How do two philosophy majors that wanted to become architects end up in the ice cream business? I found the answer recently when I met with Forbes Fisher, Co-Founder of Steve’s Ice Cream.
In 2010, Forbes co-founded the company with David Stein, who had worked with the original Steve’s shops back in the day and was interested in re-launching the brand for today’s new, millennial consumers. Today, Forbes is both Co-Founder and President for Steve’s but his journey has involved covering nearly every position in the company from marketing to packaging.
I met Forbes in his shop at the old Pfizer factory building out in Bushwick. The building is massive and it’s become sort of a mothership for Brooklyn food startups. Considering Steve’s credibility and longevity, they feel a bit like a wise older brother to some of the younger upstarts. Between sales calls and and a flavor development session, Steve squeezed in an hour to break down his personal journey and shed light on how to make it in ice cream.
Tell me about how you got started?
Dave and I met in 2010 and got along.
I liked his view of taking this older brand, the essence of that brand which is mixing things together, and thinking, what are some of the revolutionary mix-in’s today that are changing the way people think about ice cream? Or, what are some of those trends like dairy-free that we can hit on that will appeal to people today?
Early successes for us were Strawberry Ricotta and Mexican Chili Chocolate. And some more traditional ones like Salty Caramel or Southern Banana Pudding that we just put our own touches on. Our Southern Banana Pudding for example we start with banana ice cream then swirl in banana pudding.
Anyway, we saw this opportunity where people were moving away from Haagen Daaz or Ben & Jerry’s and wanted to see what we could do next in ice cream.
I lived in Brooklyn at the time but we actually launched on Long Island using one machine and just grew from there. It’s been an interesting six years, but it feels like twelve. (Laughs)
Was there a spark moment? One night where the idea came together?
I worked at Pure Food & Wine / Lucky Duck in the city and was in a CFO/COO role there and through mutual friends and colleagues met Dave. I was working on this juice bar concept and we did a deal where I licensed some dairy-free ice cream we were making for the juice bar to him to potentially manufacture. In doing that deal, we hit it off. We both were not lawyers but played that deal-making role, both were philosophy majors, both wanted to be architects in another life, it clicked.
I stayed at that job for another six months, finished the project I was working on and then approached Dave and wanted to see what his next step was when he brought up the Steve’s re-launch idea to me. We were at the original Milk Bar location behind Ssam bar and I was on board right away. We had launched it within a year.
Did you have funding and investors?
Dave had worked at the original Steve’s and that company went out of business to Ben & Jerry’s in the 90’s but before it happened, they’d taken Steve’s public so they took that infrastructure and pivoted it to a different company. That company ended up becoming the third largest ice cream company in the United States, just licensing the product out to various other companies, and Dave was the CEO, so he’d made some money to provide the initial seed investment.
The seed money was fun to play around with at the beginning but in some ways it also made it harder. I think some of it was wasted, frankly. When you have to fully bootstrap without any seed money, you have to go one way, you can’t try multiple avenues.
After that, we did a crowd-funding campaign that brought in about a million and a half dollars for round one. It was through Circle-Up and we were only the 6th or 7th brand to use that, now you look and there are hundreds of brands on the platform but I think at our time there were only a handful.
We’re focused on round two of fundraising now, aiming for about five or six million to promote growth.
What about some of your early challenges?
There is the hard road we decided to take early on, which was to own our own production. That is really hard to do - to own 100% of your production and scale.
These days, we manufacture about 25% ourselves but utilize others for about 75%. We had the money we invested in equipment and the people which is all necessary to our success but when you have to make electricity and rent on a facility 100% every week, it makes a start-up much harder. Paying a co-packer once a month is do-able if you can still ensure the production is going to be up to your standards. Doing it all yourself though, that’s tough. Rent is not a variable cost.
What were your early wins? Some moment where you felt, we’re doing this, it’s happening?
