The Little Company that Cares

I swear the ice cream gets in your bloodstream,” laughs Penny Chapman, president of Markdale, Ont.-based Chapman’s Ice Cream. “Cut me and it’ll be vanilla on one side and chocolate on the other!” Chapman’s passion for the ice cream business is something that hasn’t changed in the past 35 years since the time when she and husband David first bought the small creamery in northern Ontario, armed with the dream of offering an affordable, high-quality product that the entire family could share. Today, as Canada’s largest independent ice cream manufacturer and a perennial family favourite with Canadians across the country, Chapman’s continues to live that vision.

From a staff of just six – two of which, says Chapman, quit on the business’ opening weekend – Chapman’s Ice Cream today employs approximately 350 people during their peak production periods, and occupies an entire block in Markdale. With a 100,000-sq.-ft production plant producing approximately 80 million litres of ice cream each year, Chapman’s sells its products in convenience stores, grocery chains and foodservice operations in every province of the country, distributed direct to store from distribution centres in Markdale and Hampton, N.B. The company now boasts more than 10 separate brands, including products catering to consumers with allergies and other dietary concerns, and dozens of unique and delicious flavours. For more than a decade Chapman’s has also been producing private label products for Loblaws, a major step in the company’s evolution.

Chapman admits that the company’s humble beginnings were often challenging. After working in the ice cream business in New Zealand and England, David met Penny while the two were working at the Maple Leaf Dairy Bar in Toronto’s east end. Wanting the chance to own their own business, the Chapmans bought the 150-year-old Markdale creamery in order to obtain a plant license. “At the start of the business we did everything,” recalls Chapman. “We put the answering machine on then made the mixes, made the ice cream by hand, filled it by hand, loaded the trucks, then David would go out and find sales. We just did everything, and it worked.”

The dairy business in the 1970s was a very different landscape than it is today, with numerous small- to mid-size players that have since been bought up. To differentiate themselves from the competition Chapman’s began with what was then a huge variety of flavours – 20 – packaged in a distinctive black, two-litre container. Besides standing out in the freezer aisle, the package featured two children sharing an ice cream cone, an image that has become a well-recognized symbol with Canadian families. “That’s what it’s all about – family and affordability,” says Chapman. “At the time, there were four flavours commonly on the market: Vanilla, Chocolate, Neapolitan and Butterscotch. But even then we thought, it’s not enough, people want to have choices. So the first year we came out with flavours like Rum and Raisin, Orange Pineapple, and Mint Chip.”

The desire to offer ice cream that consumers of all ages and stages could enjoy led the company to make its two-litre ice cream line peanut and nut-free, something that has endeared it to parents, schools and day cares over the years. And although instituting the necessary operational changes, and educating and training employees and suppliers was difficult, Chapman says it was worth it. “We like to lead and not follow, so if we can do something first we will. About 25 years ago we started hearing from people who had children who’d never had cake and ice cream because they had allergies,” recalls Chapman. “There are all these magic moments you have ice cream at, and these people couldn’t partake, especially kids. So that made us focus on the fact that there’s a market out there that nobody’s serving – people with special dietary needs. That’s how the peanut/nut-free started, that’s how sorbet started, and how lactose-free started. It’s a small market, but these people are so grateful, so emotional, and it really does affect their lives.” In 2003 the company, which now offers approximately 50 SKUs that are peanut/and nut-free, was recognized for its commitment to allergy awareness with the receipt of the Susan Daglish Award for Food Manufacturing by Anaphylaxis Canada.

While the two-litre ice cream is still the company’s number-1 line – comprising approximately 25 per cent of sales – products now include novelties, premium ice creams, low-fat, sugar- and lactose-free brands and a line of frozen yogurt that is Canada’s top-selling frozen yogurt brand, with 75 per cent of the market. Just last year the company expanded its family of products with the introduction of Yogurt Plus, naturally flavoured frozen yogurt containing active probiotic cultures Lactobacillus Acidophilus and Bifidobacterium Lactis, as well as prebiotic fibre inulin. The innovative new frozen yogurt is a first in Canada. “I’d been working with my management team on something for baby boomers for the last five years, but I couldn’t pin down what they really wanted,” explains Chapman. “These people don’t only want regular ice cream in smaller containers. Finally we pinned down the reasons they would buy it – because it’s better for you, because it’s low fat, because of the probiotics and prebiotics, and because it just tastes damn good. That’s the biggest point – it had to be really good. And the price is still very reasonable, even though it’s a super-premium yogurt.”

Maintaining that close focus on listening to and then exceeding consumer expectations is something Chapman believes has kept the company successful over the years. “Because we’re an independent, and there are so few independent family firms left, we have to be cheaper and the product has to be of better quality. We also have to control it better and give customers top-notch distribution,” she says. “Everything we touch has to be better than what [the large companies] do. Everything we do we get very involved with and passionate about. If you want your product to be the best, you just have to go full force.” That commitment to customers and community got a boost in the arm last year when the couple’s son, Ashley, joined the business, bringing fresh ideas and a younger perspective to the company. “That was a key thing for the year,” says Chapman. “We will never sell out. We are the mainstay of Markdale, of the local community; we want to be here. So now as another generation comes into the business the community can see how there’s going to be continuation as we go on. We’ve got people who’ve been here from the very start, for 35 years. It’s exciting that it’s carried on, and we’ve kept so many good people who care. We’re the little company that cares.”

Not content to rest on their laurels, this year the company will introduce two new Yogurt Plus flavours, Crème Caramel and Black Jack Cherry, to “tweak the imagination of Canadians,” says Chapman. This spring will also see the launch of Chapman’s Premium Canadian Collection, a line of “indulgent but family affordable” products featuring delicious premium-quality ice cream sandwiched between two cookies and dipped in dark chocolate.

The latter innovation is the result of expansion in the company’s Markdale facilities, as well as an investment in a new extrusion line. “We search the world for the best equipment. We go and see the equipment working, we see how the consumers respond to that product. And then you learn how to use it and how to change it to do different things that maybe weren’t done before,” explains Chapman. The need for greater efficiency and a desire for good environmental practices prompted Chapman’s to construct its own waste treatment plant over 10 years ago. “Everything that goes down our drain, effluent, ice cream, mix, we treat it all and then it goes back into the town system. Some things are sort of simple to us – it’s the right thing to do.”

Today, says Chapman, one of the biggest challenges facing the industry is the trend toward the use of vegetable oil rather than more expensive butter fat. “[Some of the bigger companies] have taken out the butter fat and put in vegetable oil. I think they’re trying to pull a fast one on consumers, and I find it very tragic, and worse, look what it’s doing to the Canadian farmer. It’s devastating, and consumers don’t realize it. Vegetable oil costs nothing compared to butter fat, yet they’re charging the same prices and higher.” As a result, Chapman’s was an early adopter of the Dairy Farmers of Canada’s new branding program that adds a “100% Canadian Milk” image to packaging. “All of the dairy in our product will be 100-per-cent Canadian and we’re proud of it,” says Chapman. “We are Canadian and we sell to Canadians, we don’t sell to the States or anywhere else.”

So after 35 years in the business, does Chapman still eat ice cream? “Yes, I do,” she laughs, adding that her new favourite flavour is the Yogurt Plus Crème Caramel. “But do I eat it very much? No. Do I take it home? Not very often. It’s also why we’re not slim anymore!” But, she says, “Every day at 4 o’clock we bring maybe three or four different products into our lunchroom and try them. And we critique the heck out of them. Nobody is more self-critical than us. So I do still enjoy it, all of it, and I love the new products.”