Why Ice Cream is Tough Business
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- Опубліковано 7 лют 2025
- Download the CFO's Guide for AI and Machine Learning for FREE at netsuite.com/Mo...
Ice cream is a multi-billion dollar market dominated by legacy brands like Ben & Jerry’s, Blue Bell, and Breyers. Ice cream on paper should be a worthwhile business. It’s a frozen perishable product with decades of proven unit economics, business plans, and can be scaled into massive quantities. The global appeal has made the industry a target for private equity who have invested millions into Van Leeuwen, Salt & Straw, and Jeni’s under the bet they can one day become the Haagen-Dazs for the next generation.
Yet ice cream is a strange business. It’s so low margin that the owners of Haagen Dazs and Ben & Jerry’s not only engage in shrinkflation to squeeze out profit from each pint, but have been actively offloading their ventures. These conglomerates also own other brands from Klondike, Breyer’s, and Talenti to Good Humor, Magnum, Drumstick, and Dreyer’s. Despite having the leading brands and economies of scale, Nestle, Unilever, and Kroger have each concluded that the ice cream business is just not worth it. Retail concepts like Baskin Robbins and Cold Stone Creamery that once dominated in the 2000s have also experienced similar stagnation. In this episode, we’re diving into the curious business of ice cream from the macro-to-micro starting from the big brands all the way to 3 independents in New York City, who have found unique success in this oddly difficult industry.
🍦 SAM'S FRIED ICE CREAM (Sam)
www.samsfriedi...
/ samsfriedicecream
37B Orchard St, New York, NY 10002
🍦 SMOOVE CREAMERY (Christy)
smooveicecream...
/ smooveicecream
279 Grand St, New York, NY 10002
1285 E Calaveras Blvd, Milpitas, CA 95035
🍦 IL LABOTORIO DEL GELATO (Jon)
www.laboratori...
/ icecreamlab
188 Ludlow St, New York, NY 10002
🎬 Support Modern MBA: buymeacoffee.c...
☕️ Support Modern MBA on Patreon: / modernmba
💬 Join Modern MBA on Reddit: / modernmba
🌎 Follow Modern MBA on Facebook: www.facebook.c...
🕊 Follow Modern MBA on Twitter: x.com/modern_mba
Download the CFO's Guide for AI and Machine Learning for FREE at netsuite.com/ModernMBA
🍦 SAM'S FRIED ICE CREAM (Sam)
www.samsfriedicecream.com/
instagram.com/samsfriedicecream/?hl=en
37B Orchard St, New York, NY 10002
🍦 SMOOVE CREAMERY (Christy)
smooveicecream.com/
instagram.com/smooveicecream/?hl=en
279 Grand St, New York, NY 10002
1285 E Calaveras Blvd, Milpitas, CA 95035
🍦 il laboratorio del gelato (Jon)
www.laboratoriodelgelato.com/
instagram.com/icecreamlab/
188 Ludlow St, New York, NY 10002
🎬 Support Modern MBA: buymeacoffee.com/modernmba
☕ Support Modern MBA on Patreon: patreon.com/modernmba
💬 Join Modern MBA on Reddit: www.reddit.com/r/modernmba/
🌎 Follow Modern MBA on Facebook: facebook.com/profile.php?id=61570667949655
🕊 Follow Modern MBA on Twitter: x.com/modern_mba
Ooo la laaa
Free my boy volgoda mapping 🇺🇦🇺🇦🇺🇦
Great topic, video, and channel. Too bad it’s more ads than content. 👎
Do popcorn
So what you’re telling me is I should enjoy my cryptobro-subsidized lavender ice cream without guilt while it lasts
What
Yes
Yup
Reminder that Häagen-Dazs is an american company that adopted a gibberish name that sounds danish/scandinavian simply for the vibes and are no better content/nutrient-wise than the brands from the 90s
I too, was fooled! I love Danish ice cream, I had it every day when I was in copenhagen. The disappointment I felt when I found out was immeasurable and my lifetime was ruined
Smart move
@@MenkoDanygay
Häagen-Dazs is still the cleanest ice cream you can buy, at least form an ingredients perspective.
