They’re Trying to Scoop the Local Ice Cream Establishment in Arkansas

There’s a cold war going on--and it’s being fought with spoons.

Texas ice cream giant Blue Bell has moved into the heart of Arkansas, challenging local favorite Yarnell’s in the region’s small but sophisticated ice cream market.

“My wife, the ice cream buyer in our house, has not tried Blue Bell on the general grounds that [Texans] can’t possibly make anything better than Yarnell’s,” said Bob Ferguson of Little Rock.

According to Yarnell’s, the central Arkansas market for premium ice cream is already overcrowded. Officials at Blue Bell, which makes the same grade of ice cream as Yarnell’s, believe there’s room for another player.

“Our entry will simply make the entire ice cream market grow,” said John Barnhill, general sales manager for Blue Bell. “People simply eat more ice cream when we go in.”

Blue Bell has its fans in Arkansas. After the Texans announced their plans to move into Arkansas, Patti McCord praised the day she would no longer have to plan excursions to pick up a gallon--or more.

“I’ve driven with Blue Bell in the back seat for as little as two hours and up to 10 hours,” she wrote to her local paper.

Both Blue Bell and Yarnell’s come from small towns--Brenham, Texas (population 12,445) and Searcy, Ark. (population 15,180). Yarnell’s was founded in 1932, and Blue Bell got its start in 1907. Both are still family-controlled, and each emphasizes its down-home roots in its advertising.

Ice cream, frozen yogurt and frozen novelty desserts are in both companies’ product lines, which are distributed in several Southern states. Both have good reputations among ice cream industry aficionados.

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Blue Bell moved into the area in March in time to have its name before consumers this summer, when ice cream consumption is highest. Blue Bell’s decision to expand in Arkansas wasn’t a surprise for Yarnell’s.

“We’ve been competing with Blue Bell in a number of markets,” said Doug Sanders, a senior vice president for Yarnell’s. “They’ve been watching us and our growth. We’ve been watching them.”

Blue Bell cites studies that show the ice cream market here has room to grow. An A.C. Nielsen Scantrac survey found the market development index here to be 78, with 100 representing the average.

But that doesn’t tell the whole story, Sanders said.

“If you look at market development overall, they’re right,” Sanders said.

“If you look at it by category, super-premium and premium are over the average,” he said. “The underdeveloped part of the market is in the market grade and economy.

“I don’t know if that’s going to be where they’re focusing their advertising.”

Central Arkansas may be a high-end ice cream market because Little Rock has a supply of affluent consumers who are willing to spend their money on the finer things in life, said John Harrison, a taste tester for Dreyer’s and Edy’s Grand Ice Cream, based in Oakland.

The presence of Yarnell’s may also explain the preference for premium ice cream, he said.

“It’s a local company. It’s available. It has a good name,” he said.

Neither company would release sales figures. A ranking compiled last year by Dairy Field, a trade publication, listed Blue Bell 66th in the country, with approximate sales of $200 million in 1995. Yarnell’s didn’t appear in the top 100, where the smallest companies had about $100 million in sales.

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Extra-rich ice cream brands, such as Haagen-Dazs and Ben & Jerry’s, are considered super-premium and made up about 8.6% of packaged ice cream sales in 1995, according to the International Dairy Foods Assn.

Premium products such as Blue Bell and Yarnell’s, which have a lower milkfat content than super-premium, accounted for 31.6% of sales, the association said.

The new rivalry in central Arkansas has been hard to miss, with both Blue Bell and Yarnell’s buying full-page newspaper ads and television spots.

Yarnell’s believes it is doing more advertising and also has started a service where consumers can call a toll-free number and request that a carton of their favorite flavor be delivered to their supermarket in time for their next shopping trip.

Sanders said the service, modeled after a pilot program started by Dreyer’s and Edy’s in a few test markets, had been in the works for a while and was not a response to Blue Bell’s arrival.

But the gesture could speak volumes to consumers, said Harrison, whose company started the program.

“It says, ‘Hey, we care,’ ” Harrison said.

And the burst of advertising accompanying the new arrival explains why the ice cream market grows when a new competitor comes to town, said Rohit Deshpande, who teaches consumer marketing and brand management at the Amos Tuck School of Business at Dartmouth College in Hanover, N.H., and who has studied ice cream markets.

With an increase in consumers’ awareness of ice cream, “Disposable income is reallocated, competitive dessert consumption would decline and ice cream would go up,” Deshpande said.

The experts say there are a number of factors that help an ice cream succeed in a market. Quality and price are considerations, as is a variety of flavors.

Location on store shelves also makes a difference, leading some stores to charge premiums for prime display locations. Yarnell’s may have an edge in that regard, Harrison said.

“Yarnell’s is a local company, so I know they will find favor from the local groceryman,” he said.

But for some, the studies and marketing matter little.

“I buy whichever one’s on sale,” said Margie McCord of Little Rock.

Still, while she may buy both brands, she said she prefers Yarnell’s, although she’s at a loss to explain why.

“It could be just because I’m used to it,” she said.