I scream, you scream, we all scream for ice cream.
In fact, 98 percent of all households scream for ice cream, which would seem to make Shelley Roth’s job as president of Pierre’s French Ice Cream Co. easy. Everyone loves your product, so all that’s left to do is sell it, right?
The problem is, with a market so broad, competition is fierce. National, regional and local players all fight for space in the freezer section of the local grocery store, and consumers are overwhelmed with door after door of ice cream options. Multiple brands compete with a dizzying array of flavors that stretch from floor to head-height, with packages luring in the unwary with pictures of mouth-watering scoops of ice cream that are difficult to pass up.
With consolidation in the grocery industry, there are fewer and fewer grocery buyers to sell to. One way for a grocer to streamline operations is to eliminate the number of suppliers you buy from, focusing only on the best-selling brands.
So competing with the likes of Dreyers (marketed under the Edy’s brand name east of the Rocky Mountains), a $2 billion company with 4,500 employees, and Good Humor-Breyers, a $1.2 billion company with 2,400 employees, can be a monumental task when you have 150 employees and less than $100 million in sales. (Pierre’s doesn’t divulge exact sales figures — Roth says the figure is between $10 million and $100 million.) It means convincing buyers from outside the region who represents stores in Cleveland that Pierre’s is well-known and supported by the community and will sell well for them.
Despite the challenges, Pierre’s continues to thrive in a crowded marketplace, averaging growth of 3 percent to 6 percent annually. It uses its size to its best advantage; being a smaller company has its advantages, especially when it comes to producing new products.
The company regularly beats its larger competitors to market with innovative products such as its no-sugar-added line Slender, which uses Splenda sweetener, and its Carb Success line of low-carb ice cream. Products that sport the first-to-market advantage have given the company the opportunity to gain entry into markets that would otherwise be closed to it.
“We have tons of opportunities,” says Roth. “I think we still have opportunities here in Northeast Ohio. There are a lot of opportunities in the state. I still feel we have products and will continue to develop products that may have a more national appeal. We want to continue to improve locally, regionally and on a more national scale.”
Parlor power
Pierre’s Ice Cream Shop opened in 1932 on Cleveland’s east side. The ice cream was manufactured in the back room and served in a small parlor in the front. The popularity of the product grew, and the company began making specialty ice creams for restaurants, country clubs and gourmet markets. It was soon looking to close the shop and focus on promoting its brand to grocers and other vendors.
At the same time, Sol Roth was running the Royal Ice Cream Co., which was also growing. Both companies needed a new factory, so they came together to share operations in 1960. That same year, the family running Pierre’s decided to get out of the business and sold Pierre’s to Roth.
“My father really focused on the Pierre’s brand in the ’60s; he focused on distribution and availability and whatever else he needed to do to grow,” says Shelley Roth. “So the business kept growing until he outgrew the factory that was located on Hough Avenue, moved to a bigger location on Carnegie and continued to grow.”
The year was 1979. Shelley Roth had finished college and was living in New York City when her father called to ask her to come home to the business.
“My brother had decided to go to medical school, one of his sales vice presidents at the time was retiring ,and he felt uncomfortable with the size of the business that there should be someone to be more of a backup or understudy to him,” says Roth. “Because my brother had decided to go in another direction, my dad called me in New York and asked me to return to the business.
“I was enjoying New York a lot — a real lot,” she says with a laugh. “I was reluctant to return. But with my family and father here and the fact that he was feeling uncomfortable, I told him I would come and help. From that point on, it turned out that I really enjoyed helping us grow and giving my dad a chance to back away from the company gradually.
“He loved the business, and when you are attached to something, you don’t just cut it off and leave it to someone. I spent 15 years with him working side-by-side, then he really backed off.”
Roth started out doing sales and marketing while learning more about the financial and operational aspects of the company. Eventually, she assumed those roles as well as overall management of the company, and delegated her previous duties to others. She became president in 1991.
In April of 1995, Pierre’s moved into its state-of-the-art distribution and office headquarters at East 65th Street and Euclid Avenue, just one mile west of its original shop.
Opportunity knocks
Pierre’s has gotten where it is today by focusing on a quality product. French-style ice cream is the richest type of ice cream, and it isn’t cheap to make.
“We have always focused on quality,” says Roth. “We try to really listen to consumers, understanding their preferences, priorities and purposes. We focus on making quality products and making products they desire. We try to keep our product assortment fresh and exciting. We grew on a local scale, and eventually we got the message across to the community in many ways.”
