Freezer fever

Summer's here and ice cream consumers can't wait to find out what's new in the coolest of categories

Thanks in large part to our climate, Australians can safely be said to love their ice creams ... and convenience and impulse outlets should similarly love the sales opportunities they bring.

The statistics tell us that this country has the third highest per capita consumption of ice cream in the world and the affordable indulgence that it represents appears to have given it something of a recession-proof quality. Indeed, sales of ice cream are often said to grow in difficult economic times because people increasingly look for small luxuries they can easily afford.

Top 10 & fastest growing

Certainly the latest report from the Australasian Association of Convenience Stores would appear to bear that theory out, revealing as it does that ice cream is once again in the top 10 fastest growing categories, enjoying growth of 6%, a 1.9% overall share of merchandise sales, and a 15% share of the impulse food segment.

Australia's weather and outdoor culture means that ice creams offer a great refreshing treat for people when they are out and about and that's great news for C&I outlets.

"Australians are very nostalgic about ice cream, it reminds them of their childhood and having good times with family and friends," said Mauricio Alarcon, Head of Marketing at Nestlé Peters Ice Cream. "As a result, it will always be a strong category because in turbulent times people look for simple, innocent indulgences that make them feel better."

But in a country where so many people love ice creams, it is also important to that ice cream manufacturers offer a wide range of product to appeal to all tastes. With summer now upon us, interest in the contents of the C&I outlet's ice cream freezer is growing. As well as seeking out their old favourites, consumers are eager to discover what new products, innovations and promotions the season will bring.

While ice cream is most certainly a category which leans heavily on nostalgia, it is also one which thrives on excitement, innovation and 'buzz'.

Excitement, innovation and 'buzz'

Nestlé Peters sells some of Australia's most loved ice cream brands including Drumstick, Heaven, Billabong, Frosty Fruits and Maxibon, and it is well aware of the need for C&I outlets to stock a broad range of ice cream products.

"Since consumers shop the category for a variety of reasons it is very important that operators keep a variety of products to meet these different customer needs," said Mr Alarcon.

"Different ice creams meet different consumer needs ... for example, refreshment products such as Frosty Fruits revitalise consumers during hot weather, whereas indulgent products such as Heaven are about giving consumers a sweet moment of indulgence they can enjoy for themselves."

He also stresses that operators need to be aware of their customers' particular needs and maintain a mix of products specific to their stores. For example, a store closer to a school will need more kids and teen products, whereas a beachside store needs more summer fun products such as cones.

But the company believes that the growth of nostalgic brands is one of the major sales trends of the moment, and it points to the huge success enjoyed by Monaco bar since its relaunch last year as evidence. It has quickly re-established itself as one of Nestlé Peters' top sellers.

However, ice cream is also about innovation and Nestlé Peters has got a few new tricks up its sleeve for this summer. Drumstick will launch 'Twister' – two flavours twirled into one cone – in White Choc and Raspberry, and Vanilla and Hazelnut flavours. Heaven will launch Chunky Cookie, a cookies and cream flavoured ice cream with large chunks of chocolate cookie throughout the bar. Billabong will launch Water Squirter, a water ice product with a special toy for kids inside. Finally, Frosty Fruits will launch its first ever tube product to deliver the refreshing taste in a clean and easy to use format.

Another giant of the ice cream world, Streets, has also been very busy and has been unveiling new products and new promotions.

The company which produces the iconic Paddle Pop which has been around for more than 50 years, as well as other hugely successful brands like Magnum, Cornetto and Gaytime, says it is always reviewing its range to ensure it is offering the best possible ice cream products to consumers.

"Streets Paddle Pop Moo was developed in response to consumer demand for healthier snacking options for kids," said Andrea Martens, Marketing Director, Streets Ice Cream. "Paddle Pop Moo is made from 70% milk, has all the calcium of a glass of milk, is portion-controlled and low-GI and has proven to be very popular with parents and kids."

