Ice cream: the short but sweet seasonal winner
Short and sweet are probably the best two words to sum up a typical ice cream season in the UK. Short because the days of good weather and sunshine each summer can often be counted on one hand. And sweet because, at a typical 40% margin, returns on ice cream can be sweeter than chocolate.
Last year we were promised a 'barbecue' summer by the weather forecasters, but what we got was far from it. However, according to IRI data (52 weeks ending December 26, 2009) total value sales of ice cream grew by 4.9% to £829m. And volume sales were up 5.2%. Impulse sales of hand-held ice creams were worth £153m, up 4.9% on the previous year. Volume was down 1.4%, but according to Mel Rolfe, senior category manager ice cream (impulse) at Unilever, that's actually quite good because previous years' volume drops had been in double figures.
The weather is important, which is why Unilever buys weather data from the Met Office. Rolfe explains: "We buy this to help with our Wall's impulse singles sales. We get 10-day forecasts for 12 TV regions. We receive it on a Tuesday and it shows the forecasts for sunshine and temperatures. We put this data together with other data that looks at historic sales for specific temperatures. This then gives us a plus or minus sales uplift forecast.
"In the past, we've focused on temperature, but now we are more interested in sunny days. That's because it can be 10°C in March, but a brilliant sunny day and people will buy an ice cream. Sunshine is definitely more of a motivator than just the temperature. If we have three sunny days in a row then we see a massive spike in sales."
That said, Rolfe firmly believes that c-store retailers should sell ice cream all year round.
"Ice cream is not just about the weather, it's about occasions, too. Many consumers have an indulgent 'nine o'clock moment' on the couch when they want a Magnum Mini or some Ben & Jerry's. Independents can maximise sales for occasions it does not have to be 27°C outside for them to sell ice cream."
Charlotte Hambling, senior marketing manager for R&R Ice Cream, adds: "Ice cream sales across the winter months are understandably lower than during the summer. However, the ever-increasing popularity of take-home ice cream, the economic downturn and the Big Night In phenomenon have each kept winter sales buoyant in 2009.
"The total take-home market in the 12 weeks ending January 23, 2010 was up 3% (AC Nielsen), a growth spurt largely driven by super-premium tubs.
"It's important for retailers to make the most of their winter ice cream offerings by stocking a selection of tubs, treats and desserts that appeal to all the family."
Top of the ice cream league in impulse is Wall's Magnum Classic, followed by Magnum White. However, there are many other varieties of the stick product available. The launch of Magnum Temptation Chocolate was a big success last year. For this year there's another big launch Magnum Gold, a gold ice cream on a stick. It will be supported by a £3m marketing programme including a TV campaign featuring an A-list Hollywood actor.
Chrissie Farman, Magnum senior brand manager at Unilever UK, says: "Magnum is renowned for its innovative and exciting NPD which saw the brand grow by 10% in 2009. The challenge is to maintain momentum and we're confident Magnum Gold will deliver this."
Meanwhile, the Magnum Classic and White variants will be backed by a Crack the Code on-pack text-to-win promotion.
As the king of ice creams, Magnum comes at a regal price £1.30 for a basic one and £1.50 for the new Magnum Gold. It's a good thing, then, that Rolfe says consumers aren't price sensitive to ice cream. "Need is more important than price," she says. "And if people are price sensitive we offer an entry point ice cream Mini Milk at 30p."
Magnum is known for its chocolate indulgence, but now Cornetto is getting in on the act with the Enigma sub-brand. Cornetto Enigma is described as a "cone with no boring bits".
There are two varieties: vanilla & chocolate and vanilla & raspberry. The former has a core of chocolate sauce and crunchy almond pieces running through the vanilla ice cream from top to tip. While the latter has a dark chocolate and raspberry sauce centre. Rrp is £1.20.
Cornetto will benefit from a £2.9m marketing support package, including TV, cinema and digital.
