Dreamz ice-cream

dreams

Written by Oliver Ntjenje and Rob Warmenhoven,

Pictures by Rob Warmenhoven
Updated March 2023

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Table of Contents

Introduction .......................................................................................................................................... 3
Inside Dreamz ...................................................................................................................................... 4
Strategy ................................................................................................................................................ 5
The Production..................................................................................................................................... 5
Research and Development ................................................................................................................ 6
Products and customers ...................................................................................................................... 6
HRM ..................................................................................................................................................... 7
Sales and Marketing ............................................................................................................................ 8
Competition .......................................................................................................................................... 8
Supply Chain ........................................................................................................................................ 8

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Introduction

Since 1936, Dreamz, based in Huissen (Arnhem), The Netherlands, has

been producing the tastiest ice cream using ancient confectioners
traditions and secret homemade recipes. Their speciality is to create ice
cream based on natural and healthy ingredients. Although the ice cream is
loved by consumers, admired by competitors Dreamz stayed a small
company in the world of ice-cream giants like Unilever and Nestle. As a
reaction to the entry of Mars Food to the ice-cream market, the decision
was made to sell ice-cream to all market segments by introducing 25 new
flavours in all quantities against competitive prices. This was not a
success. Their market share stayed low, and the cost level skyrocketed.
Despite these issues, Dreamz continuously tries to find new ways to be a
creative and successful company.

In 2017 the first experiments started with natural ice-cream, which was a
success and welcomed by some specific customers in the market. At the
beginning of 2018 production of the natural ice-cream was halted because
the machine that was used no longer functioned. Although in 2018 and
2019 demand for this specific type of ice-cream was growing, no
investment has been made to develop this potentially attractive market
for Dreamz. Last year a small profit was made, far less than expected.
Although sales increased, cost levels increased even more.

At the end of 2022, a Brazilian investor showed interest in investing in

Dreamz. But before he makes the decision to invest financially and buying
a new machine to produce natural ice-cream, he would like to hear a
convincing export strategy on how Dreamz wants to improve the current
situation by expanding its business to other countries.

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Inside Dreamz

Quotation from the company brochure

2020

The production location of the factory in Huissen, The Netherlands

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Strategy
The mission of Dreamz, although outdated, is still used as a starting point
for all major strategic decisions. It was formulated in 1994 by the former
director who was known for his product-driven view. The mission of
Dreamz is to produce good consumption-ice-cream for all customers, with
a prompt delivery. (Meaning short lead times for all customers). A higher
cost level than the industry average is a consequence of this strategy.
Another implication of this strategy is that they use expensive flex-
workers in case production deadlines must be met.

The Production
The factory hall of Dreamz was built in 1939, extended in 1959. At the
moment every square meter of the hall is used for storage, production or
other activities related to the production of ice-cream. As a consequence,
the floor capacity is at its maximum.

Concerning the machines, they are not state-of-the-art anymore. The

result of producing with these old machines is that around 20% of the
production is unsuitable for direct consumption. The rejected ice-creams
must be de-frozen and re-frozen one day later to make them eatable
again, extending the lead time.

Dreamz faces seasonal supply and demands problems like any other ice
cream factory. In the summer, sales peak; hence, around 65% of total ice
cream production is sold in this season, meaning 100% production
capacity is needed; in the winter, production capacity is below 15%. The
current quality manager does not want to produce too much ice cream to
spread the production to other months, because he believes that ice-
cream stored in a deep freezer negatively influences the ice-cream quality
if stored too long.

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Research and Development
The R&D department consists of one person, working for almost 32 years
in the ice-cream business. He is one of the greatest assets for Dreamz due
to his experience and knowledge. He is now 65 years old, and his
retirement date is near. All his work is handwritten and not easily
accessible to other employees.

