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With towers of shipping containers squeezed up against a back wall, Omaha's eCreamery Ice Cream & Gelato has the best kind of business problem: the store's personalized ice cream gifts have proven to be so popular that eCreamery has outgrown its production and shipping space.
In-store sales at the parlor in downtown Dundee now account for only 40 percent of the business' annual revenue. A growing majority of sales happen online, where eCreamery is riding trends in food gifts, personalized gifts and online shopping.
A solution could already be at hand. In June, eCreamery owners Becky App, 36, and Abby Jordan, 34, went to Los Angeles to tape an episode of Shark Tank, the ABC reality show where entrepreneurs make a pitch for investment capital to a panel of demanding business tycoons. It airs Friday at 7 p.m. CDT.
App said viewers will see a 10-minute segment — with parts filmed in Omaha — in which eCreamery will ask for an investment of $250,000 to build additional ice cream production and freezer space, in exchange for a one-third stake in the business.
App and Jordan said they already know whether the sharks are “in” or “out,” although they are sworn to secrecy before the show airs. Regardless of whether they get the $250,000, they expect the national exposure to be good for business. Of course, exposure without investment could only worsen their production problem, but the owners are doing everything they can to prepare.
They've ramped up production and rented extra freezer space at Millard Refrigerated Services, increasing inventory from the usual 800 pints to 6,800.
They've load-tested their website to make sure it will be able to handle additional traffic from Shark Tank's viewers, who numbered a series-high 6.3 million for the Sept. 14 season opener.
They've hired Omaha “brand experience” agency Phenomblue to develop a video ad campaign that will launch Friday night on the eCreamery website, taking a humorous stand against “vanilla gift-giving.”
They've contracted with a local call center and educated those workers on their product.
They've developed a way to gather the email addresses of people who visit the site, so they can market to those visitors during the holidays.
App and Jordan are planning their own Friday night party where they'll watch Shark Tank with family, supporters and employees. They're excited for the episode because, while it may strain their production capacity, it will help solve what App said has been the core challenge of their business: “How does a startup educate the entire country that your product exists?”
eCreamery operates a traditional ice cream shop, but it is an innovator in something many people don't know exists: online ice cream sales. Buyers go online to create and ship customized pints of ice cream to celebrate a birthday or new baby, or to say “I'm sorry” or “get well soon.” You pick the ice cream, the mix-ins and the label and give it a special name just for the recipient.
Packing ice cream in dry ice and shipping it to Dad for his birthday isn't cheap. Sending four pints, the minimum order, starts at $49.99 plus $25 minimum shipping to most states. (People ordering from the Omaha area pay $39.99 by requesting Omaha pricing in “comments”; there is also no shipping charge if you pick up your order at the store.)
App said it is a “reasonable luxury gift” and comparable to the price of ordering a bouquet of flowers or a gift basket.
Jordan and App, former colleagues at Borsheims who were both passionate about food, marketing and online retailing, or e-commerce, started the business five years ago in what had long been a corner drugstore in Dundee and at the time was a Ted & Wally's. Mark Hasebroock of Dundee Venture Capital funded the project, and he said Jordan and App earned their ownership through sweat equity.
“Traditional gift-giving over the internet had gotten a little stale,” Hasebroock said. “Everybody loves ice cream. We wanted to stand out and have something that was really personal, and a genuine, happy experience.”
People told them they were nuts, Hasebroock said. Why would anybody pay more online for ice cream when they could just go to the grocery store and buy some?
It's not just ice cream, he said, “it's a personalized gift-giving experience, and it's a flavor you create and you name yourself. It takes on a completely different dimension.”
App and Jordan took some of the best practices of online marketing and retailing and applied them to ice cream, using web design, search engine optimization and online advertising to drive traffic and keep customers' interest.
All that — plus working with their staff to develop unique ice cream flavors and operate their popular neighborhood shop — led to their current problem, of too little space.
“We do everything out of this 1,200-square-foot space,” App said. “We dream of a production facility off-site where we have a place to ship.”
That's where the sharks could come in. Investment and support from the Shark Tank entrepreneurs have boosted many businesses and inventions over the first three seasons, with products including paddle boards, a magnetic eyeglasses holder, barbecue sauce and jewelry.
Real estate mogul and “shark” Barbara Corcoran has said that her best investment yet from the show was in another online luxury food business, Daisy Cakes, with a business model similar to eCreamery's. In exchange for a 25 percent equity share, Corcoran made a $50,000 loan to the South Carolina cake business, which sends homemade cakes around the country for $48 plus shipping. The business sold 2,000 cakes in 2010 and 18,000 in 2011. The show aired in April 2011.
That success story — plus the fact that eCreamery is an established business with more than $2 million in revenue since 2007 — might tip the sharks in favor of the Omaha entrepreneurs' pitch.
But just to help, App and Jordan did what they do best: developed personalized ice cream flavors, one for each of the Shark Tank panelists. The flavors include Kevin's Shark Bait, for software developer and venture capitalist Kevin O'Leary, made from sea salt caramel gelato mixed with chocolate-covered pretzels; and The Cubanero, a spicy dark chocolate sorbetto, for Mark Cuban, an entrepreneur in the cable and sports industries. The flavors are available at the shop and online.
eCreamery also is competing for online votes — and a $10,000 prize — in the Martha Stewart American Made contest, asking customers to go online to americanmade.marthastewart.com to vote for eCreamery in the “audience choice” portion of the contest.
Whether eCreamery wins that, convinces the sharks to invest or has to rely on a bank loan or another form of investment to fund a production facility, Hasebroock said the expansion has to happen.
“We have to make arrangements to handle the growth,” he said.
Hasebroock, who first suggested to App and Jordan two years ago that they apply to be on Shark Tank, said they are the first Omaha business to be featured.
“I just hope it encourages others to realize, they can do it, too.”
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