Following a challenging 2004, retailers were hoping for an upturn in both fortunes and the weather in 2005, but were somewhat disappointed. Nothing in the past few years has come close to the unusually hot summer of 2003 when, according to Mintel’s recent report Ice Cream UK, the weather not only boosted sales of ice cream but also helped to change consumer perception of it as a year-round product.
The sustained period of hot weather kept consumers snacking for longer and meant that companies could reposition ice cream as a treat to be enjoyed throughout the year.
According to Unilever’s out of home category manager Mark Brodrick, it’s a trend which is set to continue: “We’re conscious of the fact that it’s a highly seasonal market and we’re trying to extend the season by promoting early, starting brand activity in c-stores before Easter.”
For c-stores, achieving year-round sales in a category worth £832m (AC Nielsen/Richmond) means careful merchandising, concentrating on impulse in the summer and tubs in the winter. However, according to the Mintel report, there need to be ‘significant improvements’ in the way c-stores merchandise wrapped impulse, in particular in order to compete effectively with other snack products.
Fredericks marketing director David Taylor says there is a lot that stores can do to brighten up their range.
“We find that stores can make their range more dynamic by changing it round and not just focusing on child lines.”
This year Unilever and Masterfoods have both invested in their sales force in an attempt to get pos and merchandising in c-stores up to scratch.
According to Brodrick: “There are about 50,000 to 60,000 really tired looking cabinets out there. Unless the in-store environment is right, the category is not going to grow.” Masterfoods is adding to its existing sales force with a dedicated ice cream sales force for the independent trade which will be visiting 23,000 independent retailers from May for 12 weeks, offering, among other things, merchandising advice and deals on ice cream.
As well as sending out its sales force to visit 20,000 c-stores to help retailers merchandise their stores and to take orders, Unilever is attempting to encourage retailers to use pos with a retailer promotion. In the ‘Stick it up and snap it’ competition, retailers are encouraged to take a photo of their new Unilever pos in store and send it to the company for a chance to win a £1,000 top prize or prizes of £50. Unilever hopes the competition will double store implementation of its pos to about 60%.
Merchandising aside, another key driver, particularly in impulse, is NPD, which can even offset bad weather. Fredericks’ Taylor says: “People like new products. It’s the lifeblood, you’re almost going backwards if you don’t have NPD.”
Richmond Ice Cream marketing manager Clare McIntosh agrees: “NPD is massively important to the category, accounting for something like 10% of all sales. It’s because it’s such an impulsive category; people are always looking for treats.”
Among the key trends in impulse are kids and indulgence.
Unilever is seeking to target both with its new launches for 2006. In the kids market, the company has introduced the idea of extra value with a launch of an ice lolly with a stick which can be used as a water shooter once the lolly is eaten. Brodrick says that Ice Jet is unique as, apart from a Wall’s product called Spin, which had similar novelty value and was available ‘years ago’, he can’t think of anything similar on the market. “If it’s successful it could spawn more products which could have after-use.” Also in the kids range, a Spongebob Squarepants lolly will retail at 50p.
In indulgence the company has returned to the core flavours of Magnum, updating the brand with new branding and package design. To highlight its premium indulgent nature the ice cream itself now encompasses the new brand ‘M’ embossed into the chocolate, and redesigned packaging now has a gold interior. In impulse Classic chocolate and white variants have been joined by almond, mint and double cream.
A £6.5m marketing campaign will include TV, cinema, outdoor posters and web activity which will start around Easter, in time for school holidays.
The company is also launching a new Wall’s Cornetto variant in Cornetto Caramel which will be supported by a TV campaign.
Meanwhile, Masterfoods is setting its sights on the adult refreshment market in 2006 with the launch of Starburst lemon & lime, exclusive to impulse. The ice cream’s 3.5% fat content is highlighted on the packet to attract the 16- to 44-year-old female target audience who grew up with the brand. Starburst lemon & lime has lemon in the centre and lime sorbet on the outside and will retail at 85p.
To coincide with the launch the existing variant Starburst strawberry is getting revamped packaging.
The company is also launching ice cream Maltesers bars in multipacks. The Maltesers and Mars brands will benefit from a total of £28m marketing support in 2006 with £3.6m specifically allocated to ice cream. Targeted regional campaigns and nationwide sampling will take place. PR activity has yet to be decided but will be along similar lines to last year’s Laughter Yoga, which was sponsored by White Maltesers during July.
Advertising will begin in April and run through until August, with two focus periods in May and July for the peak period.
