Cold Stone Creamery aims to rise to the top - East Valley Tribune: Business

Cold Stone Creamery aims to rise to the top

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Posted: Friday, January 21, 2005 5:50 am | Updated: 10:14 am, Fri Oct 7, 2011.

Scottsdale-based Cold Stone Creamery has a lot on its plate — make that bowl.

The locally born ice cream chain, which grew from one Tempe store to 1,000 nationwide in 14 years, plans to become the best-selling ice cream brand in America by Dec. 31, 2009.

It’s No. 10 today, behind store brands such as Blue Bunny, national chains such as Dairy Queen, and the most popular dessert at burger behemoth McDonald’s.

Cold Stone CEO Doug Ducey announced the company’s short and long-term goals to the Economic Club of Phoenix on Thursday at the Ritz Carlton in Phoenix.

Surging past the venerable ice cream leaders is only one item on Ducey’s ambitious agenda.

Within a month or so, he expects to announce details of Cold Stone’s foray into Asia. Within a couple of months, he hopes to announce a partnership with discount department store giant Target. And in about a year, Cold Stone stores should be dishing up quarts or gallons of Cold Stone customers’ personalized ice cream concoctions, targeting a whole new market of couch potatoes.

"For years we thought the ice cream business was seasonal," Ducey said. "It’s not. Americans eat more ice cream in January than July."

But customers go out for ice cream less often in January than July, he said. So Cold Stone plans to dish up more business in the take-home ice cream market. First, the company has to figure out how to do it right to benefit the customer, the franchisee and the brand’s reputation, Ducey said.

Buying Cold Stone ice cream in supermarkets, which Haagen Dazs did, won’t be an option, he said.

The little Scottsdale company is so successful going up against the best-selling brands in the country because it "creates a unique and special experience," Ducey said.

Any doubters about Ducey’s ability to make it to the pinnacle of the $20-billion-a-year U.S. ice cream industry should know the company missed its last impressive five-year goal by only weeks. Cold Stone will open its 1,000th store within the next 60 to 90 days, he said.

Ducey set the goal of having 1,000 stores open by Dec. 31, 2004, in 1999. He had 74 Cold Stone Creameries open at the time.

However you look at the numbers, Cold Stone has achieved remarkable success.

Systemwide sales at Cold Stone stores in 2004 topped $285 million, said spokesman Kevin Donnellan. That’s an 83 percent increase from 2003.

Mostly that’s because of the phenomenal growth in numbers of stores — 362 new ones last year, including a shop at DC Ranch in Scottsdale — Cold Stone’s 38th Valley store and 906th nationwide. Another 414 stores are planned this year, Ducey said.

The company is already No. 1 in revenue per store for ice cream shops — an average of $400,000, compared with Baskin-Robbins’ average of $200,000, Ducey said.

Cold Stone is building its new headquarters on the Salt River Pima-Maricopa Indian Community side of Pima Road. The new digs, which include a floor devoted to Ice Cream University — Cold Stone’s training operation — are expected to be completed in May.

Cold Stone’s Scottsdale staff of 190 will have grown to an estimated 225 by then, Donnellan said.

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