No. 3 ice cream brand aims to maintain measured growth

BRENHAM, Texas (AP) _ Most Americans haven't heard of the Texas ice cream that often satisfies President Bush's sweet tooth, but the family that runs the ``little creamery in Brenham''

Saturday, June 5th 2004, 1:27 pm

By: News On 6

BRENHAM, Texas (AP) _ Most Americans haven't heard of the Texas ice cream that often satisfies President Bush's sweet tooth, but the family that runs the ``little creamery in Brenham'' doesn't consider it a bad thing.

``That allows us to focus on making and selling ice cream,'' CEO Paul Kruse said. ``I think everybody here would like to see it grow as we have grown _ in a measured way.''

The Blue Bell Creameries' fans in North Carolina and 13 other states where its flagship homemade vanilla and other flavors are on supermarket shelves make it the nation's No. 3 selling brand of packaged ice cream, behind No. 1 Dreyer's and Edy's, and No. 2 Breyer's.

Kruse, a former lawyer, is the third generation of Kruses to lead Blue Bell, based 60 miles west of Houston. He intends to stay the course set by his dad, uncle and grandfather _ grow methodically and give customers what they want.

The company, named after a purple flower with bell-shaped blooms, also aims to remain private and to amiably fend off repeated buyout offers, said Howard Kruse, Paul Kruse's colorful 73-year-old uncle who handed the CEO reins to his nephew in May. The company has 400 stockholders, and 40 percent of its shares are owned by some of its 2,700 employees.

``We have not considered going public,'' said the elder Kruse, who shepherded much of Blue Bell's growth outside of Texas. ``We've had tremendous success in the past. Why go public?''

The brand's loyal fans include the First Family. The dinner menu for Russian President Vladimir Putin's November 2001 visit to Bush's Texas ranch ended with Blue Bell vanilla ice cream on pecan pie. The menu for Mexican President Vicente Fox's visit in March included the same flavor on apple cake.

The creamery regularly ships vanilla, chocolate and strawberry to Camp David, Paul Kruse said.

Blue Bell's secret leading to more than $300 million in annual sales lies with consumers who make it the top-selling brand in its major regional markets, many of whom remember it in their freezers at home when they were children.

Blue Bell is sold in most of Texas, Oklahoma, Louisiana, Alabama, Mississippi, Georgia and Arkansas; most of Florida north of Miami; and in parts of North Carolina, Tennessee, Kentucky, Missouri, Kansas and New Mexico.

Along with its headquarters in Brenham, the company operates two plants in Broken Arrow, Okla., and Sylacuaga, Ala. Blue Bell's own refrigerated trucks transport ice cream to more than 6,500 supermarkets and 13,000 convenience stores.

Former Californian Monica Collins got hooked on Blue Bell during frequent trips to Texas to visit relatives. She tried to get her family to ship Blue Bell to her in Los Angeles, but she said it never seemed to work. She moved to Houston last year and now can get her fix whenever she wants.

``When I moved here, I was just a lush with the ice cream,'' she said. ``I don't know what it is, but they got me. I'm in heaven now,'' she said as she picked up some mini rainbow pops for her children at a Houston grocery story.

Blue Bell began as the Brenham Creamery churning out butter nearly a century ago. Howard Kruse's father, E. F. Kruse, took over managing the creamery in 1919 after serving in World War I, and named it after the flower in 1930.

Paul Kruse's father, current Blue Bell chairman Ed Kruse, took over after E.F. Kruse's death in 1951. He led Blue Bell's first expansion outside of Texas, when the brand ventured into Oklahoma in the mid-1980s. Howard Kruse joined the company in 1954, oversaw development of all new flavors and products throughout his tenure and replaced his brother as CEO in 1992.

In 1969, Blue Bell began selling the result of two years of Howard Kruse's dogged determination to find the right combination of milk, cream, sweeteners and flavor for what became Blue Bell's homemade vanilla _ the company's top seller and the Kruse family's favorite.

Howard Kruse still gets ribbed for calling it ``homemade'' when the creamery can churn out 30,000 gallons per day.

``It is homemade,'' he insists. ``It's homemade here.''

In all, Blue Bell produces about 250 products _ from ice cream to fruit pops to novelty items, like ice cream sandwiches and ice cream in sugar cones.

Many items are seasonal, like a new cantaloupe and cream flavor set to debut this July that will be strictly a summer ice cream. Other varieties rotate out of the lineup so consumers don't get bored, Howard Kruse said.

The company constantly experiments with new flavors, and has a room equipped with booths and small spit sinks _ much like those in dentists' offices _ for tasters.

``I can never spit it out _ I have to eat it,'' Paul Kruse said, noting his failure as a true taster.

Not all new flavors are winners. Some past bombs include the ``Purple Fink,'' a raspberry-flavored purple bar, and _ of all things _ dill pickle flavored ice cream.

And like other food producers, Blue Bell caters to diet crazes with low-fat, sugar free and now three varieties of low-carb. Made with Splenda, a sugar substitute, the low-carb vanilla, chocolate and Moo-lennium Crunch is intended to let people on Atkins and South Beach diets have their ice cream and eat it too.

Paul Kruse enthusiastically touts the taste, but Howard Kruse remains an ice cream purist. Low-carb may taste good, but it's not the real thing.

``You can't make a silk stocking out of a sow's ear,'' he said with a smile.