R&R's Hambling says last summer was a good one for her company. "Summer 2009 was the best weather for three years and, as a result, R&R experienced a three-year sales high. Sales peaked in May and July when the weather was particularly favourable and, overall, our share of the total market grew to 30%."
She says the launch of the Kit Kat cone exclusively into the impulse market in 2009 was a huge success. It became the seventh best-selling individual ice cream very quickly within its first season (AC Nielsen data).
"Thorntons' indulgent chocolate sticks also continued to perform well in impulse as consumers traded up to enjoy the quality credentials of Belgian chocolate, real dairy ice cream and special Thorntons' inclusions."
Fab and Rowntree's Fruit Pastille still continue to sell well in impulse, too.
New for this ice cream season from R&R is Aero Double the Bubble. This is a stick product that combines both mint and chocolate ice creams. Aerated pieces of bubbly chocolate are contained within the ice cream. Rrp is £1.25.
Sticking with chocolate bars that have made the successful transition to ice cream, the Mars ice cream range now features five of the Top 20 ice creams (IRI) in the sector. But this year the company will focus again on its "fewer, bigger, better" strategy, which proved a huge success last year.
Bep Sandhu, Mars trade relations manager, says: "We invested heavily in our key brands last year and it paid off, proving that the halo effect of our chocolate activity on our ice cream brands is dramatic.
"We're looking forward to a bumper summer in 2010. We'll be keeping it simple by focusing our attention on our core range of nine products under six household brands (Mars, Maltesers, Snickers, Galaxy, Bounty and Starburst) to deliver excellence."
Sandhu reckons the familiarity of the Mars brands with consumers makes its ice cream products less seasonal: "Constant, consistent communication across the brands drives ice cream sales as an everyday treat.
"In 2009, for example, Snickers ice cream outperformed all manufacturers across both take home and singles, and grew a staggering four times faster than the market. This was a direct result of the Mr T campaign for the chocolate brand, coupled with improvements in distribution of the ice cream product."
The forthcoming brand activity planned for Mars, Snickers, Maltesers and Galaxy is expected to have an equally impressive effect on sales this year.
In 2009 UK consumers got through more than 32 million Mars ice cream bars. According to IRI value sales data, it is the nation's number one ice cream bar, valued at more than £20m.
This year the Mars Bar brand will build on its sporting heritage via the supplier/supporter relationship it has with the FA.
Snickers is the number two ice cream bar in the marketplace and during the hottest eight weeks of 2009, it accounted for over £3m-worth of sales. In 2010, it will be joined by a new limited-edition multipack Snickers Dark Crunch.
Meanwhile, sales of Galaxy multipacks increased by 38% last year thanks to the introduction of the Galaxy Caramel Craving pack. For 2010 Mars is launching a new impulse line. Called Galaxy Triple Chocolate, it has been created to appeal to the brand's core consumers women aged 24-45 who like to treat themselves. It comprises Galaxy chocolate ice cream with swirls of chocolate sauce, coated with Galaxy chocolate.
Meanwhile, Cadbury Flake 99 is the number one selling cone in the impulse market, according to Nielsen Eat Now Ice Cream (52 weeks ending October 3, 2009). Sales were up 30% over that period on the previous year.
As such Fredericks Dairies deputy managing director David Taylor describes it as a 'must' for every c-store's freezer as it appeals to everyone.
"If you include take-home packs, Cornetto is bigger than Cadbury Flake 99, but Flake 99 is the biggest single-selling cone in the convenience sector.
"The growth last year came from better distribution. We made significant gains in impulse and recruited more stores. Spar was a big win for us last year its wholesalers recommend that all stores take Flake 99.
"Many c-stores only have one small impulse freezer. They don't have the luxury of space to put four or five cones in there, so they should stick with the best-selling cone."
Taylor adds that some of the larger c-stores take multipacks of Flake 99 if they have two freezers, but the smaller stores just stick to the impulse line.
