For the past 15 years, Schoep's has been the sole producer of ice cream sold under the Walgreens label by Walgreen Drug Stores, a chain that has seen phenomenal growth over the past 10 years and now numbers more than 6,300 stores.
That contract alone accounts for more than 25 percent of Schoep's business.
Earlier this year, Schoep's launched a series of products for Dollar Tree stores. It has a licensing agreement pending with an undisclosed national brand.
And, with a new president on board since May, Schoep's has positioned itself for growth for years to come, even though some of the state's other longtime ice cream operations have closed their doors.
"We're staged for the future," said Alan Thomsen, Schoep's national accounts manager, whose family has been involved with the company since 1940. "We're certainly ready to expand."
The Madison area has become a hotbed for a product that is stored in the icebox. Those companies include Culver's, Michael's Frozen Custard and Chocolate Shoppe Ice Cream.
Other parts of the state haven't fared as well.
In March, Zurheide Ice Cream in Sheboygan closed after 83 years of production. Its ice cream making peaked in the 1980s when it made about 1.8 million gallons a year but then saw that number dip to around 600,000 gallons.
In Wisconsin Rapids, Herschleb Ice Cream, founded in 1939, closed in 2006. It distributed ice cream to local stores and ice cream shops and had a restaurant and drive-in.
Changed with times
"There are fewer and fewer plants around," said Chuck Deadman Jr., president of Chocolate Shoppe Ice Cream, whose father founded the company in 1962 in Madison. "Ice cream is always a comfort food. We're definitely in a good position but a lot of smaller mom and pops are closing."
Competition from larger manufacturers and more stringent health and safety rules force manufacturers to invest into their operations or close, Deadman said.
Scott Rankin, an assistant professor of food science at UW-Madison, said that over the last 50 years, the number of ice cream plants in the country has gone down tenfold but the production capabilities have increased tenfold with technology and efficiencies.
Schoep's is one that changed with the times.
"The company has a lot of manufacturing capabilities," Rankin said. "That's one of their strong suits."
Investing for expansion
Schoep's has invested millions of dollars into its state-of-the-art plant just south of Atwood Avenue at the corner of Helena and Division streets and next to the Jenifer Street Market.
In 2005, it opened a $7 million, 46,000-square-foot distribution center on Manufacturers Drive, near the Dane County Regional Airport. The facility, which can be seen from Interstate 39-90-94, features space for 3,600 pallets and 14 loading-dock doors.
The improvements have allowed Schoep's to not only make its own brands of ice cream, which are distributed to retailers in five Midwestern states, but make products for other companies like Walgreens and LaSalle Ice Cream in New York.
"The whole industry is in flux and there's a shortage of manufacturing capacity," said Tim Timm, who was hired in May as the company's president to take over for longtime president Paul Thomsen. "There's a fair amount of demand for the services we provide."
For Dollar Tree stores, Schoep's has developed a package of four novelty bars that sell for $1. They include fudge bars, root beer float bars and ice cream sandwiches. The Big Event products have sold double their projected sales over the last four months, and both Timm and Thomsen say the concept could be expanded to other dollar-type stores.
"If you're talking about this economy, this fits this economy," Timm said. "Mom can throw out a buck and satisfy four kids."
More growth ahead
Schoep's is also scheduled in the next few months to announce a licensing agreement with a major label that could further grow sales, projected to top $40 million this year. The agreement would allow Schoep's to make and develop products for the major label.
And with Walgreens adding a store every 24 hours, more work is almost guaranteed, something that will likely require expansion at the Schoep's facility on Manufacturers Drive since the production plant is land-locked in the Marquette Neighborhood.
"We are pretty cramped," said Al Hefty, vice president of production. "For us to be a regional manufacturer and be distributed across the U.S. has allowed us to be competitive in the industry."
Founded in 1928 by E.J. Schoephoester in the back of his East Side grocery store, Schoep's employs 150 people. It made more than 10 million gallons of ice cream last year and distributes its brand to retailers in Wisconsin, Illinois, Iowa, Minnesota and Michigan's Upper Peninsula.
Cedar Crest Ice Cream -- based north of Milwaukee in Cedarburg, the state's second-largest independent ice cream maker -- is celebrating 32 years of business, with some recipes dating back to 1929.
Cedar Crest has a manufacturing plant in Manitowoc and a distribution center in Rice Lake. Its products are in stores, ice cream parlors and schools in five Midwestern states, but the company is considerably smaller than Schoep's, making about 2.5 million gallons of ice cream a year, according to Ken Kohlwey, Cedar Crest president, who owns the business with his three brothers.
A leader for the future
The addition of Timm is designed to break new ground for Schoep's.
A Tomahawk native who got his start in the ice cream business in 1972 with Gold Bond Ice Cream in Green Bay, Timm, 59, led specialty ice cream operations in Dallas for the Southland Corp.
In the mid-1980s, he worked for Steve Hammonds Ice Cream in New York, which was sold to CoolBrands International in 2005. There, he worked in manufacturing, quality control, research and development, and purchasing.
"It's great for us," said Alan Thomsen. "With his background and ability to deal with large companies, he's really helped us to be able to move on to the next level."
Alan Thomsen is one of about 19 members of the Thomsen family who own the ice cream company. Five Thomsens work at the company. Paul Thomsen, who works on special projects, started at the company when he was 9 and became president in 1974.
Timm has known Paul Thomsen for more than 25 years and came out of retirement to take over for his friend. In the last 18 years prior to his retirement, Timm logged more than 6 million miles in the air while traveling the country and living in Green Bay.
Timm still lives in Green Bay but now logs miles on highways 151, 26 and 41. And yes, he already has been nabbed for speeding through Rosendale, one of the most noted speed traps in the state.
Speeding tickets aside, a team-concept approach is favored by Timm to generate ideas and build the ice cream company into the future.
"A group of minds is better than any one mind," Timm said. "It's a highly specialized industry."
SCHOEP'S ICE CREAM
Founded: 1928
Employees: 150
Facilities: 60,000-square-foot manufacturing plant at 2070 Helena St. and a 46,000-square-foot distribution center at 6801 Manufacturers Drive
Projected revenue for 2008: $40 million
Total freezing capacity: 6,000 gallons per hour
Web site: www.schoepsicecream.com
Madison fit for success when it comes to treats
Madison may be one of the most fit cities in the country, but we like our ice cream and its fatter cousin, custard.
In addition to Schoep's Ice Cream on Madison's East Side, the success stories include:
• Culver's Frozen Custard based in Prairie du Sac. Founded in 1984, the franchise restaurant company has ballooned to more than 375 locations and is arguably the most recognizable custard brand in the country.
• Michael's Frozen Custard, founded in 1986 in an old gas station on Monroe Street. It has grown to five Dane County locations, including three in Madison.
• Chocolate Shoppe Ice Cream, founded in 1962 in Madison, has three company-owned stores in Madison and has its ice cream in more than 250 scooping parlors throughout the Midwest. The company started with 19 flavors, but now makes 110.
• Babcock Hall Ice Cream has been made at UW-Madison for more than 90 years. The name honors agricultural chemist Stephen Babcock, whose butter fat tester helped Wisconsin strengthen its reputation in the dairy industry.
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