Neal Gottlieb, is the founder of Three Twins Ice Cream, a company that makes & sells “inconceivably delicious organic ice cream”.
My first experience with Three Twins was last winter, during a family get-together in San Francisco. It was the name that caught my attention. After sampling the Lemon Cookie ice cream, I ran down the street to get the rest of my family to come taste this stuff. It was terrific!
But it’s not just the ice-cream that draws you to the brand. The odd name, the distinct packaging & the fact that you can buy a once-in-a-lifetime experience to go with it, have all been carefully crafted to leave you with a lasting impression.
For example, Neal will personally deliver a 100 pints of ice cream to you for $3333.33. Or you can climb to the summit of Mt Kilimanjaro and have a batch made exclusively from glacial ice for $60,000.
Three Twins has 4 scoop shops & sells in nearly 3000 locations in 50 states. Not bad for someone who started out as the only employee of a small scoop shop, tucked away in a corner of San Rafael.
Neal gives us an insight into that first year when he was doing everything – from making & selling ice cream to book-keeping & cleaning up. How he took to the road to sell his product beyond the limiting walls of his shop. And how to think about your brand and relentlessly look for ways to make it stand out.
Note: There was an audio glitch in the last five minutes of the recording, please scroll to the bottom of the page to read the last part.
I want to go back to when you started in 2005. You were the only employee in one small shop in San Rafael. I read somewhere that on one of the days, you had $49 in sales – one of your worst days.
Fortunately it was the worst day.
Can you tell us about that first year?
Yes, so it was actually August 27, 2005. It was the absolute last week of summer before students went back to school. We went into what turned out to be the rainiest winter in recent California history. I think in March and April it rained something like 56 out of the 61 days. It was a combination of the bliss and satisfaction of finally getting open, with the agony of realizing what getting open on a very limited budget and a terrible retail location meant.
It meant lots of long hours, being there by myself doing everything – making ice cream in the morning, scooping ice cream throughout the day, then trying to do some semblance of book-keeping and cleaning up at night.
It was really a dichotomy of things.
How did people, customers, find out about your scoop shop in that first year?
It starts with the neighborhood. That’s the nice thing about being in a place that is described as a terrible location. On the other hand, it was also a wonderful location because it’s a tight knit community with lots of families and people that did and do, even more so now, care about organic and great products. So just getting the doors open, brought about instant buzz within the local community.
Then the challenge is to get people to come from not just a few blocks away but from the larger Northern California community. We had some things working for us – like being certified organic and having great products that speaks for themselves. But we also tried to get to customers by doing things like farmer’s markets and other events.
Probably the most notable thing that I did in the first year was host the World’s Largest Organic Ice Cream Sundae in which we filled an entire bath tub with ice cream. It was something like 65 gallons of ice cream with toppings. We sold it for a dollar a scoop to raise money for a local land trust. That went a long way to bring people in because it was something out of the ordinary – nobody had ever seen a sundae in a bath tub before – but then it also helped build steam because we were doing something for somebody else.
After that event did you see the number of customers coming into the store increase?
We did actually. That entire week ended up being our best sales ever, and it actually remained that way for the next year or so. This was apart from the money we raised for the nonprofit. We did see a market spike. It coincided with the beginning of summer, but I think it was also a great opportunity to get hundreds and hundreds of people in the nearby community to see the scoop shop that maybe they’ve heard of, but hadn’t really gone out of their way to go to.
How did you spread the word about this event? What did you do to advertise to people who weren’t in that neighborhood?
I reached out to local media and got some coverage picked up by the Marin Independent Journal & a couple of other newspapers. I actually bought an advertisement – which is I think the only time I ever bought and advertised with any newspaper. It’s probably the only time I ever will. Because if you look at the money that was spent and the impact that it had, it just seems like it was minimal. I feel word of mouth is much more important. We had flyers for our existing customers to take home and share with others. This was in 2006, before social media really came on the scene. Nowadays it would be much easier to spread the word about certain events.
So far, you were selling out of your shop in San Rafael. At that point, you made an important decision about how you were going to sell your product. Can you tell us about the choice you made and why you made it?
Well, given the location where I was – it was two miles off the freeway. To get there, you have to drive by an ice cream shop that’s now been open 48 years. There are two or three generations that have grown up going to that particular shop.
Also, just getting people there- in this relatively small community, the Toledo District of San Rafael – you don’t have free traffic because it’s in the mountains and there are other geographic features. So I knew that the only way I was ever going to really build a brand was to get outside and sell ice cream elsewhere.
The first obvious thing was to start selling at some Farmer’s markets. I started selling it to one of the Marin Markets and then at the Berkeley Farmer’s markets. That showed me that there was a real demand for the product much more so than one would think tending a shop in Terra Linda all day.
