Blue Bell Creameries L.P. History

Address:

1101 S. Horton
Brenham, Texas 77834-2807
U.S.A.

Telephone: (409) 830-2180
Fax: (409) 830-2198

Private Company
Incorporated: 1907 as Brenham Creamery Company
Employees: 2,300
Sales: $225 million (1997 est.)
NAIC: 42243 Dairy Products Wholesalers; 311520 Ice Cream Manufacturing

Company Perspectives:

From the beginning, we've been cranky about the homemade taste of our ice cream. So cranky, in fact, we have people whose only job (if you call eating our ice cream a job) is to taste every flavor of Blue Bell to make sure it's perfect. But they aren't the only tough judges. Everyone from our Chairman on down is fastidious about the special taste of our ice cream. Obviously, our preoccupation with taste has paid off because Blue Bell is the most popular ice cream in these parts. Of course, the ultimate taste test is yours, so pick some Blue Bell flavors and give them a try. Once you do, you'll know why we eat all we can and we sell the rest.

Company History:

Blue Bell Creameries L.P. produces a line of premium ice cream available in 45 flavors, including year round and seasonal flavors. Blue Bell products include frozen yogurt, sherbet, and more than 70 varieties of ice cream snacks, such as Mooo Bars and Country Cones. Homemade Vanilla is the company's bestselling ice cream, as well as the bestselling ice cream in most of the company's distribution areas. Blue Bell prides itself on fresh, quality ingredients and the care that is put into the process of making ice cream. Based in Brenham, Texas, Blue Bell distributes its products in 12 south central and southeastern states. Despite the limited distribution area, Blue Bell represents the third most popular branded ice cream in the United States and produces approximately 100,000 gallons of ice cream each day.

Rural Beginnings: Early 20th Century

Blue Bell Creameries originated in 1907 as Brenham Creamery Company, founded in Brenham, Texas, 70 miles northwest of Houston. The company produced only butter until 1911 when the creamery began to hand-crank two gallons of ice cream each day in an ice cream maker set in a wooden tub filled with ice. All of the major ingredients--milk, cream, eggs, and fresh fruit--were purchased from local farmers and producers. Along with butter, a horse and wagon allowed delivery of the ice cream to the area around the creamery. Though most people made their own ice cream at the time, the creamery's ice cream became popular through word of mouth.

Financial difficulties at the company began in 1916 and continued until E.F. Kruse was hired as manager of the creamery in 1919. Bankruptcy loomed at that time and Kruse left his first paychecks uncashed to ensure the solvency of the company. Under Kruse's conservative management the Brenham Creamery thrived. The company purchased its first motorized vehicle, allowing the company to expand its delivery radius and its business. In 1930 Kruse changed the name of the company to Blue Bell Creamery. The name was taken from the bluebell, a native Texan wildflower that proliferates in the hot Texas summers--high season for enjoying ice cream. In 1936 Blue Bell acquired a refrigerated truck, allowing the company to distribute fresh ice cream longer distances, as well as a continuous freezer, which increased production capacity.

Though Blue Bell is not owned by the Kruse family, it has been operated like a family business. E.F. Kruse brought his sons, Edward and Howard, into the company when they were 13 and 11 years old, respectively. The two made ice cream sandwiches and frozen snacks on a stick and prepared fresh peaches for mixing into an ice cream base. Both proceeded to major in dairy science at Texas A & M University and returned to the company as managers. After a short time in another food company, Ed Kruse rejoined Blue Bell at the request of his father, becoming a salesman in 1951. The same year, E.F. Kruse died and Ed Kruse was selected to take his place, becoming manager of Blue Bell at 23 years of age.

Howard Kruse returned to Blue Bell in 1954 as plant supervisor. He quickly immersed himself in the details and nuances of making quality ice cream. In 1956 Howard was promoted to assistant manager of the company, though he also supervised the plant. In 1958 Blue Bell ceased production of butter and focused solely on the production and sale of ice cream.

In addition to the Kruses, another Brenham, Texas native joined the company at a young age. John Barnhill worked in the Brenham plant for the Kruse brothers and also painted the Blue Bell advertising slogans on drugstore windows where their products were sold. After college, Barnhill rejoined the company in 1960 as its first Houston salesman. In 1962 Barnhill became branch manager of Houston, Blue Bell's first sales and distribution branch outside of Brenham. With the popularity of Blue Bell ice cream growing in Houston, and after 54 years in operation, the company achieved the milestone of $1 million in sales in 1963. In 1965 another distribution center opened in Austin and the company began automated production of ice cream.