The product is available in chocolate, vanilla and strawberry milkshake flavours.

With so many ice creams, the company is able to cater to very different consumers and target markets for each product vary quite significantly. For example, while Paddle Pops are enjoyed primarily by kids (and kids at heart), the Magnum target market is largely women who are aged between 20-35 years. Retailers are then well advised to stock a broad range.

Drive sales & product awareness

"We definitely have a core group of products that are our best sellers, such as Paddle Pop, Magnum and Cornetto, which we strongly recommend retailers range in large volumes," said Ms Martens. "However, undoubtedly stocking the full range of products has benefits for any retailer who is looking to optimise sales."

But summer ice cream excitement is not just limited to the products themselves. Promotions, prizes and packaging all help to make the ice cream experience that little bit more enticing for consumers.

Streets will again be running its hugely popular Paddle Pop Lick-A-Prize promotion which will be offering prizes including family trips to WhiteWater World, 75 Wiis, 4000 instant win beach packs and one million free Paddle Pops.

"It's been extremely popular since we brought it back a few years ago," said Ms Martens. "Parents have a great sense of nostalgia for Lick-A-Prize as, for many, it's something they remember from their own childhoods, and it's also a really simple concept with some fantastic prizes."

For the first time, the Lick-A-Prize promotion will also run across the Paddle Pop Moo range. And the Streets Magnum Free Gold Class upgrade promotion is back for the third year running and it's said to be bigger than ever before. The promotion offers consumers a free Gold Class cinema upgrade, worth up to $17, with every Magnum purchased.

Ms Martens says Streets packaging also really helps the products to stand out in the freezer.

"We believe packaging is critical for driving sales and in-store product awareness," she said. "It provides a quick and effective way for consumers to recognise their favourite ice creams."

It's a point picked up on by Weis, which has been producing the Weis bar for more than half a century.

"With approximately 70% of decisions made at the freezer it is imperative that your packaging cuts through to the consumer," said Weis Brand Manager, Simon Hambleton. "The packaging needs to act as a mini billboard for your product, and Weis heavily researches its product and packaging development to ensure that it delivers the required result."

He says Weis packaging helps to sell product by being impactful in the freezer; creating a brand block with the four Weis bar flavours; reflecting and promoting the brand essence and attributes; and making it easy for the consumer to select/identify the flavour they want."

People only spend a few seconds selecting a product at the ice cream freezer so packaging design needs to clearly communicate the product offer. It must make the product very easy for the consumer to understand at the point of purchase and excite them enough to buy it.

Nonetheless, while packaging can take an ice cream product so far, Mr Hambleton believes that ultimately it is the taste that will make the biggest difference.

"Our unique format, our combination of real fruit and ice cream and our true to the ingredients flavour has made Weis bars an Australian favourite," he said. "With taste being probably the number one criteria for the consumers – consumers know they will get a real experience with Weis."

The company's best performing sku is the Mango and Ice Cream Weis bar, with its three other flavours – Passionfruit, Banana, Pineapple and Cream; Macadamia, Mango and Cream; and Vanilla and Raspberries also performing strongly.

The Weis bar target market is skewed more toward an adult consumer, because of the flavour profile and product format, but it is nonetheless enjoyed by all ages.

Like its competitors, Weis is gearing up for a busy summer and is issuing what Mr Hambleton refers to as "a call to action for the summer ice cream season", reminding retailers to ensure they check their stock and ranging to meet the demand.

"As we do each year Weis will be supporting its brand and creating awareness and driving trial through a new major summer campaign," he said. "The campaign will appeal to a much wider audience than in past years and remind consumers about Weis and the experience and enjoyment they get from enjoying one of our products."

Mr Hambleton believes that having a range of different types of ice cream products is an important consideration for retailers.

"With a large portion of the consumer's decision process being driven by their mood it is important that the retailer sells a number of different types of products to satisfy different need states," he said.