From there I went and started doing bulk ice cream for restaurants and soon thereafter packaged ice cream for stores, knowing that the world was moving more towards quality and organic, and thinking there would be a good deal of opportunity for the business outside of those rather limiting walls of the shop.
Just to clarify – did you attempt to pick a location for your shop that was more central, say in San Francisco?
Yes, I would have liked to, but in 2005 the commercial real estate market was very strong in Northern California. There were very few small spaces available, less than 1% of spaces were smaller than 1000 feet. I had very limited resources to work with. I had, at the age of 28, $70,000 saved off, and then a little bit of money that I borrowed from the bank of Mom and Dad. I had absolutely no experience at all working in food service or running an ice cream shop. It was a very competitive market to get those leases and I wasn’t a great candidate. I didn’t have experience and I didn’t have money – really the 2 things that matter.
After looking for six months, I ended up signing a lease for the San Rafael location. It was either a matter of waiting until the next year and hoping that something better showed up, or just getting into business and making it work.
I think you can’t let perfect be the enemy of the good. If I waited, who knows if I ever would have gotten a shop and I would have been maybe six months or e a year behind where I am now. So I think ultimately it’s important to have a location you can make work, but also get into business, open up and start doing things.
After the farmer’s markets gave you an indication of the demand, who was the first retailer, store, café that you sold to?
A restaurant in San Francisco called Rose’s Café that one of our customers happened to be the chef at. I remember driving to San Francisco- it must have been spring of 2006 – the first order was for three tubs of Madagascar Vanilla at $55 a tub. $165 then seemed to be a huge amount of money coming off the winter where we had sales as slow as $49.
That first order made it very clear that there is going to be a huge amount of opportunity. If you can get a few dozen accounts like that, it can really give that boost to start making some money and feel the growth.
Did you see a steady build up of other restaurants, cafes in the neighborhood wanting to buy some?
It wasn’t necessarily people finding out about Three Twins, it was more of me going to restaurants and bringing samples, bringing price lists, getting those appointments set up. Often people didn’t hear about us because we were so small and so isolated geographically.
Both, choices for ice cream were pretty limited & there was nothing else on the market that was organic other than Straus, which came in these very large containers. Straus only came in 5 flavors. We were able to offer something like 20-25 flavors in containers that were a much better size for them to work with. And they got custom flavors. We’d really work with their chefs in a way that wasn’t possible before.
Were you making all these 25 flavors yourself?
Yes, at that time I was still making all the ice cream. I’d make a handful of flavors each day. Maybe up to 10, if I had a little more time for production.
What would you say was one of the challenges in getting restaurants to buy it?
In the case of restaurants, the biggest challenge was the price. The fact that it’s not a commodity good, that it’s a branded product made of great ingredients in a relatively small scale – it ends up being more expensive. That’s often a big challenge to overcome when it comes to the food service side of things. Chefs are looking at their margins and you know their food cost can only be a certain percentage. If our product is twice as expensive as say Dreyers, even though they can easily distinguish the quality, it’s often a difficult decision to make.
On the other side of the business, I started selling pints, to maybe about 12 retailers around the Bay Area. We ran out of capacity because the ice cream was all still being made in San Rafael in a very small shop. It was really surprising how well it did. It was selling itself because the product was well positioned to do just that. It was this delicious organic product that was starting to build buzz around the Bay Area. It was in relatively attractive packaging. We had a giving model tied in, so we give money back through 1%, which made a lot of customers feel really good about it, and the product had a great entrepreneurial back story. So there were all these attributes that made people want to buy and want to support it. Plus, being local, I think we benefited from people who are really trying to think about shopping locally.
Okay. I want to talk a little bit about how you think about building and promoting the brand. Can you give me an example of something you specifically did to create buzz around a product?
I think the most important thing when building a brand, first and foremost, is to have a great product. Unless you are a big multinational corporation, that has a lot of money to put behind marketing, you really need to lay on attributes for a product that people want to buy.
As far as a specific example, I think the Sergio Romo Mexican Chocolate is probably the best example. Given that the Giant’s just won the World Series yet again, it’s also topical.
In 2012 when the Giant’s won the World Series, the last pitch was drown out by Sergio Romo, as closing pitcher. At the parade, he wore a shirt that said “I just look illegal”, calling out the Arizona immigration laws and the fact that he is Mexican-American. The shirt was obviously controversial, it got lot of media attention, and then that story went away. But a few months later I had this epiphany of- we sell Mexican Chocolate at our ice cream shops. It’s delicious; it’s a product that people like. Why don’t we pair up with Sergio Romo and bring Sergio Romo’s Mexican Chocolate to the marketplace. But the key for – the thing that got us the media attention we end up getting – was the tag line, “It only tastes illegal”, playing off the shirt.
