The cold war

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Sweet success: Lee Knowlton, president of Stone Cold Creamery, is confident the stores will prove a hit in the Middle East.

You scream, I scream, we all scream for ice cream. Almost every adult will remember the sound of the ice cream man arriving, and then the frantic decision-making process that ended in the happy purchase of a 99 Flake, or perhaps the giant gobstopper at the bottom of a tasty Screwball.

The UAE might not have its own version of the ice cream van but walk into any shopping mall and you are sure to be faced with at least one counter displaying its brightly coloured ice cream creations in waffle cones with added chocolate sauce and sprinkles. And while Mr Whippy is fighting for his patch in the major cities across the world, it would seem that the fight has now spread to prime shopping spots in malls across the region. Ben & Jerry's, Häagen-Dazs and Marble Slab are well-known brands but if their latest competitor is anything to go by, these ice cream favourites had better watch their backs.

"We are, we are Cold Stone," chant the employees at the latest US ice cream import to the tune of Queen's "We Will Rock You" as they personalise your very own ice cream experience to order.

Walk into Dubai Festival City's Cold Stone Creamery, choose your ice cream flavour and mix-ins, and then watch as a member of the team prepares a feast in a cone, while they sing and dance for you.

"We actually call our interviews auditions in our training manuals, rather than interviews. We ask potential crew members to sing to us or tell a joke, dance, juggle or maybe do a magic trick," Lee Knowlton, president, international, Cold Stone Creamery tells Arabian Business. "We want employees who are naturally comfortable in front of customers and want to have fun, it's part of the culture at Cold Stone Creamery."

Part of the culture and having fun is something Knowlton constantly refers to during our interview, so as I hear yet another tuneless burst of song from behind the counter, I ask him if he would mind giving me an example of what he would do in a Cold Stone audition. Surprisingly, given that entertainment is so embedded in the culture and I have already seen Knowlton behind the counter mixing and serving up ice cream to customers, he laughs and tries to change the subject. When pushed he admits he is a terrible singer, "And I don't know any magic tricks," he adds. He tries to make up for it when the next customer comes in but forgets the lyrics, "Now you've put me on the spot I have forgotten it," he says shyly. Not quite the Cold Stone attitude I expected.

Annoying to some it may be, but it is this entertainment aspect of Cold Stone that differentiates it from its competitors, including Marble Slab, which has already been in the region for nearly two years and also uses the mix-in concept.

A search on the internet reveals just how popular the entertainment has become. YouTube features one Cold Stone employee doing to ice cream what Tom Cruise did to mixers in Cocktail, as well as another crew member filming herself at work as her audition to star in the remake of the hit film Hairspray. The girl, Nicky Blonsky, is now starring beside John Travolta having won the role with her tape. "I think there are actually three things that set Cold Stone apart from its competitors. Unlike most brands, our ice cream is made fresh in-store, which gives it a smoother texture. So many parlours stock hard-packed ice cream which has been standing there for up to six months or even a year," says Knowlton. "The personalisation aspect is also important, as is the entertainment factor. We do try to hire staff members that have outgoing personalities," he continues. Last week's store opening may have been the first in the Middle East but Knowlton's assertiveness, coupled with Cold Stone's aggressive marketing strategy, means this is just the tip of the iceberg for the company that has been dubbed the Starbucks of the ice cream world.

"I am not going to say we're as big as Haagen-Dazs but I think the brand certainly has the potential. In Dubai we will have Cold Stone stores in Lamcy Plaza, Arabian Plaza, Dubai Outlet Mall, Atlantis and Stargate and we'll also open in Bahrain, Qatar, Kuwait and Saudi Arabia. We want to open between 30 to 40 stores across the GCC next year." Not bad for a company which just 13 years ago didn't exist.

Founded by Donald and Susan Sutherland in Temple, Arizona, Cold Stone Creamery has grown from a small town brand into a multimillion dollar international company with almost 1500 stores in nine countries. The Sutherlands haven't been active in the company since the mid 1990s when they hired Doug Doucey, the first president. It was Doucey who took the company from a regional ice cream store into an international brand. "Whenever I talk to the Sutherlands they are blown away by the success of their company. It was never their goal to have stores around the world - they just wanted to open a great ice cream shop," Knowlton says.

"The most aggressive years were between 2002-2004 when we reached 1400 stores in the US and first opened in Japan and then Taiwan. It has grown into a very well-known international brand."

He isn't joking either, last year Cold Stone Creamery reported total revenues of US$1.2bn. Cold Stone sells more ice creams than Ben & Jerry's, and fully expects to pass McDonalds this year and Baskin-Robins in 2008. By 2010, Cold Stone aims to push aside Dairy Queen to be crowned the number one ice cream brand in the US. With four stores planned for Dubai and up to 40 across the GCC in the next year, Cold Stone is expecting to see a good return for its investment. "This region has significant potential," Knowlton says enthusiastically. "In the States we average around US$400,000 per store. We have already invested US$8m in this region and we hope to see total revenues of US$8.7m." By the end of 2008 Cold Stone aims to have 10% of the region's ice cream market, and between 25-30% by 2009.

As well as the Middle East Cold Stone is keen to open in many other international markets such as Australia, Brazil and India. "We are looking for franchise opportunities in countries we don't currently have stores in. If there is a great operator out there who is passionate about ice cream then we want them to contact us. It doesn't mean we'll do a deal but we will certainly talk to them."

Despite its desire to become the next Häagen-Dazs, Knowlton is careful about where he chooses to open Cold Stone stores. It is because of Knowlton's patience that the brand has yet to conquer the UK market.

"Staying patient is top priority for me because unfortunately there has been a lot of failure in international markets with US brands. They may not have the right partner or location and it fails. I have been approached by a couple of companies for the UK market but when I did the research I just didn't feel comfortable so I said no," he says.

"It would be very easy to say yes, take their money. Maybe it would work, maybe it would fail but we love brand awareness and are keen to maintain it. Our customers love our brand so we just cannot afford to make mistakes. If we opened in the UK and closed a year later because they skipped on the recipe or something, it would do serious damage to our brand," he continues.

As Knowlton notes it is far easier to sell something when you have a product that everyone loves such as ice cream. "We have a product that is universally loved. Something like meat is loved by some and hated by others but everyone loves ice cream. I don't think I have ever met anyone who hates it, so it is just a matter of finding the right partner and operating at the same level that we do in the US."

Patient he might be but now the right partner has been sourced and a Cold Stone franchise has opened in a new country, Knowlton is keen to allow the brand to develop itself and as he describes it not to be "micromanaged" from the US.

"We visit our stores between three to four times a year and work with them on the brand but our partners appreciate the fact that they are not micromanaged," he says. "We have an arrangement with our partners over here that we take a percentage of their sales so it is our incentive to help them to grow. If the stores are not successful, we are not successful. It is a great arrangement."

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