Look at the ingredients bro. Definitely not the same as other brands
"The industry has become a target for private equity"
Ahhhhhh *that's* why it's getting both worse and more expensive.
Yeah I noticed an immediate change in Ben & Jerry's quality when it got bought by unilever :(
Put the Ben's down and grab a half gallon of Cookie Two Step. Blue Bell is still privately owned by the same family for over 100 years.
That's usually the case for any industry PE enters. Quality declines and prices rise.
@@thestanleys3235 Plus B&J constantly sets out to annoy me with political messaging - so they can happily go down the drain.
😅
Seems ice cream is best left to local small businesses, sourcing and selling locally.
Everything that you add or change to make ice-cream keep for mass market distribution just makes it taste worse. Every local premium ice-cream drops in quality when it's in grocery stores
@@ltmaid as the guy said, supermarket freezer is not cold enough, especially in preventing ice crystals from forming
I'm not eating any store bought ice cream. I make it myself
Seems so in my country we have a ton of parlors almost one per 3 blocks and business seems to be steady
Holy snap look how clean John’s shop is! I say that is the most slept on factor in business. Everyone benefits from a clean environment.
thank you. it's job #1.
Cleanliness is a huge selling point.
Private Equity tossing tons of money at something that isn't profitable? Sounds like something they do in every episode they're mentioned...
Na, it is not that PE is throwing money at something that isn't profitable. They just buy up business that is profitable but squeeze it dry as quickly as possible while finding sucker to hold the bag aka public stock market or die trying. With protection of limited bankruptcy law, they can destroy company and livelihood of it employee without facing consequence.
@@cjude6189this is just not true. I don't think you know what you are talking about. Bankruptcy laws clears debt but the debts are tied to collateral. When bankruptcy happens debtors literally get paid first and the shareholders get paid last. And PE never try to make a company go bankrupt. They try to make it better or more profitable on paper and then flip it for a profit. Not at all what you were suggesting.
It's refreshing to see someone like Jon take pride in his work and not compromise quality while managing to keep a successful business running
thank you! - jon
seems like a pretty chill industry to me
It's very cool industry too
seems like it's not a hot industry nowadays
Lmao. Underrated
Lmao
The best part about your videos is the breakdown from the conceptual/theoretical followed by case studies IRL with different business approaches.
Really liked the segments with John explaining the business
It was honestly incredibly to watch. There usually is so much talk about scaling, scaling and scaling in business, but it's nice to see the other direction of what a successful company can look like. What happens to a business when you don't scale? What happens when the owner is THE key member, where without him, it practically ceases to function? What happens when you don't compromise quality, but not in an unsustainable way like that artisan doughnut guy a few videos back, but in a sustainable way.
With a micro-manager owner the business is really in danger. You can have the best product in the world, but without someone to run the shop, it is all worthless. At 60+ he really should have built up a successor long ago
@@foobar9220 John to me is like a subject matter expert in the corporate world (and I say this as a SME myself). He's not necessarily an ideal leader or delegator, but given some independence he can do great things on his own.
However, when the business relies 100% on him, with few systems to capture his knowledge/instincts for posterity or enable his people, the business will likely go bust pretty quickly if John is hit by the proverbial bus or when his physical health declines.
thank you!
@@foobar9220 we certainly are aware of 'succession'. lots of conversations and plans. and a GREAT seasoned staff to take over when the time arrives.
Can you please adjust the volume a bit higher? Whenever an ad pops up in the midst of your videos, it's always blaringly loud not because the ads are loud, but because I had to turn the volume up to the maximum level just to hear the audio of your videos and a sudden appearance of a YT ad really emphasizes that
Try using a browser with good ad blocker capabilities or get UA-cam Premium. Free UA-cam without an effective ad blocker is not a thing users should be clinging on to.
Check to see if you have “volume normalization” on. It can make videos seem quieter/louder than they were balanced by the creators to be.
YES
That's your setting not the video 😂😂...
The last line reminds me of the games industry. The primary currency is passion. When there is no passion, games flop hard.
