How This $100 Million Popsicle Business Licks The Competition

Johnny Pops: $100 Million Popsicle Empire

Key Concepts:

• Natural frozen novelties
• Socially responsible business
• Bootstrapping
• Frozen treat market consolidation
• Acquisition potential
• Ingredient transparency
• Profitability
• Market share

1. Overview of Johnny Pops:

• Johnny Pops is a $100 million popsicle business founded by Eric Brust and Connor Ray.
• They produce nearly 30 kinds of popsicles using five ingredients or less, with no artificial ingredients.
• The brand is popular among children, moms, and millennials.
• The company is based in Elk River, Minnesota.

2. Business Model and Financials:

• 60% of annual sales occur during the summer months.
• The company has been profitable since year one and has an estimated 30% net margin.
• Johnny Pops is the top seller among natural grocers' frozen novelties nationwide.
• The business was bootstrapped with friends and family and has not taken on private equity funding.
• Brust states, "We don't chase fads, we're thinking about what's the next decade look like. This was never a grow the business to sell it type idea."

3. Market and Competition:

• The frozen treats industry is fairly consolidated, with companies like Ferrero (Halo Top, Blue Bunny), Mars (Dove), Unilever (Ben & Jerry's, Talenti), and General Mills (Häagen-Dazs) controlling the majority of the market share.
• Mainstream ice cream bars like Dove and Klondike are struggling as consumers opt for healthier brands.
• Mars is investing in the development of its Dove bar line with the goal of growing that business to more than $1 billion in annual sales globally.

4. Acquisition Potential:

• Johnny Pops could expect to get around $300 million or more if the pair decided to sell.
• Parent companies like Mars and Unilever need brands like Johnny Pops, which has been eating away at their sales, for future growth.
• This pressure is keeping the market for acquisitions relatively strong.

5. Founding Story and Social Mission:

• Brust and Ray met in a physics class at St. Olaf College in 2010.
• The idea for Johnny Pops originated from a conversation Brust had with his cousin Jonathan (Johnny) in 2007 about creating a socially responsible business that addressed concerns about ingredients in popular ice pops.
• After Johnny's tragic death following a struggle with addiction, Brust and Ray decided to bring Johnny's dream to reality in his honor.
• They started making frozen smoothies on a stick in their dorm with a blender, strawberries, and cream.
• Their version had less than half the sugar and fat of traditional ice cream pops.
• For the first two years, they ran the business while finishing college.
• They donate a portion of profits every year to organizations that support addiction recovery.

6. Early Operations and Growth:

• They started with $4,000 from savings from jobs during high school.
• They purchased a stainless steel ice cream machine from Brazil to make ice pops on a countertop.
• They used a wedding banquet center's commercial kitchen during weekdays.
• On weekends, they sold their pops at farmers markets and other local venues.
• By 2018, Johnny Pops were being sold at Kroger, Target, Walmart, and Costco.
• The pair earned a spot on the 30 Under 30 food and drink list.

7. Key Personnel:

• Eric Brust: CEO
• Connor Ray: CFO

8. Conclusion:

Johnny Pops has achieved significant success by focusing on natural ingredients, a strong social mission, and strategic market positioning. Their commitment to profitability and long-term growth, combined with the increasing consumer demand for healthier frozen treats, positions them well for continued success and makes them an attractive acquisition target for larger companies in the food industry.