Products and customers

Dreamz has around four regular customers and a lot of irregular
customers in the Netherlands. These irregular customers don’t buy that
often; if they buy, they buy in various quantities making it difficult to
make a proper forecast of production. In 2020 Dreamz started as a trial to
produce small amounts of organic, fair-trade ice cream for Eco-house, a
trading house in fair-trade organic food. The fair-trade market looked
promising and is completely ignored by the big companies in the ice cream
market. The fair-trade organic market can be considered a niche market
because most companies don’t want to go through the Fair-trade
certification process. It took Dreamz around two years before they were
certified by FLO (the Fair-trade Labelling Organizations International).
Dreamz can still use the fair-trade logo on their products for the coming
two years then FLO has to certify Dreamz again. At the moment small
amounts of Fairtrade Ice-cream is produced and sold.

Selling fair-trade products that are organically grown might be the future,
but this future comes with high costs (the sourcing of raw materials,
higher raw material prices, and certification costs). Back in 2020, it was
decided not to use the ‘Max Havelaar’ -Fair-trade logo on the packages;
this decision was made because the costs to use this logo on the ice
cream package increased the sales price by 2,5%. Only a small ‘Fairtrade’
certification mark is on the package.

Customer Turnover Turnover Products

from the in 2022 changes
Netherlands 2021-2022
NV superunie 2.200.000 -3.4% All kinds of ice-cream
Lidl 1.800.000 +1,3% All kinds of ice-cream
(lower quality segment)
SPAR 800.000 -4% Bulk ice-cream min. 500l per drum
IJsexpres 560.000 +3% All kinds of ice-cream
FOOX 150.000 +4% fair-trade ice-cream and small
quantities of exclusive ice-cream
others 2.000.000 +0.8% All kinds of ice-cream

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HRM
At Dreamz, different people do different things, although in
production most of the employees can perform multiple tasks. At the
beginning of 2023, more than 12 people are working for the
company. Additionally, at any given time at least 6 flex-workers are
hired with a zero-hour contract. In the summer months, this could
grow to around 16 flex-workers, primarily students. Although
somewhat motivated, these flex-workers don’t have the attitude,
knowledge and experience to make the perfect ice-cream and
therefore waste-levels peak at 35% in the summer months.

CEO
Mr. Coelho

Marketing/Sales
Finance
(vacancy )
Paul Santigo
Mr. Coelho
+ 3 employees
+ 3 employees

Operators Administration
Productiond management Logistical manager
Salem Melchizedek Fatima Oasis
Elke Mist Job Tangier

Production Administrative Support

Product Quality/R&D Warehouse
5 employees + 3-12 flexworkers 2 employees
1 employee 3 employees

Technical/machinery
maintainance
T. Reasure + 3 employees

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Sales and Marketing
Two people are responsible for sales. Mr Berry is responsible for all sales
in the ‘ North of the Netherlands’. Mr Straw takes care of the activities in
the ‘south of the Netherlands’. The river Rhine divides the Netherlands in
a Northern and Southern part. Although both work in the same office,
they work alongside each other. Both are taking care of their own sales
contacts. As in most industries, there is a complex bonus-discount system
for buying customers developed. Some customers get a standard discount
of 5%, some 7%. Some get a year-bonus, others no discounts at all, but
receive free delivery of goods. There is no agreement about the rules for
bonuses.

Competition
In the Netherlands, there are around 650 ice cream producers; most are
small or tiny producers and produce just enough to sell in their own ice-
cream parlour. (Total market share of these small parlours in the ice
cream market is below 7%) In the middle group, you find Dreamz. In
Europe, Unilever and Nestle are the market leaders.

Supply Chain
As stated, Dreamz sells its product in The Netherlands. The company
strives to deliver its products to the customer within two days after the
order has been placed. The necessary ingredients of Ice-cream are deep-
frozen fresh fruit, powdered milk and sugar. Normally these products are
one month in stock.

