who they are. And every cause partner looks for a company that can do that. And in this case, Make-A-Wish and Wells have found a new relationship,” Wells said.
“The greatest value we found is our employees take part in this. They show up and hand out ice cream and help build the wish for a basketball court. They help be part of whatever the event is that serves that child and that family,” Wells said. Employees return from volunteering and tell him “Thank you. I’d of paid you for the opportunity to experience that.”
The Wells family itself gives back to the town of Le Mars. Mike’s wife Cheryl runs a coffee shop, bakery and wedding cake business called Habitué. The profits support a number of faith-based charities.
Ice cream industry leadership
Mike Wells is involved in Iowa’s business community. He chairs the Iowa Business Council (and is the sole representative of the food manufacturing industry). Wells is a member of the Retail Owned Food Dealers Association, the Iowa Grocers Association and the International Association of Ice Cream Distributors and Vendors.
On a national level, he has served on the International Ice Cream Council of the International Dairy Foods Association. He served as the chairman of the International Ice Cream Association from 2013 to 2015 and vice chairman from 2012 to 2013. He also served as secretary of IDFA from 2013 to 2015. For his efforts, IDFA awarded him a Soaring Eagle award in 2016.
Rediscovering the joy
Returning to the company’s roots caused Wells and others to rediscover the joy that was always in Blue Bunny ice cream.
“I love knowing that what I do makes a difference not only to me and to the Wells family but to an entire community and ultimately, to a group of consumers out there that choose to spend their hard-earned money to purchase our products every day, and that we bring a little joy to them at the end of the day,” Wells said.
“I love my job,” Wells said. “I love the responsibility of it. What we do matters to this community. Other businesses can come and build their business around our business. That’s really cool. We’ve made a difference in a lot of peoples’ lives.”
Ice cream is comfort food, Baumgartner said. “It has the ability to connect families unlike any other food.”
Through ice cream, Wells Enterprises makes people happy.