As we enter a key season for ice cream sales, suppliers are pulling out all the stops to get consumers reaching for their wallets this summer.
A quick glance at the latest ice cream data and you’ll see that it grew in the convenience sector by 1.3% year on year (IRI December 25, 2010). But break down the figures and it seems not every sub-category is on the sunny side.
One of the winners was dessert ice cream, such as tubs of Häagen-Dazs and Ben & Jerry’s, which grew by 7%. “The luxury sub-category is not affected by the seasons, as people pick up ice cream to consume as a dessert all year round,” says General Mills UK marketing director Ed Culf. “In cash-conscious times, consumers are more likely to purchase luxury ice cream as a treat to enjoy at home, instead of going out to eat, and we have certainly felt the impact of this at Häagen-Dazs.”
Merchandising: top tips
Make sure people know you stock ice cream use plenty of pos both inside and out of the store to signpost the area
Don’t be tempted to put newspapers on top of the cabinet this is the window to your sales
Ensure that every product price is visible either on a backboard or window stickers. With so many frequent promotions it can be tricky to keep on top of your ice cream prices, but customers can be put off buying if they’re not sure they have enough change
Presentation is everything, so take the time to ensure your products are faced up. Suppliers spend millions of pounds on packaging designs, but if you just tip a box of ice cream into the freezer without making sure products are facing the right way, it’s money and valuable sales down the drain.
But while luxury ice creams benefited from year-round sales, handheld singles saw a drop of 4.8%. “We didn’t have a good August, which is reflected in the impulse sales,” says Unilever senior category manager, ice cream, Mel Rolfe. “We haven’t had a scorching summer since 2006 and the four seasons since have been tough.”
But ice cream suppliers remain unperturbed and there is a wealth of activity in the handheld sector. Top-sellers Magnum Classic and Magnum White will receive a boost with an on-pack promotion where consumers can win a ‘day of pure pleasure’, such as a spa visit.
Unilever is also launching two new Magnum Origins variants: Magnum Equador; and Magnum Ghana. The firm will be investing £2.6m in TV, cinema and outdoor activity to support the launch in April.
Also on TV screens over the summer will be Cornetto Enigma the cone which boasts sauce from top to tip. Unilever is launching a new Chocolate Caramel variant in multipack format and the brand will be supported by a £2.5m marketing campaign including TV, digital and mobile activity.
Another luxury cone hoping to get consumers’ mouths watering is Thorntons Toffee Trio Cone. It combines a chocolate dipped waffle cone with dairy toffee ice cream, toffee sauce and toffee pieces, and retails at £1.75.
And not wanting to miss out, Fredericks Dairies is introducing two successful Cadbury brands to the impulse market: Cadbury’s Caramel Cone, which has already seen multipack success; and brand new launch Wispa ice cream bar.
“It’s the biggest launch in the ice cream sector for 2011,” says managing director David Taylor. The ice cream bar has a texture that is less dense than standard, and contains Wispa chunks.
But Wispa isn’t the only mainstream confectionery brand on the circuit. R&R is hoping to make waves with Nestlé’s Potz range. Available in 220ml smaller- serve ice cream tubs with an rrp of £1.69, the range consists of four variants: Aero; Smarties; Rolo; and Toffee Crisp.
By paying close attention to weather forecasts retailers can increase sales dramatically, claims Kelly’s of Cornwall’s Nina Lumsden. “Independent retailers can be flexible with last-minute weather trends store layouts and pos around ice cream can be adapted for when the weather peaks,” she says.
But a number of retailers are missing out because they are failing to refer to weather forecasts. “In 2010 c-stores will have benefitted from sun in early summer, but when hot weather hit many c-stores sold out quickly and there would have been supply issues,” says Loseley managing director Neil Burchall. “Retailers should definitely keep an eye on the weather and stock levels.”
Forecasting consultancy Netweather offers a personalised service for independent retailers. Director Paul Michaelwaite notes that it’s important not to generalise about the weather because sunshine does not automatically equal ice cream sales. “Sales of ice cream plateau at 23°C and ice lollies take off. Plus a strong wind on a sunny day could have an impact on sales.”
R&R is also hoping to score with its own brand, Spoonys, which is a soft ice cream with added extras. Originally priced at £3.99, the products are now available pricemarked at £2 for 500ml. The firm claims that it isn’t competing with super-premium brands such as Häagen-Dazs or Ben & Jerry’s, but instead targeting families looking to trade up from plain ice cream to more indulgent products containing ripples and sweet additions.
