Greater's Ice Cream (7 page)

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.”

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 then 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.

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.

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.

Jon's accident made the other three siblings, Kathy, Dick and Lou, realize that if they were going to actually transition to the fourth generation any time in the near future, they needed to start working toward that now. That fact was reinforced in 1991 when Wilmer, who had unofficially retired a few years earlier to take care of his ailing wife, died.

But the transition wasn't easy. Dick's son, Richard, came into the business when he was finishing law school at the University of Cincinnati in 1989. He had worked with his uncle Jon at various times, helping with the financials and getting the
company's business onto computers. But when Richard originally started in the business after law school, it was an uncomfortable arrangement with his father, Dick. The father-son dynamic seemed to cause rifts within the company.

“When [Jon] left, my son was in law school so he kind of filled in that part of our loss, so to speak,” Dick said. “Well, we did get rid of him for a couple of years. We kind of decided he should do something else. We weren't getting along too awful well with everybody.” So for a time, Richard went to work with Dinsmore and Shohl, practicing law. (The law firm remains the attorneys for the family business.)

A couple of years later, Dick said, they decided they needed Richard back. “He came back, and he's been with us ever since,” Dick said.

Lou's son, Bob, came in about the same time to help organize the plant. “Bob was probably the biggest help to me when he started because there we had to start being more sophisticated in our labeling and all the rules and regulations and purchasing,” Dick said.

Kathy worked at getting Chip, Lou's other son, involved in the retail side of the operation, where she had always worked.

Richard, Bob and Chip all have memories of working in the Graeter's stores and factories during their youth, though they weren't always sure they would enter the family business as a career choice.

Richard said one of his earliest memories is coming to work with his dad on a Saturday and stamping the ice cream flavors on the lids with a rubber stamp. He also remembers working with his grandpa, Wilmer. “He was very funny. Grandpa
always had something going on,” Richard said. “At the end of the day you'd be covered with chocolate. But it just seemed normal to me. It's all we ever knew.”

Graeter's Ice Cream at Hyde Park was originally part of Higginson's Tea Room.
Courtesy of Ken Heigel
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Chip, Bob and Richard Graeter are the fourth generation of Graeters and now run the company.
Courtesy of the Graeter family
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Ice cream at Graeter's starts with cream, sugar and eggs.
Courtesy of Graeter's Ice Cream
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