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2020 Industry Outlook
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Industry Outlook
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Q & A
The National Dipper asked several ice cream shop owners from around the country to look at their business for the past year and to look ahead to predict the future of the ice cream industry in 2020. This year the participants in the Industry Outlook are: Anna Curcitt, Mercurio’s Company, Pittsburgh, PA; Sarah Ebaugh, Ebaugh’s Whistle Stop, White Lake, MI; Theresa Fouquette, Bliss Homemade Creamery, Inc., Tacoma, WA; Katie Kimball, Katie’s Homemade Ice Cream, Cape Cod, MA; Nicole Lane, Vanilla Moose, Aztec, NM; Jay Ragusa, Gofer Ice Cream, Greenwich, CT.; and Dan Sell, The STIL, Boise, ID.
QUESTION : Please give a few sentences about yourself and your store. How long have you been in business? How many stores do you own? What do you serve? Etc.
CRUCITT: I’m Anna Crucitt and my brothers are Michael Mercurio and Joe Mercurio. We are a sibling trio that owns the Mercurio’s Company in Pittsburgh, PA. We have two restaurant/retail locations and one gelato wholesale/manufacturing business. Our company developed over the last 20 years, starting with a gelato shop, the Mulberry Street Creamery, that our parents began in Kittanning, PA in 1999. In 2016, the three of us bought our parents gelato wholesale business. In our restaurants, we offer customers an authentic Italian gelato, 30 flavors at a time, served in cups and cones, milkshakes and floats in addition to Neapolitan pizza and appetizers.
EBAUGH: Hi my name is Sarah Ebaugh I am a Realtor, I fell in love with this abandoned ice cream shop up north of my cottage, so I bought it and decided to give it a go. I had to gut the whole building and start from scratch. I opened Ebaugh’s Whistle Stop in White Lake, Michigan. I have been in business for four years now. This is my only store so far. We serve soft serve and hand dipped ice cream, broasted chicken, burgers and Coney dogs.
FOUQUETTE: My name is Theresa Fouqette and I am the general manager at Bliss Homemade Creamery, Inc. in Tacoma, Wash. Super premium ice cream is made locally by us in small batches using only the very best all natural ingredients. We scoop into cups and cones and we also make milkshakes, ice cream cakes and sundaes. We started by first building out a kitchen and serving from a vintage camping trailer (food truck) while the location of our current brick and mortar in a new shopping development was under construction.
KIMBALL: My name is Katie Kimball and I am the second-generation owner of Katie’s Homemade Ice Cream on Cape Cod. I have been the sole owner since 2016 when my mother retired and I purchased the business. Our primary items are hand-dipped, homemade ice cream cones and cups, soft serve, and sundaes with a variety of house made toppings. We strive to produce as much as possible right on the premises. We are seasonal, open April through September every year.
LANE: My name is Nicole Lane and I am the owner of Vanilla Moose in Aztec, NM. Vanilla Moose has been in business since 1983 and we have been running it for the past four seasons. We are a soft serve shop that specializes in shakes, sundaes and novelties.
RAGUSA: I am Jay Ragusa and I founded Gofer Ice Cream in 2003 in Greenwich, CT. I always had the idea of expanding through franchising the concept. Today we currently have five shops with three company owned and two franchised. I’m excited to also have recently announced a renewed focus on the franchise program and our third franchise location set to open this spring. We offer both traditional premium hard and soft serve as well as a fat free and even plant based options.
SELL: We are Kasey Allen and Dan Sell and we own The STIL in Boise, Idaho. We opened in July, 2017 so we are approximately 2.5 years old. Our store serves high quality, small batch ice cream in dairy, alcohol infused, dairy free, and vegan options.
CRUCITT: The three of us are the youngest of seven kids in our family and grew up watching our parents operate the Mulberry Street Creamery. We all have a love of the Italian culture and of course, the food, and working in the family business was always a lot of fun for me. In 2005, the retail side of our business was moved to a highend shopping district in Pittsburgh, although the manufacturing remained in Kittanning. I went to college at the University of Pittsburgh, majored in Marketing and Italian, and managed the new gelateria while I was in school. I finished college in 2009 and finding a job was tricky for a new graduate. It was at that time I decided to take over the retail shop from my parents. My biggest decision to continue on with the family business was that our product is delicious, and I knew I had an award winning and marketable product. I also wanted the flexibility given to business owners and the unlimited income potential.