Over in the luxury sub-category, much of the focus is on classic flavours. “By concentrating efforts and spend on segments and SKUs that have a proven track record of success such as chocolate, which is the biggest flavour segment within luxury ice cream independent retailers can entice shoppers to the frozen aisle and encourage further purchasing within the wider category,” says General Mills’ Culf.
Häagen-Dazs invested heavily in 2010 to build a range of three SKUs Choc Choc Chip, Chocolate, Pralines & Caramel and Belgian Chocolate, which it claims has helped to increase its market share of chocolate.
Kelly’s of Cornwall is also going cocoa with a Chocolate Clotted Cream ice cream. The new variant is made with Cornish whole milk, Cornish clotted cream and dark chocolate flakes.
Meanwhile, Loseley has been busy improving its range of traditional variants. Strawberries & Cream now has more strawberries; Truly Toffee’s vanilla ice cream with toffee swirls has been substituted for toffee ice cream with toffee swirls; and the lemon swirl in Luscious Lemon has been upgraded to lemon curd sauce.
But it’s not all about traditional flavours. Jude’s Ice Cream is feeding consumer demand for seasonal produce with new launches for spring, including Rhubarb ice cream and a Blood Orange sorbet. Alex Mezger, son of company founder Jude and managing director, says: “C-stores can afford to be more experimental with the flavours they stock.”
Another less conventional launch is Ben & Jerry’s Coconutterly Fair, which is being launched to celebrate the brand’s transition to 100% Fairtrade ingredients. But while Ben & Jerry’s ethical stance is applauded, its pricing strategy doesn’t always impress.
“There is an element of de-valuing with brands such as Ben and Jerry’s, with their average price point now having dropped to under £2.50 for a product that retails at up to £5,” says Fredericks Dairies marketing manager Ed Jones.
“They’re selling a lot more tubs, so there’s a higher penetration and weight of purchase, but it saturates the market to an extent,” adds Fredericks’ Taylor. “Consumers stock up on promotional packs and don’t buy at full-price.”
Retailers’ veiw
“In our standard freezer we sell Häagen- Dazs, Ben & Jerry’s and some Spar own brand products. We also have Antonio Federici at £4.59 for a 500ml tub. We like to keep our tubs under £5. We looked at selling £8 tubs, but they’d be out of many people’s price range.
“We have a freezer by the fine wines and our new pizzeria, where we sell Jude’s, September Organics and Roskilly’s ice cream.
“In the premium freezer we’ll have more unusual flavours, such as pistachio, chilli chocolate and blood orange crush sorbet. People will try them; they often buy one they know and one more unusual. We got mince pie & whiskey ice cream in over Christmas, which sold really well.
“We have another ice cream freezer at the front of the store with Magnum and Cornetto, Feast, Calippo and Twisters. Even when it’s not that warm we still sell a lot in the summer.
“For the first time last year, we rented an ice cream machine over June, July, August and September. The ingredients hardly cost anything and we sell the cones at £1.20, plus 10p for toppings. The machine costs £120 a month and on a sunny Saturday we’d sell well over 100. We put an 8ft cone outside so everyone knows what’s available.”
James Brundle, Village Stores (Spar), Walthamstow, London
Loseley managing director Neil Burchall agrees: “Ben & Jerry’s is damaging the market. Discounting bumps volume and market share, but all you’re doing is selling to promotion junkies. Ben & Jerry’s is doing it because Häagen-Dazs is, and vice-versa.”
He claims that promotions are very important in gaining trial and building awareness, but that bogof and half-price discounts are not the way to go. “We have to be careful about devaluing the market we don’t want it to be like the cheese market where there is less loyalty.”
Instead of deep discounts, Fredericks recommends multi-buy promotions to draw customer interest without taking value from the category.
Unilever concedes that there is a limit to how far deep-cut deals can go. “Deep promotions aren’t sustainable. We don’t want to damage the equity of the Ben & Jerry’s brand,” says Rolfe.
However, she claims that Häagen-Dazs has become more competitive this year than Ben & Jerry’s, and that deep discounts have not harmed the market. “We haven’t seen an adverse impact. If anything, it encourages people to buy into the category.”
Nevertheless, Unilever is looking to distance itself from deep cuts. “We’re looking to change our promotions going forward moving away from deep discounts and utilising more multi-buys.”
With signs that the deep discounting looks set to slow, and with suppliers pouring plenty of cash into their brands, it seems the ice cream market is headed for another successful year. Rolfe is hopeful that ice cream will continue to perform, even if the weather doesn’t. “It’s a tough trading environment for all retailers, but the great thing about ice-cream is there’s something for everyone it transcends across lots of different shopper groups it’s very resilient.”
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