Ice cream: Open the door to take home

Ice cream is a staple of any retail freezer aisle with the category worth £255m in the UK convenience channel alone. More than a quarter of total retail ice cream sales transacted take place through smaller stores (Nielsen 52 w/e 28 January 2017). And after a run of lacklustre or soggy summers, the warmer weather in 2016 made it a great year for ice cream.

Handheld ice creams are the 
largest segment, worth £564m, up 2.5% year on year (IRI 52 week value sales 28 January 2017 all outlets), while ice cream tubs are now worth £429m.

You can’t control the weather but, by planning ahead, you can make sure that you are in the best place to maximise sales should the sun come out.

“The ice cream category is a big category for us in the summer, providing we have a good summer,” points out Chaz Chahal, of The Forge Shop Simply Fresh in Inkberrow, Warwickshire.

“The other thing to note, which is very important, is that the rrp of branded core lines can be above £1.50 with good margins,” Chaz adds. “This means the ice cream category drives good cash margin!”

While impulse lines are big sellers, it is take home where the growth is coming from (+9%), whereas impulse is declining at -3% (Nielsen combined 20 w/e 13 August 2016 value vs year ago).

Chaz says that he stocks a very credible offer in terms of own-label value in take-home multipack formats, but he also ensures he is stocking all the big brands.

“Regardless of the size of a freezer cabinet, a good range should always consist of the core lines such as Magnum, Feast, Cornetto, Calippo and so on, complemented with either a few niche, expensive lines and some cheaper ones, too. The focus, however, should be on the core lines.”

Manufacturers are hoping to bolster the category further with innovation. Mars Ice Cream has created a new range of tubs which it hopes will benefit from the popularity of Mars and Snickers bars, the two most popular ice cream bars in the UK (IRI Convenience 52 w/e 28 January 2017). The Mars and Snickers ice creams come in a tub format (rrp £3).

Mars Ice Cream general manager Phil Shaw says: “It’s clear that tubs and share-at-home products are driving growth within the ice cream category. The Mars and Snickers brands are well-loved by consumers and lead the category in bars – so the new tubs are sure to be a winning combination.”

Mars Ice Cream is growing at 2.9% (IRI 52 week value sales 28 January 2017 All Outlets).

Jai Singh, who owns MJ’s Go Local Extra in Sheffield, says he has a much larger range of take-home products than impulse, because these tend to be most popular with his shoppers.

While Magnum Classic and White, Calippo, Cornetto, Twister and Mini Milks dominate in impulse for Jai, it’s the own-brand products that are great sellers in the take-home category, thanks to their value for money and their all-important round pound price point.

“We do a lot of Nisa’s own Heritage range in the take-home category. They do big 2ltr tubs of vanilla and raspberry ripple ice cream for £2, which fly out during the summer as people like to use these in milkshakes and smoothies. I also have four-packs of Cornetto-style cones for £1 and three-packs of Magnum-style sticks for £1. The round pound pricemark is very appealing to shoppers.”

Emma Jenkins has witnessed the same trend at her Milverton Stores in Taunton, Somerset. “I think own label dominates the take-home market. When it comes to take-home pots we do a lot of Heritage own-label ice cream. The Häagen-Dazs and Ben & Jerry’s brands tend to sell well on promotion.”

She, too, ensures that most of her impulse range is from the big brands. “With the impulse ice creams we have a 16-basket freezer which we fill with the 16 top-selling lines. However, we do tend to make space for any new variants when they first come out as they 
usually do well for a while before dropping off.”

Merchandising

Using tried-and-tested merchandising techniques can be beneficial for any retailers uncertain of which are the best lines to stock.

Unilever’s Partners for Growth provides retailers with plenty of tips on its website at www.partnersforgrowth.unilever.com on how to merchandise ranges for different sized stores. It provides the top 10 SKUs for winter and summer, as during the winter season tubs sales increase and the demand for hand held ice-cream reduces.

General Mills UK shopper marketing manager Michael Talbot points out that refreshing fruity flavours also become more popular in warmer weather, while in the winter shoppers are interested in taking ice cream home, and so tubs and richer, more indulgent flavours will be more popular.

Babar Sarfraz, owner of Premier Supersave Mini Market, Burnley, uses the Partners for Growth advice and planograms to merchandise his ice cream range. He says that the advice to stock the top-selling brands has proven the most efficient way to maximise profit in his store.

Category advice is useful, but with a category as unpredictable as ice cream retailers also need to know when good weather is expected, to help them manage orders and ensure they can meet a sudden spike in demand. Partners for Growth’s advice is to consider identifying a secondary supplier for ice cream, as stock can sell out fast in sunny weather and it’s disheartening to turn customers away because you haven’t stocked up. More than half (54%, Shopper iQ, 2014) of ice cream shoppers say their purchase was unplanned and so range visibility in store is essential.

Bep Dhaliwal, trade communications manager for Mars Ice Cream, says good merchandising starts with where the category is put in store. “Freezers should be sited in high-traffic flow areas with clear signage to indicate that the store can offer a range of ice cream lines.”

Other than simply placing the freezer where it can be seen, making shoppers aware that you sell ice cream can also boost sales dramatically – Unilever has found that on a sunny day sales can go up by almost 400%.

What’s more, the ice cream giant has found that basic presentation can have a big impact on sales. It has found that upgrading your freezer to a modern attractive design can result in a 42% sales increase, and keeping to ‘one product, one basket’ where possible helps prevent lost sales; one in 10 customers walk away from a cluttered, confusing freezer.

So while some shoppers might opt for high-value products, particularly in the take-home category, the big brands are the winners in the impulse freezer and are a great way to both boost 
margins and catch the shopper’s eye.