As the weather (apparently) gets warmer and spring nears, retailers should have one eye on their freezers and the role sales of ice cream will play in driving profits.
According to Michelle Frost, general manager at Mars Chocolate Drinks & Treats (MCD&T), the category is worth £3.4bn in the UK, with convenience sales accounting for £790.6m. Handheld multipacks are the largest segment within convenience stores, with £378m in sales.
“It has been an interesting year for ice cream in the UK,” says Frost.
“Where we have seen major multiples dip slightly, the independent and convenience channels have enjoyed much more favourable levels of growth attributed to the warm weather. For our handheld singles, we have seen value sales increase by up to 20% within impulse channels.”
As in other treat categories such as confectionery and soft drinks, brands have a key role to play for ice cream sales, as customers look to spend dwindling disposable income on established products.
“As the cost of living continues to rise, we are expecting more consumers to seek everyday luxury in more affordable and accessible formats,” says Jose Alves, head of Häagen-Dazs UK at General Mills UK.
Mars’ ice cream range has a 42% market share, and Frost says it has delivered more than six times the growth of the category average and more than any other manufacturer. Meanwhile, within the premium ice cream segment, Ben & Jerry’s has a 29% market share, according to Statista.
Keeping the right formats can also contribute to crossselling opportunities. “Last year, Häagen-Dazs research indicated that while one in three shoppers were hosting a big night in weekly and that 60% of consumers were planning to choose ice cream for a movie night at home, almost half – 43% – couldn’t find the dessert options they wanted in store,” says Alves.
“The big-night-in occasion provides an opportunity for retailers to drive sales at a time when shoppers are feeling this squeeze on household spending. Alongside wine and other snacks categories, premium treats, such as luxury ice cream, are frequently added to baskets.”
Format fluctuations
Most independent retailers, especially those with smaller shops who need to manage their space, will be aware of the shift from handheld ice creams to take-home tubs as the weather gets cooler and indoor treats become the norm.
“As the summer ends, I cut down to about 15 single ice creams and add more tubs,” says Muntazir Dipoti, of Todmorden News in Todmorden, West Yorkshire. “We use the same freezer throughout the year, changing the range.”
Jennifer Dyne, head of ice cream at Unilever UK&I, says ice cream can increasingly be thought of as a category to suit any day of the year. “It goes without saying that ice cream sales rocket on a sunny day. However, it isn’t and shouldn’t be dictated by seasonality – it is a year-round opportunity. There are many different occasions available for ice cream that are relatively untapped – from evening desserts, to family get-togethers, to more solo indulgent treats.”
This may also dictate the quality of products retailers sell; both premium and own-label take-home ice creams offer value for money as either group treats or ways to cater to large gatherings.
The choice between handheld and take-home isn’t necessarily all that binary, depending on your customer base. Vince Malone, of Tenby Stores & Post Office in Tenby, Pembrokeshire, does a strong trade in multipacks of Magnums and Soleros for tourist families in the summer. “There are some great offers to be had,” he says. “You can get a three-pack of Magnums for £3.50 compared with £2.25 for a single.”
Retailer view
Muntazir Dipoti, Todmorden News, Todmorden, West Yorkshire
“During the summer, we tend to have the single ice creams, and the variety is quite big because I have the Wall’s three-tier Maxivision freezer. Magnums are the core sellers – I stock all flavours. My top tier is for the Magnums, then the middle one is more focused on ice lollies such as Feast, Calippo and Solero. The bottom shelf will be for kids’ items such as Haribo lollies, Ice Pops and Push Pops.
“We find that tubs don’t sell as much during the summer. People buy them more from the supermarket because they have better offers. I generally get Häagen-Dazs and Ben & Jerry’s, and I also have budget tubs. There are also some vegan lines that get regular customers.”
Balancing old and new
The ice cream category is another category affected by the one-two punch of HFSS restrictions and overall trends towards healthier products. “An increasing number of consumers are now looking for dairy-free, vegan or gluten-free and lowsugar options,” says Kenton Burchell, trading director at Bestway Wholesale. “Brands are likely to formulate their products due to this trend.”
Dipoti tries rejigging his range to give new lines enough space for him to know whether or not they’ll bed in. “If there’s a less-popular line that still sells through, I’ll give it a half facing and mix it with another line, such as Soleros, Calippos or Fabs, which have been going for ages. People know them, so they don’t need a full facing, so the newer line can get that space,” he says.
He also now stocks a range of vegan ice creams, which are increasingly accessible to convenience stores.
These niche, free-from lines don’t need a large customer base, just a regular one that will come back to your store because you offer it while your competitors might not.
Alan Mannings, of Shop on the Green in Chartham, Kent, has seen similar success from Swedish Glace’s dairy-free vegan range.
Launches
- Häagen-Dazs has launched a macaron ice cream range in collaboration with pastry chef Pierre Hermé in Strawberry & Raspberry and Double Chocolate Ganache varieties. These are available as pints and minicup formats, with respective RRPs of £5.35 and £4.80. Ferrero has launched a trio of ice creams.
- Ferrero Rocher Classic, Ferrero Rocher Dark and Raffaello are available in single sticks at an RRP of £2 and multipacks of four at an RRP of £4.75.
- MCD&T has launched Twix Ice Cream cones, available as a four-pack with an RRP of £3.50. This marks the first time the popular chocolate brand has been developed into an ice cream cone format.
- Unilever UK&I has launched four new Magnum lines. Double Starchaser and Double Sunlover are available in multipacks of three (RRP £3.99), pint tubs (RRP £3.99) and as a single (RRP £2). Mini Double Caramel Collection pairs Gold Caramel Billionaire and Caramel Almond in a six-pack with an RRP of £4.50. Finally, Vegan Raspberry Swirl is available in a three-pack at an RRP of £3.99.
- Pukpip is a brand of frozen bananas dipped in chocolate, available to retailers from CLF Distribution and Consort Foods. It is available in Milk Chocolate and vegan Dark Chocolate varieties, each at an RRP of £3.99.
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