Understand your customer

It seems clear then that all retailers put some effort into understanding their ice cream customers and their needs while in-store. Obviously, the ice cream consumer is looking for something different when shopping in the convenience channel as to when he is in the grocery.

In the impulse channel, the person who buys the product is usually the person who eats it so people are making a personal choice about the ice cream they feel like enjoying at that particular moment. In supermarkets the purchaser is often buying for their family or friends, and plans to enjoy the product at a later time. Often they will have thought a bit more in advance about what ice cream they are planning on buying – in the convenience channel, it's often more of an 'on the spot' decision.

Most grocery sales will come from 'take home' products such as multi-packs and large tubs, while in route and convenience sales are primarily single-stick products and bars intended to be eaten immediately.

"Impulse attracts a much broader consumer base from 18-year-old guys buying a Maxibon for a big eat snack, to couples enjoying a Drumstick on their way to the beach, to Mom buying Billabong for her kids," said Nestlé Peters' Mr Alarcon. "In the supermarket, the purchaser of ice cream products is typically the main grocery buyer or manager of the household ... they are looking for products that the whole family will enjoy, so tend to pick popular favourites."

Clearly then the different mindset means the consumer goes through a different buying process in the grocery environment compared to what they do in the impulse environment. Ice cream is an impulsive purchase that competes with many categories, such as confectionery and drinks, in a convenience and impulse outlet so it is crucial that the operator knows how to draw in the ice cream buyer.

Build a strong in-store presence

"Sometimes it is difficult to get the consumer to consider the ice cream freezer for a snack, so point of sale is crucial in educating them about the great offers available," said Mr Alarcon from Nestlé Peters. "A strong in-store presence does two things for our customers: it helps them choose an ice cream product according to their needs and it gets them excited and drawn to the freezer in the first place."

Streets agrees, saying that its research has also shown that in-store presence is a critical driver of sales and it therefore offers a wide variety of point of sale (POS) material to outlets to help them draw attention to ice cream products and promotions and to drive sales.

"In-store posters and product range-boards are critical to initially alert consumers to the availability of ice cream in the shop and then to draw their attention to the ice cream cabinet," said Ms Martens from Streets. "We use point of sale items to inform consumers about new products, offers and competitions ... and our point of sale items also link closely with any current advertising and promotional activity."

The company says there are a number of other simple things that C&I outlets can do to ensure they're maximising their ice cream sales. These include placing the ice cream cabinet near the counter or between the door and counter; making sure ice cream sign boards are up to date and on display inside and outside the store; keeping back-up stock in the warmer months so they are prepared for those hot summer selling days; making sure they allocate the most space to their best sellers; and always keeping their ice cream cabinet clean and defrosted so that it's presented to the customer in the best possible way.

"In the out-of-home channel, the ice cream freezer is the beacon that flags to consumers that ice creams are available," said Ms Martens. "It is therefore critical that it is as clean and well presented as well as easily identifiable and accessible to the shopper."

Simon Hambleton from Weis shares this view, and advocates C&I outlets put considerable effort into ensuring that the freezer is well maintained, stock is faced up (not jumbled) and POS and pricing is clearly displayed.

He says that Weis provides stores stocking its products with an in-freezer divider unit which is designed to help display and store the product in the freezer.

"A benefit of Weis that some retailers may not be aware of is the fact that you can fit all four flavours into one basket," he said. "Because of the Weis bar shape and in-freezer display unit you can display all four flavours neatly and offer your consumers a range of flavours from a very small space."

And the potential benefits for retailers? Well, Mr Hambleton believes they can deliver a higher sales return from a basket. And that, after all, is what it is all about.

On a hot summer's day, there can be few more effective ways of drawing a refreshment-seeking customer through the convenience store door than a well-stocked, well-presented, well-promoted ice cream freezer. And once the consumer is in-store, other sales can easily follow on from there. No wonder C&I operators look forward to summer so much.