1 in 3 Americans are at risk of lactose intolerance. A pair of millennial women invented an ice cream just for them, and now their bootstrapped dessert is in 1000 stores, including Whole Foods.
- Katy Flannery is one of nearly 120 million other Americans with lactose intolerance, where eating typical dairy products like ice cream often results in painful consequences.
- After years of trial and error, she and college friend Gwen Burlingame created a recipe for premium-grade dairy ice cream with natural ingredients and no lactose.
- Flannery and Burlingame founded Beckon ice cream and scaled up from local farmers markets to national distribution in over 1,000 stores including Whole Foods and several regional grocers.
- Flannery and Burlingame shared with Business Insider how their past career experiences - in pediatric nursing and in marketing, respectively - help them tackle the challenges of bootstrapping their business.
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One in three Americans are not able to fully digest the lactose sugar compound, and those numbers are trending up. People of non-European descent tend to have higher rates of lactose intolerance, and they represent some of the fastest growing demographic groups in the US.
Katy Flannery was 18 when she developed lactose intolerance that forced her to choose between enjoying her favorite dessert or going out with friends. She couldn't have both.
Brands like Lactaid and Breyers weren't a suitable substitute, so she teamed up with college friend Gwen Burlingame to invent a premium ice cream made with all-natural ingredients and no lactose.
They named the resulting product Minus the Moo and sold at local farmers markets for 2 years while each worked full-time jobs in medicine and corporate marketing.
Their local Whole Foods picked up Minus the Moo in 2016, and they left their jobs to pursue the business full time.
Last year they rebranded as Beckon and scaled up to national distribution online and in over 1,000 stores across the US.
Ice cream is an $11 billion industry, according to the International Dairy Foods Association, but there are still very few dairy-based lactose-free ice creams. Those with lactose intolerance typically opt for plant-based alternatives made with soy, coconut, or rice milk.
That looked like an opportunity to Flannery. "As a consumer, why can't I have exactly what I want?" she asked.
Business Insider spoke with the team to hear how they identified a problem and used their past career experience to guide their business strategy. BI also sampled a bowl of their vanilla ice cream and found it to be indistinguishable from top-shelf traditional formulations.
Making sacrifices in the pursuit of no-compromises
The first problem for Flannery was that every alternative felt like a compromise. Nothing she could find on the store shelves had the taste and texture she loved about premium ice-cream brands.
"If it's coconut based or almond based, or you can always kind of pick up on that other flavor. And the taste and texture is just different," she said. "I wanted a traditional premium ice cream that use high quality ingredients in something that wasn't stigmatizing."
Working full time as a pediatric ICU nurse, she spent her days and nights off-duty mixing and testing different recipes and failing repeatedly.
"My first batch was really icy and it didn't have the same like taste and texture as a traditional premium ice cream," she said "That's what all the innovation has been around to have that same mouth feel, and the same consistency and freezing properties."
Burlingame was at that time living and working for L'Oreal in New York City. On weekends she would take the Megabus to Boston to work with Flannery.
The duo would prep all Saturday in Flannery's kitchen and sell all day Sunday at farmers markets. Gwen would then board an evening bus to get back to work in New York on Monday.
Before the business turned a profit, Flannery relied on a special "life-jump" savings account and Burlingame nearly maxed out her credit cards.
"You have to be ready to say goodbye to anything extra, which is what we've been doing," Flannery said. "If you're willing to take the Megabus every weekend, this might be for you."
Stalking the shelves
Neither Flannery nor Burlingame had food industry experience, so the pair turned roamed grocery aisles for inspiration.
"We went to Whole Foods to walk around and make notes of all of these small brands that we admired," Flannery said.
From those notes, the team looked up contact info for their favorite companies and started sending emails and phone calls. Many of the entrepreneurs they cold-called were generous with their time and offered useful tips.
Boston's entrepreneurship scene is home to many highly competitive pitch contests, and Flannery and Burlingame won several, including pitch slams with NOSH, the Natural Organic Sustainable Healthy food industry group, and Sam Adams' Brewing the American Dream. They also garnered recognition from the New England Business Association and SCORE.
The real value of the competitions was the networking opportunities it afforded them, like mentorship from John Leahy, former President and COO of Kind Snacks.
"There's people from each of these different opportunities that have then been able to impart wisdom, so that's been super helpful," Burlingame said.
A big part of their business strategy comes down to listening to their customers, especially about flavors that folks with lactose intolerance miss most.
"It goes to that idea of nostalgia, like, what are the things that people are really craving?" Burlingame said.
Flannery described another benefit to their approach to customer engagement.
"Pretty much every day, we'll get an email from a customer or a direct message on Instagram, where they'll express to us everything that we're fighting for. And that's just been so reinvigorating," she said.
Some of the best things in life (and business) are free
Flannery and Burlingame's days of Megabus austerity may be behind them, but that hasn't dampened their appreciation for the cheap but effective tools and resources they used with a shoestring budget.
Flannery captures fleeting thoughts in her Moleskine notebooks that she calls "Think Tanks," as she has since she worked 12-hour shifts three days per week at the children's hospital. Burlingame prefers to be paper-free, and is an avid user of Google's G-suite products.
And while Burlingame has a degree in marketing, Flannery says, "I got my MBA from Investopedia and Shark Tank."
Both women are voracious readers and listeners of books and podcasts, and frequently use their Boston Public Library memberships to access the digital resources on the library apps Overdrive and Libby.
"Learn quickly all the things that you have to learn, but there has to be some sort of like gut instinct," Flannery said.
Flannery sees parallels between her time working in intensive-care and starting a business. Ice cream is obviously not a life-or-death business, but in each case she says you must process rapidly changing information to anticipate difficulty and respond to surprises.
Having perfected their recipe for lactose-free ice cream, Flannery and Burlingame say their business offers something that can't be easily replicated.
"We have a lot of empathy for the customer because we are the customer," Burlingame said. "I think that kind of authenticity to a brand is really important nowadays."
"Yeah," Flannery added, "the whole package can't be made up in a lab."