Surprise Hits: Dippin' Dots -- the ice cream of the future has finally arrived

For two decades, Dippin' Dots has been the "ice cream of the future." Like jetpacks and flying cars, it seemed like the future would never quite arrive for the little ice-cream balls that microbiologist Curt Jones invented in 1988. For years, they were an exotic, hard-to-find treat. But recently the beads of ice cream are showing up all over the place -- at thousands of kiosks at amusement parks, theaters, malls, and stores. Not that there's anything wrong with ice cream, but it's fun to eat in the freeze-dried format.

Dippin' Dots, based in Paducah, Kentucky, is finally having its day. In 2006, MSNBC put its sales at $50 million, up 38 percent in three years. Last year, Inc. named it one of the fastest-growing private companies. Entrepreneur says it has 486 franchises, up from 420 last year.

Those little ice-cream pellets that magically melt in your mouth are everywhere. The problem for Dippin' Dots is that it's no longer the sole source of cryogenically encapsulated ice-cream pellets. Founder Jones spent millions defending his patents on the flash-freezing process. (The ice-cream is frozen at minus 420 degrees Fahrenheit and must be stored at minus 40.) But Jones lost some big cases, which opened the doors for competition from Mini Melts Inc., MolliCoolz LLC, and Kemps LLC's IttiBitz.

And the recession has not been kind to Dippin' Dots, which is far more expensive than regular ice cream and must be kept far colder than normal ice cream -- and, incidentally, colder than IttiBitz, which can be stored with standard ice cream.

But don't count Dippin' Dots out yet. The company is planning a new flash-frozen product: coffee pellets that create an instant fresh-brewed cup with hot water. Now where's my jetpack?

Be sure to check out all 20 recent products that became Surprise Hits.

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