Latest / Choppin’ It Up by Bloomberg Intelligence / Quality, Portions Feed Handel’s Ice Cream Sales

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Quality, Portions Feed Handel’s Ice Cream Sales · Choppin’ It Up by Bloomberg Intelligence

0:13
Speaker 1: Welcome to Chopping It Up. I'm your host, Mike Hamlon,
0:15
Speaker 1: a senior restaurant and food service analyst at Bloomberg Intelligence.
0:19
Speaker 1: Our research and that of bi's five hundred analysts around
0:22
Speaker 1: the globe can be found exclusively on the Bloomberg terminal.
0:25
Speaker 1: If you enjoy the pod, hook me up and give
0:28
Speaker 1: us a five star review on Apple or Spotify. Today
0:31
Speaker 1: we're joined by Jen Schuller CEO and Hillary Fry CMO
0:35
Speaker 1: of Handles ice Cream, a rapidly growing, primarily franchised chain
0:39
Speaker 1: consisting of one hundred and seventy five stores in twenty States.
0:43
Speaker 1: Welcome to the pod.
0:45
Speaker 2: Thank you, thanks for having us all.
0:47
Speaker 1: Okay, so for the listeners, Hillary and I were classmates
0:50
Speaker 1: at Georgetown. Fun fact, you are the third Hoya to
0:54
Speaker 1: make a guest appearance on the podcast.
0:57
Speaker 2: Wow, I'm honored.
0:59
Speaker 1: Yeah, big shoes to fill. They were. They were both great.
1:02
Speaker 1: They're a little bit younger than us, but I'm not
1:05
Speaker 1: going to get into that.
1:07
Speaker 2: Well, we're at the exact same age.
1:08
Speaker 1: So yeah, and Jen, as far as I know, you're
1:14
Speaker 1: our first guest from Pomona College. I saw that on LinkedIn.
1:18
Speaker 1: You were a two sport athlete in soccer and track
1:21
Speaker 1: and field. Very impressive. I'll love to see it. Yeah,
1:24
Speaker 1: all right, Jen, what attracted you to handles?
1:26
Speaker 2: First of all, Like.
1:27
Speaker 3: It is phenomenal to be in the ice cream business,
1:30
Speaker 3: just to set that aside, Like it is so amazing
1:33
Speaker 3: to be part of a brand that is someone's celebration,
1:36
Speaker 3: like the reason that they're taking a bad day and
1:39
Speaker 3: making a little bit better or celebrating something great in
1:41
Speaker 3: their life. And I think when I got into food,
1:44
Speaker 3: Hillary and I both got into the food through the
1:46
Speaker 3: same path through CpG at General Mills, and in fact
1:48
Speaker 3: that's where we met over twenty years ago. That's a
1:51
Speaker 3: lot of what attracted me to food in the in
1:53
Speaker 3: the beginning, and so love that about handles per se.
1:56
Speaker 3: And for me, I actually took a year off in
2:00
Speaker 3: between my last gig when I was the CEO at
2:02
Speaker 3: Wetzel's Pretzels, and during that time I found myself like
2:06
Speaker 3: really really attracted to analog brands, like things that were
2:11
Speaker 3: less digital. If there was ever a chance for me
2:13
Speaker 3: to like not order online, but to do something in person,
2:16
Speaker 3: I found myself really attracted to that. And when I
2:18
Speaker 3: looked at the world and I saw how fast things
2:21
Speaker 3: were moving and how much digital was part of people's lives.
2:25
Speaker 3: I loved the idea of a brand that was unabashedly analogue,
2:29
Speaker 3: that was retro, that was about making in person connections again.
2:33
Speaker 3: And so that fundamentally is what attracted me to Handles.
2:36
Speaker 3: And then you layer on top of that a really
2:38
Speaker 3: best in class phenomenal product like I really would put
2:41
Speaker 3: our ice cream up against anybody else, and then strong
2:45
Speaker 3: unit economics with whitespace to grow. That combination I think
2:49
Speaker 3: is really powerful, and I think what we'll be talking
2:51
Speaker 3: about today.
2:52
Speaker 1: Hillary, I'd imagine you got a pretty nice discount on
2:55
Speaker 1: ice cream. But other than that, how did Jen convince
2:58
Speaker 1: to come work with her?
3:00
Speaker 2: Yeah? Jen did not have to work hard to convince me.
3:04
Speaker 2: There were a lot of reasons. You know. I have
3:07
Speaker 2: had the fortune of working on some of America's most
3:10
Speaker 2: iconic and enduring brands. I've worked on Cheerios, I've worked
3:13
Speaker 2: on foh Schwartz, and I really felt like Handles had
3:18
Speaker 2: all the ingredients necessary to become one of those enduring
3:22
Speaker 2: iconic American brands. It had this eighty year history and legacy,
3:27
Speaker 2: this amazing origin story, but still so much white space
3:31
Speaker 2: to grow. As Jen said, and I felt like I
3:35
Speaker 2: could really put my stamp on the brand, and I
3:38
Speaker 2: had a really clear vision on how I could take
3:40
Speaker 2: it from where it was to, you know, in the
3:43
Speaker 2: kind of cannon of brands like in and out, Burger
3:47
Speaker 2: and Seized Candy and Coke and Harley Davidson, these like
3:50
Speaker 2: all American brands. So it was just like a once
3:52
Speaker 2: in a lifetime opportunity for me. And I also felt
3:55
Speaker 2: like everything in my career laddered up to it. You know,
3:58
Speaker 2: I had worked at General mills Ons, which was established
4:01
Speaker 2: in nineteen forty one, like very similar era. Again I said,
4:05
Speaker 2: I worked on Fa Schwarz. I'd worked on a vintage
4:09
Speaker 2: inspired kitchen appliance brand like very you know, very vintage inspired.
