'Best' ice-cream maker scooping into big time

CINCINNATI — Bud Currie wields a metal paddle to furiously transfer thick ice cream crammed with Oreo cookie bits from a two-gallon cylinder into pints that will ship to groceries. For eight hours a day, his handiwork is the closest thing to mass production found in a new plant in Cincinnati that makes Graeter's ice cream, a fourth-generation family brand that is a regional icon with national — if risky — ambitions.

Currie, Graeter's head packer, will be busier than ever as Graeter's, founded in 1870, increases production in the first new plant it has opened since 1934.

The company hopes to use the facility to quadruple production and challenge ice-cream heavyweights Häagen-Dazs and Ben & Jerry's nationwide, an ambitious target considering its current distribution is limited to 45 ice-cream parlors and pint sales at 1,500 Kroger supermarkets throughout the Midwest, Texas and Colorado. Now they are heading for the coasts.

Their competitors in the superpremium ice-cream segment — generally defined by the industry as having at least 14 percent milk fat and high-quality ingredients — have far greater name recognition and marketing budgets.

"What is unique to Graeter's, I believe, is that they are just the best out there," said Larry Finkle, director of food and beverage research at Marketresearch.com in New York. Based on a study of the frozen-dessert market that he completed in January, Finkle said he believed the little family company can make it big.

"In a recession, it's a cheap way to feel luxuriated," he said. "That's what consumers are looking for, rather than going on a big trip or buying a new car or home."

Superpremium ice cream makes up 14.4 percent of frozen-dessert sales, with $1.4 billion in annual sales, Finkel said. Graeter's annual sales of $20 million are small compared with the big two, but it sees room for growth.

Cincinnati and its suburbs are blanketed with 14 ice-cream parlors run by the family, serving sundaes and milkshakes and, in some locations, bakery goods. The owners operate stores opened in the 1920s and 1930s by their great-grandmother.

Graeter's relied on a converted printing plant in the city's historic Over-the-Rhine neighborhood to make most of its ice cream. The new plant, built in another old city neighborhood on an industrial strip, is not much larger but was designed for a robot to move pints onto pallets in the arctic freezer. Kinks were still to be worked out.

"We need a warmer blanket," said Richard Graeter II, the company's president and chief executive, as a worker bundled in multiple layers had to stand in for the machine.

Regardless of volume, Graeter's plans will adhere to the labor-intensive, small-batch French Pot method of making ice cream, pouring a simple mixture of cream, eggs, sugar and the batch's flavoring into rotating 2-gallon cylinders. Melted dark chocolate, made by Peter's Chocolate of Lititz, Pa., is poured into the ice cream, where it hardens and is broken off the sides with paddles to make sometime behemoth chips.

Graeter, 46, and his cousins and partners, brothers Bob and Chip Graeter, plan to stick religiously to the formula.

The company's growth trajectory has seen spikes over the years with the help of celebrity endorsements, none greater than Oprah Winfrey's declaration, made on her show in 2002, that Graeter's was the best she had ever tasted.

"We were shipping about 40 boxes a day," Graeter said. "After her show, the next day we probably shipped 400."

Louis Graeter first sold his ice cream from a cart at a street market in 1870 and opened his first retail store around 1873, according to "Graeter's Ice Cream, An Irresistible History," by Robin Davis Heigel.

Now it is considering opening "big brand statement stores," in Graeter's words, in cities such as Atlanta, Houston, Dallas, Los Angeles and New York.

The investment carries a risk that the family considered necessary to keep the company thriving, Graeter said. "Our family has always been contented to make a little less profit in order to ensure our long-term survival. It is a trait that we intend to drum into the fifth generation the same way that our fathers drummed it into us."