Ice cream has served Frank Frederick well. His luxury apartment in London’s Knightsbridge (he has another home in Cheshire) is a stone’s throw from Harrods and the place is every inch a bachelor pad, with a flat-screen TV dominating one wall and a Toys for Girls luxury gift book on a low coffee table (‘If women didn’t exist, all the money in the world would have no meaning’ reads the hardback’s strapline).
With his sculpted silvery hair and permatan, it’s evident that the 48-year-old, who has been arrested for racing fast cars in the US, likes to enjoy himself. ‘I’m a single man,’ he says with a grin, but then he’s quick to point out that the fun is mostly for the weekends and that his work ethic and commitment to the family business, set up by his grandfather Antonio, is as strong as ever.
‘I was born and bred into ice cream,’ he recounts, going on to explain that his grandfather and father created the classic small business with a corner shop and a number of ice cream vans. The business gave Frederick direction right from the early days. ‘School was a waste of time,’ he says. ‘I was lazy. I hated it and was always in trouble – an academic zero who was moderately streetwise.’ His education came from driving an ice cream van around the mean streets of Lancashire for five years. ‘There were ice cream wars, so I ended up fighting over pitches and territories. I was locked up and beaten to a pulp once,’ he recalls. ‘I thought there must be a better way to earn a living than this.’
Calling a different tune
In the late seventies, he stepped into the hot seat of Fredericks Dairies with his brother Philip by his side. ‘We took over the business with an annual turnover of £60,000, and within five years it was up to £500,000,’ he says. The growth came from his decision to move into wholesale. ‘I started mass-producing choc ices. There were already other companies doing it, such as Wall’s and Lyons Maid, but we did it better and faster than anyone else. When everyone else was still working eight hours a day, we were working round the clock.
‘The first machine I bought cost me £150,000. I knew that if I never sold a single choc ice, I could pay it off in five years with the existing business’s profits, which is what I told the bank. I paid it off in three months and bought another, bigger machine for £250,000 and that was the launch pad for me. I was doubling my turnover each year for a few years in the 1980s. By 1987, I was netting £2 million.’
‘We bought the biggest machines and worked around the clock’
The early period of the 1980s wasn’t known for flourishing entrepreneurialism. ‘Everybody else was going bust,’ he recounts, which puzzled him at the time. ‘With hindsight, I can see why we made a fortune as we took very little money out and ploughed everything we made back into the company. We bought the biggest and best machines and worked around the clock. If a retailer told me to jump, I’d say: “How high?” At the end of the day, they had big money to spend so we danced to their tune. The business always came first.’
Today, the business, which is based in Skelmersdale in Lancashire, has sales of £40 million and 300 staff. ‘We are a charitable organisation,’ he says, tongue firmly in cheek. ‘We like to give our profits to the impoverished supermarket chains – our job is to help Tesco eke out a living. Yes, we are profitable, but we don’t make a lot of money, because I believe in quality and I pay my people too well.’
There are white label deals with Del Monte and Lyle’s Golden Syrup Ice Cream, but it was a deal with Cadbury ten years ago that saw sales rocket. ‘I was so privileged to be asked by Cadbury,’ he reflects. ‘It’s a serious brand. Up until then, everything we had done had been choc ices – you know, the cheap ten pack ices you were brought up with as a kid – that was me. So when Cadbury came along and said they would be interested in doing something, I fell at their feet.’
The deal continues to form a significant slice of the business, making up 75 per cent of sales. While Frederick accepts that the supermarkets and larger retailers are ‘a fact of life’, he is less complimentary about his two main competitors in the UK, namely Unilever, which owns Wall’s, and Nestle-owned R&R.
‘We don’t have the budget to bombard and hypnotise people with advertisements on TV about how a product tastes. I’ve got to make it good first time. Larger organisations may get away with not getting the product right initially because they have powerful, corporate brands; I can’t do that. We are smaller, so we have to be more reactive, creative and flexible, as we don’t have the scale and size whereby people have to buy off me, whereas supermarkets do have to buy from Wall’s.’
