How Jeni's Splendid Ice Creams maintains quality, character as it grows from small biz to mid-sized manufacturer.
Jeni Britton Bauer was a couch surfer, a die-hard entrepreneur living out of her Chevette during the first few months of operating her first ice cream stand, Scream, in the North Market in the late 1990s.
"There was a trial period. A time when I had to learn and prove myself and get better at what I was doing," says Britton Bauer, the New York Times best-selling cookbook author, founder and culinary genius behind the coolest ice cream company to hit the nation's grocery freezers since Ben & Jerry's and Haagen-Dazs pioneered the superpremium-pint market.
Britton Bauer opened Jeni's Splendid Ice Creams in 2002 with a pocketful of lessons learned after her first venture went sour. She dropped the "pink hair and crazy outfits" of a Gen X Short North dweller and OSU art student. She "got serious" about her business and reported to her new shop every day in a starched shirt and white apron.
The mentoring she began to receive from established members of the Columbus business community, as well as her fellow North Market proprietors, imbued Britton Bauer with the key operational skills she needed to bolster her natural talents and entrepreneurial drive.
"There are entrepreneurs," says Britton Bauer, "and there are business people. Entrepreneurs rely on people with business acumen and with business vision and intelligence and understanding. But entrepreneurs are different. They are driven to a point where it's obsessive. I always say it's like a huge crush."
The artist and former La Chatelaine pastry chef found her entrepreneurial medium in ice cream. She found her company's ideal CEO in General Electric's executive suite.
John Lowe, a long-time friend of Jeni, Charly Bauer (her business partner and husband) and Tom Bauer (her partner and brother-in-law), was the sort of executive they knew Jeni's needed on staff to meet its growth potential.
"What we didn't have was that sort of level-headed, good business leader. I knew from day one we would need that one day, because I had big dreams and goals. And it wasn't one of the three of us," she says. The partners' mantra became "we need someone like John Lowe."
Lowe met the Bauers as a first-year labor and employment attorney with Kegler Brown Hill & Ritter. He helped them structure their company in exchange for a pint of Jeni's now-famous Salty Caramel and a beer. The Jeni's team never dreamed they'd be able to divert Lowe's trajectory as general counsel for business and general aviation at GE Aviation.
But, with characteristic ambition, they took a chance and called Lowe in January 2009. "I think we told him, 'we can't afford to pay you, so when you come in you have to make your salary,'" says Britton Bauer.
Lowe became CEO of Jeni's Splendid Ice Creams six months later.
Three things drove Lowe to make his "leap of faith:" the public demand for Jeni's ice cream, the potential to build up the company's wholesale business and the founder herself.
"Jeni is a truly brilliant creative force of nature," says Lowe. "I liked the opportunity of building a team and resources around her special, unique abilities. I thought, there's a chance we can do something really special here."
Jeni's is in its fifth year of rapid growth under Lowe's executive leadership. The company's current mission is to maintain the independent culture, product quality and service standards that brought about its success-all while scaling into a mid-sized manufacturer and distributor of a very complex, perishable product. Lowe and Britton Bauer have even established a sister company-Eat Well Distribution-to help other food-producing startups compete for wholesale sales and retail shelf space.
Lowe was consumed with two primary objectives during his first year at Jeni's. First, he needed to learn every possible thing about making, selling and distributing ice cream. Next, he'd prepare the company to grow from a mom-and-pop operation to "something more spectacular."
His friendship with Britton Bauer was advantageous as Lowe took on the challenges waiting for him as Jeni's chief. "That enabled us to hit the ground running, enabled us to have conversations that would have been difficult for others," says Lowe.
Jeni's small executive team was facing a number of tough decisions in 2009. How could the company make best use of finite resources in order to grow without sacrificing Jeni's unique production process? Could the company finance that growth on cash flow and SBA loans rather than compromise their vision to meet the short-term goals of outside investors? Could they hire the staff needed to maintain their handmade quality and neighborly customer service?
"The beauty of small business is there is an infinite list of variables, and we had to spend a lot of time and effort making sure we were taking care of the basics over that first year to put ourselves in a position to be able to grow," says Lowe.
Those infinite variables are truly boundless when your business is making Jeni's ice cream. Britton Bauer's recipes are not standard for the ice cream industry. From the base up, the ingredients that go into Jeni's products are sourced and processed with an obsessive focus on flavor and consistency.
Commercial ice cream mixes-even those used by many small ice creameries-include stabilizers to texturize and extend shelf life. Britton Bauer developed a proprietary process that allowed her to achieve her ice cream's heavy texture and flavor using grass-fed cows' cream and milk alone; no eggs, no condensed or powdered milk, none of the stabilizing guar gum or carrageenan commonly found on ice cream labels.
Around 2008, Britton Bauer began sourcing the milky foundation for her ice cream from Snowville Creamery in rural Meigs County. Founded by lifelong dairy-industry professional Warren Taylor and his wife, Victoria, the creamery was struggling to survive its first year when Jeni's approached.
