The youngest company-founder to endow a scholarship fund at Penn, alumnus Jeremy Kraus has the rest of the ice cream industry paying close attention to his quirky flavors.
Photo by Candace diCarlo
By the time Jeremy Kraus graduated from the Wharton School in 1998, he was already founder and president of his own company, Jeremys MicroBatch Ice Creams.
Since then hes been building a Gen-Y empire, based on the world-view that change can be really, really good, especially if it makes ice cream taste like a cinnamon bun or a bottle of stout.
At 24, Kraus, who was raised in Dallas, is the youngest person to have taken a non-dot-com company public.
Kraus is also the youngest company-founder to endow a scholarship fund at Penn. The Jeremys MicroBatch Ice Creams Scholarship will be awarded for the first time next fall. Begun with a $67,000 donation from Krauss company, and matched by $33,000 in donations from Penns trustees, it will provide a partial scholarship to a student with the entrepreneurial spirit who might not have the means to attend Penn, Kraus said.
Krauss business partner is Sam Cohen (W98), a Wharton classmate who came to Penn from Emerson, N.J. They work in the University City Science Center, in a warren of minimalist offices where movie posters are standard decor. Almost everyone on the 16-member professional staff is young enough to think of Cyndi Lauper as an older woman. And the companys guerrilla marketing staff, which taste-tests ice cream samples in target areas, consists of college students.
We interviewed Kraus and Cohen separately, but their answers came together nicely in a single piece.
Q. Where did you get the idea for your company?
A. Kraus: I needed to produce a research paper for a new business concept, for the entrepreneurial department, for Wharton. I was intrigued by the success of microbrew beers.
Q. How did you get started?
A. Kraus: I started with the yellow pages, [reaching top people at the Bassetts and Jack and Jill ice cream corporations]. I asked a lot of questions, and not to be overly simplistic just sort of jumped into it, made a lot of mistakes, started on a shoestring budget and borrowed money as needed from friends and family.
Q. Before you became business partners, you were good friends. Did
that help in the business world?
A. Cohen: We knew each others strengths and weaknesses before we went into it. My father is an attorney and my mother is a school teacher I didnt have the sort of entrepreneurial background that Jeremy did. But I wanted to be an entrepreneur.
Q. And Jeremy Krauss family?
A. Kraus: Both my father and my uncles are independent entrepreneurs. [My father] was a distributor of surgical supplies, predominantly orthopedic supplies.
Q. What does your father think of Jeremys MicroBatch?
A. Kraus: He thinks its a good learning experience for me. He cannot believe that I built an ice cream company and took it public.
Q. How did you feel when your company opened on the stock market?
A. Kraus: Relief. That was the easy part. The hard part was in the year prior to that: Putting the company together, answering the question [of investors]: Why should we give a 23-year-old millions of dollars? for an ice cream company, no less.
Q. What is your company worth?
A. Cohen: The day we went public, the company was worth $18 million. Obviously, our mission is to increase it. Its not what we focus on, but we do expect it to change.
Q. What sets your company apart from other ice cream manufacturers?
A. Kraus: We make extremely high-quality gourmet ice cream, produced in limited-edition batches [of 120 gallons each] thats very important. And we make flavors new we make the industrys only beer ice cream, Vanilla Cream Stout. We make the industrys only vanilla caffeinated ice cream, called Wired; the only Viagra-inspired ice cream, called Purple Passion Pills; and a Triple-Espresso, one that is probably the strongest coffee flavor on the market. The ideas come from the staff. We have Jessica Riley [listed in corporate brochures as the dairy queen] whos in charge of whittling down the list.
Q. You change your line-up of flavors frequently?
A. Kraus: At least once a year, we significantly change them. We believe we can catch lightning in a bottle. Thats why were discontinuing Cinnamon Bun [a flavor that is now being marketed by other manufacturers]. Its a game of follow the leader, and were the leader or at least, were emerging as the leader. This fall will probably see two new flavors.
Q. What about customers who develop a passion for a flavor that disappears?
A. Cohen: Maybe itll come back.
Q. What were your original flavors?
A. Kraus: Our first flavors we discontinued very quickly, because they werent very good. [Laughter] The ideas were good. The flavors were terrible. Coffee with chocolate chips, chocolate with peanut brittle, and vanilla raisin.
Q. How old is the staff?
A. Cohen: The average is 25 around here. So its a very loose and amusing environment at times.
Q. Why do you manufacture your ice cream in the Chicago area?
A. Kraus: Because its the best deal. The company is based in Philadelphia, and the product is made in Chicago, and most of our business is in New York and New England.
Were in about 5,000 stores, and we have about 26 distributors. [New England and the New York area] account for 90 percent of the companys sales.
Q. Those are good markets.
A. Kraus: New England is the nations best per capita pint market. And New York is the best pint market. Philadelphia is not a good market. It doesnt sell a lot of pints, it sells a lot of half-gallons.
Q. What do you expect to be doing five years from now?
A. Kraus: Im a career entrepreneur, so likely Ill be doing something different. Not that I dont enjoy this business. I do.
Its just that my skills are transferable.
I know how to sell. I know how to market anything you want. Its not the product. Its the process. Thats a key part of understanding me.
Cohen: Ill probably move on to something else. And then, probably, move on to something else again.
Kraus: Were in the brand-management business, basically. Calling this an ice cream company is like saying Calvin Klein and Ralph Lauren are in the rag business.
Q. What role has Penn played in the success of your company?
A. Cohen: Its certainly a place that attracts wonderful people. It allowed us to have a lot of people who shared their ideas with us professors who shaped our expectations. Its a great hive of mental activity.
Q. And the entrepreneurial scholarship youve endowed?
A. Kraus: There was a certain type of student that I felt, perhaps, might be underrepresented or underrecognized. Id like to encourage the entrepreneurial spirit.
Q. And being the youngest alumnus to set up a scholarship fund?
A. Kraus: I was not aware of that when I did it.
Q. Whats your personal philosophy of life?
A. Kraus: To go in the opposite direction of the pack.
Cohen: If its not going to be the best, its not worth it.
Q. Do you like ice cream?
A. Cohen: I love ice cream. I love everything thats bad for me.
Kraus: I probably put on 40 pounds when I got into this business. But then I realized its always there.
Originally published on May 18, 2000