EBAUGH: I have always wanted to have a small restaurant and I saw this as a great opportunity. I did some research, went to a couple of ice cream conventions and learned as I went. the back of our mind we thought it would be a fun endeavor to one day open our own shop. We moved back to our hometown and heard our local shop was for sale so we inquired. Three weeks later we signed the papers with the idea to keep a local favorite in business.
RAGUSA: I will always credit my father with putting the idea in my head as we looked at this business as a family when I was about 12 years old. After an eight year career on Wall Street I decided to go out on my own and put the Gofer Ice Cream business plan into action.
SELL: There was a market gap in the high end, local ice cream market.
QUESTION: Were sales up or down in 2019? To what do you attribute the increase or decrease in business? Do you think the economy in general affected sales in your store last year or was it the weather, gasoline prices, food costs, etc.?
CRUCITT: Our sales were up in 2019 against 2018 and 2017. We have seen about 3% growth against 2016, not factoring in any increases in prices to our customers. 2016 was a big year for us so to be back at that level in 2019 was really exciting. Although, the positive of having lower revenue in 2017 is that I found ways to cut our labor costs and overhead. We went back to basics on budgeting our payroll against projected sales and working to keep our prime costs at or under 55%. It was really difficult at first, cutting labor to be in line with sales, as we were so used to having a certain number of hands on deck at all times. The challenge was in asking our initial staff to do more or essentially ‘work harder’. To them, it didn’t seem fair. But as I’ve learned, once you train someone new coming in to do something one way, they never knew it was done differently.
EBAUGH: My sales were up in 2019, I believe it was increased marketing and a new sign on the main road, directing traffic towards my shop. I’m sure the better economy had something to do with it as well. But I’ve also learned how to keep my food costs and waste down.
FOUQUETTE: 2019 was our first year in our new shop. Sales were up! We live in one of the fastest growing counties in the country. This was definitely a consideration in our decision to go into business.
KIMBALL: Sales in 2019 were slightly up over sales in 2018. There were two main factors that I believe
FOUQUETTE: My sister and I worked at our local Baskin Robbins together when we were in high school. It was so much fun! People that go for ice cream are in a happy mood. We want to be a part of our community’s every day celebrations!
KIMBALL: I decided to take over the family ice cream store because of the simple truth that ice cream makes people happy. Owning an ice cream shop gives you the privilege of offering a product that brings people together. Katie’s Ice Cream is the product of our family wishing to create a welcoming, and fun, gathering place for locals and visitors alike to enjoy a delicious treat that we all loved.
contributed to this slight increase. They include people spending a bit more and great weather with little rain. Based on our figures we saw our customers were more likely to splurge on add-ons this year over last helping to increase our sales slightly.
LANE: Sales were down in 2019. Our community relies heavily on the oil and gas industry. Without getting into politics, many had lost their jobs and still more had moved to other states where the jobs were more plentiful. Many businesses have also closed their doors or sought to be bought out by larger companies.
RAGUSA: In 2019 we were fortunate to have an up year, and in fact our best year. Average store sales ranged from +10% to +19%. I believe the great economy always helps, but I don’t feel it’s a large factor. Weather was great from what I recall and our new social advertising campaign as well as some competition dropping off in a few of the markets certainly contributed to our success.
SELL: Sales were up. We opened an additional store as well as expanded our wholesale. Store over store sales were up slightly mostly due to further market penetration.
QUESTION: Were profits up or down in 2019? To what do you attribute the increase or decrease in profits?
CRUCITT: From 2016 to 2019 our profits have been up every year. I attribute it to having lower revenue and being hyper aware of labor and product costs as to not lose any profit. We definitely lost a lot of conveniences, ie, buying a lot of the supplies with one vendor versus making multiple stops or having multiple deliveries, but we would go with whatever was the least expensive. And I’m talking about supplies like napkins, paper towels, and even milk. Milk can vary between stores about a dollar and I would find the place that carried it at the lowest price and get it there. It all adds up.
