|Title:||United Kingdom ice cream retail sales value and volume by category in pounds sterling, units, and percent change for the year ended November 27, 2011|
Start of full article - but without data
Ice cream: XX w/e XX November 2011
$m y-X-y % packsm y-X-y %
Premium ice cream XXX.X X.X XX.X -X.X Chocolate sticks XXX.X -X.X XX.X -X.X Filled cones XX.X XX.X XX.X X.X Children's lollies XX.X XX.X XX.X XX.X Two-litre standard tubs XX.X X.X XX.X X.X Chocolate bars XX.X -X.X XX.X -XX.X Adult lollies XX.X -X.X X.X -XX.X Ice cream cups XX.X XX.X X.X XX.X One-litre standard tub XX.X -XX.X XX.X -XX.X Desserts XX.X XX.X X.X XX.X Others XX.X XX.X XX.X XX.X Total XXX.X X.X XXX.X X.X
It can be chilly out there - just ask the major ice cream players. Canny own-label rivals have taken advantage of the decision by some big brands to slash advertising spend and raise prices to absorb commodity hikes - and, in doing so, left many of them out in the cold.
Value sales of own-label ice cream, which now accounts for just over a third of the ice cream market, have risen XX.X% year-on-year, according to Kantar - and XX.X% according to SymphonylRI, which includes impulse sales - and are massively outgrowing branded, which posted just X.X% growth [Kantar XX w/e XX November 2011]. A new report by SymphonylRI indicates ice cream has played a big role in helping own label increase its share of the overall food and drink market over the past year (see pXX).
Aunougn an uui one or me besisenmg brands have grown in value (see right), in many cases this growth is down to price inflation. Six of the brands have lost volume sales over the past year as own label ate into their market shares. "Customers are realising that by buying into own-label products they get great quality at great prices," attests Sainsbury's frozen foods category planner Kay Savile. So has own label got the ice cream market licked?
It is certainly making inroads into territory once dominated by the brands. According to Charlotte Hambling, senior marketing manager at own-label and branded supplier R&R Ice Cream, growth in own label was predominantly driven by the super-premium segment. Super-premium is an emerging market for private label, but one the brands are struggling in, judging by the overall slip in sub-category volume sales [Kantar]. Tesco has played a key role in this, argues Hambling, with the launch of venture brand Chokablok last June and the growth of its Finest range. And the pressure from own label shows little sign of easing, with Asda's Loaded ice cream range set to relaunch in March with increased support.
Historically tne super-premium market was dominated by more affluent, smaller households," says Hambling, adding that deep promotional activity by the big brands gave more consumers access to the market - and opened the door for own label.
Alastair Jessel, MD of Taywell Ice Creams, says he has seen a similar trend across the overall market, with consumers trading up to premium or down to budget ice cream according to their finances. "There has been a polarising of growth around the top and bottom ends of the market," he says.
Own label has certainly had a large part to play in the shift to super-premium - but one of the factors that has allowed private label ice cream to do so well across tubs as a whole is a change in promotional strategies. The proportion of own-label ice cream tubs sold on deal grew by X.X percentage points during 2011 to XX.X%, trouncing the X.X percentage point rise in branded tub deals [Kantar XX w/e XX January 2012]. While increased pressure on space in the freezer aisle has cut the number of featured space deals (see PXX), the total number of ice cream offers has risen from X,XXX in 2010 to X,XXX [BrandView].
Much of this increase has been down to a greater use of price-marked packaging captured as promotions, says Pete Harbour, Unilever brand-building director for ice cream. That said, he adds, "there has also been an increase in own-label promotions offering low-entry price points in response to the recessionary environment".
Own label has, it seems, kept its cool - but it would be unfair to suggest selling ice cream in 2011 was plain sailing for anyone. "The ice cream market as a whole struggled over the summer months, with spend staying relatively flat as poor weather - it was the coolest summer for XX years - and a lack of sporting events made their impact felt," says Kantar analyst Simon Arnell. "This resulted in XXX million fewer ice cream occasions compared with summer 2010."
