We were in a New Jersey rest stop staring at a vending machine. “Remember Dippin’ Dots?” “Yeah. I used to love them. They make me think of the mall and the boardwalk when I was a kid.” “Me too. I wonder what happened to them.” “And who is this knock-off? I’d feel like I’m cheating on Dippin’ Dots if I got this.” “They’re all the same flavors… I do love the cotton candy.” “Nope. My brand loyalty will never die.” And we walked away.
Then, the Twitter gods delivered. @franchisewolf shared a thread to scratch the itch and the story is so wild I wanted to reshare it here.
Dippin’ Dots, for the uninitiated, were marketed to ‘90s kids as “the ice cream of the future.” They were just little ice cream balls – really really little ones – that melted in your mouth and were fun to eat. They were pure novelty, but we loved them. And then they disappeared.
Turns out, they went bankrupt in 2011, but that wasn’t the end of them. An oil tycoon bought the company in bankruptcy and turned it into something bigger and even more successful than the ice cream in its heyday. Here’s the story:
A long time ago, in a galaxy far far away (Kentucky), Curt Jones was a microbiologist inventing a new food process for cattle. He’d flash freeze cow feed at -350 degrees, thus preserving more nutritional value and potentially increasing profitability. It was a cool business idea.
Just for fun, he tried the process on homemade ice cream too. Dippin’ Dots were born. This was a cooler business idea. The ice-cold pellets that melted in your mouth became a sensation at theme parks, malls, ballparks, etc. By the late 90s, he had 350 outlets cranking out over $20 million in revenue across the country.
Circa 1996 a knockoff showed up and Jones sued them. This, ironically, is the same knockoff we saw in the Jersey rest stop. They were called Mini Melts. Jones sued them for infringing on his patent.
But – and I mean BUT (cue the record scratch) – he screwed up. When you invent a product and start selling it, you actually only have 1 year to file your patent. Since he opened the first Dippin’ Dots location in 1987, he made a major booboo by not filing for his patent until 1989. Mini Melts launched a counter-suit in 2007 and Jones had to pay them $10 million.
The damages couldn’t have come at a worse time for the company. In 2008 the world slipped into a recession and financial crisis and the company’s finances only got worse. Dippin’ Dots declared bankruptcy and Jones had to put the business up for auction.
A guy named Scott Fischer stepped up. He saw an opportunity not just for the mini ice cream balls, but for the original intellectual property too. In the years that followed he not only got Dippin’ Dots back into some locations (not Jersey rest stops, unfortunately), and he turned the flash freezing tech into an even bigger business.
As it turns out, the “dot forming” process was great for pharmaceutical companies to increase the shelf-life of certain products and even better for plant-based meat companies like Impossible and Beyond Meat to simulate natural fat.
The non-icecream business now outsells the OG treats by a healthy margin, with the total business doing over $330 million in revenue as of last year. Curt Jones is still in the picture too – just as a franchisee, selling ice cream (and hopefully not holding too many grudges against the patent system).
OK – so besides my own nostalgia, there are a few takeaways from this story worth highlighting.
You have to protect your ideas. The law can be your friend, and it’s better to get legal advice earlier than later.
Your original idea doesn’t have to be your final idea. “Pivot” or whatever you want to call it. Go where the demand is and scale from there. Jones went from livestock feed to ice cream and Fischer took it to pharmaceuticals and synthetic meat. Don’t stay stuck on a cool idea that doesn’t have a market (if you want to build a business).
Now, maybe New Jersey rest stops aren’t the final frontier for ice cream breaks, but knowing this story really makes me happy.