There are a few. One is definitely Whole Foods locally bringing it in. We didn’t want to wait for the regional approach so we approached them at a store level with Tribeca, Chelsea and Bowery along with a few others in the city, and were successful. We put a lot of effort in but it’s not like we were doing sampling every week in every store but it was turning and moving off shelves at a great pace. Then that success moved us up to the regional sales level.
That was a good sign to us that it was not only appealing to consumers but also to a retailer like Whole Foods. It was validation for us on the product from a quality standpoint and from an interest level that the flavors were resonating with our New York / Brooklyn consumer base.
Our investors make fun of us but we have the opposite problem of most start-ups. We always outsell what we can produce. In this industry, if you have enough money and are spending on sampling and deep sales every week, you can sell anything.
We didn’t have that luxury so whatever our sales and marketing budget would have been went into the product. But a product that was still at an affordable price. You can look at Jeni’s selling for $12 on the shelf next to us and we have a comparable (if not better) product selling for $6.99.
We also had farm stands in the summer in the Hamptons selling fifty cases a week. That was just incredible. It was validating to us and its what has kept us going, each year a new milestone has been reached.
Outside of a great product, what marketing efforts did you utilize?
Product demos were a key thing for both this market and northern California to grow us. We didn’t really do sales promotions to drive volume like a lot of new brands; we have promotions more for sampling purposes. They’ll try us for $5.99 but then they’ll like it and come back the next week for a full price because they’ve tried it. Largely, a big part of the brand was also partnering with local brands. For Strawberry Ricotta we partnered with Salvatore in Brooklyn. We partnered with Ovenly, Blue Bottle, Taza Chocolate and a lot more. A huge part of our strategy was partnering with these brands that already have some credibility in the market.
We didn’t have street teams or anything like that though because we didn’t have budget for it, and most of our time and energy went into production. Being so close to the product taught us a lot about it, but with food and beverage, you know, for example, its really hard to have your own bottling line (editor’s note – The Barking Irons team knows!). It’s really hard to scale when you are doing all the production, but on the other hand it taught us so much early on.
What role did the legacy of the Steve’s brand play?
In terms of the legacy of Steve’s, it wasn’t so much that there was name recognition but we liked the story behind it. When we’re targeting – for better or worse – millennials or, well, me, there wasn’t going to be that name recognition. There were three hundred Steve’s shops in the mid 1980’s but the last one closed in the early 90’s, I was born in 1986.
People have bought into the product itself and the story is a secondary element. And, to be honest, marketing is something that I feel we are probably lacking the most. Now that we’re starting to have more time and I can step away from production however, we can start to tell the story of each flavor and start to take on our competition over the next five years.
I think it will still be product driven but it has to be a little deeper in terms of story.
What about packaging? Were you the first with the clear carton?
We weren’t (laughs). I’ll be honest. Talenti was really the first to go clear and had that unique screw top. And Jeni’s and us came out around the same time but they’ve since gone back to cardboard.
I think the packaging was essential to our early success in terms of people seeing the product and the swirls and what actually goes into each pint. But, it was a huge design challenge because every flavor is a different color and we’ve had to go really simple with bold lettering and black to keep consistency across a shelf.
The other thing we decided to do from the start was to focus on flavor name over brand. If you look at the hierarchy of our packaging, flavor is the first thing you see. The second thing we’d like you to see is the base, either dairy or dairy-free. We differentiate that between white labels and black labels. And then, the third thing is brand. It’s not that we want to downplay the brand but right now people are choosing on flavor. Eventually as we build the brand awareness, we’ll bring the brand up to the forefront. For right now, we’re keeping flavor first.
There is a huge downside to clear packaging in terms of production but the upside is the true transparency of the product, from the finished product through to the whole supply chain and our sourcing ethos.
A physical manifestation that is also a philosophy…
Well, yes. That has also been a production issue though. If you are going to have that window, it better look good.
For example, one of the first people we outsourced our production to, we had an issue where they were short filling the pints. With cardboard, you’ll find a 1 to 2 oz. gap at the bottom with every brand, you just never know that because it melts by the time you get down there. Everyone fills the carton and then flips it so it freezes to a flat surface when you open the container. We don’t flip it to get that gap; we just do it because the lid is a sturdier base for freezing.
