August 8, 2005
Sweet Relief | Maine's ice cream makers rely on innovative marketing and unique products to scoop out a niche
By Taylor Smith
Roger Gifford likes watching the three-gallon tubs of his company's ice cream move through the production process. From the factory floor, where ingredients are mixed and flavorings like vanilla extract are added to swirling vats of creamy liquid, the finished product ˆ Gifford's Famous Ice Cream ˆ is hosed into tubs that ride a conveyor belt into the adjacent hardening room.
Moving past the heavy plastic sheeting that hangs over the doorway, Gifford steps gingerly into the hardening room. The floor is slick with ice crystals that form where the factory floor's room temperature mixes with the 28-degree-below-zero chill of the hardening room. At certain points in the hardening process, the temperatures reach 100 degrees below zero ˆ cold enough to easily freeze the ink in a reporter's ballpoint pen.
But Gifford, who co-owns Skowhegan-based Gifford's Ice Cream with his brother, John, seems immune to the cold. He excitedly explains each step in the process, and waits for the tubs of ice cream to roll into the $1 million TRI-Tray freezing system, a two-year-old series of high-tech shelves in which tubs are stored before they're delivered to the warehouse, which is kept at a relatively balmy 40-below.
The production facility, which is filled with equipment new and old, is a testament to the company's longevity ˆ Gifford's this year is marking the 25th year since it added ice cream to its long-time milk production business. A few years later, the milk business was phased out and Gifford's began focusing exclusively on ice cream. "It's a changing world out there," says Gifford, whose family has deep roots in the dairy industry, as we walk from the storage section of the 48,000-square-foot facility through the narrow hallways and up a set of steep stairs to his third-floor office. "There used to be a lot of strong regional ice cream brands, but these days the regional guys are pretty much gone."
The ice cream industry still maintains an egalitarian streak: It's not difficult or particularly expensive to make ice cream on a small scale, and, well, just about everybody loves it. So there's still plenty of room left for small players to make a living. But moving a business beyond side-of-the-road ice cream stands or limited regional distribution is a difficult chore for any company save the big firms with hefty financial backing. Once-regional ice cream makers like Ben & Jerry's and Edy's have been bought out by big conglomerates like Unilever and Nestlé, and have then been taken national via large ˆ and expensive ˆ marketing campaigns. Deeper pockets also mean that the larger companies can more easily absorb rising costs for ingredients such as sugar and cream, and can price their products much lower than their smaller peers. In the midst of that gulf, mid-sized players like Gifford's and its peers hope to not only maintain their territory, but expand it bit by bit.
"We're right between the craft-produced ice cream and the mass-produced ice cream," says Jeff Shain, owner of Shain's of Maine, a Sanford-based ice cream maker that distributes to convenience stores, restaurants and ice cream stands in Maine, New Hampshire and Massachusetts. "If you make a great product, they'll find you, but you have to be in a financial position to stay out there. It doesn't happen overnight, and you have to be able to weather the storm."
Paying the premium
In recent years, Gifford's found that ferreting out niches in the ice cream market where a medium-sized player could make inroads was proving harder to do. The company is the largest ice cream producer in Maine, distributing more than 1.2 million gallons of ice cream a year to supermarkets, retail stores and ice cream stands in New England and parts of New York. But Roger and John Gifford figured that the company needed a complete overhaul of its branding and marketing strategy if it was going to successfully break into new regional markets.
So late last year, Gifford's hired Swardlick Marketing Group in Portland to begin looking for ways to differentiate itself from other ice creams in the supermarket freezer, whether regional or national brands. John Sauve, managing director of food and nutritional products at Swardlick, began with focus groups in Maine and Boston ˆ a city that's a foreign market to Gifford's ˆ to determine what the brand's strengths and weaknesses were relative to its competition. "What we found was that Gifford's could occupy a unique position in the marketplace that no one had occupied," says Sauve.
