Bassetts scooping up the market in China

Bassetts moon cakes , for a fall festival, are chocolate shells filled with ice cream instead of the traditional bean curd and salted duck egg.
Bassetts moon cakes , for a fall festival, are chocolate shells filled with ice cream instead of the traditional bean curd and salted duck egg.
Posted: March 22, 2013

It was a little past 8 one morning last month when Michael Strange settled down at the laptop in his living room in Philadelphia's Brewerytown section, and got on the line to Beijing.

His conference call would stretch into a Skype marathon - three hours and change.

Strange is the fifth-generation owner of Bassetts Ice Cream, the Philadelphia stalwart (est. 1861), scooping from the first days of the Reading Terminal Market, and a wholesaler of those iconic, blue-and-white pints, America's oldest - if still distinctly regional - ice cream brand.

But it was the China trade that was on his mind this morning. His business - astonishingly - was exploding there. In less than five years, it had soared from absolute zero to more than 20 percent of his sales.

With Bassetts' heirloom-recipe vanilla leading the charge (followed by strawberry, rum raisin, and, now, newly formulated green tea), he had good reason to believe those sales were on track to double.

A recent market-trend report seemed to bear him out: China, it concluded, was on the verge of "a blowout period of ice cream consumption."

Almost by fluke, Bassetts, a tiny player in the ice cream world, with annual sales in seven figures, was uniquely positioned. It had become - by some measures - America's largest exporter of U.S.-made ice cream to the China market. (Other brands - Häagen Dazs, which it had bested in a blind taste test in Beijing; Baskin-Robbins; and others - have far larger market shares in China, but their ice cream for Asia tended to be made outside the United States.)

Already, Strange's biggest customer, James Sun, had established three classy Bassetts shops - one in a fashionable mall in industrial Taiyuan, and two in southern Fuzhou, including one in a 40-story office tower (near storefronts for Apple and Starbucks) that he opened as a surprise on the day Strange visited last fall, with bundled balloons arching over the entry.

Every month, up to 6,000 dipping tubs of Bassetts' signature, ultra-rich (16 percent butterfat!) leave its warehouse in Marcus Hook, bound for the port of Xingang.

The ice cream ends up in swank hotels, high-end buffets, and large cones priced at $7.74, a reach all the more surprising because, beyond greater Philadelphia, Bassetts' is hardly a household name.

Its most-distant wholesale account had been Treasure Island Foods, a high-end supermarket chain- in far Chicago. (Where, incidentally, it costs $50 more per pallet to ship to than to China.)

But of all the months, September is the one to watch. It offers a special opportunity, and requires special attention: September is the time of China's centuries-old autumn holiday, a combination harvest festival, Thanksgiving family gathering, and lunar celebration.

It is called the Moon Festival.

That was what Michael Strange needed to talk to James Sun about this morning.

The Moon Festival would generate demand for tens of thousands of custom-made moon cakes, in this case using Bassetts ice cream as the filling instead of the traditional bean curd and salted duck egg.

An engraved, insulated box of them can command close to $300.

But they were complicated to make, assemble and ship.

And time was running out - even though September was months away.

Nearly 7,000 miles away, James Sun was running a little late.

Beijing traffic.

But shortly past 9 p.m. Beijing time, he was in his office in Dongcheng, the city's commercial center, ready to talk business with Michael Strange.

In Ambler, Dan Zhang, a broker, was on the line, too, acting as a translator.

Strange had a number of talking points. One was a recent bit of good news. Just the day before, the Farm Bill had reauthorized reimbursements to cover the cost of promoting U.S. export brands.

But his main concern was nailing down this year's moon cake order. He needed a lot of lead time.

Time to have Lore's Chocolates mold shells in North Philadelphia.

Time to have the ice cream produced. (After decades of churning it in the basement of the Reading market, Bassetts has contracted that job out to Galliker's Dairy Co., in Johnstown, Pa., which gets its milk from western Pennsylvania farms.)

And time, finally, to have that ice cream slurry sent to a plant near Baltimore called Totally Cool, where it would be poured into the chocolate shells and chilled to 20 degrees below zero.

That's not counting, of course, 40 days on a slow boat to China.

The moon cake is as ubiquitous as Christmas fruitcake during its September run, and often about as welcome: "A lot of them end up on a shelf," says Strange, whose mother is Ann Bassett.

It is typically a pot-pie-sized cake, stamped with a design and stuffed with red bean curd. But James Sun had picked up on a trend from Hong Kong: Why not fill it with Bassetts premium imported ice cream?

Foregoing China's lackluster brands, he ordered 12,000 three years ago. Last year, he ordered a whopping 60,000, prompting Bassetts to do a gut check: Galliker's said it could double its output if needed, and a brand-new West Coast plant offered almost unlimited ice cream-making capacity.

Now, Sun was explaining why this year's order - 60,000 again - had leveled off: China's new leadership was cracking down on corporate gift-giving, a major part of his sales.

How to make up for the corporate downturn? James Sun had ideas.

Since he'd need to sell more individual units, he would expand the holiday itself: "The gift box wouldn't say 'Moon Festival'," he said. Instead, he'd call it, "Bassetts Mid-Autumn Holiday" gift box.

He would try other tweaks, offering various price points, for one. But there was another strategy - exploiting the limitless potential of ice cream cakes for weddings, celebrations, and kids' birthday parties. A cake for every occasion!

"The [imported] ice cream is American culture," Sun said, "so don't worry about Chinese culture." Better to have a cake shaped like a Coach bag, he added, than one emblazoned with the Great Wall.

And so it went, from recast moon cakes (stuck for now at 60,000) to American-style ice-cream cakes, and how a Bassetts pastry consultant might make them sexier and more eye-catching.

It seemed - by 9:52 a.m. Philadelphia time - that visions of a line of Bassetts ice-cream cakes had begun dancing in James Sun's head.

The sky was the only limit.

"We have 1.3 billion people," he said.

Then almost to himself: "That's a lot of cakes!"

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