By focusing on quality, the company stood out among other local competitors.
“When I first entered the business, there were a lot of locally branded products and retailers, and now there aren’t very many,” says Roth. “I think even more now than before, customers appreciate the fact that the company is based here and we care about the community.”
Pierre’s used its local strength to expand into surrounding areas, the region and eventually to other states. Products are now sold primarily throughout Ohio, western Pennsylvania, western New York, southern Michigan, northern Kentucky and West Virginia. Some products are available in a dozen other states throughout the Southeast and Midwest.
Despite the popularity of the ice cream in Greater Cleveland, Roth says trying to become a national player would be folly.
“Our Pierre’s brand ice cream, it would be impossible to make that a national brand,” says Roth. “There are too many too powerful national brands. We couldn’t make our mark against them.”
So rather than trying to go head-to-head with billion-dollar companies, Pierre’s exploits their weaknesses for its own gain. Its line of Slender no-sugar-added ice cream hit the shelves in October 2002, long before the big players’ offerings.
“Slender has done tremendously well when introduced in markets outside of Ohio to people who don’t know the Pierre’s brand,” says Roth. “They are embracing Slender, and we have a lot more potential with that. Because of our expertise and understanding of the business, I think we have the potential to improve what we do with Slender and find other products that are unique to a bigger market.”
Big companies tend to leave gaps in their product lines, either because they won’t be profitable enough to add to the bottom line or simply because the big company bureaucracy slows their reaction time.
“We focus on being one step ahead of them, like we were with Slender,” says Roth. “We were ahead of all the national companies with that product line. We are working on things now that are ahead of them. The fact is, we have great ability to put in some items that make sense to introduce.”
With Americans flocking to low-carb diets, Pierre’s reacted well before any of the national players with its Carb Success line of low-carb ice cream. Carb Success had been on the market for months — it launched in March of this year — before Good Humor-Breyers launched its own version in mid-summer. Dreyer’s didn’t have a low-carb ice cream offering as of August, but dropped $70 million in late July to acquire Silhouette Brands, makers of Skinny Cow and Skinny Carb, a low-fat and low-carb ice cream brand respectively.
Pierre’s had a product that was in demand but that the big players weren’t offering yet, giving the company opportunities to break into new markets that otherwise would have been closed to it.
“Of course, our ice cream still has potential, but it will be more geographic,” says Roth. “First it’s Cleveland, then Northeast Ohio, then all of Ohio and then broader. We do have potential. But we can’t reach as far as we did with Slender and go directly into the Carolinas.”
While niche products may take the Pierre’s name far from its Cleveland roots, Roth says they don’t provide a launching pad for getting its regular ice cream on distant shelves.
“It’s still tough,” says Roth of trying to get retailers to accept new brands. “Knowing the retailers, I don’t want to say they wouldn’t try to make a program that made sense, but we are not putting our planning or thinking into dovetailing Slender {into a wider product offering}.”
Local attention
Pierre’s is always looking for opportunities in other areas, but the company knows the strength of its customer base is right here in Northeast Ohio. But even serving the people who are most familiar with the brand can be challenging with the consolidation of the grocery and other industries.
“There are changes amongst the places our products are distributed,” says Roth. “There have been changes from outside this region. For instance, it is a bigger challenge for a company locally here once someone is making decisions from another city and they don’t really understand our market or our brand.”
Sometimes it means having to completely re-explain the brand and its popularity.
“If we have the opportunity to tell our story and they are open-minded, they realize the brand does amazing things for their business and they’ll work with us. Our local accounts are more than supportive and excited about the programs we do and the opportunities we bring to their department. They understand the brand and its ability to help their business.
“We are always thinking about the end consumer. As long as the consumer supports the brand, it makes it helpful when we have to tell our story to people outside of the region. We treat all customers on an equal basis and do the right thing for the consumer.
“Depending on what decisions are made, it shows up in how many flavors will be in a store and whether our novelties (such as ice cream sandwiches) will or won’t be in the store. We are very proud of the success our brand has had.”
Gaining brand recognition and loyalty isn’t easy in the freezer section. If you are looking for good old vanilla, a mid-sized grocer might have a dozen or more choices. How do you get consumers to pick your vanilla over that of a competitor?
“We try to have appeal in the stores to be successful,” says Roth. “First and foremost, you have to get on the shelf to begin with, and that’s challenge No. 1. Problem two is to try to make them pick us out of everyone else in the case. Some of it is impulse, so what package gets you excited?”