Volume sales across the category were static [Kantar] - and the market has also come under increasing pressure from commodity price increases. The cost of the basic ice cream blend has risen by almost XX% since the start of 2011, driven by the mounting costs of egg yolks (up XXX%), sugar (up XX%) and milk (up XX%). As Zelica Carr, CEO of The Ice Cream Alliance, notes: "Pricing of ice cream is driven by commodity prices."
While she also contends that much of the increase is being absorbed "to minimise the impact on consumers in this difficult economy", not all of it is, and it's not helping the brands in their fight to regain market share - especially when own-label players are not only coming up with their own compelling NPD, but also offering it at lower prices.
Two formats thriving despite the difficult economy are filled cones and children's lollies. Volume sales were up by X.X% and XX.X%, respectively [Kantar] - and once again, own label has stolen the march on brands, believes Hambling, with private label kids' lollies growing value sales in excess of [pounds sterling]Xm.
"Asda has been key, performing very well in the early hot weather April period," she says. "Own-label lollies' performance is also driven by increased ranging, quality improvements and excellent value."
Hambling's colleague at R&R, Nestle brand manager James Beaumont, agrees - but also identifies a trend for new adult consumers trading down from more luxurious treats. "Some growth has come from switching into the category, which is led just slightly by switching from branded indulgence and branded super-premium products," he says.
Regardless of the reasons behind its popularity, even Unilever acknowledges own label has played a big role in driving trade to the cones and lollies fixture. "Filled cones and kids' lollies have performed very well due to an increase in own-label products on the shelves, which have created a low-entry price point," says Harbour. "Asda and Morrisons launched price-marked packs for kids at [pounds sterling]X, which have performed very well."
Kids are looking key in 2012, too, with Cornetto, Carte D'Or and Wall's all planning to extend their offerings for children. R&R, meanwhile, is hoping to build on the strength of the UK's second-biggest selling ice lolly, Rowntree's Fruit Pastilles, by adding Rowntree's Sour Pastilles to the portfolio - and is also set to launch a bespoke Mr Men and Little Miss range of character lollies into Tesco-Even small brands are getting in on the act - at the National Convenience Show this month, It's Only Natural is launching Moshi Monsters, a XXX% fruit ice lolly with an rrp of XXp.
But handheld ice cream hasn't been all about the kids - or indeed own label. Wall's Cornetto grew about XX% by both value and volume [SymphonylRI XX w/e XX December 2011]. "Cornetto Enigma has had another spectacular year, with exciting NPD that continues to drive the filled cones market," says Unilever's Harbour. The brand benefited from a tie-up with EX that increased trial and awareness with teenage consumers, he adds.
Unlike many of its branded rivals, Unilever kept its ad support for Cornetto at a similar level to 2010, while it halved its advertising investment in Magnum - a risky move, some might say, at a time when Tesco's Chokablok was venturing into Magnum territory with the launch of premium ice creams on sticks.
Despite sialic vaiue saies, Magnum maintained its pole position in the branded market. Volume sales, however, tumbled XX.X% [SymphonylRI] - and because Magnum makes up over XX% of the overall sub-category, chocolate sticks as a whole have recorded a X.X% decline in volume sales. The brand will be looking to revive its fortunes in 2012 with new sub-brand Magnum Infinity (see pso), as well as relying on its popular Magnum Minis line, which grew X.X% by value in 2011 - although its X.X% decline in volume sales [SymphonylRI] suggests price rises played a part in value growth.
Magnum has not been alone in playing to the desire for tiny treats, and 2011 saw a strong performance for mini cups of ice cream across the market. Ed Culf, marketing director at Haagen-Dazs, says the brand's mini cups are "a convenient entry point into luxury ice cream, and are playing an integral role in driving impulse behaviour among shoppers". Unilever, too, says its Carte D'Or mini tub is performing well since it launched in September - and later this year R&R is repackaging its Nestle Potz range into smaller XXXml single-serve packs.
The extension of big-name brands into smaller formats is indicative of the difference between own-label and branded NPD. "Ownlabel innovation is driven by quality and key price points offering value for money, while brands need to innovate into new formats, new usage occasions and respond to evolving consumer needs," says R&R's Hambling.
