The joy of a whim
Growing Thelma’s sells treats on Amazon, at Target stores
PERRY BEEMAN Dec 5, 2017 | 7:48 pm
7 min read time1,656 wordsBusiness Record Insider, Sales & Marketing
Thelma’s ice cream sandwiches are now available for shipping in dry-ice-cooled packages sold through Amazon’s platform.
The treats — great-grandma’s cookies on the outside, Anderson-Erickson ice cream on the inside — should soon be in some Iowa and Minnesota Target stores, said Thelma’s founder Dereck Lewis. The Target along Mills Civic Parkway in West Des Moines already has the treats.
Lewis is the mastermind behind a company known for its warm cookies served in a box that looks like an oven, with a side of milk. Thelma’s, named for Lewis’ great-grandmother, started selling the ice cream sandwiches at the Des Moines farmers market and Gateway Market about five years ago and now is going regional.
The branding is the result of years of partnership with Brian Sauer and colleagues at Saturday Manufacturing, a marketing firm based at 17th Street and Ingersoll Avenue. It was Sauer and his team who pushed the branding that centers on the “joy” that comes with cookies (and ice cream), helping mold a career Lewis says he started on a whim.
The company also is reaching out to local schools, offering fundraising programs, said Lewis. “Aggressive pricing” will set up Thelma’s to give the school groups something like 40 percent of sales.
Even with heavy automation at the company plant, Lewis expects the staff of 22 to roughly double in the next three to five years.
He declined to disclose gross sales figures.
With all that growth, it seemed like a good time to tell the Thelma’s story in some detail. Lewis and Sauer sat for a joint interview to illuminate us.
The company’s origins were modest: “My mom and I started it at the farmers market with one pushcart,” Lewis said. “We made every single sandwich. It could have been just a summer gig. But we work really hard at it, and we are growing in all these places.”
Lewis’ mother helped bake the snickerdoodle cookies Dereck’s great-grandmother had perfected. The recipe is based on her dough-filled legacy.
Lewis studied business management at Iowa State University, and his first job was selling farms for hunting. In college, he worked as a big-game hunting guide in Alaska, twice. People were paying $20,000 to $30,000 a trip for the privilege. He soaked up tips from rich business representatives who ran companies when they weren’t hunting.
Later, Lewis sold cookies for a Minneapolis-based franchise. When the company didn’t bite at Lewis’ suggestion to sell ice cream sandwiches in the summer — when hot cookies are less popular — he decided to go out on his own.
Thelma’s “just kind of evolved. My college roommate from Minneapolis called me with a franchise cookie opportunity. I had gone from real estate to selling insurance. I was unhappy there. I kind of did the cookie thing on a whim. The business plan came after.”
He started stirring ideas with a friend who runs an ice cream shop in Monroe. “We were selling my great-grandma Thelma’s snickerdoodle cookies within the franchise,” Lewis said. “I took some snickerdoodle cookies to the ice cream store, made some ice cream sandwiches, and kind of did the family and friends circle. They liked them. I took that back to the franchise company, but they didn’t really have any interest.
“I thought they were really good. So that’s when I started brainstorming and said, ‘Yeah, I think we should do our own brand and do this on our own.” “We” in this case referred to Lewis and Sauer.
“Dereck and I met in 2011 at a networking event,” Sauer recalled. “Dereck said he could use some help with marketing.”
“Dereck came to me and said, ‘I’m making these ice cream sandwiches and I need to brand them and I want to wrap them individually,’ ” Sauer said.
“We talked them into doing some brand identity and some strategy,” Sauer said. “The idea was to take the story of Grandma Thelma and to create the brand story. It was about having Great-Grandma Thelma in there, and being a family business. We came up with a brand promise of ‘joy.’ That was before we decided to call it ‘Thelma’s.’ ”
“That process took quite a while,” Lewis said.
Sauer said they were well aware the convenience store cases are full of ice cream and cookie sandwiches. “There were cheaper alternatives, for sure. But this was going to be high-end.
“Let’s build a brand that you won’t have to go back and re-engineer. Some of that took some convincing,” Sauer said.
Said Lewis: “We probably went in heavier (financially) than most because I knew if we had the right foundation of branding, that we could leverage that over and over again.”