He believes that Cadbury Crunchie Blast is now a must-stock stick, as sales grew by 43% last year, making it the fastest growing stick in impulse.
"Having different lines is key. Crunchie and 99 stand up against Magnum because of the Cadbury link," he says.
Fredericks does not buy weather data any more Taylor says it's too expensive. "We have all our production facilities on one site in Skelmersdale. We can build stock up and react very quickly if the weather gets warm. We can make changes to our production schedule in a day."
He recommends, though, that retailers keep an eye on the forecasts. "The first day of hot weather you get people going out and buying ice creams. If you're not ready for it, you can run out of stock very, very fast. Some retailers only get a delivery every three days by then the good weather can be over. If you have a back-up freezer we recommend you use it."
He advises retailers to identify their strongest sellers from the previous year, but adds that as ice cream is one of most innovative categories retailers need to stock new products, too.
As a licensee for Cadbury and Del Monte ice creams, Fredericks' products benefit from the parent advertising, but Fredericks has also been clever in generating its own publicity.
"Last year we had great PR success with a Daniel Craig-shaped frozen lolly. It was a small stunt on our part, but a big success in terms of the publicity it got. It was a limited-edition lolly that cost us about £30,000 to make, but it generated £1m-plus worth of PR. We had phone calls from people in the US and the Middle East asking about it; it was phenomenal."
"We stock take-home ice cream all year round, but put our impulse lines out on March 1 when the local campsite opens. Our best-sellers are Magnum and Cornetto. We also sell Denbighshire ice cream in individual and large tubs, which is popular with the tourists. "Last summer we had a good May the weather was great and I thought it was going to be the start of a great summer, but after that it was pretty rubbish. We sold ice creams when the weather was good, but then sales tailed off. We keep an eye on the weather forecasts ourselves, plus we get emails from head office every day telling us what to expect." Hugh Williams, Tates Spar, Prestatyn, Clwyd
l If people can see ice cream, then they will buy it l Create awareness outside the store as well as inside l It's important to site cabinets 'in impulse' not 'on impulse' l Use POS material to direct shoppers to your ice cream cabinets l Stock the best-sellers and make products easy to find by segmenting, eg chocolate snack, cones, refreshment and kids l Cabinets need to be kept clean and attractive l Stock ice cream all year round a third of all ice cream sales are made during the winter months. However, in the winter months introduce blocks and tubs to capitalise on at-home sharing opportunities. Source: Unilever Partners for Growth
All the manufacturers agree that take-home ice cream is an opportunity for c-stores whether it's Häagen-Dazs, Ben & Jerry's or multipacks of impulse lines. Carte D'Or has three new flavours for 2010 rum & raisin, raspberry cheesecake and coconut. Their launch is backed by a £3m marketing campaign including a dedicated TV ad for rum & raisin. There's also a new addition to the Magnum Minis range Magnum Mini Mint. Available now, it is supported by a £1.5m marketing package including TV and print. Chrissie Farman, Magnum senior brand manager, says: "Magnum Minis has been an enormously successful platform over the past couple of years, taking the brand into double-digit growth and adding value to the growth of handheld multipacks and the ice cream category as a whole. Its success is mainly down to its smaller size, which makes the product a more permissible treat for consumers, enabling them to increase their frequency of purchase. "Last year we saw Magnum Mint grow by 27% in the out-of-home channel (IRI) as consumers turned to traditional flavours. This, combined with the popular Magnum Mini format and the backing of a strong marketing campaign, is set to make Magnum Mini Mint an even bigger success." The new Magnum Mini Mint multipack contains mini mint, classic and dark Magnums. Rrp is £2.99. New from Haagen-Dazs