Cold Stone Creamery hot — even in chilly Alaska

SCOTTSDALE, Ariz. — The executives at Cold Stone Creamery were looking to expand their budding chain of ice cream shops in the late 1990s, but when an auto parts businessman from Alaska came seeking a franchise, they were skeptical.

The Scottsdale-based chain, which has more than a dozen locations in Utah, had tried its formula of fresh, custom-mixed ice cream only in sun-soaked places like Arizona and California, said Chief Executive Officer Doug Ducey.

The persistent Anchorage resident convinced officials to let him give it a try anyway. The result: the best-selling store during the first 18 months following its 1999 opening.

"We thought it was sunshine or warm weather that sold ice cream, but we found it's just the right people," Ducey said.

The formula — the right franchisees and high-end ice cream — have worked far beyond Alaska for the aggressively growing chain.

Six years ago, the company had around 75 stores. It now has about 1,100 outlets in the United States and Guam, opening an average of one per day. There are seven Cold Stone Creamery shops in Alaska.

Ducey said he expects the fast growth to continue at least through next year. It will make its first significant international move later this year, when a Tokyo store opens. The company outgrew its headquarters and moved last month to a new two-story building, complete with classroom space and a training store, a lab kitchen for product development and a gym down the hall.

The growth at Cold Stone is happening at a time when analysts say overall ice cream consumption has been flat or down in the United States. Over the past two years, ice cream sales at grocery stores have been down 6 to 7 percent, said Jerry Dryer, a dairy market analyst. But at the same time, Cold Stone and other players, including Marble Slab Creamery Inc. and Ben & Jerry's Homemade Holdings Inc., are adding shops.

Dryer said cooler summers in some parts of the country and carbohydrate-phobia among some dieters probably hampered sales. But people still eat ice cream, and "the dipping store is the treat kind of thing."

The new generation of dipping shops are selling premium ice cream, and lots of choices.