Cross-format marketing activity will highlight the availability of ice cream formats with on-pack awareness on multipacks of Snickers, Maltesers and Mars.
For retailers the company has updated its pos with a fresh new look that incorporates some of the ideas from consumer research conducted last year. Says Masterfoods trade relations manager Andrea Taylor, “Historically we’ve led with Mars but consumers were saying they wanted us to tell them about the whole range.” Pos will now include a parasol icon which highlights the entire range in the ice cream portfolio.
Richmond Ice Cream is continuing its theme of value for money by adding to its £1 Huge Value promotional campaign with a £2 Huge Value campaign kicking off this month. Products featured in both campaigns will include Smarties and After Eight cones, Rolo and After Eight luxury sticks, Toffee Crisp and Rolo. In the £2 promotion there are eight 100ml cones, six 100ml sticks and six 60ml bars in a pack. The company will also be investing in pricemarked packs on the Nestlé brand as, according to McIntosh: “Ice cream is the most heavily promoted category in grocery.”
New launches include a new limited-edition flavour in Nestlé Fab, Fab Looney Lime, which will retail at 60p. Fresh from success in multipacks comes the Smarties cone (rrp 90p) and an After Eight luxury stick retailing at £1. In the luxury market are the new Nestlé Mega stick range - Mega Classic, Mega White and Mega Double Berry - which retail at £1. Toffee limited edition has been added to the Festival ice cream range and will retail at 60p, and Ribena Ice push-up blackcurrant and orange lollies have had a pack redesign.
Finally, exclusive to the impulse sector, Fredericks has launched the new Cadbury Flake ’99 Mint cone, which will retail at £1.10. Also new, and hoping to trade on brand recognition, is the Cadbury Creme Egg stick retailing at £1. It joins the Cadbury Crunchie Blast stick which has popping candy in a Cadbury Dairy Milk coating and retails at £1.10.
In take home, Cadbury luxury ice cream tubs will carry a ‘Two for £3’ on-pack price across the range. Cadbury Dairy Milk Fudge bar will also be available in a four-pack for £1.99.
The company also produces ice cream for the Del Monte brand which saw sales of £1.3m in its first year. An impulse version of the Fruitini children’s product is new to market this year, retailing at 80p.
In take home, two new Del Monte smoothies, mango and raspberry, will be available in three-packs at £1.99.
TUBS TO TAKE HOME
The take-home market, particularly when it comes to tubs, is perfect to pick up the pace when hand-held sales are slowing, particularly in the luxury sector, as it appeals to customers who want either a nice way to round off a meal or a treat to enjoy in front of the TV.
To capitalise on this, Ben & Jerry’s is launching four new flavours and is hoping that 2006 will be one of its biggest years to date. The first two flavours, launching in April, are based on popular puddings.
Oh My Apple Pie includes chunks of apples and pie crust for an apple and ice cream flavour, and Chocolate Therapy includes chunks of chocolate in a chocolate pudding flavour. Chocolate Therapy is only available in one multiple, Tesco, and the convenience channel. “We sometimes limit the distribution because it helps give convenience the edge,” says Ben & Jerry’s brand manager Philippa Marshall. She adds that as multiples can usually stock only about six SKUs, c-stores can take advantage and stock more, including niche flavours.
Says Marshall: “Phish Food is our best seller and multiple shoppers will look for that, and that’s it. Convenience shoppers coincide with our target audience and are more experimental with their choices.”
Also in April the company is rounding off an integrated competition with The Times which last year invited the public to come up with a new flavour, based on a British icon. The flavour will be announced next month to coincide with a documentary film featuring the icon. Finally, in the autumn a new flavour will be announced. No details are available yet but it will be linked to a wider campaign and has “a strong social message” to it, according to Marshall.
All the launches bar Chocolate Therapy will be supported with above-the-line marketing. “In the past we’ve been very brand focused,” says Marshall, “but we’re now moving into being more product focused.”
Pos and branded freezers are available to c-stores via the company’s hotline. Ben & Jerry’s origins in the US stem from the ‘mom & pop’ convenience stores but in this country the ice cream was first available through Sainsbury’s. However, Marshall says that c-stores are vital to the company, pointing out that the target market of 18-25 ABC1s and the brand’s impulsive nature sit perfectly with the convenience channel.
The company sometimes resurrects old flavours in ‘flavour flashbacks’, one of which is rumoured to be taking place this year, but Marshall won’t be drawn on which old favourite it is to be.