Cultivation of Country Origins in the 1970s

A banner year for Blue Bell came in 1969 when Howard Kruse developed the company's bestselling ice cream, Homemade Vanilla, and Metzdorf Advertising Agency was hired to develop a country image for Blue Bell. These two events complemented each other as the new advertising strategy emphasized the company's country origins and original hand-cranked ice cream. Howard Kruse intended the new Homemade Vanilla to imitate ice cream made the old-fashioned way, hand-cranked at home. The country image portrayed throughout Blue Bell's advertising history, primarily developed by Barnhill and Metzdorf, continued with the concept of "The Little Creamery in Brenham." Advertising under the new agency fixed the country image by filming in actual Washington County, Texas settings, and using residents of the area in the commercials to exemplify homemade, country-fresh goodness.

Although Blue Bell salesmen in Houston were warned that a country ice cream could not compete in a large city against more than ten different ice cream companies, Blue Bell became the bestselling ice cream in Houston by the mid-1970s. The company's country image became an asset rather than a detriment. In 1977 that country image developed to include a silhouette of a young girl pulling a cow on a rope as the company logo. Homemade Vanilla had become the signature ice cream of the company, a top seller in every market. In 1978 Blue Bell became the first company to package Cookies and Cream ice cream, its second best seller, previously a hand mix of crumbled Oreo cookies and vanilla ice cream available only at local ice cream parlors.

Blue Bell's success relied on the quality of its product being spread through customer word of mouth, like the small town gossip that first spread news of the company's original ice cream. This served the company well in expanding to new markets in Texas as the company focused on market areas near or adjacent to established markets. New branches opened in Dallas in 1978 and in North Dallas and Fort Worth in 1982, as well as in other areas of Texas. By 1984, Blue Bell reached another sales milestone with $100 million in sales, and by 1988, Blue Bell had opened 13 sales and distribution branches in Texas, outside of the Brenham area.

Blue Bell maintained its own direct store sales and distribution system designed to support a high level of service and product quality. Driver salesmen delivered and restocked freezer cases in grocery stores, convenience stores, and other retail stores to ensure that the company's frozen desserts were fresh and well supplied for their customers. With each branch serving a 75-mile radius, refrigerated trucks maintained a product temperature of 18 degrees below zero to assure product freshness.

Solid Success in the 1980s

The mid-1980s saw a number of internal changes at Blue Bell. Ed Kruse was named CEO and chairman of the board in 1986 and Howard Kruse was made president. John Barnhill became executive vice-president as well as general sales manager and relocated to Brenham. The company also established an in-house advertising department, Blue Bell Advertising Associates, which continued to work with the Metzdorf Agency. The flourishing company required a new corporate headquarters, which was completed in Brenham in 1988, along with a visitor's center. In 1989, 100,000 visitors toured the ice cream plant.

Blue Bell's popularity has been attributed to its production of a high-quality product at a mid-range price. Blue Bell also sought to serve the needs of its customers for dietary ice cream products. In 1989 Blue Bell was the first ice cream company in the country to offer a half-gallon container of diet ice cream sweetened with NutraSweet. The company launched Blue Bell Free, fat free ice cream, in 1991 and Homemade Vanilla Light in 1996. Blue Bell was the first company in the country to develop a line of bite-sized frozen ice cream snacks in 1995.

1990s Expansion Beyond Texas

Blue Bell ventured outside of Texas for the first time in 1989 when branches opened in Oklahoma City and in Baton Rouge. The company credits customer word of mouth as well as a New Orleans Times-Picayune newspaper article for its immediately successful entry into the New Orleans market. In three months Blue Bell had attained 33 percent of supermarket ice cream sales in the Baton Rouge-New Orleans area. Oklahoma's Braum's dairy stores gave the company strong competition, but Blue Bell attained a 33 percent market share within supermarket sales in ten months. By the end of 1989 Blue Bell's grocery store sales captured six percent of supermarket sales nationwide and reached $160 million in sales. In Texas grocery stores, Blue Bell continued to experience a high level of product turnover, at 92 times per year compared with the industry average of 35 times.