The first step in that battle was to get his attention and his permission. Rather than just trying to get in touch with his agent, or trying to tweet at him, let`s actually have my graphic designer make the packaging, and have a concrete example that he can’t turn down. So I had a designer make it and then tweet it at him saying we’d like to bring this to market. He tweeted back that afternoon. As we are sitting there nervously, waiting for him to respond. He tweeted back “That’s what’s up”, and we knew then that he was interested. We figured we would be able to work out the finances because who doesn’t love the idea of having an ice cream named after her or himself.
I knew it would get us some media and sure enough, he and I were on ESPN magazine, the Huffington Post and lots of other media in the Bay Area and beyond.
You need to have a great product, but you also need to differentiate yet stay relevant. This was certainly differentiated – working with this controversial tag line, this awesome guy who is also a little controversial. At the same time, you know you’re putting your label on a product that is delicious and something people love to buy.
If you go to the Three Twins online shop, there is something called the Absurdity category, where you sell things like 100 Pints of ice cream personally delivered by you, the World’s Most Expensive Sundae, a climb to Mt Kilimanjaro. Are all these things you actively think of, to differentiate the brand?
Absolutely. I think an important characteristic of the brand is being quirky. Starting with the name – Three Twins. It doesn’t really make sense to most people because they think – twins only come in two. This is the quirk factor to the brand. So is having the 100 pints, or the Sundae, or climbing Mt. Kilimanjaro.
We never expected these to be any sort of revenue driver, but we knew that, if nothing else, it adds an element of quirk, gives customers something to read and just giggle to themselves as they read. Plus it gives the media one more reason to write about the brand. The World’s Most Expensive Sundae, as we called it, certainly did that. It’s gotten media attention around the world because people are always looking for, what I call, soft ball media items like that. They like making lists of the most expensive this and that, so by making that claim we knew we would get some media attention.
Has anybody bought the World’s Most Expensive Sundae?
Not yet. But I have climbed Mt. Kilimanjaro and made ice cream with ice from the glacial summit.
Yes and I also read that a billionaire bought the 100 pints and had you deliver it in person.
It did happen.
Does it come naturally to you to try these things out?
Oh yeah. I`m always looking for ways to differentiate and stand out. That’s part of my personality and it’s something that’s reflected in the brand, from the beginning.
Early on, we tried to do something called the “Twin Scoop”, where you get a scoop of your own choice and then you could have another tiny little scoop. It was basically just another lick or two of a different flavor. You could get a “fraternal twin”or an “identical twin”. But operationally it slowed things down, so we decided to kill that.
Another example – two days after we opened, Hurricane Katrina happened, and we did a fundraiser to help raise money for an environmental nonprofit out of New Orleans. We did a “Name Your Own Price” ice cream, so people could come into the shop and just pay whatever price they wanted. One person only paid a dollar for a scoop which was $3, another person paid $20. We raised over $1000 for this nonprofit. From the beginning, I was trying to do things differently with our own signature on them and that reflects itself in the product. It reflects in how we run the business & in the marketing.
I noticed there is ongoing buzz on the Three Twins Facebook and Twitter pages. At what point did you get into social media?
It’s such a no-brainer as far as a way to engage your consumers & give them the opportunity to sing your praises to their friends and community. That has been important for as long as I can remember, although thinking back, I know in 2005 we certainly didn’t have social media. It has been great and very important.
Is there a specific strategy you and your team follow, in terms of the kind of content you’re putting out?
Educate and engage, you know. We don’t want to just try to shove the commercials, we want that they learn something too.
What’s your advice to someone who’s looking to start a business?
Have a concrete business plan. The reason Three Twins is now a nationally recognized brand is not because it just happened, it was planned that way. So have a plan and money should be a part of the plan. How you get funds should be a big part of it.
Can you give me an example on how you raised funds in the early years?
I raised it from the Bank of Mom & Dad. And then I raised it from someone who was a customer that owned a convenience store. I talked about the fact that we were looking for funding. I didn’t ask him then, but he came back and asked if we were looking for investors.
I noticed from an old footprint of your website, that you had an email up where potential investors could contact you. Did anyone come through there?
No one. It was mostly people from my network.
Is there an example of where customer feedback made you change how you were doing something?
Yes. The density of our ice creams sold in the packaged product was different. The amount of air trapped in the ice cream affects the density. Some customers who came to the shops would complain about that. That’s another thing – we take feedback from customers at the shops and roll it into the packaged product.
Is there an interaction with one of your customers, that really stayed with you?
Just yesterday, I was at the Whole Foods wearing my Three Twins pants and people came up to talk to me. That’s always cool.
Photo Credits: facebook.com/threetwinsicecream