An Italian job
The company is moving into new territory with its own branded ice cream: Antonio Federici Gelato Italiano. ‘My success in business was because of own label choc ices, which was a market we dominated, and then we started to help develop other people’s brands. But these companies can change their direction and decide to go elsewhere, and then I could be left hanging in the breeze.’
If it works, the branded ice cream will help spread revenue streams and make the business more robust. ‘There has got to be a market for a quality ice cream brand,’ he states. ‘We have these fucking American ones full of chunky monkey nuts – let’s make some good, real-quality ice cream from the Italians who make it the best anyway.’ At this point, he goes to the freezer and pulls out a tub of the ice cream, puts it in the microwave briefly to soften and then hands me a tub with a spoon. ‘Taste it,’ he instructs. ‘This has only been out for a few weeks in this country and it’s doing remarkably well.’ He adds that the product is named after his grandfather, who trekked over from Italy at the turn of the 20th century.
Frederick doesn’t see any additional pressure for the business from the recession. ‘Ice cream is ice cream,’ he says. ‘Häagen-Dazs was launched in the last recession of 1989. It’s actually a perfect time as people are staying in more.’ In regards to finances, he observes that ‘everything is owned by my brother and me. We don’t have any debt. All the machines and buildings are ours, so we are in effect our own landlords. I’ve never had a cheque bounce in my life’.
There is also the experience and knowledge gained from seeing his father and grandfather take the business through the good times and bad. ‘They had a basic idiom that I still bang on about: “If the money ain’t coming in, it’s not going out.” It’s as simple as that. If sales are down, somebody has to go.’
All of the company’s growth has been organic. Going public or taking VC money has never interested him either. ‘Why would I do it?’ he asks. ‘What for? Ben & Jerry’s was sold to Unilever and these big companies buy interesting brands and pretend they are interested in the independents, but they’re not. It’s now part of a multi-national conglomerate; slowly, it’s been integrated into that structure.’
Fredericks Dairies is a private company to the core. ‘I can batten down the hatches,’ he states. ‘If a company is owned by venture capitalists, then the VCs want their money.’ He prefers to be answerable to no one but himself and that, he admits, has made him tough to work around. ‘I used to have a hire and fire reputation. I used to be terrible.’
He confesses to having little time for the bureaucratic intricacies of HR when it comes to dismissals. ‘People tend to fire people too late, preferring to give someone the benefit of the doubt. I think you should just do it, otherwise it is just a festering sore on the business. As soon as you feel it’s right to get rid of someone, take the pain and pay the money.’
By Frederick’s own admission, ‘he is not the best manager in the world’. He sees himself as the typical entrepreneur who comes up with the ideas and drives the company into new territory. ‘I’m a risk taker,’ he continues. ‘The everyday stuff bores me. It always has. I need good sales people, an operations person to reduce my costs to make me more efficient than anyone else on the planet, and a numbers person who knows that two plus two equals four.’
The ‘take home’ ice cream market is worth £604 million in the UK, with Fredericks Dairies holding a 7.7 per cent share. The competition from the larger ice cream manufacturers is growing stronger and for any independent company to maintain its market share, or even grow, is not going to be easy. He may be egoistic and old school in his outlook, but he evidently takes pride in the company that has, after all, lasted for three generations and is part of who he is.
‘I do live for my business,’ he says. ‘It is driven by passion. I still feel as hungry and aggressive as ever. I would put my house on the line – I’m not at the stage in my life where I would worry about losing my house for the business – fuck that. I’d lose it tomorrow.’
Although you sense it wouldn’t be the Knightsbridge pad he’d put on the line first.
Marital status: ‘Very’ single
Favourite restaurant: Cipriani, Mayfair
Greatest indulgence: ‘Girls under 30’
Pet hate: ‘Anything to do with restricting speed limits’
Motto: ‘On my gravestone I’ll probably have: “The girls he liked, didn’t like him. The girls who liked him, he didn’t like. He died alone”’