We have word in Greek that has no direct translation to English. That word is "μεράκι" (meraki). Meraki is when you put all your knowledge and skill and time into something to make it as good as possible, and when it's done, you look at your work with justified pride.
That's been really rare lately.
Yeah the devs behind COD and Fortnite are really passionate.
As a person who lives in NYC where its freezing for half the year, I too am concerned for all the trendy icecream shops with zero customers.
We need a Modern MBA episode on Modern MBA!
Same interview style
The comparative interviews could be with Yahoo finance and FT! Aim for April 1st release, LOL!
Doing one on the business of being a UA-camr would actually go crazy
@@TecnoTyler 100%
hey Modern MBA, I'm going through a tough time right now...with loneliness and all...and your videos is one of the very few things that's keeping me feeling some sort of happiness in the dour times. You just create these very exciting, intellectually stimulating videos that's I guess part of my dopamine system. Thank you very much for helping me feel something.
Check out our Halloween episode from last week - contrary to what the thumbnail implies and most people think, it's a very heartwarming, funny video that hopefully brightens up your day!
@@ModernMBAgreat stuff
@hjtechguy, sorry to hear that. Hang on to the joys in your life. I find these smart videos make me happy too. Hope things turn in your favour soon
Hope you get better soon
hang in there buddy
longtime fan of the channel and i gotta say, the deep dives into particular independant locations in this and other recent episodes are SO GOOD!! Keep up the great work mmba 😇
I really enjoyed the b2b segment. Its something that a lot of people overlook. I would love to see something on the beauty/haircare space too!
Respect to these small business owners who work unbelievably hard and take so much risks! and Great vid as always!
I love seeing the profit margins comparisons of stores from your past videos! 18:42 Immediately recognized Mikiko and Odd One Out from your donut and boba tea videos. It puts things into perspective and feels like a cool Easter egg for fans of your channel. You’re killing it!
I've been going to Il Laboratorio del Gelato for 20 years across their move to the big space on Houston, amazing place, and superb quality, the gelato is genuine, no nasty crap in there, and it's a quality product at a vey fair price. This is why it's so popular. The Fig in all its many flavour incarnations is simply divine, as is the cardamom flavour.
The owner has such a hands-on approach to his business that it seems like the business will not survive after he retires or dies.
@@JohnSmith-ho3cu Pretty sure they will be just fine.
thank you!
@@JohnSmith-ho3cu100%
MBA, would you do a video about American Chinese buffets or Pho restaurants?
Thank you!
It was only a week ago that I commented about an issue regarding captions on this channel. And you've already resolved the issue.
This channel's great!
04:30 ad skip
bumping
true
When you post ad skips put where the ad starts first that way UA-cam pushes your comment up when people are around that point
@@theshadowking3198 I Know. I don't always do it because I can't be bothered to remember both the start and end point. But I usually do, so that happens.
@ w
The episodes could be longer, really enjoy watching them.
Have you watched the haunted house episode?
I've watched every episode on your channel.
@@ModernMBA that video seems to be struggling for some reason. I have zero interest going to a haunted house but I watched it because I was curious about the economics
I think it's important that they be as long as needed, but not longer. Any time people try to hit consistent lengths, whether short or long, the videos get worse.
I am once again stopping by to say that your videos are so great and well-researched. The way you break down financials, hit business strategy and weave in commentary from the business owners is so unique.
I respect and admire Jon. He seems like the real deal.
thank you! - jon
I just love this analysis x documentary style. These small business interviews really reveal a unique POV.
Ps. The business model of the last one is so interesting. He's at advantage to be fair, but still, smart to manage resources as new source of profit.
babe wake up Modern MBA posted
We’re here!!!
Damn... Someone posted it first
literally lol
dick sandwich
@@heyerikangay comment this nigga
Ice cream in the Midwest is a year-round thing. They really like their ice cream here.
That is very ironic, but midwesterners do seem to love milk.
we are okay with adding cold on top of cold lol
For real lol I was hoping he would come to the upper midwest to a mom-n-pop ice cream shop to show the contrast versus these big-city ice cream places. I didn't even know of any of those fancy brands because they barely exist here in Wisconsin lol
I'm originally from nyc. Our mom always bought ice cream from supermarket all year. We're used to eating ice cram in cold weather. Sometimes I go to ice cream shop to treat myself in all weather.