That position was "ice cream stand ice cream," a tag Sauve says evoked focus group participants' "wonderful memories" of going to the local ice cream stand on a warm summer night. Swardlick and Gifford's then hired Cape Elizabeth-based Leslie Evans Design Associates to recast the company's packaging with a more nostalgic design, and dreamed up new flavors, such as cake batter, that evoked the ice cream stand ethos. "Ice cream has become a commoditized market where you have to compete on price," says Sauve. "Gifford's wasn't going to win on price, so they have to able to add value to the product so people are willing to pay a premium price."
Alden Greene, owner of the Downeast Ice Cream Factory in Boothbay Harbor, knows well that specialty ice cream can be a significant draw compared to store-bought desserts. And though he's worked hard to keep the costs down ˆ a one-scoop cone costs just $1.95, he says ˆ it's still a premium over the half-gallon of rocky road in a grocer's freezer. But, it's a premium that people are willing to pay: Greene says his small store, which turns out just 5,000 gallons of ice cream a year compared to 1.2 million gallons at Gifford's and 550,000 gallons at Shain's, has become a de rigeur stopping point in downtown Boothbay Harbor.
One couple, for example, regularly makes the two-hour round trip from Winthrop for scoops of his specialty orange Swiss chocolate chip ice cream. "We're growing every year," he says. "I say it's because of my great management skills, but it's really because everyone can afford two or three dollars for a cone."
But that doesn't mean marketing doesn't have a place: After launching Gifford's new packaging in stores earlier this year, Roger Gifford says supermarket sales jumped 20% in March and April. He hopes the new campaign will help increase supermarket sales, which account for 28% of Gifford's total revenues, even more. (Gifford won't disclose actual revenue figures, but says the firm has turned a profit every year it's been in the ice cream business.)
But he admits that it's tough to get into supermarkets in areas where the brand isn't well known. To break the ice in certain markets, the company since the early 90s has embraced some quirky marketing ideas, including the ice-cream-gram. The strategy involves Gifford's employees dropping in unsolicited at Maine businesses ˆ restaurants, beauty parlors or insurance agencies, for example ˆ and delivering a package that includes a bucket of ice cream, spoons and napkins.
The ice-cream-gram's coup de grace, according to Gifford, is the inclusion of a handful of Gifford's coupons, many of which find their way to supermarkets in the area ˆ whether or not those stores actually carry Gifford's ice cream. That strategy, says Gifford, has helped get his company's product into supermarkets in Maine. "Having customers ask for Gifford's forces supermarkets to pay attention," he says.
Gifford adds it was much easier to get his product on supermarket shelves in the 80s and early 90s, noting that retail competition has changed dramatically during the past 20 or so years. "We were all on the same playing field," he says. "Now, you need deeper pockets to compete."
Shelf appeal
Though the size of the average supermarket has increased considerably in recent years, so has the number of products competing for shelf space in each store. That's doubly true in the ice cream aisle: Roger Gifford remembers that ice cream flavors 50 years ago were limited to vanilla, chocolate, strawberry and coffee. These days, Gifford's alone offers more than 40 variations on the ice cream theme. As a result, many supermarkets charge food manufacturers for shelf space through what's known as a "slotting fee." A 2003 Federal Trade Commission study examining slotting fees at a handful of supermarkets found that ice cream was among the most expensive items for suppliers to get on supermarket shelves, largely because of limited freezer space. The average slotting fee for ice cream, according to the study, was $10,625 per product, and at some stores the fee rose as high as $28,921.
Gifford says he's been able to avoid such fees thanks in large part to his company's long tenure on the shelves of supermarkets such as Hannaford and Shaw's. But at Shain's of Maine, Jeff Shain says he hasn't sought out supermarket shelf space, largely because he doesn't want to compete on price against national companies like Edy's or Friendly's ˆ both of which, he says, recently offered two half-gallons of ice cream for the cut-rate price of five dollars at a local supermarket.
