
How JonnyPops' $100 Million Popsicle Business Licks The Competition
'The energy of the summer is contagious,' says Brust, JonnyPops' 32-year-old CEO. 'This is our Super Bowl—and it just happens to be multiple months long.'
Some 60% of JonnyPops' annual sales, which Forbes estimates at $100 million, come during the hottest six months of the year, Brust says. JonnyPops doesn't comment on its financials. But the brand, which Brust shares has been profitable from year one, and now pulls in an estimated 30% net margin, is the top seller among natural grocers' lineup of 'frozen novelties' nationwide, which grocery data provider Spins tracks as nearly $7 billion in annual retail sales.
Brust believes that the business he and Wray, JonnyPops' 33-year-old chief financial officer, dreamed up in their dorm room at St. Olaf College, about an hour south of Minneapolis, is built for the long haul. 'We don't chase fads,' he says of the business, which was bootstrapped with friends and family, and has taken on no private equity funding. 'We're thinking about what's the next decade look like. This was never a grow-the-business-to-sell-it type idea.'
But if the pair did decide to sell, even as the market for food deals has scaled back multiples amid uncertainty and volatility, JonnyPops could expect to get around $300 million or more. Mainstream ice cream bars like Dove and Klondike have been struggling as consumers opt for healthier brands. Their respective parent companies—Mars and Unilever—need brands like JonnyPops (which has been eating away at their sales) for future growth. That pressure is keeping the market for acquisitions relatively strong. Frozen treats are a fair consolidated industry, with Ferrero (Halo Top, Blue Bunny), Mars (Dove), Unilever (Ben & Jerry's, Talenti) and General Mills (Häagen-Dazs) controlling the majority of the market share. But there is still more room for growth: The $50 billion giant Mars, for example, has been investing in the development of its Dove bar line for the past three years with the goal of growing that business to more than $1 billion in annual sales globally.
Brust first met Wray in 2010 in a physics class at St. Olaf. As Brust studied, he couldn't get his mind off an idea he had come up with while talking with his cousin Jonathan, known as Jonny, at a family wedding back in 2007. The two cousins had come up with the idea for a socially responsible business when they both realized they loved ice pops but were having concerns about the ingredients in popular brands.
And after Jonny tragically died following a struggle with addiction, Brust and Wray decided to bring Jonny's dream to reality in his honor. They began making frozen smoothies-on-a-stick in their dorm with a blender, strawberries and cream. Their version had less than half the sugar and fat of traditional ice cream pops.
For the first two years, the duo ran the business while they finished up college (and started their tradition of donating a portion of profits every year to organizations that support addiction recovery). They started with $4,000 spent (from savings from jobs during high school) on a stainless-steel ice cream machine from Brazil to make popsicles on a countertop and used a wedding banquet center's commercial kitchen during weekdays. On the weekends, they sold popsicles at farmers' markets and other local venues.
'We tried to make methodical investments as opposed to spending a whole bunch of money on a really big swing and hoping it works,' Brust recalls. 'We've been incrementally building year after year after year.'
By 2018, JonnyPops were being sold at Kroger, Target, Walmart, Costco and the pair earned a spot on the 30 Under 30 food and drink list.
But sales were still small, an estimated $5 million a year. So the duo pivoted from smoothies to making popsicles with no artificial ingredients or high-fructose corn syrup. The rebrand worked. In the five years following that shift, the business hit triple-digit sales growth each year, reaching an estimated $50 million by 2021. (JonnyPops declined to comment on its finances.)
'They were quick to realize that they were making a very, very high-quality product and the way they did that was unique, and so controlling production was essential,' says David Finch, a 59-year-old longtime food industry CEO, who met the then-college students while running a Minnesota-based contract manufacturer and became an advisor, investor and board director. 'You can't do that with a business partner who's trying to figure out how he's going to make money along the way.'
As the JonnyPops business grew, they learned how difficult it is to make layered popsicles of different flavors without fillers or gums at scale. They wanted to start from scratch, because the machinery used by bigger competitors hasn't been updated since the 1980s. That's why JonnyPops has 20 patents and trademarks, and why it self-manufactures.
Retro Cool: "I remember having these cool, colorful pops when I was younger," says Whole Foods executive Juliana Bandin, "and JonnyPops takes me back to those memories with their flavors.'
'Everyone else is running these really old-style things that make the same widgets,' says Brust. 'We want to be inventive and push the boundaries and do things that have never been done before.'
Since opening a larger factory in 2021—the 80,000-square-foot plant in Elk River—Brust now believes the company is set up for many years to come. JonnyPops has exclusive lines with Target and representation at 27,000 stores nationwide from H-E-B and Publix to Wegmans and Whole Foods.
'The brand fills the cup and then some on the nostalgia trend. I remember having these cool, colorful pops when I was younger, and JonnyPops takes me back to those memories with their flavors,' says Juliana Bandin, principal category merchant for frozen at Whole Foods. 'Flavor is the number one driver of purchase for frozen desserts, and when a brand nails that—while also offering products that are eye-catching, fun, and nostalgic—the sales speak for themselves.'
But around 60% of grocery stores nationwide have yet to sell one of their popsicles, and that includes going nationwide with Walmart. Brust and Wray believe they can double their footprint but it will be incremental over several years.
'We have every bit of belief that our brand's going to get there, but we want to do it in the right way,' Wray says. 'When we launch with retailers, we want to have the right partnership, the right items going into the right places at the right time, with us beating the drum and having that discipline.'
In the meantime, JonnyPops is one of the few brands growing while its category of competitors has faced some contractions in recent years. Sales are up around 3% so far this year, according to NilsenIQ grocery sales data, but for the three years prior, sales have fluctuated between growing 1% and declining 3%.
The brand's success has also made it a target. Last summer, GoodPop, a competitor that formulates its popsicles with fruit juice and no added sugar, filed a class action lawsuit for false advertising, alleging that JonnyPops actually contains a lot of sugar and isn't as healthy as the company claims. (JonnyPops, which uses cane sugar, declined to comment on the ongoing litigation.)
Otherwise, the trends are promising: More than 50% of JonnyPops' consumers and customers have discovered the product only within the last 18 to 20 months.
'Flavors are great, but more of we want the pops to be these magical experiences—things that people have never seen before,' says Brust. 'We have the mindset that our best product is yet to come.'
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