Sweet Innovation – The Chipwich Story
You probably haven’t heard of Richard LaMotta but I bet you have heard of and enjoyed his innovation, the Chipwich ice cream sandwich. I rank the Chipwich right up there on my list of all-time favorite innovations along with Guttenberg’s printing press and Apple’s iPhone. Like most great innovations the Chipwich didn’t require inventing anything new, just recombining existing elements in a new way to deliver value. What could deliver more value than sandwiching soft vanilla ice cream between two, large chocolate chip cookies? As if that isn’t innovative enough add in the piece de resistance, rolling the whole thing in chocolate chips! Now that’s innovation.
LaMotta died recently and his classic entrepreneur story is worth remembering and celebrating.
LaMotta was ahead of his time in 1982 when he deployed unheard of guerilla marketing tactics to take the idea for Chipwich from a retail confectionary store called The Sweet Tooth in Englewood, New Jersey to selling 200,000 per day across the country at its peak. The name Chipwich came from an early crowd sourcing effort when LaMotta held a contest offering a year’s supply of the product to the winning contributor. A student from New Jersey came up with the winning name and was rewarded not only with a year’s supply of the tasty treat but also put through college by the company for her contribution.
LaMotta had a vision to take the Chipwich national but was told by marketing “experts” that it would take $50M in working capital that the company didn’t have. No worries, LaMotta took the campaign to the streets of Manhattan, literally, deploying street cart vendors complete with identifiable pith helmets and khaki pants. They created an innovative sales channel without the help of the experts establishing a new product category for premium handheld ice cream and an attractive new price point breaking the $1 barrier. Prior to Chipwich hand held ice cream products were low quality and low cost. Vendors consistently sold out of Chipwiches and the price point continued to move up. Fortune 100 food giants approached LaMotta to use the carts as a trial medium for their own products.
Chipwich went viral without the help of today’s social media platforms. Imagine the tweets. Chipwich received an estimated $50 million of earned advertising exposure receiving thousands of free endorsements. Mayor Koch even posed for a publicity photo, for no fee, as he took a big bite of a Chipwich. It was an attractive David vs Goliath story that the press ate up. LaMotta says he gained 30 pounds just doing free media interviews.
LaMotta learned the many hard lessons of entrepreneurship along the way, twice filing for and then emerging from bankruptcy, as the knockoffs came fast and furious. He also learned first hand what happens when an entrepreneur mixes it up with the world of large corporations. LaMotta laments what he called large corporate “analysis to paralysis” syndrome and cautioned aspiring entrepreneurs about the importance of non-disclosure agreements. In 2002 with a nationally recognized brand, more than a billion Chipwiches sold, and 3700 vendors in 36 markets, he sold the company to Coolbrands International, a Canadian distributor, who also owned the Eskimo Pies brand. Coolbrands then in turn sold both brands to Dreyer’s, a subsidiary of Nestle, who discontinued making the Chipwich because they already had another brand in the category. Like most entrepreneurs LaMotta struggled with losing control of his baby.
LaMatta was a classic entrepreneur who never quit. He said it best, “I got out there, I went for it, and persevered through the rough times.” He did indeed. Chipwich is a great innovation story. Rest in delicious peace, Richard LaMatta.
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