4:15
Speaker 2: And I just felt like everything had kind of come
4:17
Speaker 2: together for Handles. And I loved Handle's product, Like I
4:22
Speaker 2: am so proud of our ice cream. I will put
4:23
Speaker 2: it up against anyone. It is delicious. But there's as
4:27
Speaker 2: a marketer, there's also so much to work with. We
4:31
Speaker 2: have one hundred and fifty flavors on the bench. We
4:34
Speaker 2: have forty eight flavors in every store. Just like visually,
4:37
Speaker 2: there's so much to have fun with from a marketing perspective,
4:41
Speaker 2: so it's really just been a dream job for me. Mike,
4:44
Speaker 2: Can I say one thing about that?
4:45
Speaker 3: One I want to say about part of the reason
4:47
Speaker 3: why I wanted Hillary in this role, which is, you know,
4:51
Speaker 3: we both came from that classically trained marketing background, and
4:54
Speaker 3: as you said, like so much of her career in
4:57
Speaker 3: dealing with retro brands, legacy brands, nostalgic brands, that experience
5:01
Speaker 3: was great. But I think it's also her wiring in
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Speaker 3: that she's results oriented, but she also really cares about
5:09
Speaker 3: understanding the heart and soul of the brand. Like she
5:12
Speaker 3: really spent time with people who'd been with this brand
5:15
Speaker 3: for a long time and thought deeply about the values
5:18
Speaker 3: of the brand, so that what we did was really
5:21
Speaker 3: consistent with the eighty year history and it's part of
5:23
Speaker 3: a trajectory.
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Speaker 2: It's not disconnected from it.
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Speaker 3: And I didn't think there were many people I knew
5:30
Speaker 3: who had that combination of like hard charging and results
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Speaker 3: oriented but had the humility to really understand what the
5:36
Speaker 3: brand was about and steward it forward. And like you've
5:40
Speaker 3: definitely done that, Hillary.
5:41
Speaker 2: That's so nice. Thanks for saying that. I like think
5:44
Speaker 2: of my profession as being a brand steward, Like I
5:47
Speaker 2: almost feel like it's a calling. Like I'm not sure
5:49
Speaker 2: why I am wired and oriented this way, but I
5:52
Speaker 2: feel like that's what I was kind of put on
5:54
Speaker 2: this earth to do. And so it's just as I said,
5:58
Speaker 2: like it's been a dream.
5:59
Speaker 1: Yeah, and it's so important and in this business. I mean,
6:01
Speaker 1: when we see brand stray away from you know, what
6:04
Speaker 1: they're famous for and why they're loved, it's when they
6:08
Speaker 1: typically run into problems.
6:10
Speaker 2: Yeah, yeah, so hard, it's so hard to watch.
6:13
Speaker 1: Yeah, Jen, and you two both kind of hinted towards
6:17
Speaker 1: at least part of this answer. What do you think
6:19
Speaker 1: Handles does materially materially better than the rest of the
6:23
Speaker 1: ice cream category?
6:24
Speaker 3: The ice cream like fundamentally, you know, like and the simplicity.
6:29
Speaker 3: So I think it's in food, it doesn't have to
6:32
Speaker 3: be hard, do something very well, consistency, consistently and with discipline,
6:38
Speaker 3: and when you have that consistent quality over time, of
6:41
Speaker 3: course at the right price point as well and the
6:43
Speaker 3: right experience, guests will come back to it. So we
6:46
Speaker 3: have a tradition of making ice cream from scratch in
6:50
Speaker 3: store every day. It's how Alice Handle started the business
6:53
Speaker 3: eighty years ago. Today, we're not tempted to get into
6:56
Speaker 3: retail and into CpG. We're not tempted to send something
6:59
Speaker 3: to centralized manufacturing for cheaper cross. We are doing it
7:02
Speaker 3: in store every day and I think guests taste that great.
7:05
Speaker 1: And this one's for the brand. Steward over there, Can
7:08
Speaker 1: you talk to me a little bit more about the
7:10
Speaker 1: original founder, Alice Handle, and the DNA of this brand.
7:14
Speaker 2: Absolutely. Yeah. So Alice started in her husband's gas station
7:18
Speaker 2: in Youngstown, Ohio, as I think we said, in nineteen
7:21
Speaker 2: forty five, so eighty one years ago this July. She
7:27
Speaker 2: dedicated her life to the art of ice cream making.
7:30
Speaker 2: She was an artist for forty years. She ran a
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Speaker 2: single shop and every single day of her life made
7:37
Speaker 2: all of the ice cream. The stories are she didn't
7:40
Speaker 2: go to weddings, she didn't go on vacation like her
7:43
Speaker 2: entire life was dedicated to her art, which was ice
7:47
Speaker 2: cream making. And you know that is such a gift
7:50
Speaker 2: to us and to the legacy of Handles. She did
7:55
Speaker 2: that for forty years. In nineteen eighty five she sold
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Speaker 2: the brand and to Lenny Fisher, who was living in
8:02
Speaker 2: Youngstown had been there for a while, had opened and
8:05
Speaker 2: ran several restaurants there, and they worked side by side
8:09
Speaker 2: for two years together. She didn't let him make ice
8:12
Speaker 2: cream for six months. He had to watch and observe
8:15
Speaker 2: and learn, and Lenny was, you know, the perfect person
8:21
Speaker 2: to take the brand over. He promised her that the
8:24
Speaker 2: ice cream, you know, he wouldn't change the ice cream.
