How A Small Ice Cream Business Pivoted in Tough Times

Hannah Hong and Mollie Cha have a few things in common. They both:

💪 Grew up in entrepreneurial environments

😰 Became lactose intolerant in their 20s

🦷 Suffer from a case of sweet tooth

So naturally, they co-founded a snack company, and started making dairy-free ice cream together.

Source: LA Weekly

They got a taste of success, signing deals with retailers like Whole Foods and Sprouts Farmers Market, and making ~$3.7m in revenue last year.

But they’ve also weathered some storms, like getting rejected on Shark Tank, and having to discontinue their flagship product and lay off most of their employees.

I spoke to Hannah about her experience and lessons navigating the low points of entrepreneurship:

What Happened?

Must Love built early momentum riding the plant-based trend in 2017, but they still had major hoops to jump through:

• Dairy-free ice cream is hard to compete with traditional ones

• High manufacturing costs of frozen desserts with healthy ingredients

• Competition from established brands

It was also difficult getting onto shelves at big chains like Safeway, Kroger, where more conventional shoppers go.

“Our consumers were there, but not enough of them,” Hannah said.

Last November, Sprouts Farmers Market decided to stop carrying Must Love’s ice cream as part of a product category reshuffle.

The worst part: It was Must Love’s biggest distributor, contributing to over 50% of their revenue.

The co-founders were still getting profit from Amazon, but practically no sale from their direct-to-consumer website. At that point, it didn’t make financial sense to continue making the ice cream.

In January, Hannah shared the sad news on Must Love’s Instagram.

A bittersweet pivot. Source: Instagram

But the co-founders weren’t giving up. Their next move? Graham crackers, with a Must Love twist.

And this time, they’re armed with the lessons learned from their first venture:

Stay Agile, And Diversify

Hannah and Mollie thought up the crackers a few years ago, trying to add a product line with lower overhead and broader consumer appeal.

That’s some good instinct — branching out into cookies paved the way for their current pivot.

But they didn’t move fast enough.

“We were hoping to have time to ramp that up before taking a more critical look at the frozen line, but Sprouts discontinuing the line really ripped the band-aid off.” Hannah said.

Don’t sit on a good idea – get building as soon as you can.

Focus Your Message

To the founders, their ice cream was special in many ways, and they marketed every single one: plant-based, dairy-free, indulgent flavors, non-GMO…

… until the messages got lost in a mountain of labels.

Now, the only message Hannah wants to get through with the cookies is “no added sugar” – they’re 100% sweetened with dates (I tried some, they’re quite addictive).

“Consumers have a hard time listening when you are telling them 10 different things,” Hannah said. “So really stick to your biggest differentiator.”

Stop v. Pivot

When a business meets a challenge this big, the options are to pivot, or to stop building.

You need to figure out what would really make you want to keep doing it.

After some reflection and reset, Hannah and Mollie are meeting with retailers again, bringing the same level of energy to their new product.

They’re excited to expand revenue streams (retailer, website, and Amazon), and turn Must Love cookies into a pantry staple.

“We see a vision of cookies really being a platform for better snacking,” Hannah said.

Trends' Takeaway

Building on an emerging trend will definitely give you a leg up – that’s why we do what we do here at Trends. But continued business success comes down to:

• Can you make a profit? (Don’t underestimate the operating costs)

• Can you differentiate against incumbents and newcomers?

• How well can you weather a storm?

Figure these out, and your business will be winning for a long time.