Meanwhile, Shain says he tried to find other ways to boost sales without going through the supermarket checkout line. One of his most successful products has been the Sea Dog Biscuit, a hunk of vanilla ice cream wedged between two chocolate chip cookies. The confection was born in the early 90s, before its namesake Portland Sea Dogs even stepped onto Hadlock Field for their first minor league ball game. On a whim, Shain approached members of the Sea Dogs front office, visiting their makeshift headquarters in a trailer on the site where the stadium was being built. "I asked them if they'd like to put their name on a product, and they said sure," says Shain. "But I didn't even know what kind of product it was going to be. I was driving down the highway thinking, 'What have I got myself into?'"
But despite that initial uncertainty and some early supply chain problems ˆ the York County homeless shelter that Shain contracted to make the cookies, for example, missed orders after it lost most of its workforce during the balmy summer months ˆ Shain's Sea Dog Biscuit has become a perennial fan favorite. Shain says the stadium crews typically sell more than 2,000 biscuits per game, at $2.25 per biscuit; he expects sales to reach 300,000 this season.
Meanwhile, Shain has developed other niches in the ice cream world. He supplies a dozen or so Japanese restaurants in southern Maine with exotic ice cream flavors like green tea and ginger, and handles a number of accounts with institutional clients including Colby College in Waterville and Maine Maritime Academy in Castine. Bulk sales, which makes up roughly 65% of Shain's business, require Shain ˆ the company's only deliveryman ˆ to make the rounds of the company's hundreds of clients from Massachusetts to Maine. Shain logs between 4,000-5,000 miles on his fleet of four trucks each week ˆ he says he'll drive a different one each day to spread the miles around ˆ making the rounds with his product.
That personalized attention to the business, he says, has helped the company increase revenues at a 15%-20% clip each year, though he declined to give specific numbers. "I'll still make the trip to take two tubs of ice cream to a convenience store," he says. "We still have the small-business mentality."
Meanwhile, just as Shain is banking that personalized service will help his company land customers and expand his market, Roger Gifford is wagering that his company's new marketing effort, which ties Gifford's Ice Cream into the nostalgia of old-time ice cream stands, will help his company continue to grow for the next 25 years. "We had to find ways to do things that others can't do," says Gifford. "We started with ice cream stands, and that conjures up good memories. We're the ice cream stand ice cream, and you can't put that on Breyers or Friendly's."
Moving past the heavy plastic sheeting that hangs over the doorway, Gifford steps gingerly into the hardening room. The floor is slick with ice crystals that form where the factory floor's room temperature mixes with the 28-degree-below-zero chill of the hardening room. At certain points in the hardening process, the temperatures reach 100 degrees below zero ˆ cold enough to easily freeze the ink in a reporter's ballpoint pen.
But Gifford, who co-owns Skowhegan-based Gifford's Ice Cream with his brother, John, seems immune to the cold. He excitedly explains each step in the process, and waits for the tubs of ice cream to roll into the $1 million TRI-Tray freezing system, a two-year-old series of high-tech shelves in which tubs are stored before they're delivered to the warehouse, which is kept at a relatively balmy 40-below.
The production facility, which is filled with equipment new and old, is a testament to the company's longevity ˆ Gifford's this year is marking the 25th year since it added ice cream to its long-time milk production business. A few years later, the milk business was phased out and Gifford's began focusing exclusively on ice cream. "It's a changing world out there," says Gifford, whose family has deep roots in the dairy industry, as we walk from the storage section of the 48,000-square-foot facility through the narrow hallways and up a set of steep stairs to his third-floor office. "There used to be a lot of strong regional ice cream brands, but these days the regional guys are pretty much gone."
The ice cream industry still maintains an egalitarian streak: It's not difficult or particularly expensive to make ice cream on a small scale, and, well, just about everybody loves it. So there's still plenty of room left for small players to make a living. But moving a business beyond side-of-the-road ice cream stands or limited regional distribution is a difficult chore for any company save the big firms with hefty financial backing. Once-regional ice cream makers like Ben & Jerry's and Edy's have been bought out by big conglomerates like Unilever and Nestlé, and have then been taken national via large ˆ and expensive ˆ marketing campaigns. Deeper pockets also mean that the larger companies can more easily absorb rising costs for ingredients such as sugar and cream, and can price their products much lower than their smaller peers. In the midst of that gulf, mid-sized players like Gifford's and its peers hope to not only maintain their territory, but expand it bit by bit.