Indeed, we're only three months into 2012 and the brands are already trying to raise the NPD stakes. Haagen-Dazs recently introduced Secret Sensations, with a gooey sauce centre, as well as new flavour Mint Leaves & Chocolate, the first mint-flavoured luxury ice cream (see pso). Mars, meanwhile, has rolled out a new recipe for its Twix line - the UK's only biscuit ice cream - across single formats, four-packs and six-packs. The supplier hopes sales of its ice creams, including Snickers and Bounty bars, will be boosted during Euro 2012 by the "halo effect" of its sponsorship of the FA.
Plans are afoot at market leader Unilever, too. Ben & Jerry's Core - XXXml tubs with a soft core of chocolate truffle, chocolate fudge or caramel sauce - hit shelves last month, supported by a [pounds sterling]sm marketing campaign, the brand's biggest media spend to date.
Lesley Buxton, owner of premium ice cream maker Yorvale, says smaller players, too, need to develop new ideas. "Innovative recipe development is the main driver for growth at Yorvale," she says. "It's one of the few areas where we can compete with the powerful brands." The company will roll out several new flavours this year, including cinnamon & pecan, mango & lime, rose & lychee and coconut & Chinese ginger. It's a move that picks up on the trend for more exotic flavours, also reflected in Rubicon's new ice cream tubs and lollies (see pso).
Manufacturers could also benefit from considering healthier options, says Dom Robertson, MD of marketing agency RPM. "The trend towards healthier eating means ice cream is often seen as an occasional treat. For brands, introducing healthier and natural ranges such as sorbets or frozen yoghurts will increase the chances of repeat purchase throughout the year."
Nigel Langstone, joint Ml) ot UK brand Joe Delucci, which aims to be available in supermarkets next year, agrees. "I think the market will see a move away from high-fat dairy ice creams in 2012. Apart from the obvious health benefits, a reduction in dairy fat makes for a cleaner taste," he says. "We are constantly being told by 'experts' that sorbets don't sell in the UK as they are too icy. Italian sorbets are less icy than their British counterparts and, in my view, a sorbet packed with fresh fruit with a 'creamy' texture can't be beaten. We sold nearly three million scoops in the UK last year and sorbets accounted for roughly XX% of our total sales."
Frozen yoghurt plays directly into the health trend, and supplier Yog says its lines have performed well since being introduced to Waitrose and Whole Foods Market in October. Two new flavours will be added this summer. R&R is also aiming to capture healthier hearts as it embarks on a joint venture with Yoomoo frozen yogurt (see PXX).
But health may not be the first thing on people's minds come this summer's celebrations - including the Queen's Diamond Jubilee, the Olympic Games and Euro 2012.
Sainsbury's Savile predicts Cadbury, as an official Olympics sponsor, will feature heavily. Kelly's brand manager Nina Lumsden is also expecting big things. "2012 is a major opportunity as a truly British year, which fits perfectly with our brand positioning. Around the Jubilee, we will support the brand on TV and with in-store price promotions," she says. Haagen-Dazs, too, is ready to celebrate. As Culf points out, special occasions - whether personal or public - tend to see consumers trading up to luxury ice creams.
Ice cream brands may well be able to capitalise on the sunny mood of the British public, but it won't be a walk in the park. In the shadow of the recession, it's not getting consumers to buy into ice cream that's the trick - it's getting them to pick brands over more affordable own-label alternatives.
And with the expertise to grow its share further still, own label may well have ice cream licked - if the brands don't raise their game on a multitude of fronts.
* The ice cream market is valued at [pounds sterling]XXXXXX, with X.X% growth driven primarily by price inflation and shoppers purchasing ice cream more frequently.
* The market struggled over the summer due to poor weather - the coolest summer for XX years - and a lack of sporting events.
* Filled cones and children's lollies bucked this trend, bringing new consumers to the sector over the summer months - and there was a strong performance from ice cream cups, a relatively new part of the market.
* The core ice cream consumers are children, although the XX+ age group is also critical and accounts for XX% of consumption.
* Of the big four retailers, Sainsbury's has posted the strongest performance over the past year, although each of the retailers has seen growth. Tesco has grown behind the market but still overtrades in ice cream. Morrisons, too, overtrades after growing its share of the market.
Symphony IRI Group