When Scott Fischer read about the troubles plaguing ice-cream maker Dippin’ Dots in the Wall Street Journal, he recognized the company had enormous untapped potential. While the product enjoyed brand recognition built up over two decades, Fischer realized the company was moving in too many directions. Nevertheless, he was confident it could be profitable again. All the pieces were there: great brand, quality products, passionate customers, and dedicated employees. Keen to capitalize on a good opportunity while diversifying his family’s investment portfolio, Fischer jumped at the opportunity to get Dippin’ Dots back on course.
A steadfast base
Perhaps the brightest spot amidst Dippin’ Dots’ financial challenges and bankruptcy was the customer loyalty the brand enjoyed. A visit to the company’s Twitter site and Facebook page shows an engaged and longstanding customer base. “It is a nationally recognized and beloved brand with a substantial amount of value in brand equity,” Fischer says. “The organization has decent cash flow, and it’s full of good people well versed in the ice-cream business. This presented Dippin’ Dots as a company waiting for an infusion of capital and leadership to reinvigorate it.”
The potential to regain its research and product momentum was another reason Fischer was eager to purchase the company. He’s quick to note that Dippin’ Dots is a perfect example of entrepreneurial creativity at work, and he intends to reignite that creativity to propel forward “the ice cream of the future” with new products and expansion of markets. “There are other ice-cream product sectors the company can penetrate,” Fischer says. “In fact, several regions around the globe are ripe for a Dippin’ Dots launch.”
Fischer also saw opportunities to eliminate nonproductive, nonrevenue-producing efforts. “The business resembled the freeway system in Los Angeles: it was going in too many directions and lacked discipline,” he says.
The presence of Curt Jones, the inventor of Dippin’ Dots, was also a major plus. Jones had an understanding of what it would take to turn the tide, and he was willing to remain on board to carry out a turnaround plan. “It was nice to befriend him going through this process,” Fischer says of Jones. “No one knows the product better than Curt. It was critical to keep him involved.”
Churning for a new market
Fischer, working in concert with existing management, quickly began restructuring the company. He quickly eliminated unproductive projects and products, and oversaw a much-needed revamp of the organization’s franchise system. He has also devoted more resources to strengthen the core business of making and selling Dippin’ Dots. “Our immediate objective is to reinvigorate the brand,” Fischer says. “We’re doing that by focusing and expanding our sales efforts through research and development, and with the introduction of new ice-cream products.” And while Fischer says the younger generation is the sweet spot for Dippin’ Dots, that doesn’t mean the company isn’t looking for ways to court other customers. “Every generation enjoys Dippin’ Dots,” Fischer says, pointing to the popular Dots ’n Cream line, which he says could see some exciting changes in the next year.
Fischer also says a new product line, marketed under a clever new label and influenced by a four-year-old Dippin’ Dots loyalist, is in the final stages of preparation for rollout. It will be available in conventional grocery stores, resulting in the opening of a new distribution channel for the brand. “We are excited about the long-term potential of this new line in grocery stores,” Fischer says. “It allows us to take advantage of the intrinsic value of the brand name and reach a broader market, without losing our unique beaded product.” Similar to how the frappé- and espresso-flavored Dots have become favorites with the adult coffee crowd—or the appeal of the Dippin’ Dots floats, freezes, and shakes to dessert lovers—Fischer says the new product line will give aficionados of traditional ice cream something to love.
While the brand has seen success in several countries, limitations in global rights and capital was hampering international growth. Fischer has addressed those issues. “Coming out of bankruptcy, we reestablished those rights to create business avenues to expand Dippin’ Dots to various countries,” he explains. Existing markets in Canada, Korea, Japan, and Australia are seeing reasonable success. “We’re looking to expand into China, and we are working on plans in Turkey, Russia, the Netherlands, and Greece,” Fischer says. “The potential to establish opportunities internationally and leverage our brand equity is one of the areas of potential growth for us in the coming years.”
Rebuilding with the right leadership
Coming from a successful family has given Fischer a host of mentors to learn from along the way. “My father has an entrepreneurial spirit,” Fischer says. “I share that same passion.” The family historically focused its business in the energy sector, but the family is diversifying into investments in financial institutions, real-estate development, pharmacies, and marketable securities. “We pursue opportunities where we can use our capital and experience to help a business regain traction,” Fischer says.
Fortunately, the business issues at Dippin’ Dots never weakened the brand in the eyes of the consumers. “The Dippin’ Dots brand is associated with fun, family, and good memories,” Fischer says. “These are attributes every brand would like to claim. There is incredible value in that for us.”
Some entrepreneurs find it difficult to incorporate a company’s existing leadership into a turnaround strategy, but Fischer says it can be a win-win when everyone goes into it with the right mind-set. Curt Jones created the Dippin’ Dots products and founded the business, but instead of viewing the company’s buyer as a threat, he clearly sees the potential for success in linking his vision with Fischer’s business acumen. “Both of those components form a great partnership,” Fischer says. “We have the innovation and creativity from Curt. Mixed with our business experience and capital, we have a great match.”