A story by the Cincinnati Enquirer in 1979 led the way for the rivalries between the upcoming national brands versus local favorites. In an unofficial taste test with children as judges, Graeter’s outscored Baskin-Robbins in the strawberry flavor (the other longtime Cincinnati ice cream maker, Aglamesis Brothers, took first place). Outsiders Baskin-Robbins came in first in the chocolate tasting, outscoring Graeter’s and the Aglamesis Brothers. Häagen-Dazs, the other national brand in the taste test, never scored better than Graeter’s.
Coloring pages such as these with an alien/robot theme were often given out to kids who visited Graeter’s. Courtesy of the Cincinnati Historical Museum.
Inside, the Hyde Park store still feels like it did ninety years ago when it opened. Courtesy of Ken Heigel.
The tasting was not a sign of strong competition for Graeter’s, however. Today, there are only three Baskin-Robbins locations in Cincinnati, while there are fourteen Graeter’s Ice Cream stores.
Along with fun, Baskin-Robbins competition proved to be good for Graeter’s on another level. The advent of “super-premium” ice cream brought national players with deep pockets, including Häagen-Dazs and Ben & Jerry’s, into the market.
Before the late ’70s and early ’80s, the ice cream market could be basically divided into two categories: premium ice cream and value ice cream. The main difference was in the quality of ingredients and the amount of butterfat and overrun, or air pumped into the ice cream during the processing. The more air, the less dense the finished product. Super-premium ice cream introduced the country to a whole new version of the sweet treat—or so some of the makers wanted the public to believe. In actuality, Graeter’s had been making a super-premium ice cream all along.
Häagen-Dazs came out of a company called Senator’s Ice Cream in New York that had spent years in the first part of the 1900s making cheap ice cream with high overrun and low butterfat. Its high-end entry started in the late ’50s by switching the old formula on its head, with a low overrun and high butterfat, a similar product to what Graeter’s had always made.
Super-premium ice cream was also significantly more expensive than other value and premium brands on the market, which made its popularity seem counterintuitive. The ’80s brought a humbling recession, an unemployment rate of a historically high 7.5 percent and inflation at more than 13 percent. But at the same time, consumers wanted higher-quality products and were willing to pay for them. The mentality seemed to be that maybe consumers couldn’t buy a new house or car, but if they were going to buy ice cream, it was going to be the good stuff, not sweet, artificially flavored frozen air.
On a menu from Graeter’s probably from the ’60s or ’70s, the business tradition is explained. Courtesy of the Cincinnati Historical Museum.
Despite the health concerns that cropped up later in the decade, ice cream—especially super-premium ice cream—became an affordable indulgence. In Ben & Jerry’s: The Inside Scoop, author Fred “Chico” Lager wrote, “Weight Watchers had studies that showed that ice cream was the number one food people gave up their diets for. It was America’s favorite dessert, and people seemed more inclined to make an exception for ice cream than anything else.”
With its faux Danish name (Häagen-Dazs does not translate into anything in Danish or any other language; owner Reuben Mattus made it up) and high-quality product, Häagen-Dazs created a newfound appreciation for ice cream. By the ’80s, all the major manufacturers had come out with super-premium lines of ice cream with foreign-sounding names, such as Frusen Gladje, Le Glace de Paris and Alphen Zauber.
Ben & Jerry’s was a similar high-quality product with humble roots, this time in Vermont in the late ’70s. What made Ben & Jerry’s different was its social conscience. The company used local products to support farmers and gave money to help fund charities, such as a drug counseling center and homeless shelter in Harlem. It also set up a nonprofit arm called Ben & Jerry’s Foundation, to which a portion of the company’s profits were granted. The foundation then donated the money in the form of grants to other nonprofit organizations.
Unlike elegant, super smooth Häagen-Dazs, Ben & Jerry’s turned to super-chunky fun flavors such as New York Super Fudge Chunk, Dastardly Mash—a combination of pecans, walnuts, chocolate chips and raisins in a chocolate ice cream base—and Cherry Garcia with cherries and chocolate.
