How MilkMade is turning a boutique ice cream company into a venture-backed startup
MilkMade isn't a traditional startup, but it's also not a traditional food company. Founder Diana Hardeman has eschewed the usual routes to success in consumer packaged goods, which usually involves private equity, Whole Foods distribution, and shipping partnerships. She's also steered clear of the path some of her food industry peers have taken, entrenching themselves in a local market with catering gigs, food trucks, and local stores. Both of those approaches can yield successful businesses, but that's wasn't the way Hardeman wanted to build MilkMade.
Instead, by using the tools of the Web, she's built an in-demand brand, turning MilkMade into a one-woman powerhouse with a person waiting list 5,000 people long and 1.6 million followers on Tumblr.
Currently, MilkMade's small-scale operation runs out of the tiny Melt bakery in New York's Lower East Side, delivering pints of ice cream in-person each month to its hundreds of subscribers. But now, with a Kickstarter campaign (called, naturally, a Lickstarter"), MilkMade opens up to subscribers across the country.
None of this, though, was the original plan. You might call Hardeman an accidental entrepreneur. Yes, she went to business school (NYU Stern) and has made her career as a business consultant. But she never set out to turn her ice cream hobby into a full-time job, let alone a scalable startup.
Hardeman started experimenting with ice cream in her kitchen three years ago after realizing that even the quality ice cream brands like Ben and Jerry's weren't that good. Breyers doesn't even have enough milkfat in it to legally call itself ice cream anymore. (It goes by "frozen dairy dessert," which is a lot like Kraft Singles American Pasteurized Prepared Cheese Product.)
So she made some ice cream, trying out unusual flavors like red velvet cake, pretzel, margarita and candy corn (made by steeping the candy corn). It was a hit among her friends. And their friends. And their friends. She started delivering the pints; a bunch of media outlets picked up on it, and MilkMade was born.
Hardeman got offers to distribute her ice cream in grocery stories like Whole Foods, but turned them down because she didn't think her product, which carries a super-premium price tag, would resonate with users on a shelf next to all the other pints. "I had no control over how the product would be presented on shelves and no budget for marketing," she says.
That's the same reason she hasn't taken on any shipping deals yet. MilkMade is only available in New York, because that's where MilkMade's "maids" can deliver the pints in-person. That experience sets MilkMade apart from other mass market ice cream brands.
In the name of research I bravely taste-tested a few scoops, including chestnut and a Christmas-themed ice cream flavored with pine needles with candied cranberries. Two pints of MilkMade, delivered to your door, cost $30. They are worth the premium price.
During the flood of national press coverage, MilkMade had a limited capacity, so new users were wait-listed. That meant MilkMade was "exclusive," making all the more desirable.
Now, Hardeman is finally ready for her national debut. The Kickstarter campaign will help MilkMade ramp up capacity with a new pasteurizer. Most ice cream you get in the grocery store was made from a pre-made vanilla mix. The campaign will also introduce MilkMade's first expansion outside of New York. (New buyers won't get hand-delivery, though.)
The next step, if all goes as planned, is to raise some venture capital. Hardeman says the company has the brand and exposure necessary to take its product to the next level, with possible distribution through online outlets like FreshDirect or Amazon's new grocery offering. She's currently talking to angel investors about turning her boutique accidental business into a not-so-accidental startup.