13:48: Gross revenue.... take out $36,000 for rent, add utilities( not cheap), insurance( definitely NOT cheap in New York City) payroll ( who is minding the shop when they are traveling "to 100 fairs" in the northeast) and travel costs ( I doubt the equipment and booths fit into a car so are we talking about truck rentals? Gas also IS NOT CHEAP). This from someone who doesn't know " what his margins are " and just knows "he takes in more than spends". Even if he has a 10% net profit margin, how is he living on $20,000 a year IN NEW YORK?
A business concept missing from this video is something like a Frozen Custard shop it’s essentially the same product but instead of simplifying the production and equipment, they have custom machines in every store and make product hourly. Any of these brands like Andy’s are standalone locations and gross millions per store a year.
Cold stone was a mystery to me.
Friend and i were in Louisiana and everybody was excited to pay 15 bucks each for ice cream mixed with candy.
I couldn't grasp it. There was a long line and people were very excited.
Need a video on the economics of nail salons next!
John is an excellent example of how passion and integrity still matter.
I don’t know if it’s eastern europe or just Latvia, but here we are basically in a recession, yet still we have a huge variety of ice cream brands and types. To be fair, a lot of them are local to here.
Jon is the exact reason I chose a career in specialty. Quality over everything.
I've been really loving how you showcase individual businesses that take very different approaches to the market/business! I hope you keep doing it in future videos!
Private equity: ruining everything everywhere for all time.
Yo, MMBA, those in-person case studies were AMAZING. It was great to see the diversity of interest, target demographics, and strategy being implemented. Plus, now I have a few recommendations for my snobby NY friends
I randomly bought 3 pints just two days ago at my local HEB. Only the second time this year I have bought ice cream, but usually its 0 per year! I blame my work which started celebrating everyone's birthdays every 1st Friday of the month with cupcakes and ice cream.
Makes sense. The money is in making and distributing it. Not in retail locations. I learned that the hard way.
Jeni’s ice cream is absurdly good. Unlike anything I’ve had before and if you have a brick and mortar their cones are so far elevated above anything I’ve had before that I’d happily eat the cone by itself if they were sold in stores. Seriously, if you haven’t tried their flavors yet, you will not be disappointed.
It’s a shame that it will likely follow the same path of other brands of slowly switching out for cheaper ingredients and smaller pots to push up profit margins. Can’t have shit :(
their birthday cake flavor is probably my favorite ice cream ever rn, so good
Nice try, Jeni
They used to be better but they needed to scale up.
My friend works in production there, and the quality of ingredients they use is insane. We're talking top-shelf alcohol, vanilla that's $25 per ounce, gourmet goats cheese... it's really good stuff.
The last guy truly is a business marvel, as long as he is happy I think that’s all that matters.
Thanks for the vids man. The continuous uploads and improvement in quality over the years is awesome to witness.
Jon seems to be a hard working person dedicated to what he loves doing. I wish I could try his ice cream, but im in Europe.
thank you! come visit! - jon
09:50 a major issue is greed, the thought that you can always grow, expand, and make more money when the demand isnt there
The fact that doing huge volume at 10% margins is a business Wall Street doesn't really want is sad. So much greed nowadays.
The issue isn't that, it's shrinking industry size.
Operating margin is not net profit
dirty capitalists
Fastest way to get people to stop buying ice cream? They mostly stopped selling real ice cream and sell instead a "frozen dairy dessert". It's so much not ice cream they can't even call it ice cream.
And still worth it. Brazil example, two major taxes on products are PIS and COFINS. Frozen dairy desserts, not ice creams, are actually exempt from those, as ice creams have specific taxation. So they deliberately downgraded their recipe through tax engineering until it stopped being legally recognized as ice cream.
