China Screams for Imported American Ice CreamBloomberg News
When Michael Strange, president of Bassetts Ice Cream, attended a food-marketing seminar for Philadelphia-area executives seven years ago, he didn’t expect to do more than exchange a few business cards. But one of his new contacts, an international food broker, had ties to China and asked that Bassetts to send some ice cream samples overseas. ”I thought, ‘Well, this is going to be $400 down the drain,’” Strange recalls.
What has happened since has unexpectedly transformed Bassetts, which describes itself as America’s oldest ice cream company. Bassetts now ships 40-foot container loads of ice cream to China and has employees experimenting with new flavors designed to appeal to Chinese palettes.
The ice cream exports by Bassetts reflect a broader revolution in the U.S. dairy industry, which has been upended by the developing world’s insatiable demand for milk, infant formula, yogurt, pizza, and ice cream. Dairy farmers have been big beneficiaries, as a surge in export demand has driven farm-level prices to record levels. Many U.S. dairy processors have suffered, forced to pay sky-high prices for crucial raw ingredients.
Strange, the great-great-grandson of founder Lewis Dubois Bassett, who began making ice cream in 1861, said he too is being hurt by high raw milk costs. But in his case, the blow has been partially offset by his growing business in China, which now accounts for nearly 20 percent of his revenues.
His initial shipment of ice cream ended in the possession of Sun Gongyun, a veteran trader of coal and mining machines who believed there was money to be made in ice cream. Sun stored them in refrigerators at a friend’s sashimi restaurant and, after buying whatever other brands he could find, organized a blind taste test. Bassetts beat them all.
Sun began placing orders with Strange’s company, and he now sells Bassetts to hotels, grocery stores, and restaurant, including the buffet chain Golden Jaguar. He has also opened four Bassetts Ice Cream stores in China and has plans for a fifth this year in Beijing.
Bassetts created new flavors for the Chinese market like black sesame and green tea and gave up trying to get Chinese customers to embrace pumpkin and caramel. While it’s not nearly as profitable as coal, Sun said he is optimistic about its future.
“Food business in the future will be the rising sun,” Sun said while showing off one of his Bassetts stores at the Metro City Mall in central Shanghai, with 30 seats and free Wi-Fi. He is planning to sell Bassetts cheesecakes, too. “China has a lot of people. That means a lot of birthdays and other occasions for celebration.”
As for Strange, he said he still can’t believe his good fortune from a chance meeting. He now has his sights on other foreign markets, including Taiwan and India. And the new flavors have found fans back home in Philadelphia. “I am stunned by how many people get a cone of green tea ice cream,” he said.
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