Swapping an executive post at one of the industry's great success stories to head up an upstart chain of scoop shops named for a lipstick-painted cow might raise eyebrows in some circles, but it made sense to Jon Jameson. The former senior vice president and chief brand officer for Panera Bread Co. joined Columbia, Md.-based MaggieMoo's Ice Cream and Treatery as president and CEO in December 2003 with an ambitious goal to expand from 107 units to 1,000 in five years' time.

"It's absolutely evident from what Panera has taught that people are willing to pay for quality and they're willing to pay for an experience. I saw that as an opportunity," Jameson says.

Reports from the U.S. Department of Agriculture's (USDA) Economic Research Service (ERS) mirror Jameson's viewpoint. "Since 1988, Americans on average have been eating a little less ice cream overall but more of the higher-priced, higher-milkfat premium and superpremium ice creams, as well as frozen yogurt and other frozen dairy products," notes a June 2003 ERS report.

Consumers' desire to reward themselves with quality frozen treats has eclipsed recent economic challenges as well as the growing national interest in more-healthful eating. Operators are adapting to the trends by introducing more health-minded options but for the most part staying true to full-flavored products.

"In the frozen-dessert business, quality is king. If you don't have quality product, quality service and quality toppings, your customer knows the difference. That's what's driving our success," says Andy Kuntz, president of Springfield, Mo.-based Andy's Frozen Custard.

Americans spent $12.5 billion on frozen dessert purchases away from home in 2002, according to the USDA's Dairy Facts 2003 report. Besides ice cream cones and cups, emerging chains typically menu specialty sundaes, malts, milkshakes (often hand dipped), hard-scooped and soft-serve frozen yogurt, frozen custard, cakes, pies and ice cream-based drinks. Lighter items such as sorbets, sherbets and smoothies round out menus to provide a "something for everyone" experience.

Inside the segment's hottest chains, superpremium ice cream--defined by its low overrun (amount of air incorporated into the mix during freezing), high fat content and top-quality ingredients--headlines menu boards. This group includes rapidly expanding companies such as Scottsdale, Ariz.-based Cold Stone Creamery and Houston-based Marble Slab Creamery, as well as small but growing concepts such as MaggieMoo's and Atlanta-based Jake's Ice Creams & Sorbets.

Tom Fletcher, president of Wheaton, Ill.-based cooperative KaleidoScoops Ice Cream & More, says most of his 84 units sell premium ice cream (a notch below superpremium but also known for a lower overrun and higher fat content than regular ice cream) because "it appeals to the masses." Premium ice cream also is the product of choice at Bridgewater, Pa.-based Bruster's Real Ice Cream, where former TCBY President Jim Sahene is CEO, and at category leaders Dairy Queen and Baskin-Robbins.

At non-ice-cream concepts such as Andy's Frozen Custard and Fayetteville, Ark.-based Shake's Frozen Custard, product typically is made fresh on site at regular intervals throughout the day using customized machines. A higher egg-yolk content lends the product its trademark smooth, creamy texture.

Unlike premium and superpremium ice cream chains, where a multitude of flavors are available each day, custard stores generally offer only vanilla, chocolate and a daily featured flavor.

Mixing It Up
The role mix-ins play varies by concept. For some, among them MaggieMoo's, Andy's, Shake's and Orlando-based 2 Scoops Cafe, these additions are a defining aspect.

"We view the inclusions as a way to enhance and prop up our frozen custard," says Corey Osborne, president and CEO of Shake's, where custard mixed with items such as candy and fruit are dubbed Concretes. Offered in three sizes, they are the No. 1 seller.

At family-focused 2 Scoops Cafe, which has contracts underway for stores in five states in addition to its two existing locations, toppings aim to appeal to children, with options including chocolate-crème cookies and gummy worms.

Other chains, such as KaleidoScoops, Bruster's and North Aurora, Ill.-based Oberweis Dairy Inc., offer a limited number of toppings and mix-ins but refute the idea that they are a new mainstay of business.