According to General Mills sales director Andy Foweather, convenience stores are perfectly placed to benefit from sales of tub ice cream: “People tend to treat themselves on the spur of the moment by seeking to buy luxury ice cream in their local store or corner shop.” Christmas 2005 proved to be a good one for Häagen-Dazs, and luxury appeared to be a key driver for category growth. Foweather says: “The brand achieved a 36.1% increase in total brand sales during December 2005 compared with the same period the year before.”
Häagen-Dazs is following up its successful trial as a limited-edition line with the launch of Chocolate Cherry Brownie, exclusive to the impulse sector this year. The variant is available in 500ml tubs for £4.49. In the hand-held sector the company launched multipacks of Häagen-Dazs Cream Crisp in packs of three in February, backed by the re-screening of the company’s ‘Longer, Lasting Please’ ad campaign.
Richmond’s main success story of 2005 was the low-fat Skinny Cow brand. This year the company is hoping to build on that success with a £2.5m marketing campaign including TV ads which will break this summer. Last month the brand was an official sponsor of London Fashion Week and will be hooking up with fashion retailer New Look to offer shoppers the chance to win prizes such as tickets to red-carpet events. New variants for 2006 include raspberry and strawberry Swirl Pots with less than 2% fat and under 100 calories, retailing at £2.29 for four 100ml pots.
MacIntosh says that the issue of health in ice cream shows no sign of abating and, according to Mintel, there is room to develop the health sector of the market by capitalising on demand for additive-free food.
The key for retailers is to ensure they can respond to whatever the customer wants throughout the year. While the weather will impact on sales in the summer, clever stocking of NPD and old favourites will go a long way to ensure sales. In the winter months luxury rules and a good stock of tubs and take-home will help the ice cream freezer fulfill its potential. And whether it’s summer or winter, keeping the freezer clean and inviting will mean that whatever the weather, it’s always sunny in-store.
I CAN'T BELIEVE IT'S NOT ICE CREAM
Big business in the US but virtually unknown here, frozen yogurts could offer retailers profit potential, according to Ben & Jerry’s brand manager Philippa Marshall. Tasting like ice cream but with less fat, the yogurts were launched in October last year, not a traditional time for ice cream launches but, says Marshall: “We felt that January was going to be a really big time for frozen yogurt as it’s a time when there’s an odd combination of post-Christmas detoxing and hibernation, when people stay in with DVDs. It fitted with the Ben & Jerry’s image very naturally. And we want to build up to a really big summer.”
Two variants were launched - Chocolate Fudge Brownie and Cherry Garcia - both already successful as ice creams.
The brand isn’t aimed at dieters, says Marshall, but rather those looking for the indulgence with less of the guilt.
While not well known over here, frozen yogurts are big business in America and despite UK consumers’ unfamiliarity with the product Marshall says that the company stuck with the yogurt tag and she doesn’t see UK consumers being put off by the name.
“It was important to us to keep the international identification intact. But there’s definitely a job to be done in terms of educating the consumer. Some people perceive that yoghurt has a sour taste; there is none of that in the frozen yoghurt - it’s got the same great taste as ice cream.”
She also points out that Ben & Jerry’s is a luxury brand and she doesn’t think that a low-fat ice cream would sit well with consumers, whereas a low-fat yogurt still hits the target market: “It could be the beginning of a really big category.”
Marshall says that retailers should ideally merchandise the frozen yogurts in two ways: with the existing Ben & Jerry’s ice creams to catch customers familiar with the brand and with other luxury light products to catch people looking for lower-fat options. More sampling and cinema advertising of the yogurts will follow into the summer.
Husky is offering retailers the chance to defer free stock delivery until Easter, plus free stock insurance on new freezers ordered before April 2006. The company has a new range of VIS freezers including the VIS 28, costing £398 (ex VAT), which comes with £401-worth of free stock.
Richmond has announced a range of freezer deals this year. For smaller retailers there is the ‘hot spot’ freezer measuring 680mm x 880mm x 650mm costing £315 (ex VAT) with free stock worth up to £150 at retail. The Malta model at 1.84m long costs £1,199 (ex VAT) and comes with £600-worth of free stock. All freezers come with a three-year warranty and free delivery in the UK.
Belfield has launched a Neapolitan ice cream 1ltr bar under the Ice King brand, retailing at 99p.
Ben & Jerry’s will be rolling out its multipack of The Wich nationally this year.
Magnum has a new range of multipacks available in classic, white, almond, triple chocolate and dark coconut.
Unilever is relaunching 70s classics Lemonade Sparkle, Orange Fruitie and Strawberry Split.