Pennsylvania Ice Cream Maker Gets the Scoop on China Market

By Doug Barry

The first dollop of Bassetts Ice Cream was served in Salem, New Jersey during the first year of the Civil War. The company then decamped for Philadelphia in 1885. No one kept count of the scoops served, scoops lost before reliable refrigeration, happy kids’ mouths splattered, head and toothaches endured by eating too cold, too much, too fast. Too much pleasure generated to quantify. Today, the dollops keep coming, and the company now sells up to 20 percent of its production to three countries in Asia including China.

The story began in the times before sprinkles and chocolate dips, making Bassetts the oldest ice cream company in the country.

Michael Strange, the current president, refers with pride to his great, great grandfather who founded the company, discovering the right mix of rich butter cream, sugar, and flavoring which keeps the generations coming back for more. In 1983, his mother, who ran the business at the time, and his grandfather, took him to dinner to convince him to join the company. “They paid for the meal,” he recalls, though it’s unclear whether they celebrated with ice cream. The younger Strange was just 25.

Best of all he liked to experiment and produced Borsht sherbet to celebrate Russia’s leader Nikita Khrushchev’s visit to New York. It was not a hit.

“I always worried about fighting with my mother over the business, and we did have some battles royale. But the relationship survived, as did his admiration for his mom as a visionary, and so did the business as Strange prepares to anoint another family member to take over as part of the family’s sixth generation.

His grandfather upped the game by changing the recipe used today. “He was a genius and a true gourmand,” said Strange. “He imported cheeses, spoke several languages, was a pilot.” Best of all he liked to experiment and produced Borsht sherbet to celebrate Russia’s leader Nikita Khrushchev’s visit to New York. It was not a hit. But he was—with his grandkids, who remember how he’d put a scoop of ice cream on their breakfast cereal during weekend visits. His grandparents shared a goal of making the best possible ice cream.

Cone, cup, or anti-anxiety meds?

COVID-19 brought mixed results to the business. On the one hand, sales to restaurants and catering took a hit. On the other hand, the grocery business increased measurably, as did walk-up ice cream shops. Food delivery services picked up on a pint-by-pint basis. Venture capital funded brands also posed a threat as they spread nationally, but interestingly people stuck at home consumed more ice cream than ever.

Strange had already expanded the market mix when he shipped his first order to China in 2008, the year the global financial crisis began. For all this stress and the product he makes that can address this stress, he seems surprisingly fit. “You’re only seeing me from the chest up,” he quips to a reporter. He also has a line of sorbet for those wishing to reduce the amount of fat in their diets.

China was not part of a strategic plan, but Strange attended a food marketing event in 2007, where he happened to sit next to an international food broker who invited him to lunch. The broker was an American citizen born in China. A deal was made, and a sample shipment sent.

A blind tasting was done against Haagen-Dazs, which was extremely popular at the time in China. Bassett fared well in the blind taste test and an order was made for half a container. “I thought that was the last order I’d get.” He was wrong. Soon an order for a full 40-foot container was made, and Strange was on a plane to China.

“You feel like you’re chasing your tail on this pricing. If you don’t stay ahead of it, you aren’t going to be around next year.” 

Once there he partnered with a Shanghai entrepreneur who promptly opened four stores in posh shopping malls featuring the ice cream and Bassett’s brand. “It’s a status symbol in China to take a date to an ice cream shop for premium American-made ice cream.”

Trump-era tariffs could have been a problem but somehow ice cream was spared the extra costs and business continued to surge with ice cream sandwiches introduced to the product mix. Consumers from the get-go preferred different flavors, especially green tea and mango which now are part of the corporate product line illustrating the benefits of what you can learn by entering an international market. The biggest-selling flavor in China? Vanilla—as it is in all other Bassett’s markets. But not by much. Chinese consumers also like butter pecan. And they don’t like cones because it means touching the paper wrapped around the ice cream, which is too close to touching the product, something Chinese people don’t usually do. Cups rule.

The next crisis was the spread of the pandemic in China which began in early 2020. It killed traffic in the stores. “My partner had to do a real pivot, more so than I did in the states,” remembers Strange. “He had his ass handed to him.” The pivot involved focusing on sales to grocery stores and online. Want a pint of ice cream delivered to your apartment to assist with streaming video binge watching? China has an app for that.

“I’m afraid to ask how his business is doing now,” Strange said during the midst of a total lockdown in Shanghai as residents struggled to get food of any kind.

Slow boats to China

Strange also has other worries including shipping which is both more expensive because of supply chain snarls and hard to find space on outbound ships. China logistics issues are amplified as Bassett’s expands to other markets in Asia including South Korea and Taiwan. An order to Taiwan was supposed to ship in January of 2022 but didn’t depart until the end of March.

Price increases are another worry. International profit margins are already tight because of freight costs and tariffs. As a result, the product retail price is about 25 percent higher than in Philadelphia. Inflation is causing the prices for everything to increase: milk, sugar, labor, fuel. “You feel like you’re chasing your tail on this pricing. If you don’t stay ahead of it, you aren’t going to be around next year.” 

“What Chinese consumer is going to buy an American product after all the tariff back and forth? Well, some will. There is a certain regard for the American brand. If it is American made, it is the best.”

Strange would like the company to be around for six more decades. One strategy is to expand the market in China and elsewhere in the Asia Pacific region. His company is relatively small with about 20 employees. But he can increase capacity and is looking for opportunities in other China markets.

The agreement with the current partner includes specific volume requirements which if met guarantee exclusivity. The pandemic has made it hard to meet those requirements. “He’s a good partner, and I know how hard it is to find a good partner.”

For help doing so, Strange relies on local resources in the Philadelphia area such as the World Trade Center Philadelphia and the US Commercial Service of the Department of Commerce. The Pennsylvania governor’s office also provides help finding qualitied buyers overseas. This informal US-China trade ecosystem is found in most states.

Does Strange worry about a possible negative consumer reaction including boycotts as bilateral relations further sour? “I’m a happy worrier and tend to worry more about a consumer backlash than my Chinese partner.” Strange thought, “What Chinese consumer is going to buy an American product after all the tariff back and forth? Well, some will. There is a certain regard for the American brand. If it is American made, it is the best.” He said many Chinese consumers lack trust in some of their own brands and food supplies.

He refers to the 2008 melamine scandal in China in baby formula. There were deaths of children and a nationwide furor. “It was right after we shipped our first container. We worried the Chinese weren’t going to eat any dairy. But Chinese consumers assumed that American dairy wouldn’t have melamine, so it helped secure additional orders.”

Now he worries about how low the bilateral relationship will go. “I’ve been working at linking the two countries through my ice cream, high standards and customer service. This makes it harder to decouple. To decouple, some hard, hard decisions would have to be made by both countries.”

Ditch the avocado toast

For now, he’s grateful for the business and seems enthusiastic about growing it, if he can. He attributes his success in China with opening doors to business in other Asian countries, a big deal for a small company. He’s proud that his company’s international sales support jobs in the United States. And he’s constantly learning new things which could become the next big thing for a business that was a startup before the Civil War, created by an ancestor who was good at thinking outside the vanilla, though he reminds his visitor that the vanilla is very special.

Strange warms to the idea of his partner’s avocado milkshakes containing avocado, Bassett ice cream and milk. “Do you think anyone here would like it? I think I’ll try it in the Reading Terminal Market store,” he said, a note of trepidation in his voice. Perhaps he’s remembering the fate of borscht sherbet invented by his grandfather. But he’d be the first to admit that times are changing.