And while Häagen-Dazs was slick, Ben & Jerry’s was homespun. In those days, co-founder Ben Cohen was known to say, “We’re the only super-premium ice cream whose name you can pronounce.”
Both companies rolled out a limited number of scoop shops across the country but also made their ice cream available by the pint at some grocery stores. (Both companies have since been purchased by large corporations: Häagen-Dazs by Pillsbury, which was eventually acquired by Nestle, and Ben & Jerry’s by Unilever.)
To compete with these new super-premium ice creams, Graeter’s turned to grocery stores. The company had sold its products to an exclusive market called Washington Market in the TriBeCa neighborhood of New York in the early ’80s but was surprised to discover that the store was in turn selling the pints for a whopping $8.85 (in Cincinnati, at the time, a pint went for $2.50).
So in 1987, Graeter’s decided to stay closer to home and struck a deal with Kroger, the largest grocery chain in the Midwest, to start selling Graeter’s pints. By 1990, eleven Kroger stores also had soda fountains so customers could get a scoop of ice cream while they shopped and could then pick up a pint to take home.
But one newcomer of the ’80s proved decidedly difficult for ice cream producers, including Graeter’s: frozen yogurt. During the ’80s—and ever since—consumers became concerned with sugar and fat, two things ice cream couldn’t be made well without. About the same time, a new product, frozen yogurt, came onto the market.
The front of a coupon from 1989 offers a free scoop of ice cream from Graeter’s stores. Courtesy of the Cincinnati Historical Museum.
Frozen yogurt is made much like ice cream but with milk and water instead of cream and eggs and with the addition of yogurt culture. When frozen yogurt was first introduced in the ’70s, it was a dismal failure because consumers thought it tasted too much like regular yogurt. Manufacturers reformulated the product into something sweeter and more like soft serve ice cream, but still with a “healthy halo.” A half cup of TCBY frozen yogurt, one of the most popular shops that popped up during the era, contained roughly half the calories, less sugar and just a fraction of the fat of a half-cup portion of Graeter’s Ice Cream. Later, some frozen yogurt took on more of a traditional hard-frozen ice cream appearance, and makers including Häagen-Dazs got in on the action.
Dick said sales in the ’80s leveled off specifically because of the introduction of frozen yogurt. But he didn’t worry; he considered the treat to be a flash in the pan.
“Frozen yogurt is the fad food of 1988,” said Dick in an article in the Cincinnati Enquirer in 1988. “It’s a fad that will grow and will peak, and then it will start dropping off. We’ll wait until the fad passes.”
Dick was right about it being a fad. By the ’90s, soft serve frozen yogurt had all but disappeared, though new versions such as Pinkberry and Red Mango have started making another run on the ice cream market in the latter part of the first decade of the 2000s. And refrigerator cases at supermarkets still contain a brand or two of hard frozen yogurt, including Häagen-Dazs and UDF.
A “NEW” FRENCH POT—AND FRANCHISEES
If the steady competition wasn’t challenging enough, during the same time it became clear that the company would have to begin replacing some of its aging French pots. Graeter’s was still using the same cypress wood vats, old tin bowls and maplewood paddles for scraping the ice cream from the sides of the pots. “We basically made ice cream on one-hundredyear-old antique ice cream machines,” Richard said.
The family needed something new and more reliable that wouldn’t compromise the high-end, handmade quality of their ice cream. It proved di
fficult to find a suitable replacement.
For a time, they turned to Alvey Washing Equipment Company in Cincinnati to make stainless steel vats to replace the cypress bowls. They switched from the maplewood paddles to a plastic composite. But the new version of the actual machine was harder to replace.
When Dick attended a bakery trade show in 1978, he saw an ice cream maker made by an Italian company called Carpigiani that was similar to the French pot. Instead of a hand-operated paddle, it had a corkscrew scraper that turned automatically. The company bought one machine to see how it would work.
The results were good enough that Graeter’s could achieve one of its long-term goals: making the ice cream in-store instead of just at the plant. The first place Graeter’s tried this was at the Colerain Avenue store.