"I don't believe mix-ins are for die-hard ice cream lovers," says Jake Rothschild, founder of Jake's Ice Creams & Sorbets. "Ice cream should have its own personality and quality."

Competitors that share this viewpoint often offer flavors with extras already added, such as KaleidoScoops' Trash Can variety: vanilla ice cream with a chocolate swirl, cookie dough, sprinkles, caramelized nuts and cookie pieces.

Baltimore-based Lee's Ice Cream, a 25-year-old concept primed for growth after its August 2002 purchase by father-and-son team Jacques and Steven Rubin, co-brands with sister bakery chain Claudia's Kitchen to offer flavors featuring brownies and cookies.

While ice cream indulgences are unlikely to lose their place in the mainstream American diet, operators are trying to cover all the bases when it comes to nutrition. From "carb-friendly" creations at Oberweis to dairy-free "Joyscream" at Jake's, ice cream chains are selling every variety of more-healthful items: nonfat, low fat, low sugar, no sugar added and lower carb.

Smoochies Lite & Creamy, a four-unit New York City chain, built its concept for the more nutritionally minded: all 60 soft-serve flavors (four are available each day) have just 15 calories per fluid ounce and less than 1 gram of fat per standard four-ounce serving. All products are kosher and lactose-free as well.

"As health trends come and go, we see part of the segment moving into those areas," says Bruster's Sahene. "But standard premium ice cream has always remained the core of the business."

Some ice cream chains have expanded their bill of fare to include nondessert items as well. Smoochies sells bagels, muffins and biscotti throughout the day, while 2 Scoops Cafe menu choices include sub sandwiches, wraps, hot dogs and nachos at larger-footprint stores.

The "gourmet soda fountain menu" at Jake's Ice Cream & Sorbets gets even more ambitious, featuring options such as a fried-green-tomato BLT and house-made chicken salad with roasted chicken breast marinated in hard cider and topped with apples and pepper jack cheese. According to Rothschild, food sales comprise 60% of business and drive average checks higher than the competition.

Regardless of menu size and scope, operators in the ice cream category expect sweet returns looking forward.

"I don't know that there's a cycle in the ice cream industry in the sense that it goes out of favor. There are good and bad economic times, but people will continue to choose to buy a treat like ice cream," says Bill Caterham, senior vice president of operations at Lee's Ice Cream. "It has universal appeal."

Hot Shots

Oberweis Dairy Inc. garners more than 40% of sales from its brisk home delivery business. The company, which built a new dairy processing facility in 1996, regularly delivers products such as ice cream, milk, cheese, butter and eggs to 45,000 customers. Family-friendly 2 Scoops Cafe features child-sized counters and kids corners with coloring books and reading materials. Franchisees also have the option of closing on Sundays. Customers can purchase used books at Jake's Ice Creams & Sorbets through the chain's partnership with Dancing Frog Books, which pays rent to Jake's and gives the company a percentage of sales. Jake's also requires franchisees to invest 3% of their marketing budgets in community involvement. MaggieMoo's Ice Cream and Treatery uses gelato-style dipping cabinets to give customers a great view of its ice cream's colors and variety.

The Scoop on Campus Creameries

Several universities have operated their own on-campus dairies for decades, providing fresh ice cream and products to students and local residents. The University Creamery at Penn State University in University Park, Pa., is one of the largest campus creameries in the country. It produced 225,000 gallons of ice cream in 2002 and similar numbers in 2003, says Manager Tom Palchak. Part of Penn State's Department of Food Science, it employs a full-time staff of 21 but also offers internships that help students prepare for careers in government inspections, quality control, and dairy research and development. At Washington State University in Pullman, Wash., students from all backgrounds take jobs at the creamery as well as at Ferdinand's Ice Cream Shoppe, where its products are sold. A self-funding unit of the Department of Food Science and Human Nutrition, the creamery produces about 12,000 gallons of ice cream each year, says Manager Russ Salvadalena.