No matter the crazy new flavors nothing beats a good homemade vanilla from Blue Bell
Yess a new episode
I never understood the hype of Baskin, Haagen, Ben and Jerry’s, Breyers, etc. I’m very picky when it comes to ice cream. It has to be creamy and flavorful and not too sweet. But when I finally tasted Jeni’s, Van Leeuwen’s, McConnells, Creamery and some small artisan labels, I finally knew why ice cream is so delicious.
Years ago, those were the only good brands around. I happen to like those old brands, ben and Jerry's.
Haagen Dazs, Breyers was all natural.
How strange. Icecream gets more expensive and the executives who rob their workers wonder why they can't afford what is fundamentally a luxury (non-essential) food product. I wonder where the problem is.
I like seeing other less known companies you talked about in past videos in your charts and graphs. its like the Modern MBA expanded universe
The grand Unilever's Ice Cream Empire vs. the hundreds of members of the Dairy Farmers of America (Breyers vs. Friendly's)
Talenti’s quality immediately plummeted when Unilever acquired them. I used to love the vanilla but now it’s just bland and tasteless.
How did this get recommended to me while I eat icecream lol
i polished off the last of my Publix Cookie Dough ice cream while eating one of their Heath Bar cookies made fresh from the bakery. it was the perfect grand finale getting to watch John defend his quality and business practices because he genuinely cares.
Im pretty sure I average a half gallon of ice cream every 2 weeks 🤫
Great episode, no notes. Your production value keeps getting better and better. Thanks for a great lunchtime watch!
Are these interviews produced in house? They are really great.
My man serving gold on his content. Love your stuff man.
Really enjoyed this episode on a train ride back from after a busy weekend of conferencing and meeting friends. Made me smile to watch it :) thank you!!
Ice Cream and Modern MBA are two great flavors that taste great together ❤
Ice cream can't pay billion dollar CEO salary so it's an strange business
Is it normal for these modern MBA videos to make you cry, because listening to john talk about his business certainly did 😭😭
Thanks!
Thank you for the support as always!
Really interesting how different ice cream business appears to be compared to cookies. Initially my partner and I were thinking that they seemed fairly similar, but the more we learned and thought about it the more we realized just how different they are.
Hi ModernMBA, great video as always; quick suggestion: at the end of each video, perhaps make a quick recap of all the learnings from the different case studies
Thanks!
Comprehensive presentation. Thank you, Modern MBA!
So so good, Modern MBA just releasing banger after banger!
Management fees. It's literally only about management fees.
THIS!
70iq
@@kgrey0582 yeah, that's the average in that line of work
off topic but I noticed that most of your video titles rhyme and I appreciate that
The problem is every small brand using real milk and cream is inevitably bought over by a megacorp that replaces real ingredients for milk powder and hygrogenated palm oil
Yeah in Italy many corner ice cream scoop places adopt the last strategy - quality. Then people will want to buy it. For competition, add some diversity so people change up which place to go to. Always have classics so it doesn't matter which place to go to. Just like what was said in the video.
And yeah they are often also just cafes or pastry shops for the down seasons. Doesn't seem like they're suffering, it's the same small cafes open for decades.
Yeah and Italian expats in Germany and elsewhere. The restaurants could have thier own kiosks.
A dude from my football team, works thier parents restaurant.
He says thier kiosk will sell €5,000/day during the week during summer. And as much as €15,000 during weekend.
This was such a great video! It's amazing seeing people like John sticking to what works and carving his own successful path.
Great video I’m thinking about adding funnel cakes and fried ice cream to my shop. Being different and offering crazy milkshakes is what is making my store become a staple over a store that’s been around for 10 years in my city
19:30 NYC has long winters, but just give manmade climate change a few more decades and NYC winters will be downright balmy.
Literally what I was thinking!
I’m a little surprised you went to NYC to talk to small ice cream shops, but never mentioned the relatively nearby midsized independent ice cream maker Perry’s.
I just did two loads of laundry and the netsuite infomercial is still running.
Jenni’s ice cream is so good I gift it to people for their birthday!