Throughout the 1990s, Blue Bell utilized the contiguous market expansion plan to introduce its ice cream products into Kansas, Alabama, Missouri, Arkansas, Georgia, New Mexico, Tennessee, and Mexico, as well as new markets in Texas, Louisiana, and Oklahoma. Blue Bell became the bestselling brand of ice cream in Birmingham, Alabama, in less than a month by relying on word of mouth through its loyal customer base from adjacent markets. In less than six months Blue Bell achieved a market share of 44 percent of ice cream sales in Birmingham in 1995.

The company concerned itself with expansion into out-of-state markets while it strove to maintain a high-quality product as well as its image as "the little creamery in Brenham." To accommodate expansion in the northern distribution area, Blue Bell opened a production facility in Broken Arrow, Oklahoma, in 1992, expanded its plant in Brenham, and opened a facility in Sylacauga, Alabama, in 1997 to serve the southeastern distribution area.

Word about Blue Bell ice cream reached far beyond its sales and distribution territory. Betsy Newman, owner of Fruit Baskets of Brenham, began to offer Blue Bell ice cream by courier after her father, a Blue Bell executive, mentioned that the company often received requests for its ice cream from out of state. The ice cream was sent to faraway places for birthdays, weddings, and to employees stationed outside of Texas to work for long periods of time. In addition to the price of the ice cream and sales tax, a delivery of three half-gallon containers cost $15 for dry ice, $16 for the cooler, $36 for shipping, and $11 in administrative fees. Newman averaged six orders per week in 1994.

Blue Bell's humorous television commercials have captured audiences throughout the distribution area. One commercial featured a driver salesman consuming most of the ice cream in his delivery truck his first day on the job. This fit with the company slogan, "We eat all we can and sell the rest." Another commercial featured a character named "Fred" who invited his friends over for homemade ice cream. His friends raved about the ice cream and wanted to know his secret. In a long narrative Fred described the "special recipe," which included vanilla and ostrich eggs from Madagascar. The final act of the commercial showed Fred's real secret, as he filled his home freezer with Blue Bell ice cream.

In July 1996, Blue Bell made the bold move of advertising during the Olympic Games. Shown in 11 south central and southeastern states, the television commercials ran during opening and closing ceremonies, as well as during actual events. A special commercial was produced to underscore the company's country image. Three siblings of retirement age visit the country of their childhood and experience flashbacks to the memories of the old-fashioned country life.

After 90 Years in Business

By the end of 1996 Blue Bell became the third bestselling ice cream company in the United States. With its products available in 14 percent of supermarkets nationwide, Blue Bell held the number three position behind Dreyers Grand and Breyers, both of whom sold their products in 85 percent of the nation's grocery stores. In 1997, the year that Blue Bell celebrated its 90th anniversary in business, company sales grew 17.8 percent.

Blue Bell ice cream products became a market share phenomenon. A 1998 A.C. Nielsen ScanTrack determined that Blue Bell had attained more than 40 percent of supermarket ice cream sales in some of the largest southern markets. The Houston area had always been the company's strongest market, with 66 percent of supermarket ice cream sales. In Dallas the company reached a 60 percent market share, San Antonio/Austin reached 53 percent, New Orleans/Mobile reached 49 percent, Birmingham/Montgomery reached 42 percent, and Oklahoma City reached 36 percent. With its outstanding market share Blue Bell earned the spotlight in diverse publications that spread beyond its distribution area, such as Time, Sports Illustrated, and Forbes magazines.

The company continued to grow through its dependable plan of gaining strength in one market and allowing word of mouth to precede the company into the next contiguous market. Consumer requests for Blue Bell ice cream in Memphis led the company to enter that market in 1998. It also entered the Atlanta area, opening two sales and distribution branches there in 1998.

The company continued to invent new dessert novelties. In 1999 Blue Bell launched Rainbow Sherbet Cups, which contained a swirl of orange, strawberry, and lime flavored low-fat sherbet. The Banana Split Country Cones held banana ice cream with a strawberry ice cream center and the ice cream top dipped in chocolate and chopped peanuts. As long as ice cream lovers abounded, Blue Bell could be expected to keep them, and its business, smiling.

Blue Bell Creameries L.P. History

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