EBAUGH: My profits were up, because my sales increased.
FOUQUETTE: We are in the growth and learning phase. We have great expectations for 2020! cream, so I’m not sure. I do bring vanilla back from Mexico when I go.
FOUQUETTE: We haven’t heard anything new.
KIMBALL: Profits in 2019 were up slightly. I contribute this to the new business practices we began implementing three years ago including diversifying food distributors, focusing on food cost management and changing employee and scheduling practices.
LANE: Profits were up in 2019. The previous year I had read the book Profit First by Mike Mikalowicz and implemented his principles in our business. 2019 was the first year my husband and I were able to take home a profit and had money left to do some capitol improvements on our business property.
RAGUSA: Our profits were great. However we did stumble when a neighboring building tenant had a fire, as a result we lost our top performing shop in mid October. So that continues to be a drag on our personal profits as it’s being rebuilt. The Gofer Ice Cream stores, both company and franchised owned, had increased profits thanks to increased revenue, as well some more efficient operations and our market penetration.
SELL: Due to our pace of growth, our profits were down as the money was being reinvested into the business.
QUESTION: Vanilla prices have been very high in the past few years. What are your vanilla suppliers telling you about prices for the 2020 season?
CRUCITT: For the past three years we have purchased a year’s worth of vanilla at a time through the NICRA auction, paying slightly more than market in an effort to support the scholarships. I have noticed the price increases since 2017 and trends for 2020 seem to be consistent with the prices continuing to increase.
EBAUGH: I don’t make my own ice KIMBALL: I’ve been told that vanilla prices are expected to fall slightly or stay pretty much the same.
LANE: Vanilla suppliers have made it sound like the prices will be about the same as in 2019 with a possible slight decrease towards the end of the year. I’m not holding my breath, however.
RAGUSA: I actually just had a brief discussion with our supplier last week and he indicated the prices are indeed coming down a bit over the next few months. After years of record high prices from as long as I have been in business (since 2003), I’m certainly looking forward to some relief.
SELL: My vanilla supplier reduced prices for 2020.
EDITOR’S NOTE: We contacted Nielsen Massey Vanilla and received the following statement regarding vanilla prices: “As a manufacturer of high quality natural vanilla extracts, Nielsen-Massey closely monitors global pricing trends weekly for vanilla beans with its partners around the world. According to Craig Nielsen, Vice President of Sustainability, the 2019 vanilla crop in Madagascar was smaller-than-anticipated due to wet, cold weather in the country’s vanilla growing regions. Early indications are that the 2020 crop will be more robust in size, which means there should be plentiful supplies of high quality vanilla beans coming to market later this year and into 2021.” Nielsen said his company will update customers and partners about potential changes in vanilla prices as the year progresses.
QUESTION: Are your mix/ice cream prices increasing or decreasing for 2020? To what do you attribute the increase or decrease in price?
That year, we decided to work with a dairy to produce our gelato base versus pasteurizing and making on site. It cost us too much in labor to make the quantity that we needed on a weekly basis. It also has eliminated any possibility for waste during the production process. We are able to buy our gelato base from the dairy at a lower cost than making it ourselves because we were eliminating the cost of labor and waste.
EBAUGH: My mix prices are increasing, due to the increased price of milk.
FOUQUETTE: We haven’t heard anything new.
KIMBALL: Ice cream mix prices are increasing for 2020.
LANE: I saw an increase last year in our mix prices. I assume our prices will continue to increase since our state has implemented an increase in minimum wage over the next three years.
RAGUSA: From my understanding butter prices have been flat to down recently and this summer milk looks to be up a little bit and vanilla prices down. So overall I expect flat prices versus 2019 for our mix this season. EBAUGH: I will be offering extreme shakes this year and ice cream cakes.
FOUQUETTE: We just added milkshakes including our “MovieStar” milkshakes. We will continue to add celebratory Instagram worthy desserts and continue to develop more fun flavors that we release and promote in very small batches.