8:27
Speaker 2: And he has really been our torch bearer for ice
8:32
Speaker 2: cream craftsmanship for the next forty years and is to
8:35
Speaker 2: this day. He still is the person who you know,
8:39
Speaker 2: when he's in store, knows exactly if the vanilla is
8:42
Speaker 2: off just by one percent. I mean, his dedication to
8:45
Speaker 2: the craft and the craftsmanship of ice cream making is unparalleled,
8:49
Speaker 2: and he is a huge reason for our success.
8:52
Speaker 3: I also say to your question Mike about what differentiates us,
8:55
Speaker 3: I think it's also our flavors. So yeah, we have
8:58
Speaker 3: one hundred and fifty flavors, so that bread is pretty incredible.
9:01
Speaker 3: But the bar that we hold for flavors, and that
9:05
Speaker 3: I think that comes from Lenny as well, is really high,
9:07
Speaker 3: and we really think about delivering classic flavors.
9:11
Speaker 2: So we're not giving you like the fig and.
9:12
Speaker 3: Olive oil, We're giving you banana cream pie, and we're
9:15
Speaker 3: giving you flavors like our idea and Lenny always says,
9:18
Speaker 3: this is like it shouldn't hit you when you taste it.
9:20
Speaker 3: That flavor should come to you. And so that like
9:23
Speaker 3: that ice cream experience, like you want to take the
9:25
Speaker 3: next bite because you're like ooh, oh my gosh, there's
9:27
Speaker 3: a little pie crust in that BikeE like, oh yeah.
9:29
Speaker 3: And so we really like think about that like it's
9:32
Speaker 3: a it's a slow process and it's a slow experience
9:35
Speaker 3: and the flavor should come to you. I think all
9:37
Speaker 3: of it is really consistent with how we think about
9:39
Speaker 3: the brand and our product and our flavor innovation.
9:42
Speaker 2: And we have some of Alice's handwritten recipes. Do was
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Speaker 2: original recipe and it was so moving to us. We
9:49
Speaker 2: were going through them and in her handwriting in the
9:51
Speaker 2: corner it said, you know, don't be stingy, put a
9:55
Speaker 2: lot of pecans in the pecan. And it has really
9:58
Speaker 2: you know, codified our corporate value of generosity. So we
10:02
Speaker 2: have three corporate values Craftsmanship, which I just talked about, generosity.
10:07
Speaker 2: We want to be generous with all across the board,
10:10
Speaker 2: with our portion sizes, with what's in the ice cream,
10:13
Speaker 2: you're going to get a ton of oreos, you know,
10:15
Speaker 2: in your ice cream, You're going to get a ton
10:17
Speaker 2: of pecans in your in your butter pecan, and with
10:20
Speaker 2: each other, how we act as you know, as as
10:24
Speaker 2: as employees of the corporation, like when in doubt take
10:27
Speaker 2: the more more generous path. And community that's our third
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Speaker 2: And you know, Alice was really just so foundational in
10:35
Speaker 2: her community that forty years later they named the street
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Speaker 2: after her. So the original Handles is you know, Handle's
10:42
Speaker 2: Court now the location that that is our original location.
10:46
Speaker 2: So those you know, taking it back to your original question,
10:49
Speaker 2: like the values we live today are Alice's values, Jim,
10:53
Speaker 2: what are.
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Speaker 1: The hardest operational challenges in maintaining consistency across the franchise locations?
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Speaker 1: And does the brands focus on quality create sourcing or
11:03
Speaker 1: margin challenges?
11:04
Speaker 3: Oh that's a great question. Okay, so you talked about
11:07
Speaker 3: consistency and then sourcing and margin challenge. On the consistency one,
11:11
Speaker 3: I think this is something like Hillary and I have
11:13
Speaker 3: stepped back when we think about the brand as an
11:15
Speaker 3: important one, we think there's places where national brand consistency
11:20
Speaker 3: is really critical, and that's around product and so We
11:24
Speaker 3: really insist on that, and we when we are finding
11:27
Speaker 3: franchise partners, we are finding the ones who are like,
11:29
Speaker 3: we think that this is the best ice cream we've
11:32
Speaker 3: ever tasted, and we just want to uphold that tradition
11:34
Speaker 3: and we make that really really clear. But then there's
11:38
Speaker 3: places where we want this to be very much your
11:41
Speaker 3: local ice cream shop, and we're trying to thread that needle.
11:43
Speaker 3: I think in a way that's differential than other franchise
11:46
Speaker 3: businesses out there. Our franchisees have their own social media accounts.
11:50
Speaker 3: We want them to be connected with the little lead.
11:52
Speaker 3: We want to be inviting the teachers in for teacher
11:55
Speaker 3: Appreciation Day, and so we are really striking that balance
11:58
Speaker 3: between national around quality and consistency with the highly local touch.
12:03
Speaker 3: And I'll stop there because it might be something interesting
12:05
Speaker 3: for Hillary.
12:06
Speaker 2: To talk about.
12:07
Speaker 3: It's really good that you put your finger on the
12:09
Speaker 3: supply chain piece Smite, because not a lot of people do.
12:13
Speaker 3: We put quality and like premium product above all. So
12:18
Speaker 3: for that reason, we don't have like a national distributor partner.
