If you’re from Texas, you know this about Blue Bell Creameries ice cream: It’s a big deal. When it comes to state pride, it’s up there with BBQ, big oil, football and being able to withstand heat so God awful you can fry an egg on the sidewalk at 8 a.m.
As someone who spent the first 10 years of her life in Houston, the news that Blue Bell was recalling its beloved sweet treats in March was a shot to my soul that’s still deep in the heart of Texas. How could this beloved brand have become tainted?
This situation has indeed been a nightmare for food manufacturers and Blue Bell consumers alike. In March, Blue Bell issued a recall for products — the first recall in its 108-year history. A handful of its products have been linked to 10 listeria cases and three deaths across several southern states. Then in May, after suspending production and working to pinpoint the source of the outbreak, Blue Bell laid off about 37 percent of its workforce, or about 1,450 workers.
In the wake of the recall, the future of Blue Bell, which is still off the shelves, has felt bleak. At least it did, until a few days ago when Fort Worth billionaire Sid Bass announced he’s investing an undisclosed amount in the millions to help get this marred company back on its feet. So, just who is this dollar-bill-caped crusader? And why would he throw his financial might behind a company that hasn’t sold a single scoop in months?
One of four brothers who inherited a fortune from his oil-tycoon uncle, Bass is a career investor who’s worth about $2 billion, according to Forbes. Most of his investments have been in oil and gas, but from 1984 to 2001, he was also one of the largest shareholders in The Walt Disney Co. He was last ranked the 324th wealthiest person in the U.S.
He’s also a big-time philanthropist who donated $20 million to Yale in 1990 and $25 million to the Metropolitan Opera in 2006.
With deep pockets and presumably that Texan sense of pride in Blue Bell, it seems logical to deduce that Bass is bailing the company out to help restore this piece of state glory. But in a recent Dallas Morning News report, a chief investment officer from Dallas said it isn’t likely an investor of Bass’ magnitude would make a business decision for sentimental reasons.
Instead, Bass is probably looking to fuel a profitable comeback.
“A distressed situation very often can create opportunities. I’m sure he didn’t just throw money into it because it’s an iconic Texas brand,” Mark Freeman said.
Blue Bell’s revenue from last year was estimated to be $680 million, up from $620.7 million the previous year. But it’s estimated that the company has lost about $130 million because of the recall and because sales are not expected to resume soon, the total loss could be closer to $180 million.
So what is Bass banking on?
If it’s brand loyalty, he’s likely to cash in. Since the recall, Blue Bell’s Facebook page has been an outpouring of support from fans saying they’re eager for the frozen confections to be in stores again.
And although reports recently surfaced saying Blue Bell attempted to quietly pull some of its products from stores because of listeria before it issued a recall, leading to criticism from some food safety experts, others have praised the company for its transparent handling of the whole affair.
A few days ago, Blue Bell said they would soon start trial runs of ice cream production in its Alabama plant. If Blue Bell can prove that its products are once again safe, its popularity could lead to a rush of sales once they’re back in stores — assuming, that is, memories of listeria melt as quickly as an ice cream cone in the Texas heat.
WHAT DO YOU THINK?
Will this investment pay off for Bass? Will Blue Bell pull off a major comeback? Let us know what you think by commenting below.