Australian Convenience Store News -Ice cream

ike the product itself, the ice cream season is short and sweet. While there are some exciting new products on the market and more to come, they're all battling to score maximum results in the minimum time. ACSN went looking for adviceÖ.

When it comes to ice cream sales, C-stores are on a winner. They're a vital factor in the manufacturers' marketing plans and not just for single impulse purchases. With a little thought, the potential is huge.

"Ice cream is obviously bought on impulse and you have to be where that impulse is felt, whether it's at the beach, the service station or the movies," says David Hahn, senior product manager at PB Foods for impulse ice cream. PB Foods licenses the Cadbury Schweppes portfolio of brands such as Cherry Ripe, Picnic and Crunchie and also handles the Peters brand in WA.

"It's not a planned purchase as such. It's a case of 'I'm hungry' or 'I'm hot' or 'I'm in the mood for an ice cream'."

Route is Important
"Route is half our business in value terms, so it is very important to us," says Peter Meek, marketing manager for Nestle Peters. "The petrol and C-store segment is growing as the traditional milk bars are closing down due to the growth of all-hours supermarkets and C-stores."

"The traditional route market is a very important market for Streets and still represents a large percentage of our sales," says Dan Pote, category manager Australasia for Streets. "It's estimated that in 2001 this market, in Retail Sales Value, was worth over $418 million so it is a market that we value highly."

While route represents an important outlet for the product, ice cream itself is not growing to any huge extent. Rather, the category is changing.

"The market isn't really growing, so everybody is fighting for a share of a small pie which operates for a very short season, but that can be a good thing. That encourages innovation," says Julie Weis, joint managing director of Weis Frozen Foods.

"Companies obviously want to maximise their share so they research more and come up with new products and that stimulates competition. I think we've seen some fantastic innovations over the last little while and I think we'll see some more over the summer."

"Impulse ice cream is declining six or seven per cent a year and we believe there are several reasons," says PB's David Hahn. "One is that the route trade is shrinking in terms of numbers of stores, so if you're not in the spot where the person feels like an ice cream, then that desire goes unsatisfied. They're not going to search for it. Fewer stores means total availability isn't what it used to be."

Mr Hahn also points out that the traditional impulse buyers were children but changes in lifestyle have reduced their numbers.

"Sticks still make up about 35-40 per cent of total volume, but what you have now is a generation of kids who don't go out after school on their bikes or kick the footy at the park. They go home and sit in front of their computer or Nintendo or whatever, so the opportunity to sell them an impulse ice cream is not there.

"What we are finding is an increase in total take-home ice cream, things like multi-packs. So instead of buying one or two at the local milkbar, mum's buying a box at the supermarket and sticking them in the freezer at home and we actually think there's an opportunity for C-stores in multi-pack and take home," Mr Hahn says.

"We believe the traditional route market will continue to decline, with corner stores the hardest hit. The BIS Shrapnel report indicated that store numbers are likely to decline at a rate of two per cent per year, says Streets' Mr Pote. "Whereas, according to the Australasian Association of Convenience Stores, total industry store numbers have increased each year from 1991.

Product Innovation the Key
"Is it possible to change the pattern? Good question. The global trend for the route market is very similar with a decline in most markets and it will be difficult to stop this but we believe there is a way to make a difference and that is by listening to consumers and acting on that information."

It's a course of action that all the manufacturers are following, and the result is a host of new products on the way for the new season. Most will be supported with generous advertising campaigns and the smart move is to link in with those campaigns to maximise your returns on these new creations. In general terms, the products are available from now, while the advertising will kick in around mid-summer.

"We have a lovely new product which is called Raspberries And Cream, made from premium whole raspberries with an extra thick layer of Weis cream down the sides," says Weis' Julie Weis. "The advertising concept is 'berry yourself in the new Raspberries And Cream Weis bar'."

PB Foods' policy is to replicate Cadbury's power brands so the result is several new additions to the 2002/2003 range, says David Hahn. "First up is the Cadbury Dream which is a white ice cream and white chocolate stick which obviously fits in the indulgence category. Then Pascals have recently launched a new product called Fruit Bursts, so we have a Pascal Fruit Burst tropical-flavoured water ice on the way. It's a hard water-ice shell that is pineapple flavoured, with an orange and pineapple sorbet inside."

Nestle Peters has two products aimed at the indulgence sector with solid advertising campaigns behind both, according to Peter Meek. "We're very confident that these two will do well. One is the Superchoc Drumstick, which is an ultimate chocolate indulgence while the other is an addition to the Heaven Range. That's Chocolate Biscotti Heaven - a vanilla ice cream with crunchy chocolate biscuit and dipped in chocolate.

"We've also got some new refreshment products on the way including one the kids will love which is the Nestle Peters Bugz. It's a water ice cylinder that is coloured blue. It colours the kids' lips blue but mums can rest assured because it does wash out of clothing quite easily.

"Inside are five different flavoured 'bug lollies'. It's been a huge success everywhere else. We also provide information about the bugs, so it's educational too! And another refreshment-type product, but perhaps more appealing to adults, is the new Frosty Fruits lemon lime twist cup which is fat-free and full of juice."