12:22
Speaker 3: We work with regional distributors because we want to you know,
12:26
Speaker 3: when we tested our new cookie dough, I think the
12:28
Speaker 3: team tested somewhere between thirty and forty cookie doughs until
12:31
Speaker 3: we spect the exact one that had like the brown
12:34
Speaker 3: butter flavor that we wanted. And so for that reason,
12:37
Speaker 3: we use regional distributor partners where we can ensure that
12:41
Speaker 3: we get those products pecked through distribution and then also
12:44
Speaker 3: that the service levels are better for our franchise ease
12:46
Speaker 3: or their higher touch. Let me say that I think
12:48
Speaker 3: the big guys can do it, but they're higher touch.
12:50
Speaker 3: And so as we were talking about like making sure
12:52
Speaker 3: a franchisees experience with us and our supply chain is
12:55
Speaker 3: high touch and that they are delivering that same experience
12:58
Speaker 3: to their guest and the community, it's also high touch
13:01
Speaker 3: and personal.
13:02
Speaker 1: Hillary what's on the menu and is it the same
13:04
Speaker 1: across the store base.
13:05
Speaker 2: That's it. That's a great question. The menu at each
13:09
Speaker 2: store consists of forty eight flavors, and it's a perfect
13:13
Speaker 2: example of that needle we're trying to thread between a
13:15
Speaker 2: national brand and your local ice cream store. So twenty
13:19
Speaker 2: flavor Twenty of the flavors of the forty eight are
13:22
Speaker 2: Handle's favorites. Those are the ones that you can expect
13:24
Speaker 2: to get at every handles. They're either your classic ice
13:27
Speaker 2: cream flavors you know, your chocolate, your vanilla, you're you know,
13:30
Speaker 2: the things you expect at every ice cream store, or
13:32
Speaker 2: they're your your legacy handles flavors like the things you
13:35
Speaker 2: expect from handles that we do really well, as Jen
13:38
Speaker 2: talked about banana cream pie, buttered pecan, et cetera. But
13:42
Speaker 2: so those twenty are our set, and then the other
13:45
Speaker 2: twenty eight are up to the franchise's discretion on what
13:48
Speaker 2: they carry to reflect their local community. And it's fascinating
13:53
Speaker 2: to me, like being you know, a data person Georgetown
13:57
Speaker 2: School of Business, like being a numbers person in I'm
14:00
Speaker 2: a you know, numbers and pictures are the language I speak.
14:04
Speaker 2: How different the data is from store to store. You
14:08
Speaker 2: can have a store store two stores three miles away,
14:11
Speaker 2: and you know, the favorites at one store are totally
14:14
Speaker 2: different from the favorites the store three miles down the road.
14:18
Speaker 2: It's really fascinating. We do see some regional, you know,
14:22
Speaker 2: regional preferences, but in general, it is a community based
14:27
Speaker 2: menu that the franchise changes on a monthly basis, So
14:31
Speaker 2: you know, you should be able to go to your
14:32
Speaker 2: local handles owner and say, oh, I really miss that
14:35
Speaker 2: great flavor, like I want it. Can you put it
14:37
Speaker 2: back on the menu like the community has that, say locally,
14:42
Speaker 2: because twenty eight of those flavors are to the franchise
14:45
Speaker 2: these discretion.
14:46
Speaker 1: Jen what percentage of the stores are franchised and is
14:49
Speaker 1: there any unit economic data that you can share?
14:52
Speaker 2: Sure?
14:52
Speaker 3: Yeah, So we're primarily a franchise organization. Have a handful
14:56
Speaker 3: of corporate stores in Youngstown, Ohio, where it all started
14:58
Speaker 3: that we still own and operate and keep our finger
15:01
Speaker 3: on the pulse of the business there. But beyond that,
15:04
Speaker 3: our focus for our growth is certainly on the franchise side.
15:08
Speaker 3: We're about one hundred and eighty locations today, I think
15:11
Speaker 3: in across twenty states. I think the unit economics are
15:15
Speaker 3: very compelling on this brand, and part of that goes
15:18
Speaker 3: back to its simplicity. So you know, where you see
15:21
Speaker 3: other folks ice cream shops, maybe they are stretching out
15:23
Speaker 3: into burgers and we can add fries, and we stay
15:26
Speaker 3: very focused on our core. So we do it well
15:28
Speaker 3: and we keep the simpler you keep the business, the
15:31
Speaker 3: more margin I think you can deliver out of that.
15:33
Speaker 3: So in our latest fdd our AUVs are over a
15:37
Speaker 3: million about one point one, and margin is twenty percent,
15:41
Speaker 3: so cash flowing ebit dot twenty percent. So to have
15:44
Speaker 3: a two in front of that number and anything food
15:46
Speaker 3: is pretty much puts you in a best in class position.
15:50
Speaker 2: But I think the other element of that.
15:52
Speaker 3: So that's what I saw on paper when I joined
15:54
Speaker 3: the brand, and I was like, Okay, on paper, you
15:57
Speaker 3: have this really nice unit economic model sing over a
16:00
Speaker 3: million AUV, steady history plus white space. And then I
16:04
Speaker 3: went and did my two weeks of training and I
16:06
Speaker 3: was like, and there's no fryer, and people come in
16:09
Speaker 3: happy and they leave happier, and there's no waste because
16:13
Speaker 3: it's a frozen product. So you make what you need,
16:16
Speaker 3: you serve it through, you change the flavor, and there.
16:18
Speaker 2: Is no waste.
