Baskin-Robbins scooping out new territory: Soft serve

— -- Make it 31 Flavors, and a softie.

Baskin-Robbins, the world's largest ice cream chain, Thursday will announce plans to sell soft-serve ice cream, a risky marketing move that it has resisted since its founding 62 years ago.

With ice cream industry sales down in recent years — and stagnant the past decade — the chain is stretching for a way to stand out in a crowded and combative field. As summer approaches, the chain also wants a piece of one of ice cream's few growth areas. Soft-serve sales topped $4.6 billion in 2006, up from $4.3 billion in 2005, the last years tracked by the International Dairy Foods Association.

It may be hard to swallow, but soft serve represents 70% of all ice cream servings, says NPD Group, the research firm.

"This helps us overcome the veto vote, say, when a child wants a soft-serve cone," says Ken Kimmel, brand officer at Baskin-Robbins.

The soft-serve vanilla line will be Baskin-Robbins' largest product rollout in decades, Kimmel says. It was a no-brainer, he says. The chain plans to sell soft serve in all 2,400 of its U.S. stores by next spring. By summer's end, it will be in about half of its domestic locations.

The move could shake up the $13.9 billion ice cream industry and put soft-serve giants Dairy Queen brka and McDonald's mcd on notice. And it could signal forward thinking by Baskin-Robbins, which has lost market share to Cold Stone Creamery and others, says Howard Waxman, editor and publisher of the Ice Cream Reporter newsletter.

"They're trying to reclaim their position," he says. "They want people to know they're back."

But after spending six decades telling the world that hand-scooped ice cream is its specialty, Baskin-Robbins walks a fine line trying to suddenly convince folks that it's now a soft-serve specialist.

"It may be a great marketing opportunity, but it's a lousy brand strategy," says Robert Passikoff, president of Brand Keys, a consulting firm. "Selling soft serve dilutes the brand and is a credibility issue."

There's another risk: A regular soft-serve cone at Baskin-Robbins is $1.65, a lot less than the $1.99 for a hand-scooped ice cream cone.

But Kimmel says sales did well in test markets and that the majority of consumers in the tests also purchased add-ons such as sprinkles.

Baskin-Robbins has spent two years trying to modernize, including a redesign of its stores and logo. And now, along comes soft serve.

Dairy Queen is unimpressed. "Brands get themselves into trouble when they lose focus of their core equity," warns Michael Keller, who besides being chief brand officer at Dairy Queen is a former senior vice president of marketing at Baskin-Robbins.

Dairy Queen has plans to raise eyebrows next month when it becomes the first retail, food service company to mix Girl Scout cookies into its ice cream. Coming in June: The Thin Mint Cookie Blizzard.