Fri, Nov 17, 2006 - Page 12 News List

President Chain plans to scoop ice cream market

PREMIUM BLEND The Taiwanese firm signed a licensing deal with a US company to offer a premium `blended per request' brand of ice cream in this country and in China

By Jackie Lin  /  STAFF REPORTER

President Chain Store Corp (統一超商), operator of the world's third-largest 7-Eleven franchise, signed an exclusive licensing deal yesterday with US Cold Stone Creamery to market the premium ice cream brand in Taiwan and China.

Unlike the Starbucks brand that President Chain has obtained the right to develop only in eastern China, the Taiwanese firm now hold the license for Cold Stone Creamery in all of China.

The new entity will be 100 percent invested by President Chain while the US company will provide operational know-how during the 30-year contract term.

The subsidiary in Taiwan, with an initial capital of NT$100 million (US$3 million), will be led by James Hsieh (謝健南), President Chain's vice president. Operations in China, capitalized at 65 million Chinese yuan (US$8.3 million), will be headed by Louis Chang Jen (張簡雲輝), another President Chain vice president.

"Cold Stone Creamery's ice cream is delicious, and they're famous for creating a happy atmosphere in the store. We're very happy to introduce this brand and hope to open the first outlets in Taipei and Shanghai by next April," said Hsu Chung-jen (徐重仁), president of President Chain, during yesterday's contract-signing ceremony.

The firm plans to open 60 outlets in this country and 105 in China within the next seven years. Cold Stone Creamery moved into Japan late last year, its first foray into Asia, and into South Korea in July.

Despite its heavy investment, President Chain is confident it will break even in the third year, considering consumers' growing appetite for sophisticated sweets, Hsieh said, adding that the stores will be located in department stores, shopping malls or as independent outlets.

Asked why it chose a Taiwanese partner to market the brand on both sides of the Taiwan Strait, Cold Stone Creamery senior vice president Lee Knowlton said they liked President Chain's consistency and its successful track record in retailing as well as food and beverages.

In addition to Starbucks and 7-Eleven, President Chain has introduced Mister Donut, the Japanese lifestyle brand MUJI and Duskin into the local market.

"We think now it is a perfect time to introduce Cold Stone Creamery here, as Taiwan's economy is robust and China is going to host the Olympics Games in 2008," Knowlton said, adding that negotiations had taken two years.

Established in Arizona in 1988, Cold Stone Creamery has 1,400 outlets in the US and 10 internationally. It offers fresh ice cream with a range of mix-ins blended on a frozen granite stone according to customers' requests.

In the US the unit price ranges from US$1.5 to US$4, but Hsu was tight-lipped about its pricing strategy here.

Taiwan's high-end ice cream market has been dominated by Haagen-Dazs, which has a market share of more than 90 percent. The local office welcomed the competition, brand manager Daisy Chu (朱蕙芳) said yesterday.

Haagen-Dazs has 18 outlets nationwide and cooperates with nearly 500 restaurants. Revenues between May and last month grew between 15 percent and 20 percent from a year ago, Chu said.

According to a survey by ACNielsen Taiwan, Taiwan's ice cream market, regardless of price range, generates sales of NT$3 billion a year, based on statistics compiled from hypermarkets, conveniences stores and supermarkets.

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