Despite the slogan “ice cream of the future”, Dippin’ Dots went bankrupt in 2011.

After a savvy acquisition by an oil tycoon for ~$12M, they now do over $330,000,000 in revenue per year.

The crazy part? Most of the revenue isn’t from selling ice cream.

Here's the wild story 🧵
Curt Jones worked as a microbiologist at a research center in Lexington, Kentucky.

He invented a new food process for cattle - which involved flash freezing cow feed at -350 degrees.

The end result was food pellets that better maintained the nutritional value for cattle.
He decided to test the same process on home-made ice cream, resulting in ultra-cold ice cream pellets that melted in your mouth.

Jones ran with it and immediately opened the first Dippin’ Dots location in Lexington.

After early struggles, he found success via distribution:
By distributing Dippin’ Dots to theme parks, malls, ballparks, etc. he found a cheap & effective way to reach customers.

This strategy continued through the 90’s, and Dippin’ Dots had 350 outlets and $20M in annual revenue by the year 2000.

But the next decade brought trouble…
Back in 1996, Jones sued competitor “Mini Melts” for infringing on the patent he filed for his unique ice cream creation process.

A valid patent gives you exclusive rights for 20 years to make + sell your product.

But Jones made a crucial mistake:
When you invent a product and start selling it, you have 1 year to file a patent.

Jones opened the first location in July of 1987, but didn’t file a patent until March 1989.

This mistake cost him the lawsuit, and he had to pay Mini Melts $10M in a counter law-suit in 2007 😵
Then in 2008 the Great Recession hit, and far less people were going to venues where you could find Dippin’ Dots.

Sales dropped from $46M in 2007, to $30M in 2010.

The recession X lawsuit led to Dippin’ Dots being $11M in debt, and forced them into bankruptcy.
The business went up for auction in what’s called a 363 sale - allowing buyers to piece-meal what they’d like to acquire.

Scott Fischer saw the opportunity: “I was able to pick the diamonds from the rough, free and clear of any liabilities.”

The next era of Dippin’ Dots began.
Fischer, whose father founded Chapparal Energy, turned Dippin Dots from a brand that couldn’t keep the lights on to a business doing well into 9 figures.

He’s done this through 3 key areas:

• Product Expansion
• Acquisition ➡️ Franchising
• Licensing the Dippin' Dots IP

Fischer built a new production facility & introduced the frozen yogurt product YoDots.

He also expanded into supermarkets with a special freezer that’s cold enough to hold their products.

Both have been a hit. "We’re fighting to keep supply up with demand & growth"

Dippin’ Dots lost it’s presence in shopping malls, so Fischer acquired DocPopcorn in 2014 to bring more foot-traffic.

Co-branded stores enable sweet+salty treats for customers, & dual-revenue for franchisees.

Franchise units took off shortly after 🚀

In 2018, Fischer formed a subsidiary to license the flash-freezing and ‘dot forming’ tech.

Pharmaceutical companies started using it to increase the shelf life of their products.

But the biggest customers of this revenue stream? Impossible Foods and Beyond Meat.
The plant-based meat giants feed their ingredients through Dippin Dots’ cryogenic (flash freezing via liquid nitrogen) process-

And out comes pelletized products that simulate the consistency of natural fat in their burgers, bacon, and sausage.
The impact it’s had on the business is undoubted:

“With that one we’ve been doing really well. It’s increased our net substantially and actually is surpassing the Dippin’ Dots business right now”.

Fischer has led an eye-popping turnaround, but what happened to Curt Jones?
The founder is involved, but only as a franchisee.

“Curt’s a brilliant guy. He left behind a legacy to be proud of that will go down in the history books. And he’s one of Dippin’ Dots’ most successful franchisees.”

Not what you hope for as a founder, but better than nothing 🤷‍♂️
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TL;DR, Dippin Dots:

✅ Found success via distribution

✅ Went bankrupt due to recession and a patent mistake

✅ Makes more money by licensing their cryogenic process

✅ Founder is now a multi-location franchisee of his own brand
Here's an inside look at the Dippin' Dots cryogenic process that they've licensed to Beyond Meat, Impossible Foods, and others:

Random insight from the comments - the former White House press secretary has a grudge against Dippin' Dots. Care to weigh in @seanspicer ?

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Really good read. 👇👇