As a freshman at Father Judge High School in northeast Philadelphia, Dan Kilcoyne volunteered to help his older brother Shawn find a product not sold in the area for his business class during his senior year and then draft a plan to convince its manufacturer to bring it there.
The brothers settled on Dippin’ Dots, a brand they loved after spotting it on vacation. They wrote up a business plan suggesting they open one in their high school cafeteria and mailed it to the beaded ice cream maker. Months later, Dan and Shawn got a surprising response back from the company that changed Dan’s life.
”We got a letter in the mail, saying, ‘You know, sounds great, when can you start’ and we said, ‘Aw man, we better tell Mom and Dad what we did,’ ” Kilcoyne recalled.
It didn’t take long before Dan was wheeling out a cart to peddle Dippin’ Dots in the school cafeteria and at sporting events and dances. Eventually, Dan opened 18 retail stores in the area while in high school. But when Dippin’ Dots adopted a franchise model a few years later, saddling Kilcoyne with franchise fees and royalty payments, his ice cream business shut down and college suddenly became a harsh reality.
But like in high school, ice cream remained top of mind. In 2004, Kilcoyne joined forces with Mini Melts, a U.K.-based competitor to Dippin’ Dots that was looking to make inroads in the U.S., and he began selling its version of the super-chilled ice cream on this side of the Atlantic. What was once a side hustle in high school, has since grown into a successful career and a product that is now available in 40 states.
Today, Mini Melts sells 14 flavors, with cotton candy, cookies and cream, and rainbow ice its top three selling items. Its ice cream has 14% butterfat, a threshold that allows it to be considered a premium offering in the category, according to the company. While butterfat costs more, it leads to a denser, richer, creamier-tasting product. It also contributes to unique shapes and sizes instead of perfect circles.
“We feel like a bit of a startup,” Kilcoyne, now 40 years old, noted. “We’re growing very quickly.”
Business at Mini Melts is heating up. The company expects to sell up to 30 million cups in 2023 across 34,000 points of distribution, including 2,000 of its stand-alone kiosks, compared to about 19 million cups a year ago.
Kilcoyne said sales, which are above $50 million, are growing 35% annually. They are within striking distance of $100 million in the next 18 months as Mini Melts enters new outlets in existing markets and moves into 10 new regions across the U.S.
Mini Melts has largely eschewed retail stores, instead prioritizing convenience and drug stores, such as Wawa, 7-Eleven and Walgreens, where it brings in a specially designed freezer set at 40 degrees Fahrenheit below zero to carry its ice cream.
Entertainment establishments like Dave and Busters, zoos and aquariums also are popular, but they typically carry the ice cream cups in special kiosks that Mini Melts can monitor remotely to gauge demand and see which flavors are most popular.
As Kilcoyne and his team worked to enter these and similar establishments, they weren’t always met with an enthusiastic response. After dogged persistence, a few convenience and drug stores agreed to carry Mini Melts. Soon Kilcoyne became armed with invaluable, and somewhat surprising, data he could use to appeal to other businesses.
Consumers who purchased Mini Melts were more likely to buy another ice cream product, debunking earlier notions that carrying the product would siphon off sales from other novelty treats, Kilcoyne said. The reason is likely because Mini Melts’ prepackaged cups make it ideal for an individual to consume while a pint or tub of ice cream is more conducive to sharing.
In many cases, Mini Melts outsells other single-serve ice cream products like bars or cones by a five-to-one margin, he said.
The company makes its ice cream and distributes it from 23 locations across the U.S. Controlling much of the supply chain, rather than depending on a co-packer or a trucking service, has allowed Mini Melts to largely withstand recent disruptions in manufacturing or driver shortages that have impacted its competitors, he said.
While Mini Melts entered the U.S. about 20 years after Dippin’ Dots, it has benefited from its competitor's ability to build awareness of the once-futuristic category. As consumers warm up to the beaded ice cream and look for a premium indulgent treat, they are more likely to buy it and retailers to carry it.
“We’re really starting to see very early signs that there’s just a ton of runway left for the business and the product,” Kilcoyne said.