It took us months to figure out how not to have that gap in the bottom though, getting the entire product down to the bottom with the filler and then freezing it quicker to lose the gap.
Anyway, that’s the issue a lot of artisanal brands have, nailing those little production issues.
What types of things keep you up at night?
I think the execution piece is huge. On both sides really, when we used to make it ourselves - you can’t make ice cream and not think about the recalls of the last year – as well as outsourcing.
Dairy, it’s not like a lot of other products, it’s a very volatile in the sense that it goes bad quickly and it is friendly to microbes, like listeria.
That is one major thing that kept me up a lot last year.
But one of the reasons we decided to outsource some of our production was quality and consistency. Some things are out of our control like if something melts and re-freezes, you get a grainy pint of ice cream. We have a great staff that executes things properly but with a larger team, you make bigger batches, and you can be more consistent.
There are stricter product safety rules as well with these larger manufacturers that help me sleep better.
The downside of that is that we lose out on some of our smaller partners. An organic product like Taza chocolate won’t meet the standards of a larger manufacturer but, for us, it’s about working with them to grow along with us so we can continue our relationship.
It really comes down to product when it comes to what I worry about. This year, we’ll likely sell two to three million pints. I know that there are some bad pints in there – that is uncontrollable - but it’s hard to accept when you’re a control freak like me.
So, I try to tamper those inevitable disappointments with really great customer service and making sure that we’re taking care of people that may have had a bad experience, whether or not it was in our control.
That leads me to another question, with social media, how do you stay connected with your consumers?
We were scooping at Brooklyn Flea to get feedback on flavors, etc. initially. Early on, we did a lot of events to stay face to face with customers and hear their thoughts but that is waning a bit now.
In terms of social media, we’ve always had Twitter and Facebook but I think Instagram has been the primary driver for us. That’s how we mostly stay in touch and speak to consumers. We get a lot of feedback with Facebook as well though; people messaging us there with any negative experiences they may have had.
How do you handle product development, innovation and new flavors?
Well, we have a smaller group of people, not focus groups because it’s not formal like that, but a smaller group of people that give us feedback in terms of flavors and new mix-ins that we’re working on.
Surveys are another thing we use, especially in regards to new flavors. This is a great example, we made a malted ice cream with mission figs in it and we did tastings with friends and family and contacts in the food industry and hands down it was the favorite. And then we send out a survey of “What would you buy of the following?” and that flavor came in dead last. Surveys are interesting because it gives us insights into what people will actually pick up.
Strawberry ricotta is another good example. It got written up as the best ice cream in New York and had great press but we took it national and it just didn’t stick. Strawberry is a tough sell anyway which people don’t realize but on top of that, people “get” ricotta here but it’s not going to be as popular in the Pacific Northwest and the West Coast. It just didn’t sell well.
It taught us that you need to be innovative but you need to stay with something that people can identify and are still somewhat comfortable with. Twists on classics instead of going super crazy, at least in packaged pints. I think that’s a real key.
This year we plan on adding some brand ambassadors and we’re launching a 4 oz. cup, so we can easily get into some non-traditional sampling venues and do more events with those cups as well. The cups are really more of a self-funded marketing vehicle for us, not as much about revenue stream.
We’re in talks with JetBlue to make something happen, college campuses, tech company kitchens; those are sampling opportunities for us. If we can break even but get in front of those audiences, that is what’s important.
Sampling in our focus cities – NY, SF, LA, Boston and Chicago are our key five markets –and getting people on the ground there to do sampling is going to be a priority. And then, connecting with our small demographic whether that’s at Outside Lands or Coachella or even a small greenmarket, the focus is going to be getting to our people that identify with our values.
We have a great team but we’re all based here and I can only fly out so much. We need people on the ground in those markets to really build.
So, two people, you and Dave, any challenges you find working together?
