Multi-Distribution Strategies: A Case Study on Jeni's Splendid Ice Creams
In 2002, Jeni's Splendid Ice Creams debuted in a humble stall at the North Market, a public showcase for food entrepreneurs in Columbus, Ohio. Back when the word "salted caramel" still elicited quizzical looks, Jeni Britton Bauer was hand-crafting and scooping her own adventurous flavors. Four years later she opened her first store. Britton Bauer has since opened nine more stores and two additional stores are in the works. Her local retail model made sense for a product most effectively marketed with a dollop on a plastic spoon and whose shelf life can be measured in minutes on a sunny day.
In 2006, Britton Bauer"s brother-in-law worked out the mechanics for shipping ice cream. Her husband created a Web site, and the company began shipping direct to homes. That drew the attention of The New York Times and Food and Wine Magazine. Al Roker paid a visit. Britton Bauer further raised her profile with an ice cream cookbook that elicited a James Beard Award. Around the country, high-end groceries began clamoring for pints of Jeni's Spendid Ice Creams' many unique flavors.
"One of the goals when I joined the company in 2009 was to open more shops, and the other was to create a wholesale business," says Lowe. Today, in addition to its own stores and Web site, Jeni's Splendid Ice Creams ships direct to wholesale customers around the country - roughly 500 stores including Dean and Deluca in New York and The Goddess and Grocer chain in Chicago. The company's CEO, John Lowe, proclaims, "We are the largest buyer of dry ice in the state of Ohio." The company, which has upwards of 400 employees, serves another 300 locations - including Whole Foods - through leading natural-food distributors DPI and UNFI.
The scoop shops, located in Ohio and Tennessee with one slated for Chicago, do not compete with the company's wholesale customers. And the company makes sure that its Web site, which vaulted Britton Bauer to prominence, doesn't either. Jenis.com functions almost like a gallery: a place where the artist can display her latest, most challenging work and charge a pretty penny for it. "We charge on our Web site what we believe is the highest price for our ice cream: $12 a pint," says Lowe. "That enables us to not undercut retailers around the country," which generally charge $10 a pint. In addition, the company requires minimum Web orders of four pints. "That positions it more as a gift purchase or an event-type purchase," says Lowe. "In the grocery stores, people are typically buying one or two pints at a time."
The high price and bulk purchase requirements appeal chiefly to Jeni's Splendid Ice Creams aficionados. The Web channel further targets that market with exotic flavors not available elsewhere. "That allows us not to compete with the grocers while also augmenting our brand, which is for unique, special flavors," says Lowe. For example, Queen City Cayenne - dark chocolate with a cayenne kick isn't everyone's cup of tea. But it has earned a cult following that includes the food writer for Esquire Magazine, who proclaimed his love on the TV show The Best Thing I Ever Ate. "It is important for that flavor to be available to core fans but not appropriate for it to be on store shelves where a smaller percentage of people would want it," says Lowe.
The Web site also allows Britton Bauer to indulge her inner artist by creating limited-edition ice cream "collections." For example, the four-flavor Zelda Collection - an homage to the wife of F. Scott Fitzgerald - included Cognac and Marmalade and Loveless Biscuits and Peach Jam. Britton Bauer whipped up just 60 batches, and they sold out in two hours - at a cost of $75 for the four pints. The press attention that follows such fanciful releases predictably boosts wholesale customers' sales.
The company further supports its wholesale channel with an energetic social media program. And it has built a team of part-timers across the country to hand out samples at groceries. Most food companies use outside providers for that, says Lowe, "but we prefer that it be our own employee who understands the product and can talk about it." At Jeni's Splendid Ice Creams' stores, consumers can enjoy almost endless sampling, which helps customers identify flavors they can later pick up from their grocers during routine shopping trips.
The distribution strategy pursued by Jeni's Splendid Ice Creams succeeds on multiple levels. With its high prices and exclusive offerings, the website caters to the brand's most ardent fans. It also gives the founder free rein to develop more imaginative but less widely-appealing products that can be manufactured in small batches for limited release. That attracts press and builds sales in all the channels. The company stores, meanwhile, encourage consumers to taste with abandon, increasing demand and decreasing their hesitation about plunking down $10 for a pint at Whole Foods. Like the best multi-channel models, there is something for everyone.