Carvel Looks Forward As It Celebrates Past

Friday, May 22, 2009

Eight years after being bought by Atlanta-based Roark Capital, Carvel Ice Cream continues to lead a double life, said Carvel President Gary Bales.

If you mention the Carvel name in metro Atlanta, home to Carvel's corporate headquarters, some folks might be puzzled. "The best one I've heard is that somebody thought we were a travel agency that we had combined ‘car' with ‘travel'," Bales said.

But mention it in New York, where the chain started, and people "start out by telling you how many generations have been getting the whale cake," Bales said.

As Carvel marks its 75th anniversary next week, the ice cream chain hopes it has found the right balance between old and new.

Carvel faces competition from other long-time players, such as Baskin-Robbins with more than 2,700 U.S. outlets. A long list of newer chains, such as Bruster's, Cold Stone Creamery, Marble Slab Creamery and MaggieMoo's, crowd the ice cream market.

Carvel, which has about 500 stores, has renewed its focus on expansion along the East Coast, rather than aggressive moves into new regions, Bales said. Northern Georgia, where Carvel has 15 stores, will be one of the few areas emphasized outside of the core East Coast markets.

Carvel also has added products to appeal to a new generation. In addition to its signature soft-serve ice cream cones, cups and cakes, the chain has launched a host of blended beverages. They include coffee-based Carvelatte drinks, Iceberg beverages inspired by ice-cream soda floats and Arctic Blenders, which mix ice cream with cookie dough and peanut butter cups.

Carvel's current strategy comes after several twists and turns in its history. Tom Carvel started his first ice cream store on Memorial Day weekend in 1934. His mobile ice cream truck had a flat tire in Hartsdale, N.Y., so he anchored it there and opened the first of many shops.

Carvel developed proprietary ice cream equipment and a seemingly endless stream of products, including a Fudgie the Whale ice cream cake, Flying Saucer ice cream sandwiches and Brown Bonnet chocolate-shelled ice cream.

Known for his mustache and gravelly voice, Carvel starred in his own low-budget commercials. "It was very campy, hokey," said Peter Romeo, a Long Island native and author of the Restaurant Reality Check blog.

"The problem, of course, is that Carvel doesn't mean a lot to folks who didn't grow up in this neck of the woods," Romeo said.

A year before his death, Tom Carvel sold the chain in 1989 to Investcorp, a Bahrain-based investment firm. Investcorp sold too many franchises to investors opening multiple units, said Frank Auriemma, a Carvel franchisee for 50 years who has three stores in Queens, N.Y.

"This is still a mom and pop operation," he said. "It doesn't work as well as the McDonald's guy who has 20 stores." Roark has done a better job supporting franchisees, Auriemma said. Carvel was the first of several restaurant chains that Roark bought and put together to create Atlanta-based Focus Brands.

Carvel has proven successful in some new markets, thanks to an initial draw of former Northeasterners raised on its treats.

Marty and Perri Kunofsky opened a Carvel store five years ago in Suwanee. They've worked to make local connections, primarily through fund-raisers and other activities tied to schools.

"After five years, we're starting to crack the non-traditional (non-New Yorker/south Florida) customer to become loyal to our brand," said Marty Kunofsky, who grew up with Carvel in Waterbury, Conn.

Bales, who joined Carvel shortly after it was bought by Roark, said the new Carvel team made a priority of repairing franchisee relationships and rebuilding the brand.

It's refreshed Carvel stores and is working on more new items, including candy and frozen take-home baked goods, Bales said. The renewed focus on product creation is a throwback to Tom Carvel, who was constantly coming up with new treats, he said.

"That's what I think is the bridge from the past to the current," Bales said. "The one thing we've tried to stay consistent with is the innovation."

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