But ultimately, the Carpigiani machine didn’t work for Graeter’s. “We finally decided they weren’t heavy-duty enough for what we were doing with it,” Dick said. The machine was designed to make gelato, a slightly softer version of ice cream than what Graeter’s produced.
But it did give them an idea of what they needed in a new French pot, and the company set to work at designing its own machine. “We probably reinvented that machine a couple of times,” Dick said. “I know we had to spend a million dollars over time, maybe more.”
Graeter’s Ice Cream now manufactures the machines it uses for production today, still using the basic principle of the French pot. It doesn’t have a patent on the actual machine, though it considers the company that makes it to be proprietary information. Still, Dick said he doesn’t worry about anyone stealing the concept. “Nobody really wants to make product this way.”
In the end, it’s the production that sets ice cream apart, according to Dick. All ice cream recipes, he says, are basically the same. “There’s no real secret recipe to ice cream. There’s cream, sugar and eggs,” Dick said. “I don’t care whether it’s Häagen-Dazs or Ben & Jerry’s or Graeter’s. It’s still cream, sugar and eggs.”
EXPANDING BY FRANCHISING
With a number of retail stores running successfully, the Graeters decided to try expanding their business by franchising in the ’80s.
In 1985, Graeter’s Ice Cream offered a license store to Lyle Brumfield. He was permitted to open one, at most two, stores in Kentucky, a new area for the company. When the arrangement worked well, the Graeters became more comfortable with the idea of a true franchise.
In 1989, Graeter’s entered into a franchise deal with Maury Levine and Clay Cookery of Columbus. But it had taken the duo years and an inside connection to get the deal in place, though it had been their dream since just after college. “After business school, I went to work for P&G [Procter & Gamble],” Levine remembers. One of the first places new friends took him was to Graeter’s Ice Cream. “As soon as you taste it, you can instantly tell it’s better than anything else you’ve ever had. It’s a marketer’s dream.”
Levine married Susan Sachs, who had roomed with Dick’s daughter Cindy at Miami University. Through his wife, Levine and Cookery met Dick and became social friends. After eight years, Graeter’s finally sold them the franchise. “I think they had an interest in expanding, but they never had the ability because they were very hands-on,” Levine said. Richard says it was the persistence of the duo—and their apparent business savvy—that finally convinced Dick to sell them a franchise.
Levine and Cookery opened the first Columbus store on Lane Avenue on August 24, 1989. The franchise agreement allowed them to make the ice cream according to the recipes and specifications of Graeter’s and on the leased French pot machines. They were allowed to open stores within Franklin and, eventually, Montgomery Counties.
Levine and Cookery expanded to eleven stores in Columbus and four more in Dayton, but never without careful planning. Levine, who said it was a joy working for Dick, remembers Dick’s words of wisdom when it came to opening stores: “Once you’re dead, you’re dead a long time.”
Since 2000, all of the Graeter’s Ice Cream sold in Columbus and Dayton—including that sold at grocery stores—has been made at the Bethel Road location, where the plant portion of the store is glass-enclosed and customers can watch the ice cream being made.
After offering a franchise to Levine and Cookery, Graeter’s changed the license agreement with Brumfield in Kentucky to be a full franchise so that he could open stores anywhere in the state. Jim Tedesko, a homegrown Cincinnatian, was a certified public accountant at the time, and Brumfield was one of his clients. Brumfield convinced him to come to work for him in the franchise operation in Kentucky in 1997. Not long after, Tedesko decided he wanted his own franchise, so he approached the Graeters about expanding to Indianapolis.
“They said they weren’t set up for Indiana and suggested I buy the Louisville portion from Brumfield,” Tedesko said. So in 1998, that’s what he did.
For Tedesko, being a franchise owner of Graeter’s was ideal. “I was born and raised in Cincinnati, so I grew up on the product,” he said. “I wanted to be in business for myself. And over the years I’d become familiar with their processes.”
Now Tedesko is the owner of eight stores in Louisville and the ten surrounding counties. In addition he owns a ten-thousand-square-foot plant, where he produces the ice cream for all of the Louisville stores and, as in Columbus, for all the Louisville grocery stores that carry it, too.
