Moorenko's Ice Cream looks to sweeten bottom line

By Thomas Heath
Monday, June 28, 2010; A11

One of the best things about shopping at Whole Foods is the free samples. I sometimes skip lunch and fill my belly with free cheese, crackers, Italian bread dipped in olive oil, sliced nectarines, or any number of desserts, from bundt cake to super-fat ice cream.

Which brings me to this week's subject.

I don't usually write about the same industry two weeks in a row, but I've decided to write about ice cream again. What better time to write about the frozen dessert than in 90-degree heat? Besides, July is National Ice Cream Month, designated by President Ronald Reagan in 1984.

Last week we talked about two brothers from New Orleans who moved to Washington and opened up a chain of Haagen-Dazs stores.

This week's piece originated in a corner of the Whole Foods on River Road where I shop. It was there I found Susan Soorenko offering samples of her Moorenko's Ice Cream. A niece had suggested the cow's "moo" at a Rosh Hashana celebration, and Soorenko's trademark lawyer loved it.

Soorenko, 58, was dishing out vanilla, blueberry, honey-lavender, ginger and other flavors at a demonstration toward the front of the store.

She told me she was a fitness trainer in McLean for 30 years, but she quit her job, got divorced and lost her parents all within two years. When she and her son went west on vacation around nine years ago to take a breather, she fell in love with some wonderful ice cream, which she will not name, and decided on a new pursuit.

"I was going to bring this ice cream back here from out west, but with this particular company, you can't ship it. I started looking at [making her own ice cream] and thinking I could figure this out. So I went to ice cream school in New York."

At a hotel in Tarrytown, north of New York City, she paid around $1,500 to learn the art of making ice cream. She studied under Malcolm Stogo and Bill Lambert, both respected experts whom she found through the Internet.

Soorenko finished ice cream school in 2002 and wrote a business plan with help from her brother, who is a real estate developer and owns a commercial photography studio. He helped find a consultant to help her apply for a Small Business Administration loan. She took the plan to nearly a dozen banks before Eagle Bank in Maryland gave her a $280,000 loan at 7 percent interest.

She recruited a real estate agent she knew from her fitness days to help her find space in a stand-alone building in McLean, barely big enough for an ice cream kitchen and a front service counter. "I wanted to be in my own neighborhood. I wanted my kids to come there after school," she said.

Her business plan called for making ultra-premium ice cream, a designation for a product with very high milk fat -- at least 17 percent of the ice cream mix. She guessed it would create demand in restaurants and hotels, a business-to-business model that would bring in steady, reliable year-round revenue.

The U.S. Department of Agriculture says a dessert has to have at least 10 percent milk fat to be called ice cream. Below that, it's something else, like gelato, which can have 4 to 10 percent milk fat. Standard supermarket brands might have 10 to 12 percent milk fat. Between 12 and 14 percent is designated premium ice cream. Between 14 and 16 is super-premium. Above that is ultra-premium. The more milk fat, the more expensive the ice cream is to manufacture.

Most ice creams include milk, cream, sugar and sometimes egg yolks. Soorenko's mix arrives in 2 1/2 -gallon bags, and she adds her own flavorings to make one of her 50 different ice creams.

"The higher the milk fat, the lower the ice cream is in some other ingredient. The milk fat may be squeezing out sugar or something else. The high-fat product makes it taste good, so you don't need to eat so much of it," she said.

That doesn't work for me.

But Soorenko said the fat content anchors the flavor better.

When I talked to her last week, Soorenko had just received 350 gallons of mix at her Silver Spring ice cream factory, which she took over from another local manufacturer in March 2009.

Soorenko has barely broken even over the past eight years, but 2010 could be her breakthrough year. She left her small factory-store in McLean (she calls that store "my biggest mistake" because of its expensive rent) and last year moved into a new, larger space in Silver Spring with freezers and ice cream machines that allow her to make more ice cream at less expense.

Demand for the ice cream has not been a problem, said her brother, Barry Soorenko, who handles the books. The problem has been making enough to sell at a large scale.

About two-thirds of her projected $800,000 in annual revenue this year comes from wholesale customers, which includes Whole Foods. That's about double last year's revenues. She also sells to hotels such as the Omni Shoreham and the Westin Dulles, to the Baltimore Country Club, and to 60 restaurants that range from Comet Ping Pong on Connecticut Avenue to Willow in North Arlington and to Pesce in Dupont Circle.

Her ice cream isn't cheap. She charges wholesale customers $52 for 2 1/2 gallons, which is about twice what it costs her to make. But the customers can sell 65 to 80 scoops of ice cream from those 2 1/2 gallons at $2.50 to $3.50 a scoop, which will reap them several times their cost. And a pint at Whole Foods is $5.39; the grocer pays about $3.25 for that pint, which is a standard grocery-industry markup. She ships her ice cream in rectangular boxes in two Moorenko's Ice Cream trucks.

Soorenko has 17 employees. Labor is her biggest expense, consuming around 25 percent of revenue. Ingredients and mix account for 25 to 30 percent more. Rent, utilities, trucks and packaging eat up most of the rest. Soorenko, who owns 100 percent of the company, said she takes a draw when there is enough cash to pay herself.

These days, she works hard to spread the word about her brand. Her demonstration at the River Road Whole Foods was one of three going on that weekend. Her sons were hawking the dessert at Mom's Organic Markets in Rockville and Alexandria.

Soorenko wished me a happy Ice Cream Month.

Follow me on Twitter at addedvalueth.

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