Oh yeah! (Laughs) All the time. I think tension is a good thing. Dave and I are very similar in a lot of ways which is great but can also cause it’s own set of problems. I don’t think we balance each other out as much as two business partners probably should. We have a lot of the same positives and a lot of the same negatives as opposed to if you had two business partners that were more complementary.
Dave is older and has more experience in the industry. I’m younger and am more tied in to the so-called “Brooklyn” market that really just means our target demographic. Packaging is one thing where we butt heads a lot. I think a lot of times it’s positive tension where the end product is something better than one of us would’ve done individually though.
I’m not married, I’m getting married next year but I imagine that having a business partner is harder than a marriage. I think my business problems cause more of my relationship problems than vice versa. (Laughs)
To Dave’s credit though, he gives me a lot of latitude to try what I want to do. And there’s definitely more positives to our partnership than negatives.
It all depends on what challenges the business faces and how you grow. There are times now, because we know that packaging is something we’ll disagree on, we’ll bring in a third party to weigh in and then it turns out even better.
You come to these realizations that you view the world and prioritize things differently so you will disagree. To me, I prioritize fairness. If someone isn’t pulling his or her weight, it is putting everyone else’s job in jeopardy. Dave for example, would probably cherish kindness at the top. From a moral standpoint, I can respect that but from a business standpoint, I’m like, you can’t be kind all the time. You can be kind to an extent but not to these people that aren’t being fair.
You learn a lot about yourself from all the stress. I think if nothing else, if it doesn’t make you a better person, it gives you much better personal awareness of strengths, weaknesses and what you prioritize what you personally value.
You alluded to the fact that six years of business feels like twelve. I think entrepreneurship is an inherently intense experience, what have you learned about yourself in the past six years?
I would hope that what most people would learn is just resilience. I think most people are far more resilient than what they give themselves credit for. I know I’ve learned that.
Also, you learn what you cherish most. It’s an intense process that puts you under extreme stress. There are plenty of times where you are like, what the fuck am I doing? Why am I doing this? Ice cream is great but I’m being pushed to the brink over ice cream?!
It’s this absurdist thing. I hope that people take a step back and think when they’re having those overwhelming moments.
It’s this Sisyphean thing. You’re not in it for the end result but you’re in it for the process of it and seeing where the process goes. Take a step back, take a deep breath and things will just happen.
You’re always wondering, what are my competitors doing? Are we winning? Is everyone happy?
You have all these worries and stressors and you’re not necessarily even paying yourself. Our problems haven’t diminished; we’re in a stage of growth where it’s almost scarier now. If we have big mistakes, it can put us out of business. When you’re little and mess up a batch, it will cost you a small amount, if you mess up when you’re big, you lose millions of dollars.
We’re in this scary time but I think that you have to let go a little bit and think strategically but also know that, yes, things will go wrong and you just have to cherish what’s going on in the day to day.
I used to spend eighty hours a week working. Now, I spent more time with my fiancée and only do sixty hours a week but have a clearer head and that’s better for the business and worth one hundred hours or more, in the end.
This also teaches you how to take care of yourself. If you don’t, you’ll go out of business.
And you’ll ruin your health.
I’ve just started getting healthy again personally. I probably put on sixty pounds since I started here. Not from eating ice cream but from stress. The last six to twelve months, I’ve had a slow revelation that taking care of yourself is not only something you should do personally but it’s also a responsibility to your staff. If I am burnt out and don’t deliver for our people, well, it all comes back to that fairness thing.
It’s all about balance. Balance in taking care of yourself, balance in being “in it” versus stepping back. For six years I’ve been so tactical, fighting it out in the trenches. It’s hard but you have to step back, look at things strategically and put the right people in the right places in order to execute those things if we’re going to succeed and become a bigger brand.
Your business goes through different stages. It’s like a child. Your business is two and you figure out what it wants and then it turns three and everything is different.
Did you have any mentors when you were younger that played a really significant role in shaping who you are today?
