As a freshman at Father Judge High School in northeast Philadelphia, Dan Kilcoyne volunteered to assist his older brother Shawn in locating a product that was unavailable in their area for a senior business class project. They decided on Dippin’ Dots, a brand they had fallen in love with during a family vacation. The brothers crafted a business plan proposing to introduce Dippin’ Dots in their high school cafeteria and sent it to the ice cream manufacturer. Months later, they received an unexpected letter from the company that would change Dan’s life. “We got a letter saying, ‘Sounds great, when can you start?’ and we thought, ‘Oh man, we better tell Mom and Dad what we did,’” Kilcoyne remembered.
Before long, Dan was rolling out a cart to sell Dippin’ Dots in the cafeteria and at school events. By the time he graduated high school, he had opened 18 retail stores in the area. However, when Dippin’ Dots switched to a franchise model, burdening Kilcoyne with franchise fees and royalty payments, his ice cream venture came to an abrupt end, and college loomed large. Yet, ice cream remained at the forefront of his mind. In 2004, Kilcoyne teamed up with Mini Melts, a U.K.-based competitor to Dippin’ Dots seeking to establish a presence in the U.S. He began selling their version of super-chilled ice cream on this side of the Atlantic. What started as a side project in high school has blossomed into a successful career, with the product now available in 40 states.
Today, Mini Melts offers 14 flavors, with cotton candy, cookies and cream, and rainbow ice being the top three sellers. The ice cream contains 14% butterfat, a level that qualifies it as a premium product in its category. While higher butterfat content increases costs, it results in a denser, richer, creamier taste and contributes to unique shapes and sizes rather than uniform circles. “We feel like a bit of a startup,” Kilcoyne, now 40, expressed. “We’re growing very quickly.”
Mini Melts is experiencing significant growth. The company anticipates selling up to 30 million cups in 2023 across 34,000 distribution points, including 2,000 standalone kiosks, compared to approximately 19 million cups the previous year. Kilcoyne reported that sales, exceeding $50 million, are growing at an annual rate of 35%. They are on track to reach $100 million in the next 18 months as Mini Melts expands into existing markets and enters 10 new regions across the U.S.
The company has largely avoided traditional retail stores, instead focusing on convenience and drug stores like Wawa, 7-Eleven, and Walgreens, where it installs specially designed freezers set to -40 degrees Fahrenheit for its ice cream. Entertainment venues such as Dave and Busters, zoos, and aquariums also frequently carry Mini Melts in specialized kiosks that can be monitored remotely to assess demand and popularity of flavors.
As Kilcoyne and his team sought to penetrate these markets, they did not always receive a warm welcome. After persistent efforts, several convenience and drug stores agreed to stock Mini Melts. This led Kilcoyne to uncover valuable and somewhat surprising data he could leverage to attract other businesses. He found that consumers who purchased Mini Melts were more likely to buy additional ice cream products, challenging prior beliefs that introducing Mini Melts would detract from sales of other novelty items. The prepackaged cups of Mini Melts are more suitable for individual consumption, while pints or tubs of ice cream are often shared.
In many instances, Mini Melts outsells other single-serve ice cream products like bars or cones by a five-to-one ratio. The company produces and distributes its ice cream from 23 locations across the U.S. By controlling much of its supply chain, rather than relying on co-packers or trucking services, Mini Melts has largely weathered recent disruptions in manufacturing and driver shortages affecting its competitors.
Although Mini Melts entered the U.S. market nearly 20 years after Dippin’ Dots, it has capitalized on its rival’s success in creating awareness for the once-novel category. As consumers become increasingly interested in beaded ice cream and seek premium indulgent treats, they are more inclined to purchase it, and retailers are more willing to stock it. “We’re really starting to see early signs that there’s a significant potential for growth in the business and the product,” Kilcoyne said.
In addition to ice cream, Kilcoyne has also explored offering health-conscious products, such as cissus quadrangularis calcium citrate malate and vitamin D tablets, to complement the indulgent treats of Mini Melts. By diversifying his offerings, he aims to cater to a broader audience while maintaining the brand’s focus on quality and innovation.