16:19
Speaker 3: So I think even underlying the numbers, there's a real
16:23
Speaker 3: beauty and simplicity and running running an ice cream business
16:26
Speaker 3: specifically it handles ice cream business.
16:28
Speaker 1: How many new shops are you looking to open a
16:30
Speaker 1: year and are you entering new markets, filling in existing ones,
16:34
Speaker 1: or doing a mix of both.
16:35
Speaker 3: Yeah, so we are kind of accelerating the growth for sure.
16:40
Speaker 3: So last year probably opened about twenty stores. We'll get
16:43
Speaker 3: near doubling that this year, maybe around thirty five stores,
16:47
Speaker 3: and on track to probably open sixty stores in twenty
16:50
Speaker 3: twenty seven. And we're being intentional about that, you know,
16:54
Speaker 3: Hillary and I from a marketing background, really like to
16:56
Speaker 3: understand our consumer, understand the demographic, the psychographic, and choose
17:00
Speaker 3: the markets where we see is really going to have
17:02
Speaker 3: the strongest appeal and the most the strongest AEVs.
17:06
Speaker 2: So when we are building out today, I would.
17:08
Speaker 3: Say about about half of our development is coming out
17:11
Speaker 3: of existing markets and frankly existing franchisees, and so because
17:16
Speaker 3: of the strong UNI economics and payback period, they're beginning
17:19
Speaker 3: to grow.
17:19
Speaker 2: In the areas that they're in.
17:21
Speaker 3: And then I think the other half of our growth
17:23
Speaker 3: is coming from new markets, but i'd split those into two.
17:27
Speaker 3: Of that, I'd say twenty five percent roughly is markets
17:30
Speaker 3: that are seeded where we've got a few locations, we
17:33
Speaker 3: have proof of geographic portability, and we're starting to actually
17:37
Speaker 3: really build out a market, and then twenty five percent
17:40
Speaker 3: are brand new markets, ones where we have a thesis
17:42
Speaker 3: that hey, you know what, we think Colorado Denver area,
17:45
Speaker 3: for example, has those outdoor loving families, the people who
17:49
Speaker 3: appreciate high quality product, handmade product, and there's growth in
17:53
Speaker 3: that market. That's an example of a market that's new, new,
17:57
Speaker 3: and that we'll be developing really rapidly.
17:59
Speaker 1: Selling exclusive agreements to certain markets or you open them
18:03
Speaker 1: up to competition.
18:05
Speaker 3: We're selling, we're going in when we identify our market
18:07
Speaker 3: and dividing it out into territories and looking really for
18:11
Speaker 3: multi unit operators in that sort of three to ten
18:14
Speaker 3: unit commitment range because you know, as you know that,
18:18
Speaker 3: especially when you're hitting the new markets, when you can
18:21
Speaker 3: bring that multiple storefronts at once, it's going to drive
18:24
Speaker 3: your brand awareness, it's going to improve your supply chain,
18:26
Speaker 3: it's going to improve your cogs, it's going to improve
18:28
Speaker 3: your bottom line profitability. So that's definitely the way we're
18:31
Speaker 3: beginning to enter some of those new new markets.
18:34
Speaker 1: Hillary talk to me about the training program. I'd imagine
18:36
Speaker 1: it's pretty intensive since Ice Scream is made at each
18:39
Speaker 1: individual location.
18:40
Speaker 2: Yes, it is there, there's multiple parts, so every new
18:45
Speaker 2: owner will go to a two week training in Youngstown, Ohio.
18:49
Speaker 2: Jen and I attended training. It's really foundational. It's really
18:53
Speaker 2: hard work, but it's really really fun. You know where
18:57
Speaker 2: you are doing all parts of the business. You're learning
18:59
Speaker 2: to scoop, you're learning the pos, you're learning to make
19:01
Speaker 2: the ice cream. So that's incredible. That's a two week process.
19:06
Speaker 2: And then we because you know, we have such a
19:08
Speaker 2: commitment to our value of craftsmanship, there is an additional
19:11
Speaker 2: piece of that where we are going out our operations
19:14
Speaker 2: team is going out to every store and certifying the
19:18
Speaker 2: ice cream makers in that store. A lot of times
19:20
Speaker 2: the ice cream maker that they come from like a
19:22
Speaker 2: culinary background, they aren't necessarily a scooper, or they don't
19:26
Speaker 2: work in the window. That's their only job, and so
19:29
Speaker 2: they are certified as well in store and keep that
19:35
Speaker 2: certification up. It's a two year every two years, and
19:38
Speaker 2: so you know, the owners and a lot of time
19:42
Speaker 2: the manager are coming to the motherland, they're coming to Youngstown.
19:45
Speaker 2: But then we are going out and doing it in store.
19:48
Speaker 2: And then we're trying to have ongoing training as well
19:50
Speaker 2: that we're always having, you know, when we have new products.
19:54
Speaker 2: Training that is continuous as well.
19:57
Speaker 3: Going back to your quality, Mike, I remember so well
20:00
Speaker 3: in my training I was making ice cream. It was
20:02
Speaker 3: I think it was a cherry cherry Magnolia ice cream,
20:06
Speaker 3: and we use whole cherry, so like, you know, Hilary
20:08
Speaker 3: talked about that generosity, like you don't get just a
20:11
Speaker 3: little sliver of a cherry, use a whole cherry. And
20:13
Speaker 3: I was the ice cream was coming out and I
20:15
Speaker 3: was placing the cherries by layer, and my trainer, Leslie,
20:19
Speaker 3: stopped me and she was like, those cherries are about
20:22
Speaker 3: three inches apart. That's not acceptable. Those cherries need to
20:25
Speaker 3: be like no more than an inch apart, because you
20:28
Speaker 3: got to make sure the guest gets a cherry in
20:30
Speaker 3: every bite. And I love that. I loved that, like relentlessly.