He tried not to borrow too much. “We bought stuff on Craigslist,” Lewis said. “I carried The Des Moines Register sometimes in the mornings before work. I did odd jobs. Brian helped by spreading the bill out and not making it one lump sum at the beginning.”
The focus was on quality from the start, which Lewis banked on setting Thelma’s apart from some of the competition. “Their sandwich is $1.50 and mine’s three bucks,” Lewis said. “Mine is five or six times better. A Porsche is more expensive than a Ford.”
The first versions were snickerdoodle and chocolate chip. Now, Thelma’s makes 10 versions, including a cayenne chocolate chip cookie and vanilla ice cream combination. Most stick to basics like the snickerdoodle, chocolate chip, double chocolate chip, sugar cookie, peanut butter and peanut butter chocolate chip. The ice creams in the middle include strawberry, chocolate, vanilla and banana, depending on the version. (There are several more coming.)
Thelma’s buys bags of ice cream mix from AE, and adds flavors in the production facility north of Anderson Erickson Dairy in the former Townsend Engineering complex on the city’s east side.
The first wholesale client was Gateway Market. “We hand-wrapped them in Saran Wrap and put a sticker on them, and there wasn’t a sticker on the back, or a UPC code. It was pretty loose. I would take a little cooler up with 100 sandwiches, and they would call me back in a week when it was empty.”
His first commercial kitchen was shared space in the basement of the building that houses Buzzard Billy’s restaurant. Thelma’s ramped up in 2011 and 2012.
The ice cream sandwiches are fueling the growth because they are easier to build inventory.
In 2012, the Des Moines farmers market let Thelma’s in. The next year, Lewis walked into the Urbandale Hy-Vee with a cooler of sandwiches. “How do I get these onto the shelf?” Lewis asked. “This is not the way this usually works in the grocery business. But the department managers at Hy-Vee have the autonomy to buy products.”
The frozen food manager at Hy-Vee helped Lewis set a good price and filled an end display with Thelma’s sandwiches. “They moved really fast,” Lewis said.
Thelma’s also got to hand out samples.
The company got better wrapping and a UPC for the back label. The sandwiches showed up at 20 Hy-Vees.
Sauer came up with a one-sheet flyer that told the Thelma’s story. The oven boxes launched at the same time, in spring 2012.
“We talked about the box being a signature marketing piece,” Sauer said. “The ice cream sandwiches were seen as something to sell over the summer.”
Thelma’s has a store in the East Village, but it will close Dec. 23. The store will reopen Jan. 2 at the east-side plant site.
For a while, the sandwiches led in summer, the cookies the rest of the time. “Then the sandwiches just shot up, up, up,” Sauer said.
Orders started by phone before the web was added later. Lewis’ mom, Lana, would bake cookies. Lewis would deliver them. (He typically took care of ice cream products before the cookie baking started for the day.)
“There is this huge joke in my family, because she never cooked anything when I was growing up, like, ever,” Lewis said.
Thelma’s now is in a bit over 500 retailers in eight states. “We are in Hy-Vees, Fareway and all the grocery stores in the Twin Cities,” Lewis said. “We do a variety of outdoor events, RAGBRAI, arts festivals. … We do catering, weddings, corporate events, graduations.”
And, now, Amazon and Target.
Tips from Lewis & Sauer:
• Have a good product. That’s the most important thing. Marketing is a close second to that. Even the very best marketing can’t make up for a bad product.
• Your brand isn’t just your name or logo. You need to understand what you’re trying to deliver and what sets you apart from the competition.
• Have patience. Give marketing and advertising time to do its job.
• Check your surroundings. Take the temperature of what’s going on in the world.
• Don’t be afraid to take a chance on creativity and put it out there.
• Just sell. Get out there and start selling something even if your product isn’t as polished as you would like. This will get a fan base going for you before anything else. Put some old-fashioned shoe leather into it.
• Beware of getting stuck in the startup mentality. If you sit around talking about what could be, you’ll never get to what will be.
• Don’t skimp on marketing details up front. Get the creative plan done, and invest in the brand so that it doesn’t become a burden later on. Plan for it to continue beyond your current vision.
• Be the face of your business. Make real connections with your retailers and visit them often. Commit the time to find ways to connect with your end users; they will tell you what to do next if you listen.
• Study your process to build systems to solve problems. Make small changes to tweak the process and then watch it work.