Thursday, October 17, 2013

Impulse Ice Cream—Make These Products More Craveable with Innovative Flavors and Eye-Catching Packaging

Mainstream retail sales (dollar and volume) of packaged ice cream and multi-packs of frozen novelties, are at best, flat. But with almost three-fifths of all ice cream and frozen novelty dollar sales coming through foodservice (up from being half of all sales less than a decade ago) according to Packaged Facts’ market research report entitled Ice Cream and Frozen Desserts in the U.S., retail marketers need to do more of what’s going on in foodservice. What is that? They need to make ice cream more craveable.   

According to the report, sales of all ice cream and frozen novelties topped $25.1 billion in 2011, up 2.4% over the previous year--representing a small upswing after two years of flat sales. Because ice cream and frozen desserts purchased in foodservice channels have a higher ticket price per serving than do their counterparts purchased in retail channels, foodservice is the larger of the two sectors in dollar terms, accounting for 57% of overall sales. Within the retail mass market for packaged products, packaged ice cream is the largest category, accounting for 55% of total retail sales, followed by frozen novelties at 36%. The fastest dollar growth, however, came from the frozen yogurt specialty segment.

In the mature U.S. marketplace for ice cream and frozen novelties, according to Packaged Facts publisher David Sprinkle, marketers, retailers and foodservice providers can grow their businesses by creating and marketing products that speak to today’s consumers on an emotional level. This includes localized strategies and niche products representing true differentiation.

This is a highly competitive market, with two multinational conglomerates--Nestlé and Unilever--at the top of the heap in the U.S., and actually throughout the world. Across most countries, nonetheless, are hundreds of regional and local competitors that often go head-to-head with the industry giants in particular geographic markets, with many local and regional brands commanding the loyalty of generations of customers. In addition, a slew of niche companies run by entrepreneurs are making more than a blip on the radar screen with innovative and truly differentiated products. Also in the mix is a generous swirl of private label, with the improved quality of store brands making them an attractive price/value alternative to premium brands.
For further information on this report, visit HERE.

Huge opportunity in single-serve novelties
There’s a niche channel that has lots of room for growth in the U.S., and that is the convenience store. I’m not just talking 7-Eleven, rather, it’s the growing channel of corner, neighborhood markets…the type of c-store that has long been the norm throughout Europe. In the U.S., such markets have been limited to the New York metro region and ethnic urban neighborhoods in larger cities such as Chicago, Los Angeles and San Francisco. But that’s changing.

Fresh, quick and local fare is helping make mom and pop-type markets (even though they are usually managed by larger corporations) become an attractive grocery destination for “tonight’s dinner.” These markets are selling prepared foods, often with a gourmet or ethnic twist, and are especially appealing to Millennials who crave convenience along with minimally processed.

According to the Culture of Millennials 2011 report from The Hartman Group Inc., Millennials eat impulsively. They try not to “really think about it too much...just eat whatever I want when I feel like it.” They are also less likely to have home-cooked meals and they like to try new kinds of ethnic cuisine.

Millennials are eclipsing Baby Boomers in numbers and importance. As a demographic group, Millennials (27% of the population) are more numerous than Boomers and are projected to outnumber non-Millennials by 2030. Their estimated $1.3 trillion in current consumer spending is only expected to increase as well. That’s a whole lot of purchasing power.

How can ice cream and frozen novelties get their fair share of the Millennial’s pocket money?

It’s all about impulse and quality. And this is not likely to change, even when the Millennial gets 2.2 kids and moves to the white picket fenced house in the burbs. A family-sized (half-gallon to 1.5 quart) container of ice cream or a multi-pack of novelties will likely not be on their shopping list. A gourmet pint, made locally or with a philanthropic positioning, as dessert for that evening’s family dinner is possible. But even more likely will be a walk down to the corner store to either get a scoop of freshly made gelato, a premium single-serve novelty from the self-serve case or a soft-serve fro yo with topping bar.