20:35
Speaker 3: I don't know how many batches over her career, twenty
20:37
Speaker 3: year career, she's meeting of that ice cream and she
20:40
Speaker 3: refused to let me get out the door with three
20:43
Speaker 3: inches apart on the cherries.
20:44
Speaker 1: That's cool and I love that both of you went
20:47
Speaker 1: through the training. It reminds me of Dominoes. They have
20:49
Speaker 1: a working store in the basement of their headquarters and
20:52
Speaker 1: every employee has to work in there for two weeks.
20:55
Speaker 1: I absolutely love that. Hillary. Is it difficult to find
20:59
Speaker 1: employees in the summer, You know, our our.
21:03
Speaker 2: Store owners are great at finding and retaining employees. It's
21:07
Speaker 2: such a fun place to work. We always say we
21:09
Speaker 2: want to be the most desired first job if you
21:13
Speaker 2: think about it. We are a vintage concept. A lot
21:16
Speaker 2: of our stores are walk up so you're walking up
21:18
Speaker 2: to a window. So inside that window, you're scooping ice
21:22
Speaker 2: cream with your friends, you're listening to music. You are
21:25
Speaker 2: you know, serving happy customers that are about to get
21:28
Speaker 2: happier after you give them ice cream. So it's really
21:31
Speaker 2: a lovely environment. And the store owners that I know
21:35
Speaker 2: are really able to not only you know, hire well,
21:39
Speaker 2: but really maintain their employees over time. There's so many
21:43
Speaker 2: stories of people, you know, going to college and coming
21:45
Speaker 2: back from college and working on their summer and winter breaks.
21:48
Speaker 2: I remember we were doing a crew contest around National
21:52
Speaker 2: ice Cream Day and the owner said, you need to
21:54
Speaker 2: get me that the prizes because so many of my
21:57
Speaker 2: my employees are going back to college. They come back
22:00
Speaker 2: every year. And so I think, because this is such
22:03
Speaker 2: a fun brand to work on, and our store owners
22:06
Speaker 2: do such a great job infusing the culture into the
22:11
Speaker 2: store that people it's a place that people really love
22:14
Speaker 2: to work. We just had a handles open in Henderson, Nevada, here,
22:18
Speaker 2: and I am getting so many texts from parents saying, like,
22:21
Speaker 2: my kid really wants to work at handles? Can you
22:24
Speaker 2: put in a good word to the store owner for
22:26
Speaker 2: her or him?
22:28
Speaker 3: So?
22:29
Speaker 2: Yeah, I think, you know, I wish it was around
22:31
Speaker 2: when I was sixteen seventeen, I was working, you know,
22:35
Speaker 2: as folding shirts at the gap. But I think ice
22:37
Speaker 2: cream would be more fun.
22:39
Speaker 1: Yeah, I'm sure, And I still I'm embarrassed to say
22:43
Speaker 1: I still haven't been to a handle. So when I'm
22:45
Speaker 1: at the RFDC conference in November, yeah, I'm gonna have
22:48
Speaker 1: to make a trip out to Henderson.
22:50
Speaker 2: We'll get you there. I'll meet you there.
22:52
Speaker 1: Mike, sounds like a plan. Jen, who's your typical customer
22:56
Speaker 1: and are you seeing any consumer weakness of late?
23:00
Speaker 3: Yeah, So for the typical customer for us, as you
23:03
Speaker 3: might imagine, is family, but specifically like the outdoor loving family,
23:09
Speaker 3: the family that is going to be on the sports
23:12
Speaker 3: field and then transitioning over to handles. And that's part
23:14
Speaker 3: of the reason I think the walk up format has
23:16
Speaker 3: such high appeal for our guest target. You know, I
23:20
Speaker 3: would say we're seeing the opposite of weakness, We're seeing
23:22
Speaker 3: strength in the brand. So double digit same store sales
23:25
Speaker 3: growth driven primarily by transaction growth, which is quite unique.
23:30
Speaker 3: But for us, you know, we we talk you know,
23:33
Speaker 3: we talked about spirit of generosity. What flows out of
23:35
Speaker 3: that is affordable luxury. When you try handles, you're going
23:38
Speaker 3: to be astonished at the portion size. It's probably more
23:41
Speaker 3: than you can possibly so generous, and we're very cautious
23:45
Speaker 3: about price point. Like we look at legacy brands like
23:48
Speaker 3: in and Out and they are modest about taking price
23:51
Speaker 3: and I think when you do that, the guest rewards
23:54
Speaker 3: you with their loyalty, and so we're very conscientious and
23:57
Speaker 3: careful about that. And what you find is that as
24:00
Speaker 3: a result, in times of economic uncertainty or tightening, when
24:05
Speaker 3: people come to handles, they still feel like, oh, I
24:08
Speaker 3: can treat my whole family and it's not killing me.
24:11
Speaker 3: And they haven't started making the oreo pieces smaller and
24:14
Speaker 3: the scoop sizers are still are still generous.
24:18
Speaker 2: And so I think because.
24:20
Speaker 3: Of our positioning, we do particularly well in times of
24:23
Speaker 3: economic uncertainty.