KIMBALL: We are not planning on offering any new products in 2020. We are actually having a flashback year in which we feature old flavors that have been retired including: Lemon Meringue: Lemon ice cream swirled with Italian meringue. Sandy Dunes: Hazelnut ice cream with a milk chocolate swirl and pieces of chocolate biscotti. Shark Tooth: Chocolate peanut butter ice cream with chunks of chocolate. Double Dutch Chocolate.
LANE: We have some new products such as a week of breakfast cereal toppings, a scoop able cookie dough, a Fluffer Nutter shake and we will continue to develop in season fruit flavors for our fruit popsicles. On the business side, we are offering more catering options for special events such as weddings, Birthday parties, graduations, etc. We have attended Expo’s where people can see us as a catering option.
RAGUSA: We decided a few years back to focus on plant based ice cream since I had a personal interest in this area. Therefore, I believe we have been ahead of the trend and are much farther down the road versus the competition in our offerings. I expect to really expand our options and feature this category as a differentiator as we grow the franchise program.
SELL: We’ll be rolling out several new ice cream flavors as well as fresh baked (in store) cookies.
QUESTION: What was your best selling item during the 2019 summer season? Why?
CRUCITT: Our best selling item last year was a small cup of gelato with 2 flavors. Our cup in about 3-5 ounces sold by the ounce and customers love that they can get a smaller portion with more than one flavor. The waffle cone would be a close second.
EBAUGH: Soft serve ice cream, be-
SELL: Ours are the same as 2019. We are hoping to drive them down a bit given additional economies of scale and purchasing power.
QUESTION: What new products and/or flavors will you offer customers in 2020?
CRUCITT: We are adding gelato filled donuts and bubble waffles to our menu. Also working to turn some of our popular flavors into vegan, nondairy options. New gelato flavors include, frozen hot cocoa, caramel coffee crunch, brownie brittle, white chocolate peppermint bark, strawberry matcha tea, cherry ricotta, chocolate rum raisin, salty caramel butter pecan and honey roasted pistachio. We serve 30 gelato flavors at a time and rotate our list to include 5 brand new flavors every two months. We always hope that one might be a hit and then add it to the rotation for the following season.
FOUQUETTE: Cups and cones continue to be the most popular.
KIMBALL: Our best-selling item is a one scoop ice cream cone because it is affordable, sizable and fulfilling.
LANE: Twist Cone. Our cones are priced so that it’s an affordable option and customers will come back many times a week to enjoy it as a treat. I’ve even had customers come back more than once in a day to enjoy a cone.
RAGUSA: I believe our standard single scoop cup followed by our soft serve regular and our Razzle “mix-in” remains our most popular items over the years.
SELL: Brownie Batter, people love their chocolate.
QUESTION: Good employees are one of the “keys” to a good business. How do you find good employees and what do you do to keep them?
CURCITT: It’s all about the customer experience. When customers come in, they either (hopefully) like or love their experience with your company. If they love it, they will go online and leave a review, post pictures on social media, tell their friends and generate positive attention towards your business. People want to work for companies that have that type of reputation. For the most part, our employees are customers first and they wouldn’t apply if they didn’t feel like it was a place they would be comfortable working. I think we keep them by creating an atmosphere that challenges them but isn’t high pressure. We also overstaff by 15% of our total hours to make sure that we can accommodate their schedules. We feel that flexibility and recognition are major factors in retention.
EBAUGH: I hire people with good personalities and a desire to work and learn. I train them well and make sure they know how much I value them. At the end of the season, I take them on an outing/theme park, to show my appreciation and most of them come back to work the following season.
FOUQUETTE: We ask our good employees about their friends. It also helps that we have a 19 year old son with friends. We are also located near universities and technical colleges.
KIMBALL: To hire good employees, we hire from within the company, we hire brand new job seekers, and relying on existing employees being brand ambassadors to recruit people they believe to be a good fit. In order to keep our good employees, we make sure that they are given opportunities to grow, offer benefits unique to our company, manage with trust and challenge them when needed.
LANE: I work with the school counselor at our local high school. I send her applications every year and she hands them out to kids based on our criteria for an employee. I also ask our current employees to recommend friends who they believe would enjoy the job and they would be willing to work alongside on a busy night.
