L.A. Creamery, a Chatsworth-based artisan ice cream company, is eyeing sweet opportunity in the Middle East, Las Vegas and area grocery stores. The company’s lineup of flavors — including salted caramel, honey lavender and chai tea latte — caught the attention of United Arab Emirates royalty, and L.A. Creamery owners say they now are working on a licensing agreement with the Tourism Development & Investment Company (TDIC), the master developer of major tourism destinations in Abu Dhabi. Although details of the agreement have not been finalized, the project will include the development of 20 new retail locations in the Middle East over the next 10 years, said Brad Saltzman, co-owner of L.A. Creamery. Additionally, the company is scoping out several Las Vegas casinos and hot spots to set up one or two retail shops, Saltzman said. He declined to discuss potential locations, noting the venture is in its preliminary stages. L.A. Creamery sticks to a strict philosophy of producing natural ice cream consisting of no more than five ingredients, no hormones, artificial flavorings or preservatives. And the company only uses organic milk. But company officials are not afraid to take risks in other matters — whether it’s testing a new flavor or venturing back into the retail business after a couple of failures on the first try. Last year was a difficult one for the local startup, as stores at Westfield Topanga, Westfield Fashion Square and The Americana at Brand closed after being open for less than a year. But this year appears to be bringing new promise and opportunities for growth, Saltzman said. After ending 2011 with just under $500,000 in revenue, the company is aiming to nearly double that this year. “In 2012, the brand is going to get a lot more exposure and more places will try it,” Saltzman said. Middle East Expansion According to the Datamonitor Group, a UK-based provider of global business information, artisanal ice cream sales in the United Arab Emirates (UAE) are expected to hit $8.5 million in 2012 and $9 million in 2013. Saltzman said the growing dessert market in the Middle East represents “huge” potential for the young company to launch future international ventures. The TDIC agreement does not limit the company to Abu Dhabi, but spans several areas in the Middle East including the United Arab Emirates, Kuwait, Bahrain, Lebanon, Saudi Arabia, Turkey, Qatar, and Egypt. “It will create more awareness for the brand,” Saltzman said. “Brand awareness, brand recognition, it all helps.” Through the licensing agreement, L.A. Creamery is entitled to an up-front fee for each shop that the TDIC opens. The company also will receive a percentage of annual gross sales. L.A. Creamery officials declined to disclose exact terms. Under the deal, the TDIC will oversee day to day operations but L.A. Creamery also will have a role in the process. The company is responsible for maintaining the “consistency of the product,” conducting biannual inspections of the Middle Eastern locations and ensuring that all questions and concerns regarding the brand are addressed, Saltzman said. The booming dessert market in the Middle East makes for some fierce competition for the young company. Ice cream retail giants Baskin Robbins and Cold Stone Creamery already are established in the region and frozen yogurt companies Pinkberry and Yogen Fruz also have also set up shop in the region. Saltzman isn’t worried. “If we were not making a unique product I would be concerned,” he said. “If we were just another regular ice cream company, I would never go into that market because it’s so competitive.” Asim Khan, CEO and president of Zeons Global Inc., an Orange County-based export management firm, said licensing overseas is a great avenue for cost-effective growth. “The reality is the cost of doing business (in the U.S) is going up,” Khan said, adding that manufacturing resources are diminishing. International expansion allows for a company to build a palpable presence in an environment where sales activity is ripe, cost of entry is low and interest in American brands is at its peak, he said. Learning from mistakes As the company explores its global expansion opportunities and the possibilities of a retail business in Las Vegas, L.A. Creamery owners say they’re learning from their mistakes and doing their due diligence to ensure success. Upon starting the company in 2010, Saltzman and partner Stephen Bikoff positioned the company as a wholesaler, catering to upscale eateries and markets. The duo had hoped to find a home for their products in major supermarkets such as Bristol Farms and Whole Foods Market, but struggled as many vendors were unfamiliar with their brand. To increase L.A. Creamery’s visibility in the market and build up its wholesale business with local establishments, the duo opened the three retail stores. But the company quickly encountered challenges at the Westfield mall locations, as foot-traffic didn’t meet expectations, Saltzman said. That drained the successful business that existed at the Americana. “We decided to close all stores, and reevaluate our retail model based on the lessons we learned,” said Bikoff, co-founder of L.A. Creamery. “All future stores, wherever they are in the world, will represent the ‘lifestyle model’ that worked so well for us at The Americana at Brand.” Domestic retail operations are no longer a priority, Saltzman said, noting Vegas may be the exception. Following the Valley area store closures, the company’s focus shifted to its growing wholesale division, he said. That business has experienced success with the addition of well-known establishments such as Casa Del Mar Hotel in Santa Monica and Joan’s on Third Marketplace. Meredith Cella, assistant manager of Joan’s on Third Marketplace, said L.A. Creamery’s local presence and all-natural and fresh ingredients have been major selling points with customers. The unusual flavors have also been well-received. “Their Salted Caramel is the best seller,” Cella said. L.A. Creamery currently supplies 12 restaurants and independent markets. Now the company is looking to add supermarkets to its roster of clients, Saltzman said. “This year, we would like to be in 30 supermarkets,” he said.
Scrumptious Scoops