24:24
Speaker 1: Yeah, what you get for what you pay has just
24:26
Speaker 1: been so important, and we've seen the companies that have
24:30
Speaker 1: some of the lowest costs of goods. I'm sorry, the
24:33
Speaker 1: highest costs of goods have the best traffic because people
24:35
Speaker 1: are are you know, know that they know what they're getting.
24:39
Speaker 2: For sure, you're noticing it more than ever.
24:42
Speaker 1: Hillary, how are you know? Jennifer mentioned same store sales,
24:45
Speaker 1: Are you know, phenomenal traffics phenomenal? What's been contributing to
24:50
Speaker 1: the growth?
24:51
Speaker 2: I think there's a lot of things contributing to the growth.
24:54
Speaker 2: I think first off, we starting last year, had estellar
25:00
Speaker 2: lineup of new flavors come out. So we had four
25:03
Speaker 2: incredible flavors come out. Our innovation kind of machine is
25:07
Speaker 2: really is really really just kind of revving up, and
25:12
Speaker 2: so I think that drove a lot of traffic. Those
25:15
Speaker 2: lto's coming. There's a national promotional window where everybody's carrying
25:20
Speaker 2: it for six weeks and then it goes away, and
25:23
Speaker 2: so we people are starting to realize, like, I've got
25:26
Speaker 2: to get it, and if I like it, I've got
25:28
Speaker 2: to go back and get it a couple of times
25:30
Speaker 2: in that six week promotional period and I probably need
25:32
Speaker 2: a pint in a court funny story, we had one
25:35
Speaker 2: of those. We had a couple flavors that were just
25:38
Speaker 2: such planned flavorites but one of them. Our last flavor
25:41
Speaker 2: of last year was called Not Your Average Dough cookie
25:44
Speaker 2: dough flavored ice cream with cookie do pieces. That amazing
25:47
Speaker 2: cookie dough JOm talked about earlier with a salted pretzel ripple,
25:51
Speaker 2: so sweet and salty, so delicious, And there were like
25:55
Speaker 2: Reddit threads with people talking about how far they drove
25:59
Speaker 2: to get Not Your Average Dough, Like I drove an hour,
26:02
Speaker 2: I drove two hours. Well, I drove four hours to
26:04
Speaker 2: get it. I mean. So I think the the you know,
26:08
Speaker 2: these new flavors coming and them being the scarcity of
26:11
Speaker 2: them being around for a limited time has really been
26:14
Speaker 2: been great. But I also think Handles, you know, we
26:18
Speaker 2: are just everything is kind of working together, think like
26:22
Speaker 2: strength and marketing overall. We're entering all these new markets,
26:26
Speaker 2: like we're just kind of really buzz And I would say,
26:29
Speaker 2: like kind of at a tipping point where maybe you
26:31
Speaker 2: didn't know handles five years ago. But Jen and I
26:34
Speaker 2: were speaking at a conference recently and someone raised their
26:36
Speaker 2: hand and said, I had never heard of handles two
26:38
Speaker 2: years ago, and now one is cropping up everywhere I go.
26:42
Speaker 2: And so I think it's it's about growth, it's about
26:44
Speaker 2: great new products, and it's about really strong marketing and
26:48
Speaker 2: those are all just working so nicely together.
26:51
Speaker 1: Now your average dough sounds fantastic.
26:52
Speaker 2: You have me, I'm going to send you some. It's
26:54
Speaker 2: we had to bring it back due to customer demand
26:58
Speaker 2: and make it a permanently available for franchises to put
27:02
Speaker 2: on their menu because it was just people would not
27:04
Speaker 2: let it go. So we're like, we've got to give
27:06
Speaker 2: We've got to give the people what they want. But
27:08
Speaker 2: we're having so much fun.
27:09
Speaker 3: Because it's like it's like Disney where they have the
27:11
Speaker 3: vaults and it's like it's time to bring snow White
27:13
Speaker 3: back out again. You know, like there's we've got all
27:16
Speaker 3: these classic flavors, the innovation, innovation engine, humming, and like
27:20
Speaker 3: kind of trying to decide what you bring to life,
27:22
Speaker 3: and you know, how you're delighting people in their summer
27:24
Speaker 3: is awesome. But to what Hillary said, I think there's
27:27
Speaker 3: like definitely a convergence happening as the brand is expanding,
27:31
Speaker 3: and I think it also goes to those fundamentals we
27:33
Speaker 3: talked about, like when guests feel like they can't find
27:37
Speaker 3: places where they're getting a good bang for their buck,
27:39
Speaker 3: where things aren't like they used to be. We're like this,
27:43
Speaker 3: you know, a place you can come where you step
27:45
Speaker 3: back in time a little bit, and in a world
27:48
Speaker 3: that is getting increasingly fast, it's a place you can
27:52
Speaker 3: slow down. And so I do think there's an element
27:55
Speaker 3: of what is happening in the world around us that
27:58
Speaker 3: is getting people to seek the simplicity and comfort in
28:03
Speaker 3: the way in the way they choose to eat or
28:04
Speaker 3: treat themselves. And I think Campbell's is really well positioned
28:07
Speaker 3: for that. And then, as Hillary said, with the combination
28:10
Speaker 3: of the expansion in marketing, it's like the wave is
28:12
Speaker 3: hitting it and we're catching it right at the right time.
28:15
Speaker 1: Jen, do you have any tech initiatives you and the
28:17
Speaker 1: team are currently working on and how do you balance.