When I was in fifth or sixth grade, I was tutored by an old physicist; an older gentleman that had retired, Murray. Oddly, when I was younger, I was more of a math and science person. He definitely had a huge impact on my life and into what I became. I studied so much in physics and math. Had it not been for this, I think I’d probably be an aerospace engineer or something like that.
Then, in college, I ended up working at my first real job. My boss there was a young guy, Eli. He was probably the best professional mentor. I went to a very progressive boarding school in Colorado and was at Columbia at the time. He guided me how to have fun at work but be professional at the same time and navigate that transition of coming from the academic world to the professional world. Eli gave me the professional confidence to start something as a co-founder.
Any advice for someone that is just starting out?
Don’t get into the food and beverage industry (laughs).
Everyone says that same joke; I love it.
If you look back and think, would I do this all over again? I would definitely say yes. I think the biggest advice is to go slow. A good example is People’s Pops, who are down the hall. They want to expand and my advice was, pick 50 retail customers and do a really good job with them. Don’t just take on every one. If you focus on a few things and do it really well, that’s a better recipe for success than doing too much and doing things in a mediocre way. That’s something we learned the hard way by trying to grow too fast.
Success in the food and beverage business and maybe more broadly, I think it is the 40/40/10/10 rule. 40% is tenacity. When we were about to go out of business, we just stuck in there. I think a lot of people go out of business because they’re just tired of dealing with things.
The other 40% is serendipity. Timing is huge. We have certainly been a part of a renaissance of new ice cream. Had we launched in the mid-90’s we would’ve gone out of business in a year. People were only buying Haagen Daaz and Ben & Jerry’s but lucky for us the average Ben & Jerry’s eater is now over the age of 55.
Then, another 10% is strategy. All those things that go into have a good plan and a good product.
And the final 10% is listening. Listening with a discerning ear but listening to buyers, consumers, retailers, and the people with something valuable to share. Distributors as well, I actively solicit feedback from our distributors. A lot of times you can drink your own Kool-Aid and think you have the best product on the market that can’t be improved and that is a recipe for disaster. I know we have a great product if it is executed correctly but I always am looking to be more innovative.
Any hopes for the upcoming election?
Business wise. I don’t think so. Personally I am a Hillary supporter. Bernie has a great message and I think it would be nice if some of that could be incorporated into the next President’s platform but on the democratic side, I think it would be good for a woman to be president. Trump would be a disaster (laughs).
For me, I see people fighting on Facebook - if Bernie gets elected, we’ll have to pay too much in taxes, Trump will do this, etc. - but whoever is elected, I don’t see there being a huge impact on business. Even with Trump honestly.
There’s that argument that luxury items are the first to go when times are tough but I think that is a really outdated way of thinking. I think people are prioritizing their food purchases, even in ice cream, and making responsible selections, both environmentally and socially. Even if we were going to go into slow economic growth, I don’t think that would affect our market share.
Final question, what’s the vision for the company?
We’d love to open a factory store here in Brooklyn where we could innovate and have the one-on-one face-to-face connection with consumers. I don’t think we’d go heavily into the retail space but maybe one here and one in LA to balance out the coasts.
We’re also coming out with regional flavors that appeal to the southwest or the northeast with local partners. Once our new production model of outsourcing some production is fully figured out, we’ll work on expanding that line of catering to more regional and niche taste.
I also think cups are going to be a huge thing for getting into those alternative spaces I mentioned for sampling. And not in the near future but we’ve also played around with a novelty item like an ice cream sandwich or a cake. My personal dream is to do a small packaged ice cream cake, not like Carvel but just a small cake. Maybe no one else wants it but I do.
And really just coming up on new flavors, take matcha for example. You’ve seen matcha shops popping up all over the coasts in the last few years. We’ve tried a few variations but one we’re working on now is a matcha mint chip; black sesame chocolate chips and a matcha mint base. That’s taking something that people recognize but partnering it with something on trend that is exciting to try.
In general, new flavors, new packaging and finally, building our brand story. There is such a story behind each flavor and each creation that will help tell the Steve’s story more. And in that, with our co-brands, as we grow, we’ll help our partners to scale with us.