Dive Brief:
- J&J Snack Foods is exploring further expansion of its recently acquired Dippin’ Dots brand into retail, CEO Dan Fachner told analysts during the company’s fourth quarter earnings call.
- The company has made “significant progress” in recent months introducing the frozen treat to new customers and channels, including under-penetrated markets and theaters and food service, he said.
- Dippin’ Dots was purchased by the Icee owner in May for $222 million in a move that could allow J&J to add a strong consumer brand with a profitable, growing business that it can further scale.
Dive Insight:
While J&J may not be a household name, several of the company’s food and drink offerings are known to consumers. Brands such as Superpretzel and Luigi’s Real Italian Ice are found in convenience stores, supermarkets, movie theaters, stadiums and amusement parks.
By acquiring Dippin’ Dots, J&J added an iconic, differentiated brand that complements its frozen novelty and frozen beverage businesses and has wasted little time growing the brand. J&J already is planning its first cross-brand collaboration with the launch of Icee cherry and blue raspberry-flavored Dippin’ Dots.
Dippin’ Dots brought $31.5 million in revenue during the company’s fourth quarter, which ended Sept. 24. The new acquisition was responsible for about 12% of its $256.8 million in foodservice during the period.
But while Dippin’ Dots has carved out an enviable presence in foodservice, retail is an entirely different story.
“It really isn’t in the retail sector today,” Fachner said during the earnings call. “We do some things with licensing that allow it to be in the retail, but that’s something that we think that we can bring to that company over time, and one of the things that we’re working on for innovation of the future.”
For J&J, bringing Dippin’ Dots further into retail could not only boost sales during the warmer months when it generates the lion’s share of its sales, but allow it to offset lost revenue at some venues that close or see a sharp drop in traffic during the winter. Roughly 70% of sales occur from April to the end of September, the company said on the call.
Dippin’ Dots has high brand recognition among consumers who have seen or purchased it in other channels. That would likely give the ice cream immediate inroads as it competes against other brands in retail that are owned by deep-pocketed CPGs. Dippin’ Dots also would benefit from further recognition that more points-of-sale would bring, along with opportunities that come with expanding the branding to other sections of the store.