RAGUSA: We are still looking for the best method of finding employees as we rely on word of mouth and postings in the local high schools. To keep them, we provide very flexible hours to match their schedule and work with the crew as long as they work with us. We try to make it a fun experience for all involved, and that includes the crew.
SELL: The culture we have created in our shop is something individuals are drawn to. Further, our current employees are a great source of referrals, they are fans of our product and business.
QUESTION: In your opinion, what are the other “keys” to a successful business?
CRUCITT: I’m always thinking about my contingency plan for the next dollar. If this doesn’t work out, what’s next? If it does, what’s next? What am I willing to do and where am I willing to take my business that falls in line with my brand and mission. Also, engagement with my customers is so important. Whether it’s in the shop or online, they want to hear from us and want those relationships. It’s difficult to balance the effort and time it takes with all of the other owner responsibilities we have, but it’s always worth it.
EBAUGH: Pricing and getting people through the door. Letting your customers know what they mean to you.
FOUQUETTE: We are just trying to learn from our past mistakes and build upon our successes. A positive outlook and a desire to connect with our community in positive ways have been so important!
KIMBALL: An awesome product for a decent price. Love what you are doing, the people you work with and the people you serve. Budget and be careful with your money. Invest and reinvest in yourself, your employees and your business.
LANE: Passion and Purpose. You have to love what you do and understand why you do what you do.
RAGUSA: As for the “Keys to Business” I will always defer to the late great Dicky Fox. “ The key to business is personal relationships”, in our case with our customers and franchisees. We strive to go the extra step to understand and relate to them and have their best interest in mind in all we do.
SELL: Make a great product. Know where your money is being spent. Create raving fans both internally and externally.
QUESTION: Do you use social media to promote your business? If yes, tell us what you use and how you use it. If no, tell us why.
CRUCITT: Absolutely. I use it to promote our business because as a consumer, I respond to it when other businesses use it to promote their businesses. It works! We are currently on Facebook, Instagram and TikTok. I use each of these for different purposes. My Facebook wall mostly has content that I share between other businesses,
events that are going on in our community and events that we are holding in our shops. I use our Instagram wall to push the face of our brand. I want people to look through our content and know exactly what experience they will receive when they come to our restaurant and how they will feel. I use our Instagram story in conjunction with TikTok to show the fun elements of our business, our personality, and more of the behind the scenes.
EBAUGH: I do, I mainly use Facebook with daily posts, to let our customers know what we have going on for the daily specials or activities.
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FOUQUETTE: Yes!! We have hired an independent social media manager. Her photography is amazing! We are so busy with daily operations that keeping up with social media would be impossible without her! Her work has been gold!
KIMBALL: No. I’m am just learning how to use social media to promote the business. I am beginning with Instagram.
LANE: Absolutely! Social Media is a must for growing business. We use Instagram and Facebook. We use it from everything to promotions, product features, customer pictures, event pictures to holiday wishes. We even encourage our employees to post if they see families making great memories at our store.
RAGUSA: Social media is clearly of growing importance. As Gary Vee says attention people are giving to their phone is replacing the television, and we can’t ignore it. This summer was actually the first year we had any sort of structured paid advertising on Facebook and Instagram. At the same time we did have our best sales season. So while it is hard to attribute to this campaign, I sure can’t discount it.
SELL: Yes, it’s our prime source of marketing. We leverage it to interact with our most passionate customers as well as to expand our partnership network.
QUESTION: What do you see as the biggest problem in running your store? What are you doing to solve it?
CRUCITT: Managing the different personalities of the staff, handling egos and removing gossip. We schedule staff based on who works well with one another and create groups that bring each other up. Our expectations of behavior are clearly outlined in our policy manual and this is read to the staff at orientation, before they become an actual employee. They know that we have a zero-tolerance policy for gossip and talking negatively about anyone outside or inside our business is cause for dismissal. It doesn’t always solve the problem as certain types of people love to carry on with drama but once our managers catch wind or it’s reported by another staff member, that team member is let go. It’s the only way we’ve been able to keep the morale up.
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FOUQUETTE: Communication can be especially difficult in a fast paced and changing environment. We can’t always be there to make sure that everything has had training in all areas. We are trying to get better at using technology to make sure everyone stays informed.