Pierre’s has distinctive red packaging that is a big contrast to its huge competitors, which have predominantly brown and black packages.
“We pop off the shelf,” says Roth.
The third challenge of getting consumers to pick Pierre’s is to try to reach out with advertising or promotions to those who have never had the ice cream.
“That’s the other fun part of our business — the marketing,” says Roth. “We have to find the right message to match people with what they are looking for. It might be, ‘Try me if you want the highest quality ice cream, or if you have special dietary needs such as ice cream without sugar or if you need a low-fat or low-carb product.'”
Pierre’s uses a strategy of multiple marketing channels that changes from year to year. In early summer, the company was running a radio campaign. When your product is consumed by 98 percent of all households across the entire demographic spectrum, there are many marketing avenues available.
Pricing is also a factor in a consumer’s decision, but when you emphasize quality, you can’t be the lowest-cost player.
“We’re always competitive,” says Roth. “It’s just part of the business, but if we have to be the lowest price on the shelf, we could never do that with the quality we have and the flavor assortments. Some of our flavors are very expensive to make because of the fudges, peanut butter or brownies that are in them.”
Unlike in other industries, the food industry prices products in an average range despite individual costs. An ice cream with expensive components is typically going to be the same price as a standard flavor.
Behind the ice cream
“There are a lot things going on besides what you see on the product side,” says Roth. “There are a lot of exciting things on the inside that help make us a better company. We are focusing on the development of our management team. We are focusing on technology.”
Pierre’s recently upgraded its computers companywide. Its delivery drivers have a system of handheld computers similar to what UPS drivers use.
“We do things to help them be more efficient,” says Roth. “We are continually upgrading our equipment and doing improvements on production equipment. There are a lot of things that go into the business that are invisible that make us a better company and keep us competitive.
“I think technology is incredible. I can’t quantify it for you, but the ability to communicate better, to get information at your fingertips and the ability to understand your business — it’s very exciting.”
The company also runs a distribution business that includes hauling competitors’ products to the same stores where Pierre’s goes.
“At first it seems like, ‘Wow, why are you helping a competitor?’ but the way we look at it, when you go to the supermarket, you will see 10 to 40 doors in the ice cream department,” says Roth. “We have enough product with the Pierre’s name to probably fill six doors. That means there are four to 34 doors, that even if the store had every flavor, there are still going to be other products, and there are other products out there that fill people’s needs. The point is, we have an investment in special handling warehouse equipment, and those products have to get to the store one way or another, so it comes along with our brand. In other markets, there are enormous grocery warehouses, but we have the expertise for specialty handling.
“We do a better job than a neutral warehouse, because a neutral warehouse has tens of thousands of units. We have 800 to 900-some units. We have the low temperatures to keep the product best. We do a better job, and people appreciate that. It’s even different from frozen food. Ice cream should be at minus 20 degrees, while frozen food is fine at 0 degrees.”
While the business continues to grow, Roth is quick to credit her management team and employees.
“I’d like to say I’m a better listener than talker because we have such incredible people,” says Roth. “I do a lot of listening and try to help bring some perspective to the equation. I try to let people do their jobs. There is a lot of experience throughout the company, and I value that very much. When new people join us, I value that, too.”
Going against billion-dollar competitors means there’s little time to celebrate successes, because only constant innovation and utilizing the advantages of being a smaller company keep Pierre’s a step ahead of the others.
“We recognize we can’t rely on the ways we did it five years ago,” says Roth “As long as management recognizes changes and brings changes to the business, that’s what is exciting. We’re more flexible than the national companies.” How to reach: Pierre’s French Ice Cream Co., (216) 432-1144.
Pierre’s scoops
* Pierre’s French Ice Cream Co. has been serving ice cream since 1932.
* The most popular flavor is French vanilla.
* French ice cream is a richer and creamier tasting ice cream because pasteurized egg yolks are included in the recipe.
* Pierre’s has 51 flavors of ice cream, but with the combination of ice creams, frozen yogurts, sherbets and sorbets, the company has more than 235 products and flavors that bear its name.
* Pierre’s 30,000-square-foot warehouse holds the equivalent of 36 million scoops of ice cream.
* New flavor ideas come from many different places including consumer requests, employee suggestions and new ingredient developments.
* The warehouse freezer is kept at a constant 20 degrees below zero.
* There are 14 half-cup servings in each 1.75 quart of Pierre’s.