According to research from NACS: The Association for Convenience & Fuel Retailing, which just held its annual NACS Show in Atlanta this week, ice cream and frozen novelties were 1.08% of total in-store c-store sales in 2012, with average single store dollar sales for these products being $25,584. This represents a 4.15% increase from 2011. With an impressive nearly 96% of all c-stores selling ice cream and frozen novelties, this growth is expected to be even greater from 2012 to 2013. Is your product in this channel?

A number of impulse ice creams debuted at NACS. They were not your 99 cents strawberry shortcake stick ice cream bar or malt cup. They were products with a premium positioning. The formulations and the packaging spoke to Millennials. Check them out.

Snoqualmie Ice Cream was founded in 1997 by Barry and Shahnaz Bettinger and is located in Maltby, WA. The location in Maltby is home to a fully sustainable manufacturing plant that creates ice cream for the established in-house brand of pints, custom ice cream mix and other custom flavors for ice cream shops and restaurants in the Northwest. Snoqualmie Ice Cream never compromises on ingredients and handcrafts its ice cream in small batches. Most ingredients come from the company’s mini-farm and other local sources, which ensure a fresh “true pint.”

At NACS, the company introduced single-serve 4.69-oz cups of its five top-selling pint flavors: Cascade Mountain Blackberry, Danish Vanilla Bean, Island Coconut, Mint Chocolate Chip and Mukilteo Mudd. For more information, visit HERE.
Mars debuted Starburst Sorbet Bars at NACS, which will hit freezers in February 2014. Available in 2.6-oz singles, this new item rounds out Mars’ frozen novelty portfolio and gives consumers an alternative to traditional ice cream products. The suggested retail price is $1.29.

In case you missed Wells Enterprises’ south-of-the-border line of flavored ice creams at NACS, you can read more HERE.

The Hispanic-inspired flavored iced creams come in four flavors. They are:
Coconut Mango Swirl: Coconut ice cream with mango sorbet
Cuatro Leches: Homemade vanilla ice cream with tres leches cake pieces and swirls of dulce de leche
Flan: Flan-flavored ice cream with swirls of caramelized sugar
Hot Chocolate con Churros: Cinnamon spiced chocolate ice cream with cinnamon sugar churro pieces.

These new flavors come in pint and 1.75-quart containers and will be available in March 2014. 
They are very much on target with today’s ice cream flavor trends. Read “Flavor Trends for Frozen and Refrigerated Dairy Desserts” HERE.

At Expo East in Baltimore about a month ago, Gelato Fiasco, a Maine-based gelato scoop shop concept showcased its best-selling flavors in pint containers that are now available for national distribution. Varieties include Maine Wild Blueberry Crisp Gelato and Strawberry Balsamic Sorbetto.
For more information, visit HERE.
Rich Products introduces Jon Donaire Greek Frozen Yogurt Cakes and Cupcakes. Infused with thick and creamy Greek frozen yogurt, the new cakes and cupcakes are designed to appeal to a youthful audience seeking indulgent flavors, more-healthful ingredients and everyday luxuries.

Rich’s is first to the marketplace with a novel portfolio of three offerings: Chocolate Cake, Strawberry Granola Cake and Mixed Berry Cupcake. To read more, visit HERE.

 At the Anuga expo earlier this month, Romania-based Macromex SRL showcased its La Strada concept. The ice cream flavors were inspired by the fashion world and carry the tagline of “contemporary gelato.”
La Strada is a premium line of ice creams aimed at a trend-setting community, the Millennials. The company’s brand mission is to “evolve from eating ice cream to wearing the ice cream packs on the street. They are turning the sidewalk into a catwalk and the product into a fashion icon.”

The company offers a unique set of merchandising tools and promotional materials for the trade to help sell this Red Carpet dessert. For more information, visit HERE.

Italy’s Tonitto, a manufacturer of premium gelato since 1939, used Anuga to debut its new single-serve line of “il gelatino” cups, which include a spoon in the lid. The mini cups use high-quality graphics on the cups to communicate the premium ingredients inside.
For more information, visit HERE.

All of these products are the beginning of a new era of ice cream and frozen novelties designed to appeal to the Millennial consumer. Is your company ready to meet the needs of this booming demographic? 

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