KIMBALL: The biggest problem in running the store is uncontrollable employee costs. Not really a solvable problem, we are focusing on conservative scheduling, increased in-store efficiency through layout, menu and design, and employee training.
LANE: My biggest problem is delegating. I know exactly how I want things to be done so it’s quicker to do it myself. I’m working on being better at training others to perform tasks and being open to suggestions or other ways of doing things.
RAGUSA: In growing Gofer Ice Cream we feel hiring and managing managers across a growing number of locations led us to conclude that franchising is the best way for us to grow. We have a proven system and now we need to bring in highly motivated managers (franchisees) to own and operate new shops.
SELL: Time and attention. We are often too involved with the day-to-day operations to effectively “drive the bus.” We have hired a general manager and will be empowering employees to take over certain facets of the business.
QUESTION: What was the best promotion you ran in your store in 2019?
CRUCITT: National Ice Cream for Breakfast Day in 2019 and 2020 was a huge success. We offered different menu items, like bubble waffles, breakfast sandwiches made with two pancakes and gelato, frozen berry parfaits, new breakfast gelato flavors and drinks. It was promoted as a one day only event and the feedback from the customers was great. It drove in a day’s worth of business in just 3 hours. EBAUGH: Free family movie nights. I provide a big screen outdoor movie, with free popcorn to show my appreciation to my customers.
FOUQUETTE: We use Clover for our POS and utilize the promo feature to send out instant promos to our customer base. The app also sends out 20% off coupons to our customers if they haven’t checked in at our shop in a while. This tool has been great at enticing people to come in when it may not be on their mind.
EBAUGH: I am very involved with my community and I show my customers appreciation.
FOUQUETTE: Fun flavors that change often and a fun atmosphere. We also make a lot of vegan flavors! So many people can’t or don’t do dairy. It is great to have many options for just about everyone.
KIMBALL: We didn’t run any promotions in 2019.
LANE: We have monthly (seasonal) specials and our best seller was our Key Lime Sundae and Shake.
RAGUSA: We have been a little relaxed on the promotion side in 2019 with a focus on the relaunch of the Gofer Ice Cream franchise program. But in an effort to add value I can mention my favorite promotion we did in the past, that we will bring back soon. We call it the “Name Game”, we pick one male and one female name for each day of the month and those people get a free ice cream. We just posted them on an on-line calendar and people loved it. The promotion got us a lot of social attention. People got involved and were telling their friends and requesting their name be added. I wish I could take credit for the idea but I believe my brother Justin learned about it from some craft beer promotion. So we did some good old fashioned R&D on that one (Rebrand and Duplicate!)
SELL: Ice cream for breakfast.
QUESTION: What sets you apart from your competition?
CRUCITT: Our unwavering commitment to quality and our products. We use what we truly feel are the best ingredients available to us. We frequently make our flavors with different ingredients to see if there is a way to make it better. We try not to fall into the trap of ‘this is how it’s always been done’. I feel that there are always new ingredients on the market and always KIMBALL: We are traditionally, untraditional. Not only do we offer a wide selection of classic flavors and treats but we also offer some unique flavors. We also try to be as genuinely, homemade as possible in order to make the familiar unique.
LANE: We are the only family owned ice cream business in town, which gives us a competitive edge. We also have been around for a while so customers have childhood memories tied to our shop and want to share those same memories with their families. We are truly a community establishment and hope to be for many years to come.
RAGUSA: We feel being truly part of the communities we serve, sets us part. Gofer Ice Cream is the home team and a gathering place for friends, family and fun. Quality, variety, cleanliness and good service are always important and as we build the Gofer Ice Cream it is important to deliver on that brand promise. We also use technology to allow for our franchisees to have multiple streams of income like on-line ordering, delivery, catering and we are working on a curbside pickup app for 2020.
SELL: The quality of our ice cream. We do not use artificial flavorings, extracts, etc. Whatever the flavor says is in it...is in it. We utilize gelato machines so that customers get less air and a thicker, richer ice cream experience. Finally, we incorporate alcohol both as a flavoring, as well as a complimentary item in the form of beer and wine pairings. v
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