Warehouse Dreamz

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Appendix 1: How to make Ice Cream

Ice cream production

The production of ice cream involves mixing the ingredients together, followed by
pasteurisation. It is then homogenised, a process that allows the distribution of fat
into as many separate small fat globules as possible. After homogenization, there is a
cooling and ageing process. The mixture is left to age for 4-24 hours, and during this
time, all the dry ingredients are hydrated and the fat is crystallised. The product is
then frozen in a continuous freezer and air incorporation takes place. When the ice
cream leaves the continuous freezer at -5˚C, approximately 50% of the water is
frozen. The final process is hardening, which freezes out most of the water at -40˚C.

Ice cream is a complex product. Dairy ice cream contains milk fat, and other
components, such as proteins and carbohydrates. Sweeteners, flavourings,
emulsifiers and stabilisers are added during processing to enhance flavour, texture or
appearance. Ice cream is over 50% water, from milk or other ingredients. Air is
incorporated into the product, resulting in finely distributed air cells protected by a
layer of fat globules.

What you need

Production requirements include:

• dry store for ingredients and packaging

• mixing/ageing vat
• pasteuriser/homogeniser
• ice cream freezer – batch or continuous*
• packing machine/filler
• freezer room
• freezer store (packaged product).

*A batch freezer is ideal for small runs and for those starting out in production. A
continuous freezer, as the name suggests, works for several hours, as long as ice
cream mix is fed into the hopper.

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Ingredients

Each ingredient selected for the production of ice cream has a specific function in
terms of its effect on the final structure and eating quality of the product.

Fat (milk or vegetable)

Fat provides flavour, body and texture. The type and content of fat in ice cream is
used to classify individual products according to certain regulations. “Dairy ice cream”
must contain a minimum of 5% milk fat and should contain no other fat. “Ice cream”
must contain a minimum of 5% fat; however, it can be vegetable fat. The types of
vegetable fat most widely used are coconut oil, palm oil and palm kernel oil, or a
combination of these.

Non-fat milk solids

Non-fat milk solids include proteins (whey and casein), lactose and minerals. The
proteins contribute to the structure of the ice cream and to the incorporation of air
during processing. Ice cream must contain a minimum of 2.5% milk protein. Lactose
contributes to the sweetness and minerals are derived from the milk or cream used in
production.

Sugar and sweeteners

Sugar is added to provide sweetness and improve texture. A combination of sugars
(e.g., sucrose, glucose, fructose) is normally used to obtain the desired sweetness of
the final product. Sugars control the amount of frozen water in ice cream and
therefore, the softness of the final product. Sweeteners are also permitted for use in
ice cream production and are often used in lower- calorie products.

Flavours and colours

Flavours and colours are added to almost all ice cream to enhance the appearance
and taste of the product, but these flavours and colours can be natural in origin.

Emulsifiers and stabilisers

Emulsifiers help bind all the ingredients during the manufacturing process and
improve the whipping quality during mixing. Stabilisers improve air incorporation.
They have a positive influence on the body and texture of the ice cream, contributing
to the creaminess and melting properties of the finished product.

Other frozen dessertsFrozen yogurt: a low-fat or fat-free alternative to ice cream, but made with
yogurt

• Sherbet: a product made with a small amount of milk fat that is sweeter than ice cream, and
tends to contain citric fruit and may have a tart flavour
• Sorbet: a frozen fruit puree – no dairy products are used.

Equipment
Ice cream equipment can be expensive, with large variations in cost and product
output. Small-scale equipment, with a production capacity of 10-30kg/hour will enable

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most start-up businesses to get up and running. Larger-scale equipment may be
needed if you wish to sell as a wholesaler or have an existing customer base. Larger
ice cream equipment will allow you to freeze multiple pans of each flavour in the
same batch cycle, together with faster production. The size of the equipment you
require will depend not just on the amount of product you need to make, but also on
the available production and storage space that is available at your premises. It
would be wise to seek as much information as possible before any decision is made
with regard to purchasing.

Outside the factory(above)/Ice-cream production (below)

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Production of ice-cream

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Visitors at Dreamz ice-cream factory AKA Rob Warmenhoven and
Oliver Ntenje

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