"We're right between the craft-produced ice cream and the mass-produced ice cream," says Jeff Shain, owner of Shain's of Maine, a Sanford-based ice cream maker that distributes to convenience stores, restaurants and ice cream stands in Maine, New Hampshire and Massachusetts. "If you make a great product, they'll find you, but you have to be in a financial position to stay out there. It doesn't happen overnight, and you have to be able to weather the storm."
Paying the premium
In recent years, Gifford's found that ferreting out niches in the ice cream market where a medium-sized player could make inroads was proving harder to do. The company is the largest ice cream producer in Maine, distributing more than 1.2 million gallons of ice cream a year to supermarkets, retail stores and ice cream stands in New England and parts of New York. But Roger and John Gifford figured that the company needed a complete overhaul of its branding and marketing strategy if it was going to successfully break into new regional markets.
So late last year, Gifford's hired Swardlick Marketing Group in Portland to begin looking for ways to differentiate itself from other ice creams in the supermarket freezer, whether regional or national brands. John Sauve, managing director of food and nutritional products at Swardlick, began with focus groups in Maine and Boston ˆ a city that's a foreign market to Gifford's ˆ to determine what the brand's strengths and weaknesses were relative to its competition. "What we found was that Gifford's could occupy a unique position in the marketplace that no one had occupied," says Sauve.
That position was "ice cream stand ice cream," a tag Sauve says evoked focus group participants' "wonderful memories" of going to the local ice cream stand on a warm summer night. Swardlick and Gifford's then hired Cape Elizabeth-based Leslie Evans Design Associates to recast the company's packaging with a more nostalgic design, and dreamed up new flavors, such as cake batter, that evoked the ice cream stand ethos. "Ice cream has become a commoditized market where you have to compete on price," says Sauve. "Gifford's wasn't going to win on price, so they have to able to add value to the product so people are willing to pay a premium price."
Alden Greene, owner of the Downeast Ice Cream Factory in Boothbay Harbor, knows well that specialty ice cream can be a significant draw compared to store-bought desserts. And though he's worked hard to keep the costs down ˆ a one-scoop cone costs just $1.95, he says ˆ it's still a premium over the half-gallon of rocky road in a grocer's freezer. But, it's a premium that people are willing to pay: Greene says his small store, which turns out just 5,000 gallons of ice cream a year compared to 1.2 million gallons at Gifford's and 550,000 gallons at Shain's, has become a de rigeur stopping point in downtown Boothbay Harbor.
One couple, for example, regularly makes the two-hour round trip from Winthrop for scoops of his specialty orange Swiss chocolate chip ice cream. "We're growing every year," he says. "I say it's because of my great management skills, but it's really because everyone can afford two or three dollars for a cone."
But that doesn't mean marketing doesn't have a place: After launching Gifford's new packaging in stores earlier this year, Roger Gifford says supermarket sales jumped 20% in March and April. He hopes the new campaign will help increase supermarket sales, which account for 28% of Gifford's total revenues, even more. (Gifford won't disclose actual revenue figures, but says the firm has turned a profit every year it's been in the ice cream business.)
But he admits that it's tough to get into supermarkets in areas where the brand isn't well known. To break the ice in certain markets, the company since the early 90s has embraced some quirky marketing ideas, including the ice-cream-gram. The strategy involves Gifford's employees dropping in unsolicited at Maine businesses ˆ restaurants, beauty parlors or insurance agencies, for example ˆ and delivering a package that includes a bucket of ice cream, spoons and napkins.