28:20
Speaker 2: We have a phones down, cones up philosophy, So Jen,
28:25
Speaker 2: you can talk tech, but our tech tech is very intentional.
28:30
Speaker 2: I've never heard you say that phones down, cones up.
28:32
Speaker 1: I love that so much.
28:35
Speaker 3: Yeah, So we want like no technology between us and
28:39
Speaker 3: the guests, like, do not put a kiosk in front
28:41
Speaker 3: of me, And so we're very explicit about that and
28:46
Speaker 3: very cautious about any technology we would bring into the
28:50
Speaker 3: into the experience.
28:52
Speaker 2: For a guest.
28:53
Speaker 3: Certainly, you know, we're we want the guests to be
28:55
Speaker 3: able to access us in any way so they can
28:57
Speaker 3: order on Uber and door dash, et cetera. But we're
28:59
Speaker 3: very it and intentionally so, and I think we're going
29:02
Speaker 3: to remain that way. We are interested though, in like
29:06
Speaker 3: technology usage back of house that makes the franchisees life easier.
29:11
Speaker 3: I think obviously with the emergence of AI, there's going
29:13
Speaker 3: to be a lot more tools available for doing that.
29:16
Speaker 3: So for us, it would be things like, you know,
29:18
Speaker 3: you've got you've got forty eight flavors. Every day, you've
29:22
Speaker 3: got to look at those flavors and ensure, Okay, which
29:25
Speaker 3: ones do I need to make? How big is this
29:27
Speaker 3: weekend going to be? What does the weather forecast look like?
29:29
Speaker 3: What trends Like Hillary said, Hey, wow, does my guests
29:32
Speaker 3: do they love cherry in the fall, but they hate
29:35
Speaker 3: it in the spring. And so we're interested in that idea,
29:38
Speaker 3: like bringing together flavor seasonality at a local level trend
29:42
Speaker 3: to help franchises manage inventory, manage their order of making product,
29:48
Speaker 3: just to make them more efficient on the back of house.
29:51
Speaker 3: That would be an area we're going to began to
29:52
Speaker 3: lean and lean into.
29:54
Speaker 1: Okay, And my last and most important question is for
29:58
Speaker 1: both of you, what's your favorite flavor? And no cheating,
30:01
Speaker 1: you can only pick one.
30:03
Speaker 2: Mine is so easy because it is just I tend
30:06
Speaker 2: to find something and stick with it forever. And so
30:10
Speaker 2: I am a chocolate person. We like to say like
30:12
Speaker 2: you're a chocolate person, a vanilla person, a fruity person,
30:14
Speaker 2: or maybe a coffee person. I am a chocolate person.
30:18
Speaker 2: So chocolate peanut butter brownie is my favorite. Every handles
30:21
Speaker 2: I go to, I get the same same order chocolate
30:24
Speaker 2: peanut butter brownie and a cake cone. Like love, love
30:27
Speaker 2: love it. If you're a chocolate person, you can't go wrong.
30:30
Speaker 2: I am gonna cheat, Mike.
30:32
Speaker 3: I'm going to defy the rules, Michael, and I am
30:35
Speaker 3: going to do a four scoop sampler everywhere we go.
30:38
Speaker 3: I had a forource scoop sampler last night, Hillary, I
30:40
Speaker 3: was out in Santa Clarita. I got four scoops because
30:43
Speaker 3: that's we are about variety. So I'm gonna tell you
30:46
Speaker 3: my force scoop sampler last night was key lime pie,
30:49
Speaker 3: raspberry sheet cake, coffee, chocolate chip, and I topped it
30:52
Speaker 3: off to answer your question with what I do think
30:54
Speaker 3: is my favorite, and that's salted caramel truffle.
30:57
Speaker 1: All right, cool? Can I give you an ice cream
30:59
Speaker 1: flavor recommendation?
31:01
Speaker 2: Oh yes, always? All right?
31:03
Speaker 1: So, growing up, like one of my favorite flavors, if
31:07
Speaker 1: not my favorite flavor flavor was Friendly's Chocolate Almond Chips.
31:11
Speaker 1: So it was chocolate ice cream with chocolate covered almonds
31:15
Speaker 1: in it. And I used to and I could sit
31:18
Speaker 1: and eat a whole half gallon when I was you know,
31:21
Speaker 1: your son's age, Hillary, when I was like fourteen, But
31:23
Speaker 1: I wouldn't just eat the half gown. I would crunch
31:26
Speaker 1: up pretzels and throw it in. Oh so, like the
31:31
Speaker 1: chocolate covered almonds and the pretzels and the chocolate ice cream,
31:35
Speaker 1: I think it would be a winner.
31:36
Speaker 2: You know that pretzel ripple. I could see the pretzel
31:39
Speaker 2: ripple involved. It is so good and unique, and that
31:42
Speaker 2: there is something about that sweet and salty that it's
31:44
Speaker 2: just so satisfying.
31:46
Speaker 1: Hell yeah, all right, that was fun. I'm sure the
31:49
Speaker 1: summer is very busy for you too, so I'll let
31:51
Speaker 1: you get back to work. I am gonna go get
31:53
Speaker 1: ice cream because you made me very hungry. Thanks to
31:58
Speaker 1: the audience for tuning in. If you'd like to find
32:00
Speaker 1: your nearest handles, go to handles ice cream dot com.
32:04
Speaker 1: If you liked our discussion, please share it with your
32:06
Speaker 1: friends and colleagues. Check back soon for an interview with
32:09
Speaker 1: Erasio Buza, founder and CEO at FUDA