What about an ice cream business that buys the equipment, then rents/leases production to smaller shops? $65,000 is a big investment, sure, but that allows the small guys to no longer need the space in their shops, and if you're only making it once or twice a week that means you could probably serve 5-10 businesses at a time per machine
Equipment rental companies already exist, the main problem is that you have a massive surge in demand in the summertime and no rental demand during the winter as many smaller shops will close during that time.
At that point the company would be similar to a contract brewer for independent craft beer brands, or a smaller version of a B2B outsourced manufacturer that the big CPG companies use to produce product for them.
It is no surprise to see a big corporation selling off its ice cream division, given its thin margins:
- High logistics costs, with expensive cold storage and 24/7 refrigerated trucking.
- Rising prices for dairy, sugar, and flavoring due to political and climate issues.
- Growing consumer shift to dairy-free alternatives.
- Grocery and wholesale retailers view freezer space as valuable, limiting variety in frozen desserts thus ice cream and other dairy products are often sold as loss leaders, frequently on sale to drive impulse purchases.
“Van Luwen” lol 🇳🇱😹
It’s the sugar. Make good tasty creamy ice cream that isn’t super expensive or pre-diabetes in a container.
This was an outstanding video production. Thank you. Please keep it up
Great video, definitely appreciate how you both covered the large and the small!
John has a great business but John's business is worthless without him.
i respectfully disagree. i have a seasoned trained staff, and plans of succession. - jon
I never realized Turkey Hill was a large as it was. I always thought it was just a local company that was in my county and region. I used to race my friends up turkey hill on our bikes and the farm was the “finish line” lol.
In the 80's, I only knew about it from visiting family that lived in Lancaster, and never saw it anywhere else. Now I can get it at any local grocery store way up here in Maine.
Bro is about to make me run to laboratory del gelato rn! 😂
"Its never a question of whether someone will eat ice cream, but when" 😂
It was interesting to hear Salt & Straw talked about as a business with no cross sale as a weakness because up until a couple years ago they DID sell other things -- sodas, drinking vinegar, finishing salts, ect. They cut a LOT of that a couple years ago to minimize costs and satisfy investors. I think that, in addition to their transition to sweeter, plainer flavors, really undercut their model as a unique, destination ice cream shop.
There was a time when everyone went at least once a month to try all the new flavors, but now its like, you might go after dinner if youre nearby, but its not a destination.
If your business model is novelty, you need to be novel. If its good ice cream, it has to be good. Sadly, S&S is steadily becoming neither and I worry that we will soon lose it as an independent Portland business.
Great work, team. Could be the best video yet!
great to see il laboratorio del gelato on this and the details of its longevity! i have a dairy allergy and always appreciated the diverse options of sorbets so that i'm not relegated to the usual lemon or berry. i still think about the first time i tried their pear sorbet over a decade ago
haagen dazs' vanilla is still the single greatest ice cream to ever be made
Icecream has been so shrinkflated and "premiumized" I now rarely buy it. I'm not paying $10+ for some pissy little 500ml bucket. I don't care what wacky flavour combos you come up with.
This was a well researched video. As an entrepreneur I enjoy these deep dive analyses.
This is weird. In my country(Argentina) we have a bunch of succesful ice cream parlors. One of them(grido) has grown so large its the fifth largest producer of ice cream in the world by volume. A rare success story of the lost decade in Argentina
15:43 had to pause the video. Did she just say new york city has long winters? In the year of our lord 2024? It’s november and still 80 degrees outside. For the last 2-3 years it hasn’t even gotten cold til like mid february and that’s over by mid april.
Relatively
The Earth goes through warming and cooling cycles. NYC will go back to having long, cold winters before you know it. Our knowledge of climate and weather hasn't gotten to the point where we can make completely accurate predictions. The Earth likes to thumb it's nose at our predictions quite often.
Van Leeuwen’s quality has definitely gone down. When I tried it for the first time ~2017 it was the richest chocolate ice cream I ever had. Now in 2024 it (literally!) pales in comparison
It may never happen, but if I were to ever visit New York, and il laboratorio de gelato is still around as a business, I've been sold, I must visit.
Got here faster than Argentina can become hyperinflationary again
Too soon...
Best ice cream in NYC is Kith treats, maybe do a feature on Kith?