Streets also has some new additions to its range for adults and children. Streets' Dan Pote says the company's research shows that even though they will return to the old favourites, children are always on the lookout for something new.

"For that reason we're launching Paddle Pop Paw Prints which combines ice cream, chocolate and biscuits, with bite size pieces that have heaps of taste and texture. Another addition to the Paddle Pop range is Paddle Pop Cyclone which is a twist of blueberry, peach and pineapple.

"Adults and older kids will enjoy Calippo Frost Pine Berry. It draws on the success of Calippo Passion Berry and marks the return of the original pineapple flavour. There's also the new Calippo Splice Traditional Raspberry, the first new splice variant for Splice since 1993. This product has been especially developed for the convenience market.

"The indulgent chocolate segment is leading the market with innovation this year but there has been no product that specifically capitalises on the summer months, hence we're introducing Magnum Let's Mango, which is Magnum vanilla ice cream with a real fruit mango gelato swirl and cased in Magnum white chocolate."

Another entrant in this sector, which Streets is pitching primarily at men, is Magnum Cone Choc to the System. As it sounds, it has extra-rich chocolate and vanilla ice cream swirled together and topped with a thick layer of dark chocolate and chocolate covered biscuit pieces.

Given there is no shortage of new products which will line up beside the traditional favourites, ASCN asked the experts for some advice on getting the best return from your freezer. The answer is, it's pretty basic.

"Listen to the information provided by your reps as to what's new and how you can capitalise on it," says Julie Weis.

"The other thing would be to look at individual brands separately, rather than deciding to take one brand over another. Some individual brands from each manufacturer sell well, (while others don't) so those are the ones you need to combine in your freezer. Pick the eyes out of the best selling brands because it's not possible to stock the lot.

"In our products, our Mango is our top seller in all states so that should definitely be in the freezer. Then there are regional differences. In Queensland and South Australia, we have a big following for Fruito which was our original Weis bar, whereas in Victoria we believe the raspberry product will be very successful," Ms Weis says.

Keep Customers Informed
"Keep in mind that a lot of thought and research goes into promotions and point of sale material, so use it. The important thing is to make sure the customers know about the products.

"It could be worth moving the freezer to the best spot to maximise sales. And make sure you remove all the old point of sale material - dog-eared pieces of paper look pretty sad. Have a fresh look at your freezer and the area around it and make sure the whole area is fresh and appealing," Ms Weis says.

PB Foods' David Hahn agrees with her on the amount of research that goes into not only the product but also the POS and any promotions or advertising. He suggests it's up to the retailer to put the final pieces in place.

"We always maintain that a good clean freezer, an up-to-date range board and a wide range of product - and not just from one manufacturer because none of us carry a range wide enough to satisfy everyone's taste - will certainly help maximise sales results.

"There's also nothing worse than a freezer with product that's iced all over. That won't encourage sales. Additionally, keep your ice cream fridge for your ice cream. Storing fish next to your Flake Ice Cream doesn't encourage sales of either product.

"Ice-cream combos, 'meal deals' are one way to encourage customers to try a new product and that's something that's easy to do at store level. But remember, it's not a high risk to try a new product - just buy one box to fill one basket in the freezer and see how it goes. Just make sure you have anything new when they're launched because that's when the promotions are happening and the interest is high," Mr Hahn says.

"Make sure your freezer is visible, or there's good point of sale material pointing to it," says Nestle Peters' Mr Meek.

"But it's just as important to make sure other POS isn't actually obscuring the freezer. If it's not possible to make the freezer easily visible from the front of the store, build a 'path to purchase' starting with outside POS, then more inside and more at the freezer itself."

Streets' Dan Pote makes the point that an empty freezer equals an empty till. The logical way to ensure you maximise your profits on what can be such a weather-dependent product is to ensure the opposite is true.

"You've got to be sure your freezer is well stocked at all times. Order all the new products and keep back-up stock of all the fast selling new lines as well as those regular favourites. It's important to think about the share of the space you have. Back the big brands and make sure they have enough space in your freezer.

"Remember that the impulse zone is between the cashier's counter and three metres back towards the entrance of your store so if you move your freezer to this zone, you'll encourage customers to buy more ice cream. The Shell EPOS Data Research International has illustrated that sales can increase up to 43 per cent when your freezer is moved into the impulse triangle," Mr Pote says.

It is important to keep your eye on trends and be guided by your rep. While no-one can argue with the huge popularity - and margins - of the indulgence brands, there are other quiet success stories that should not be ignored.

PB Foods has found that Cadbury Ice Cream's $1.20 vanilla bucket keeps growing in sales year by year. It's one of the company's top three or four products in terms of numbers sold, the lesson being it's just as important to maintain stocks of the classics as well as the new and daringly different.

It's also important to think laterally. C-stores don't just have to be about a single impulse purchase. Entertaining has turned casual and it's acceptable to bring a tub of super-premium ice cream to the party along with the bottle of wine, so it's worth considering stocking such products as well as multi-packs. That way, you'll have every consumer type covered this summer.