After struggling for years following the Great Recession when consumers were more reluctant to spend money for one of its cups or packets filled with tiny ice cream pebbles, Dippin' Dots finally filed for Chapter 11 bankruptcy protection in 2011.
Today, with movie theaters, sporting events, theme parks or other gatherings closed or scaled back because of the coronavirus pandemic — venues responsible for most of the company's revenue — Dippin' Dots was able to avoid a similar fate this time around by diversifying into new revenue streams that tap into the very thing that makes its ice cream unique: cryogenics.
"It definitely would have damaged us. Whether it would have us pushed back into bankruptcy, I don't believe so, but it definitely would have damaged our business," Scott Fischer, CEO of Dippin' Dots, said to what would have happened to the company if it were only producing ice cream. "It would have been something that would be difficult for us to bounce back from."
Fischer, who purchased Dippin' Dots out of bankruptcy in 2012 with his dad, said he started noticing there was interest from businesses who wanted to use the company's flash frozen process. In 2018, Dippin' Dots expanded its cryogenics operations — a process where an item is subjected to super-cold temperatures in liquid nitrogen of around minus 320 degrees Fahrenheit — beyond ice cream using the knowledge and efficiencies it has amassed during more than 30 years in business.
"I knew there was a market for it. I just didn't know what that market was. But I figured if we would go out there with our brand equity in [the Dippin' Dots name] into this new venture, that business would come to us, which it did."
CEO, Dippin' Dots
Since then, it has done work for plant-based meat manufacturers, pharmaceutical companies, probiotic brands and animal feed, among other industries that require high-volume cryogenic freezing.
"I knew there was a market for it. I just didn't know what that market was. But I figured if we would go out there with our brand equity in [the Dippin' Dots name] into this new venture, that business would come to us, which it did," Fischer said.
The plant-based sector, where Dippin' Dots freezes oil that becomes the simulated fat giving the product its juicy flavor, has been among the most robust growth areas for the company. Dippin' Dots sees more opportunities ahead, especially in food, where its flash-freeze technology could be used in sauces or gravies for frozen meals and to freeze fresh cream and butter into beads that can be more easily stored in the home freezer.
In August, Dippin' Dots opened a new $3.2 million manufacturing facility in Kentucky, where it is headquartered, solely to focus on growing its cryogenics business beyond the frozen indulgence. A nearby plant, which has been used for flash-freezing both its ice cream and the company's push into other industries, will now be used only to produce the popular novelty treat.
Dippin' Dots was started by Curt Jones, a microbiologist who used cryogenics to create feed for farm animals. In 1988, Jones applied his knowledge of cryogenics to ice cream, and what started in his parents' garage in Illinois, has since expanded into the iconic colorful ice cream beads the company is known for today. The confection, for years touted as the ice cream of the future, generated $300 million in gross retail sales in 2019.
Fischer said it won't be long before revenue in its other cryogenics businesses outpaces sales in frozen treats. "I could see it easily surpassing our ice cream side by 2021, and definitely by 2022," he said.
Still, Fischer said Dippin' Dots, which is synonymous with ice cream, has no plans to drop the popular name that has come to define it for much of its history. The Dippin' Dots brand is popular with parents who grew up with the ice cream and are now passing it on to their children, he said. It's also a valuable tool for the company to quickly grow its cryogenic operations.
"Dippin Dots, one of its most valuable assets is its brand equity, because it is so recognized throughout the United States," he said. "It helps us market that cryogenic process and kind of captures that recognition" with consumers.