Constant Evolution Returns Dippin’ Dots to Growth
When Dippin’ Dots exploded onto the scene in the 90s, it was dubbed the ice cream of the future. Now, 31 years on, nitrogen-frozen drops of ice cream aren’t exactly mind boggling, but the company’s constant evolution in the last few years has things moving in the right direction again.
Back in 2008, when the company filed for bankruptcy, a lot of people made jokes about how “the future is dead.” And the company took a big hit then and through the Great Recession—but CMO Michael Barrette said the company has been making some great strides.
“We had the same headwinds as others during the Recession, but since then we’ve more than doubled our business,” said Barrette. “We’ve grown since then by 130 percent.”
In his wheelhouse, he said the marketing has been on point to connect with the key demographic of eight to 18. A focus on pop culture that resonates with young fans has been a major boon. For one, the company connected with the musician Dawin for a song called “I want my Dippin’ Dots,” and it slaps [is that what the kids say?]. And a sweepstakes promotion around Train Your Dragon 4 drove some traffic for franchisees.
But the many operational changes don’t require any cash course in youth culture, and there have been a lot of changes. There has been product innovation from pumpkin spice pie ice cream, capitalizing on the fall pumpkin-everything trend and returning to Dippin’ Dot roots with healthier, yogurt-based flavors. But the biggest change was a shift was away from the typical mall-based operations.
“We came out of that in 2009 or 2011, there were more headwinds in the mall space,” said Barrette.
That meant turning franchisees into wholesalers.
“We reinvented the model somewhat, so they went form a mall centric model to a territory model. We wanted our zees to become wholesalers in the convenience store channel. So we do this on a direct basis in over about 13,000 convenience drug sores and grocery stores,” said Barrette.
Under that model, franchisees also brought packaged Dippin’ Dots into more than 3,000 schools.
He said the addition of Doc’s Popcorn in 2014 was another value-add for the remaining outlets at theme parks, sporting venues and yes, malls.
“We have about two dozen co-brands,” Barrette. “That helps franchisees have more penetration into the malls space without more labor cost or rent.”
He said quality malls are still some of the best locations, and Gen Z is flipping the script on the mall decline, they actually like to shop.
Above all, it was about getting close and staying close to that core demographic.
“It always begins and ends with the consumers, it’s about having connectivity with that core demographic, not being all things to all people. Strategy is about what not to do as opposed to what to do, stay with that rifle approach to who the consumer is,” said Barrette.
According to the Dippin’ Dots FDD, in the year ended December 31, 2018, the company revenue hit $66 million with a franchise AUV of $485,500 and a $112,204 to $366,950 buy-in. The company also added 20 locations since 2016.