Baskin-Robbins drops its plain-vanilla approach to marketing, responding to intensified competition
NEW CANAAN, Conn. -- Baskin-Robbins executives recently started getting angry calls about its commercial that showed a grandfather changing his pouting granddaughter's test grade from an "F" to an "A" so that her mother would buy her ice cream as a reward for good marks.
For Baskin-Robbins, the commercial -- its first television advertisement in more than two years -- was pure fun. And while the chain prefers words of praise, the calls meant something big was happening: Baskin-Robbins was finally getting noticed again.
"We need to be a little edgier. Being complacent or trying to be too safe wasn't going to help us get the recognition we needed," said Baskin-Robbins brand officer Ken Kimmel .
Indeed, executives at the country's second-largest frozen dessert chain are giving the brand a much-needed face lift. They've recently tested prototypes for new stores, renovated some existing ones with interactive sundae stations, and signed on franchisees to build the first stand-alone shops in a decade. During the past year, the chain, with about 2,800 stores nationwide, has generated more than 200 commitments to open new shops over the next three years, according to Kimmel.
Until recently, Baskin-Robbins had largely fallen out of the public eye. A decade ago, executives decided the ice cream company wasn't a viable brand anymore to stand on its own and began building stores that combined Baskin with Dunkin' Donuts. Dunkin' Brands Inc., of Canton, Mass., owns both companies and saw Baskin as a way to fuel growth for its mar quee doughnut-and-coffee chain. A Dunkin' store can bring in about $1 million annually, while a Baskin-Robbins generates about $300,000 on average.
But that strategy changed when Dunkin' Brands chief executive Jon Luther took the reins in 2003 and decided that the restaurants needed to separate to succeed. The move came as the ice cream industry started seeing sizable growth with the expansion of chains like Cold Stone Creamery, which offers an interactive experience with workers mixing toppings into the ice cream over a slab of cold stone in front of customers.
"There is room for Baskin to grow in the market. It's a premium ice cream. But for years, Baskin-Robbins stores looked tired ," said Dennis Lombardi , executive vice president of food-services strategies at WD Partners in Columbus, Ohio. "They need to get refurbished and create a better consumer bond at their stores. Clearly Baskin's new sundae stations are a counter to the mix-in shops."
Baskin-Robbins dates back to 1945, when Irv Robbins opened Snowbird ice cream shop in Glendale, Calif. In 1953, Robbins and Burt Baskin , who ran Burton's ice cream shops, consolidated stores under the name Baskin-Robbins 31 Ice Cream, with the idea of offering a different flavor for every day of the month.
Ice cream is still big business, with the country's frozen dessert shops bringing in about $6.3 billion in 2006 -- a 12 percent increase from 2003, according to Technomic Inc., a Chicago food service industry research firm. Over the past three years, the market share of the nation's top two chains -- Dairy Queen and Baskin-Robbins -- has stagnated at about 40 percent and 9 percent, respectively. But third-place Cold Stone Creamery tripled its sales over the same period and grew its market share to about 7.5 percent, narrowing the gap with Baskin, according to Technomic.
Competition, however, isn't just from rival ice cream shops. It's also supermarkets, the country's biggest seller of ice cream, explaining why ice cream stores are pushing the experience of eating the sweet treats.
Kimmel, the Baskin-Robbins executive, says the company isn't trying to imitate the competition with its new semi-circular sundae bars enveloped in pink neon light and outfitted with glass candy jars full of toppings. Previously, stores kept the toppings in the back counter, so whenever people ordered sundaes, employees turned their back on customers to make the treats.
Jami Clark , a Cold Stone Creamery spokeswoman, said, "We're flattered that others may be trying to mimic certain elements of our brand, but at the end of the day, people continue to vote for Cold Stone Creamery with their dollar."
Baskin-Robbins's sundae station is just one part of its turnaround plan. Over the past year, the company tested several new concepts in Las Vegas, which included full-length wall murals, a new logo, and a step-up rail in front of the dipping counters so children don't have to be picked up to see the ice cream flavors. The renovated stores saw a 10 percent sales boost and more than 200 stores have already undergone the transformation.
Franchisees are also now required to bake their own waffle cones in the stores as a way to make the shops smell more enticing, and music is piped in to help cover up the noisy freezers.
At a newly opened store in New Canaan, Baskin shop owner Anna Valente-Krolikowski added a few of her own touches, including extra tables and chairs, and a 37-inch flat-screen television that plays Disney movies all day. Outside benches are on the way.
On a recent afternoon, 5-year-old Henry Selvala sat quietly with his eyes glued to a "Shrek" movie, sipping his strawberry smoothie. His mother, Kristin, said she used to visit the old Baskin-Robbins store about once a week.
But now, she's here up to three times a week between her three kids. Selvala is the target customer for Baskin-Robbins -- a mom with young children who makes the decisions on when and which ice cream shops the family visits.
"We come more; we buy more. It's so bright and feels like a hometown place, not a chain," Kristin Selvala said, in between slurps of her chocolate peanut butter milkshake.
Valente-Krolikowski said she's seen a 30 percent boost in customer traffic since she reopened her shop with the renovated look in a new location.
Even though she said she hasn't paid herself a salary in two years (she blames high rent), Valente-Krolikowski, who has run the shop for 15 years, says she already knows the new store is worthwhile.
"We got lost for a little while," she said. "But now we're back on television, back with a good look, and back in the customer eye. We're back on track."
Jenn Abelson can be reached at email@example.com.