The ice-cream-gram's coup de grace, according to Gifford, is the inclusion of a handful of Gifford's coupons, many of which find their way to supermarkets in the area ˆ whether or not those stores actually carry Gifford's ice cream. That strategy, says Gifford, has helped get his company's product into supermarkets in Maine. "Having customers ask for Gifford's forces supermarkets to pay attention," he says.
Gifford adds it was much easier to get his product on supermarket shelves in the 80s and early 90s, noting that retail competition has changed dramatically during the past 20 or so years. "We were all on the same playing field," he says. "Now, you need deeper pockets to compete."
Shelf appeal
Though the size of the average supermarket has increased considerably in recent years, so has the number of products competing for shelf space in each store. That's doubly true in the ice cream aisle: Roger Gifford remembers that ice cream flavors 50 years ago were limited to vanilla, chocolate, strawberry and coffee. These days, Gifford's alone offers more than 40 variations on the ice cream theme. As a result, many supermarkets charge food manufacturers for shelf space through what's known as a "slotting fee." A 2003 Federal Trade Commission study examining slotting fees at a handful of supermarkets found that ice cream was among the most expensive items for suppliers to get on supermarket shelves, largely because of limited freezer space. The average slotting fee for ice cream, according to the study, was $10,625 per product, and at some stores the fee rose as high as $28,921.
Gifford says he's been able to avoid such fees thanks in large part to his company's long tenure on the shelves of supermarkets such as Hannaford and Shaw's. But at Shain's of Maine, Jeff Shain says he hasn't sought out supermarket shelf space, largely because he doesn't want to compete on price against national companies like Edy's or Friendly's ˆ both of which, he says, recently offered two half-gallons of ice cream for the cut-rate price of five dollars at a local supermarket.
Meanwhile, Shain says he tried to find other ways to boost sales without going through the supermarket checkout line. One of his most successful products has been the Sea Dog Biscuit, a hunk of vanilla ice cream wedged between two chocolate chip cookies. The confection was born in the early 90s, before its namesake Portland Sea Dogs even stepped onto Hadlock Field for their first minor league ball game. On a whim, Shain approached members of the Sea Dogs front office, visiting their makeshift headquarters in a trailer on the site where the stadium was being built. "I asked them if they'd like to put their name on a product, and they said sure," says Shain. "But I didn't even know what kind of product it was going to be. I was driving down the highway thinking, 'What have I got myself into?'"
But despite that initial uncertainty and some early supply chain problems ˆ the York County homeless shelter that Shain contracted to make the cookies, for example, missed orders after it lost most of its workforce during the balmy summer months ˆ Shain's Sea Dog Biscuit has become a perennial fan favorite. Shain says the stadium crews typically sell more than 2,000 biscuits per game, at $2.25 per biscuit; he expects sales to reach 300,000 this season.
Meanwhile, Shain has developed other niches in the ice cream world. He supplies a dozen or so Japanese restaurants in southern Maine with exotic ice cream flavors like green tea and ginger, and handles a number of accounts with institutional clients including Colby College in Waterville and Maine Maritime Academy in Castine. Bulk sales, which makes up roughly 65% of Shain's business, require Shain ˆ the company's only deliveryman ˆ to make the rounds of the company's hundreds of clients from Massachusetts to Maine. Shain logs between 4,000-5,000 miles on his fleet of four trucks each week ˆ he says he'll drive a different one each day to spread the miles around ˆ making the rounds with his product.
That personalized attention to the business, he says, has helped the company increase revenues at a 15%-20% clip each year, though he declined to give specific numbers. "I'll still make the trip to take two tubs of ice cream to a convenience store," he says. "We still have the small-business mentality."
Meanwhile, just as Shain is banking that personalized service will help his company land customers and expand his market, Roger Gifford is wagering that his company's new marketing effort, which ties Gifford's Ice Cream into the nostalgia of old-time ice cream stands, will help his company continue to grow for the next 25 years. "We had to find ways to do things that others can't do," says Gifford. "We started with ice cream stands, and that conjures up good memories. We're the ice cream stand ice cream, and you can't put that on Breyers or Friendly's."
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