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    Friendly’s Ice Cream warming up to supermarket sales

    Fresh out of bankruptcy, Friendly’s Ice Cream warms up to supermarket sales

    Wendy Maeda/Globe Staff
    Long a presence at local chains, Friendly’s has started selling products at about 2,400 Walmart locations, like the one in Quincy where Deborah O’Malley shopped recently.

    Friendly’s, the famed maker of Fribbles, is switching from scoops to supermarkets as a way to boost its struggling ice cream business and expand the brand across the country.

    While the Wilbraham company’s restaurants have attracted attention lately for their failures - about 100 of 500 locations closed after the chain filed for bankruptcy protection in October - Friendly’s has been doing better beyond its own walls, signing ice cream contracts with major retailers such as Walmart and Food Lion. In the past eight months, Friendly’s products have been added to the freezer aisles of 3,200 more supermarkets, a 40 percent increase.

    “We will double [the number] within the full year and have Walmart selling our ice cream cakes coast to coast,’’ said Harsha Agadi, who served as Friendly’s chief executive until resigning last week and currently sits on the board of directors. “It’s a huge opportunity.’’


    The supermarket business is the fastest growing part of Friendly’s Ice Cream LLC, now accounting for 25 percent of sales, and could be key to a turnaround following the company’s emergence from bankruptcy last month. As executives try to make over the chain’s remaining restaurants, Friendly’s also is aiming to lessen its dependence on take-out cones and sit-down meals. Over the next several years, it hopes to double retail sales to $200 million with new partners and products, such as ice cream pizza, Reese’s Peanut Butter Ice Cream cake, and Keebler Grasshopper Fudge Mint cookie sundae cups.

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    Retail analysts say expanding through grocery stores and mass merchants is a way to build awareness for the Friendly’s brand without incurring the major expenses needed to open and operate new restaurants. The company is taking advantage of excess capacity at its Wilbraham plant to churn out more ice cream cakes, cartons, logs, and single-cup servings to be delivered nationwide.

    It’s a smart, if not overdue, strategy given Americans’ fondness for frozen desserts at home, say analysts. Ice cream servings at restaurants fell 1 percent in 2011, while in-home ice cream consumption increased by about 6 percent, according to the most recent figures available from NPD Group, a New York market research firm.

    “The restaurant industry has been a very difficult environment for the last three years,’’ said Harry Balzer, NPD’s chief food and beverage industry analyst. “Distribution to supermarkets will get you in front of most American households in a way that would never be possible with restaurants.’’

    Friendly’s has long had a presence in some local supermarkets, such as Stop & Shop stores. But in recent months, the chain has added about 2,400 Walmarts, 300 A&P and Pathmark supermarkets, 200 Food Lion grocery stores, 178 Giant Foods locations, and 70 Target stores, among others. Friendly’s, which has just over a 2 percent share of the ice cream market nationwide, will now go head-to-head with rival brands such as Breyers, Edy’s, and Turkey Hill that dominate supermarket sales, according to SymphonyIRI Group, a Chicago market research firm.


    “This kind of growth is great if you can manage it,’’ said Todd Hooper, a retail strategist with consulting firm Kurt Salmon. “Taking on Walmart is often good and bad news for companies. The requirements for serving such a large network are so high and can be challenging. But it can be very profitable and enhance the brand if it’s managed well.’’

    Friendly’s said adding Walmart as a customer wasn’t daunting because the giant retailer wanted to stock only a limited number of items for its stores nationwide. Nonetheless, the ice cream company designated an entire team to focus on the account and added a second shift to its cake production line for a period of time.

    Walmart, the nation’s largest grocery seller, began carrying Friendly’s products in the New England area in 2009 and decided last summer to expand across the United States with the brand’s Reese’s Peanut Butter Ice Cream cake.

    “Choosing the right merchandise mix is an art and a science,’’ said Tara Raddohl, a Walmart spokeswoman. “We engage several methods to determine the best product assortment for our customers, including local market analysis.’’

    Other restaurant brands, including T.G.I. Friday’s and Dunkin’ Donuts, have had success branding products for the grocery aisles. Executives at Friendly’s, which was founded as an ice cream shop by two brothers during the Great Depression, acknowledge that they probably should have adopted the expanded supermarket strategy earlier. But the company only recently upgraded its production facilities - a multimillion dollar investment - making it possible to pack ice cream in curved containers with separate lids rather than the old brick-shaped cartons that were easily ripped by consumers.


    “Getting new customers and having them take us seriously as a contender in the premium ice cream category meant getting relevant packaging,’’ said Timothy B. Hopkins, Friendly’s executive vice president of retail manufacturing. “It’s not as simple as you might think.’’

    Now, the plant is running 24 hours a day, 5 days a week to keep up with demand. More than 1 million cakes came off the line last year, up from 300,000 a few years earlier. Friendly’s says its 48-ounce container already is the top seller in New England, beating out rivals such as Breyers, Edy’s, Turkey Hill, and Hood, and steadily gaining market share across the Northeast and in other parts of the country, according to data from AC Nielsen.

    “I’d like to double our size over the next three to five years,’’ Hopkins said. “It’s a pretty aggressive growth objective, but I think it’s doable.’’

    Jenn Abelson can be reached at Follow her on Twitter @jennabelson.