|Title:||United Kingdom ice cream take-home sales by category in pounds sterling and kilos with percent change for year ending November 28, 2010|
Start of full article - but without data
Ice cream: XXw/e XX November 2010
[pounds sterling] y-o-y % kilos (m) y-o-y %
Premium XXX.X X.X XX.X -X.X
Chocolate sticks XXX.X XX.X XX.X XX.X
Filled cones XX.X XX.X XX.X XX.X
Children's lollies XX.X -X.X XX.X -X.X
Two litre standard XX.X X.X XX.X X.X
TOTAL (MARKET) XXX.X X.X XXX.X X.X
When sugar prices hit their highest level in XX years in the second half of 2010, ice cream suppliers faced a conundrum; should they absorb the cost, increase the product prices or re-engineer their SKUs so that margins could be maintained and consumers not left to pick up the bill?
The solution was a mix of all three. Market leader Unilever was first to pass on the cost increase to consumers. The average headline price of Ben & Jerry's XXXml tubs topped [pounds sterling]X for the first time in November. Later the same month, rival Haagen-Dazs followed suit in a move hailed by some suppliers as a psychological breakthrough.
"Breaking the [pounds sterling]X barrier is a positive move for the market," says Neil Burchell, MD of Loseley Dairy Ice Cream. "Consumers need to understand that quality food commands a reasonable price."
Others, however, considered the price rise a red herring. "The headline price has moved, but after they'd moved it they were still promoting down to the same price point they had before - it was a bit of a false dawn," says David Taylor, MD of Fredericks Dairies.
Total ice cream: XXw/e XX November 2010
SALES CHANGE [pounds sterling]m y-o-y %
Own label XXX.X X.X
Magnum XX.X X.X
Ben & Jerry's XX.X X.X
Haagen-Dazs XX.X XX.X
Carte d'Or XX.X X.X
Cornetto XX.X -X.X
Kelly's XX.X XX.X
Magnum Mini XX.X XX.X
Viennetta XX.X -X.X
Mackie's XX.X -X.X
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Taylor points out that it's not just the inflated price of sugar that has heaped pressure on ice cream suppliers in the past XX months. "Everything's been high. Even cardboard boxes cost XX% more last year."
Mars Ice Cream says it, too, has had to recoup some of this cost "in order to maintain the viability of our business and grow" - like Fredericks, it has done so partly through increasing prices. So it's hardly surprising that value sales of ice cream grew by X.X% to [pounds sterling]XXXm [Kantar XXw/e XX November 2010] in 2010. But more encouragingly for the category, volume sales also rose by X.X%, suggesting that suppliers' strategies are paying off.
So how have they persuaded consumers to pay more for ice cream yet buy more at the same time?
Rather than push through a percentage price increase across its entire portfolio, which includes Cadbury and Del Monte licensed products and the super-premium Antonio Federici brand, Fredericks has decided to rethink certain products. "Some of our packs are smaller and some units smaller," says Taylor. "What we might do is take a unit out of a multipack or shrink each product a little bit. What we don't want is to be very top-end in price and then find consumers aren't willing to pay."
The re-engineering route is also being taken by former Morrisons ice cream buyer Mike Lewis, whose Good Feeling Solutions ice cream survived three range reviews in Morrisons before growing sales to [pounds sterling]XXX,XXX at retail last year, he says. But inflationary pressures coupled with the increase in VAT meant Lewis's [pounds sterling]X price-marked three-litre packs of Banoffee Neapolitan ice cream were no longer financially viable, thanks to a combination of commodity costs, VAT and retailers' reluctance to increase prices on price-marked products. His solution was to invest [pounds sterling]XX,XXX in repositioning it as a four-litre Big Value Pack, which he hopes will give better value.
Providing value was also behind R&R Ice Cream's launch of copycat Ben & Jerry's brand Loaded in Asda last March. The new exclusive own-label brand has already generated sales of [pounds sterling]X.Xm for Asda, says R&R Ice Cream marketing director Phil Griffin. R&R backed this up by introducing another premium tertiary brand, Spoony's, into Morrisons. The price-flashed [pounds sterling]X pack comes in at almost half the price of Ben & Jerry's and represents "a much more affordable solution", says Griffin. While conceding that though "aggressive promotional tactics" Ben & Jerry's has widened the target market for super-premium ice cream, he insists price is a barrier for this sub-category.