this month, is the roll out of its Chocolate, Pralines & Caramel sku previously available only via specialist ice cream wholesalers. The brand's Choc Choc Chip also has a new recipe. The roll out and recipe change is being backed by the Melt Together TV campaign, which saw its first airing in October '09, is back on screens this month. The big news from Ben & Jerry's is the brand's pledge to be fully Fairtrade by 2011 in the UK. Globally, the Fairtrade conversion will be complete by 2013. The rollout here begins this month, supported by a £4m marketing support package. Rob Michalak, Ben & Jerry's global social mission director, says: "Ben & Jerry's launched the first Fairtrade ice cream in 2005. Our global 100% Fairtrade commitment means that all ingredients that can be Fairtrade certified will be, across 58 flavours and 121 different chunks and swirls." The brand, owned by Unilever, will absorb the price of going Fairtrade rather than pass it onto retailers and consumers. The brand has a 52% value share of the luxury ice cream market and is enjoying 26% growth year on year (IRI). David Taylor at Fredericks reckons c-stores should stock impulse ice cream in the summer, but out of season they should restrict their ranges to take-home packs such as Häagen-Dazs and packs of Cadbury Button Cones. "Our Buttons Cones pricemarked at £2 sell very well," he says. R&R's Charlotte Hambling reckons pricemarked packs are a great way to capitalise on the take-home ice cream opportunity as they ensure freezer standout and reassure consumers on price. She adds: "The launch of Lion Bar ice cream in a take-home format last year saw it reach the highest pack rate of sale performance in ice cream bars in the total market (IRI)."
1Magnum Classic 2Magnum White 3Twister 4Cornetto strawberry 5Calippo orange 6Feast chocolate 7Mars Xtra vanilla caramel 8Solero exotic 9Cadbury Flake 99 10Magnum Double Caramel Source: IRI total impulse MAT October 31, 2009
"We stock ice cream all year round. We have two local lines. One is Cadwaladers, which has been around for years. We stock small and large tubs. In addition, we've just started stocking Mon Ar Lwy ice cream from Anglesey. It does really fancy flavours in premium tubs, selling at £4 a time. "We do sell Ben & Jerry's, but it only sells when it's on promotion. And in the winter multipacks of ice creams sell when they are on promotion. "In the summer we sell tons of impulse lines we're in a seaside town so it's what you would expect. "We load up with high-end lines Magnum, Solero and Calippo to make the maximum cash profit. "We watch the weather on the BBC every day. We get deliveries three times a week from Blakemore so there really is no excuse for running out." Conrad Davies, Spar, Pwhelli, Gwynedd
"We stock ice cream all year round, but sales really only just tick over in the winter. However, on Christmas Day last year we sold seven Twister lollies! "Last summer was definitely better than the year before that in terms of ice cream sales. It's the usual suspects that sell Magnum, Cornetto and Twister lollies. "It is important to have a range that appeals to both children and adults. "We are lucky because we have a back-up freezer room so we can stock up ready for the hot weather." Susie Hawkins, Simon Smith Group, Gloucestershire
Fruity pop Fredericks Dairies has launched a Vimto squeeze-up ice lolly product. The company reports that early take-up of the lolly is good. rrp: 80p tel: 01695 713900 Funky fruit The new Real Fruit Frenzy range comprises 100% real fruit ice lollies in squeeze-up tubes. The three flavours are blackcurrant, orange and apple & raspberry. rrp: £1 tel: 01273 446440 Gold rush Magnum Gold is the first gold ice cream on a stick. It comprises vanilla ice cream with a swirl of caramel, covered in golden milk chocolate. rrp: £1.49 tel: 0845 600 6612 Squeezy does it Milk Time Squeezy is a new Calippo-style squeeze-up product. It is made from vanilla and chocolate milk ice cream and contains 30% of a child's RDA of calcium. rrp: 70p tel: 0845 600 6612 Freeze it Confectionery cash and carry Hancocks recommends that c-stores sell ice poles for kids. The company says Mr Freeze is a must-stock. Boxes of 80 cost £4.99. rrp: 20p tel: 01509 216644