The son of an Ohio dairy-industry man and milk taster, Taylor was raised to appreciate quality dairy products. He spent his childhood hand-cranking ice cream; after graduating from OSU with a degree in dairy tech, Taylor spent his career designing milk plants for dairy giant Safeway. Instead of retiring, he and Victoria staked everything on opening Snowville Creamery. A self-proclaimed "dairy evangelist," Taylor is not the sort of entrepreneur to sacrifice quality for profit. Taylor was skeptical of the flashy new generation of ice cream makers he saw entering the market.
He drove up Route 33 to Jeni's Grandview scoop shop to give her ice cream a try. "I remember being in the store and having the Jeni's experience and walking out thinking: Of course I want to make her ice cream. She's a flipping genius!" says Taylor.
On his delivery runs, Taylor was mesmerized by the complex, by-hand operations taking place in Jeni's commercial kitchen and production facility. He relished watching employees shucking corn, cutting fresh peaches or handcrafting caramel.
"They are running a different operation every day, making all their different flavors," says Taylor. "She's playing with fresh ingredients, coming up with flavors for a year later because she's got to begin sourcing and arranging to get those ingredients in quantity to support her production. She's a time lord. She lives in the future."
The future came quickly for the Jeni's-Snowville partnership. In the beginning, Snowville produced 200-gallon batches twice a week for Jeni's ice cream base. By last summer, Snowville was making nearly 6,000 gallons every week. Jeni's had outgrown the creamery, and Taylor wanted to expand his yogurt production. The two amicably parted ways in March 2014.
Jeni's now sources its milk from a number of grass-grazing family farms within 200 miles of its production facility, says Lowe. Jeni's buys an entire field of pumpkins from Hirsch Fruit Farm for Jeni's fall pumpkin flavor; Hirsch also supplies the bulk of the strawberries used for Jeni's summery Roasted Strawberry Buttermilk. The peaches in Jeni's Sweet Cream Biscuits and Peach Jam ice cream come primarily from the Peach Truck, a husband-wife business based in Nashville, where Jeni has opened two new scoop shops since 2011.
Jeni's measured expansion has been based on how well consumers would bear the higher price points necessitated by Jeni's production and ingredient standards. Jeni's pint prices are nearly double those of premium name brands-a risky position for an artisan trying to break into the competitive grocery distribution space.
"We came to market at $9.99 for only one reason, and that was our COGS (cost of goods sold) were so high. We had to charge that much," says Lowe. "We're fortunate that America has responded to this extraordinarily high quality and allowed us to grow."
In 2006, a Columbus connection at New York's Dean & DeLuca helped get Jeni's in the gourmet foods catalogue. Though Tom Bauer had led the early charge to ship their ice cream online around 2006, Dean & DeLuca remained Jeni's only wholesale account until Lowe joined in 2009.
Today, Jeni's boasts 1,700 wholesale distribution points nationwide. From a stall in the North Market, Jeni's has grown to 17 scoop shops throughout Ohio and in hip urban neighborhoods in midtown Manhattan, Chicago, Nashville, Atlanta and Charleston.
Earlier this year, Jeni's applied for a five-year city tax incentive worth $245,812 to move and consolidate its Grandview headquarters into a new Downtown location. Jeni's has outgrown the 5,000-square-foot offices that house the company's administrative operations and test-kitchen. In 2011, Jeni's received a five-year, 25-percent new employee income tax incentive from the city development department to relocate its manufacturing and distribution operations from Grandview to its current 5,000 square-foot base in the Harrison West neighborhood just north of Downtown.
As reported in the Columbus Dispatch, Jeni's hopes to move 40 existing and 15 new employees from Grandview into a 17,000-square-foot space in the Arena District by April 2015; the company plans to make improvements and upgrades worth $200,000.
Back when Jeni's was located only in the North Market and a few storefronts around Columbus, Britton Bauer hosted weekly dinners for all of her employees. Today when Britton Bauer hosts a company-wide lunch, she sets the table for 561.
As mom-and-pop shops expand into mid-sized operations, they risk losing their core character as they adopt stricter corporate organizational structures and add to executive teams. Lowe and Britton Bauer have been mindful of maintaining the independent spirit that resonates with their customers. They do not hire the stereotypical cutthroat corporate climber.
The running joke around Jeni's when Lowe became CEO in 2009 was that, on the company's staff of 150 employees at the time, there were 149 artists and then there was John. Coming from GE-the paragon of American corporate structure if ever there was one-Lowe relishes working in a company full of driven, community-minded artists. But, he says the time has come to hire people with the specific business training, education and experience needed to propel Jeni's as a middle-market company.
From the 22-year-old employee who handled their finances in 2008 (now a barista in Portland, OR), Jeni's now boasts a "sophisticated finance team with a real CFO, a tremendous 32-year-old, wickedly smart female controller and a team under her that can produce the financial information that you need to be a sophisticated world class company," says Lowe.
As the company scales, Lowe says it's imperative they "keep quality as our North Star. Luckily for me, the best spot in the world to be CEO is where you're in a company where the founder is ferocious about quality."
Lowe says that the ice creams Jeni's makes today have gotten better because the company can now afford better freezing technology and ingredients.
"There's an idea that it's really hard to grow and have quality. We've just kept doing what we've always done, we just hire more people," says Britton Bauer. "Quality's a choice (and) every company makes a choice of how they produce their products."
Kitty McConnell is assistant editor.