How Mini Melts Built a $150M Pearl Ice Cream Business Through a Worldwide Network of Automated Products
If you’re like me, you’ve probably bought ice cream cones at your local ballpark or stadium during the dog days of summer. You know the kind, that ice cream that comes in little frozen balls that melt when you scoop a spoonful into your mouth.
My experience with beaded ice cream is mainly from Dippin’ Dots, but today there are a number of beaded ice cream products out there, another great non-dotted option being Mini-Melts.
After starting in Europe in the 90s, Mini Melts landed in the US a few decades ago when the former distributor of Dippin Dots bought the North American rights to the bead ice cream brand. After successfully resisting a legal challenge from Dippin’ Dots, Mini Melts ice cream can be found today across the country, sold mainly in automatic ice cream machines that keep the ice cream at 40 degrees Fahrenheit.
The company grew from one kiosk in 2005 to more than two thousand in the field today, but the journey to widespread availability has been difficult. After testing a few different kiosks in the early years, the company began working with one third-party vendor to build the machines from 2009 to 2019. After ten years of tinkering and getting used to machines, they decided to build their own robot shop from 2019.
I recently caught up with Mini Melts USA’s Dan Kilcoyn to hear the story of how the company went from one Dippin’ Dots storefront location to a network of over 2,000 automated kiosks serving up to 30 million ice cream servings and $150 million+ in annual sales.
So how did you start releasing Mini Melts in the US?
So we used to use physical sales points especially in supermarkets. In 2004, we started to get out of those retail locations, and we wanted to test the automated kiosk concept. We started with one kiosk. Unfortunately, we didn’t really know what we were doing at the time. So instead of reading the manual, we actually broke the original one, but it was a good learning curve for us, and we built on that to the kiosk we have today.
At first, you used a third-party kiosk?
Yes. We started with a few different third-party options that were out there, but some didn’t work from a temperature standpoint. We really needed to make sure that we could have our remote telemetry and have our probes download our sales information. So we tried a few options. From 2004 to 2009, everything was very testing. Then we had one supplier from 2009 to 2019 before they went out of business.
So in 2019, your third party supplier is going out of business. Was that when you started making your own stock?
You know, when we were taking these different third-party units, we were doing a lot of work ourselves to make them work for the Mini Melts. So before 2019, we started asking, ‘What would this look like if we wanted it to be our own store?’
What was the main consideration?
We wanted to know what was important in the area. Most of our locations are high-traffic tourist destinations such as zoos, aquariums, and theme parks. And they traditionally focus on face-to-face sales. So when we started with vending machines, we had a pretty steep hill to climb because usually, if someone is in the area, they expect to be served by someone else. As we hit the ground running in 2019, we needed to make sure the kiosk held the right number of units because, on a given day, we could sell 200 or more cups of Mini Melts.
Has accepting different payment methods been considered?
In 2019, we saw that our consumers have really shifted from a cash-based system to credit card payments, Apple Pay and Google Wallet. So we really needed to make sure that the board in our machine was able to accommodate all of that dynamic payment capability.
How did customers pay in the past compared to today?
In 2005, about 5% paid with credit cards. in 2019 they are changed to -50%. Today it is 60%. in 2019, mobile payment was less than 1%, and today it is about 5%, growing by 2% every year.
Where is your ice cream made?
So when we started, we started in the Philadelphia area, initially, and our manufacturing facility is in Connecticut.
And that one agency serves the entire country?
Yes. We have built 23 distribution centers across the US. Our team is in 23 cities in the US. With our trucks, our technicians, and they come in and handle everything from the production of the product to the end of the product.
How do you get ice cream across the country?
We have 40-degree offset tractor-trailer units that we have, and we tow tractor-trailers to our depots.
Your new kiosks remind me of a game I would see at Chuck E. Cheese. How does it compare to older machines?
The new ones certainly match the claw style game you are referring to. The only difference is that there is a reward every time you don’t have to worry about the robot being lost. Older units can either be a traditional type of bunker freezer where one can slide the top out and just pull the unit out, or it will work like a pulley system.
What is the mix of new and old equipment in the field?
About fifty-five.
And have you updated the old machines?
Yes. We went back and reinstalled all the legacy stocks in the field to make sure they were able to take the payment systems and kind of improve everything from a technology standpoint.
What are some examples of locations for your kiosks?
We are at the National Zoo in Washington DC, Philadelphia Zoo, Mystic Aquarium, Georgia Aquarium. The biggest family entertainment centers will be Dave and Busters. Round One, Urban Air and Sky Zone Trampoline Parks. We are on college campuses, many lounges, non-traditional retail locations.
Is anyone trending right now?
It’s interesting that our resort business is starting to grow a lot as they add electric car chargers, because those guests tend to stay longer because they charge longer. We see that there is a huge demand to sell there.
Thank you for your time.
You are welcome.
You can watch the Mini Melts kiosks below in the video provided by the company.