Ben & Jerry's figures, however, suggest it's a surmountable barrier - sales rose X.X% to [pounds sterling]XXm [SymphonyIRI XXw/e XX November 2010]. Age-old foes Ben & Jerry's and Haagen-Dazs were the star performers in the premium category, which rose in value by X.X%, but saw volumes decline X.X%.
Following a catastrophic 2009, with value sales falling XX.X%, Haagen-Dazs bounced back strongly in 2010, delivering sales growth of XX.X%. Last year, the brand added a chocolate, pralines and caramel variant to its chocolate portfolio, which had "an absolutely outstanding response" from consumers, according to Ed Culf, marketing director for brand owner General Mills. Culf says that on the back of a strong promotional plan and a national TV ad campaign, overall Haagen-Dazs brand penetration is the highest in a decade.
The other big hitter in 2010 was Magnum. Suppliers say its performance is one of the main reasons the chocolate sticks market has grown XX.X%. The launch of Magnum Gold was one of the key innovations in the ice cream category in 2010 and, boosted by a huge ad campaign featuring Benicio del Toro (see PXX), the product has already recorded value sales of [pounds sterling]X.Xm since launch, according to Pete Harbour, category director for ice cream at Unilever.
Not that Unilever is resting on its laurels. Magnum Cocoa arrives in-store this month. The new range uses Rainforest Alliance-certified cocoa and its Ecuador Cocoa and Ghana Cocoa variants will benefit from a [pounds sterling]X.Xm campaign. "Magnum is a real powerhouse brand," says Taylor. "We're the only challengers that can fight them in chocolate snacks because other brands come and go." However, on filled cones, which grew XX.X%, Taylor believes "honours were more even". Fredericks' Cadbury Caramel and Creme Egg cones did well," he says, "with the former the top-selling brand all year in Tesco."
Lollies were less successful, with value sales falling X.X% to [pounds sterling]XXm. Griffin blames a downturn in innovation for the lacklustre performance of the segment. "Twister and Fab have been key to the underperformance of lollies as both brands benefited from extensions in 2009 that weren't repeated in 2010," he says. R&R plans to generate fresh growth in 2011 by launching Fab Apple & Blackcurrant.
Lack of innovation, however, was not the only culprit. Lollies' poor performance was also exacerbated by brand extension causing a blurring of the line between adult and kids' products, says Richard Hayhoe, marketing director of wholesaler P&H.
The strong performance of big brands such as Magnum and Ben & Jerry's has meant ice cream has had a "fairly strong year" in the convenience channel, according to Hayhoe, while of the supermarkets, Tesco showed the greatest increase in ice cream market share, followed by Waitrose. Ice cream buyer Vanessa Stephenson says Waitrose has sustained growth over the past four years without significant range changes, although the premium segment has been added to with the launch of a new own-label offering. "Historically, we overtrade in premium ranges, so we have boosted this with the Seriously From Waitrose range," she says.
Top-end branded suppliers have also been evolving their product range. Loseley Dairy Ice Cream will overhaul its brand this month, with a new packaging design and improvements to flavour (see pXX).
Kelly's of Cornwall launched a Chocolate Clotted Cream Ice Cream in September and this month is introducing a Blackcurrant Clotted Cream Ice Cream to Tesco and Waitrose. "We are taking a genuine Cornish ice cream and making it available to the wider public without compromising on its quality or taste," says Kelly's of Cornwall ice cream brand manager Nina Lumsden.
The transition of brands such as Kelly's from regional to national player should encourage niche brands looking to increase their penetration in supermarkets.
While delis and farm shops give smaller brands a certain amount of exposure, becoming part of a supermarket range remains crucial to consumer engagement, according to Lawrence Rippon, national sales manager at New Forest Ice Cream.
Smaller producers - including those in other sectors - are making the most of the opportunities in ice cream. The Patchwork Traditional Food Company, better known for its pates, is launching a range of adult ice creams with grown-up flavours, including Calvados-soaked apple with Calvados Caramel Ripple. This month also sees Simply Ice Cream launch a nut range including a chilli chocolate almond variant.