“It’s such a labor-intensive product, we have to make it locally,” Tedesko said. “Customers, the press talk about Graeter’s being a Cincinnati-based company, but the ice cream we sell is really homemade in Louisville.”
Brumfield eventually retired and sold the northern Kentucky part of his business in 2003 to Zaki Barakat, who now owns four Graeter’s stores.
“The original concept of the franchise was that they would have a couple of these machines and operate them on premises, manufacturing, selling,” Dick said. “But most of them, like Columbus, started at one store and made it in the back room then used that store as the manufacturing then opened up the satellite stores.”
SPECIAL FLAVORS
The basic ingredients may be the same, but there are some Graeter’s flavors no one else has been able to duplicate. Black raspberry ice cream, for example, was Dick’s creation. “I was the first one to make black raspberry. The reason I made it: I could find the puree to make it with,” he said.
The flavor was a childhood memory for him. “I remember as a youngster buying black raspberry ice cream from the local drugstore. All the soda fountains at the drugstores had black raspberry,” he said. “For some reason I liked it.”
Later—Dick doesn’t remember the exact date, though he thinks it was in the 1970s—he tried adding chocolate chips to the black raspberry flavor. It quickly became—and remains—the bestselling Graeter’s flavor, accounting for 20 percent of total sales of the ice cream.
Dick said they made the black raspberry both with and without chips for a long time but eventually got rid of the one without chips, much to his dismay, because it didn’t sell as well. “I quit eating black raspberry when I put the chips in. I don’t like it. I never liked it.”
Lou, however, is a big fan of the chocolate chip flavors, including black raspberry chocolate chip, though his favorite flavor is mocha chocolate chip. For customers, too, the flavors with chocolate chips are by far the favorite, accounting for 70 percent of total ice cream sales.
For Kathy, her favorite flavor remains the simplest: vanilla. “I like the texture of the smoothness, the coolness,” she said. And while she doesn’t mind the chocolate chips in some flavors, she says, “I always want my final bite to be vanilla.” She feels the customers enjoy the chocolate chip flavors so much because it’s an indulgence. To the Graeter family, who eat ice cream every day, it’s a little too much.
Another of Dick’s contributions is the rotating seasonal flavors. He came up with the concept, he says, to keep customers coming back. “I just did one a month. We’d run it for six or seven weeks the
n drop it,” he said. “You can almost tell by the month what flavor I had.”
Coconut was in January, followed by cherry chocolate chip in February and chocolate almond in March. July always brought peach, and the fall brought autumn flavors such as pumpkin in October, cinnamon in November and peppermint and eggnog in December. Now the company offers seasonal flavors instead of monthly flavors, bringing in a few different ones for longer stretches: peach, for example, might run from July to August, and strawberry chocolate chip, a spring favorite, will begin in April and run through May.
SHIPPING TO NEW MARKETS
In addition to grocery stores, Graeter’s Ice Cream also turned to shipping to reach markets outside of Ohio and Kentucky.
In the early ’90s, the only option for shipping was FedEx because UPS wouldn’t accept dry ice, which was necessary to ship ice cream. The problem with FedEx, however, was that its distribution didn’t reach everywhere. And the U.S. Postal Service? “They were impossible to work with,” Dick said.
In the mid-’90s, everything changed. “Sometime in ’94 or ’95, [UPS] changed their policy and they started taking dry ice shipments,” Dick said. “UPS was the best way to ship to individual homes and things. Distribution was 100 percent of the United States. There were very few places they didn’t go.”
In 1994, shipping was 0 percent of the family business. Today, it brings in $3 million a year.
TOUGH TRANSITION
The transition of Graeter’s Ice Cream from the third generation to the fourth started by accident—literally. In 1989, Jon tumbled down a flight of stairs in a house he was renovating. After a lengthy recovery, he looked at his life, the long hours and hour-long commute from Georgetown every day, and decided it was time to retire. Kathy, who until this point had worked for the company but had not been an owner, bought out his shares.
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