Ice cream is a treat few could pass up. The delicious indulgence is as ubiquitous to the long, hot days of Australian summers as to accompanying a warm dessert on a cold winter night. The category is worth $106 million to the Australian convenience channel, according to market research company IRI Australia. The category has seen modest value growth of 2.8%, above the total channel growth of 0.2% for the same period (MAT ending May 31, 2020).
Unilever, the company behind Streets and premium brand Ben & Jerry’s agrees convenience is an important channel for the category. OOH Ice Cream Category Assistant Maxine Townley said while P&C represents 9% of scan dollar value of those in grocery, convenience remains a key priority for ice cream manufacturers as it captures
the number one shopper mission for the number of ‘needs for now’ trips.
“Consumers are living more fluid lives, which has resulted in fragmented consumption occasions and a shift from the traditionally rigid breakfast, lunch and dinner meals.
Consumers are increasingly favouring quicker shopping trips in nearby convenience channels to instantly satisfy their hunger or craving,” Ms Townley said. Consumers also have clear shopping patterns in the channel. While sales occur at all hours, the key time for impulse buys, Ms Townley said, is the afternoon between 2pm- 5pm, which accounts for 46% of C-store sales. Impulse sales also peak towards the end of the week and significantly over-trade on weekends.
Take home ice cream sales are more evenly spread across the day, Ms Townley said, and were also supported by last-mile delivery services.
“The spike in take home ice cream sales in the late evening is particularly driven by convenience outlets who partner with online delivery apps such as Uber Eats. Indeed,
Ben & Jerry’s highest volume hour on Uber Eats is 8pm and Ben & Jerry’s purchases over-index versus all restaurants on the Uber Eats app between 10pm and 2am,” Ms Townley added.
Premium and super premium tubs are also experiencing growth – the latter was the largest take home segment in the convenience channel in terms of dollar sale, accounting for 62% of take home tubs value, Ms Townley said. Premium tubs 500ml-1.5L were the third fastest growing ice cream segment in the channel.
“Super Premium tub brands like Ben & Jerry’s and Premium tub offerings like Magnum Pints not only delight consumers with high quality ice cream, but also stand out due to their decadent inclusions like cookie dough and brownie pieces, rich chocolate and indulgent sauces.”
“These additional benefits provide shoppers with a real, tangible reason to trade up to the Premium and Super Premium segments, which in turn drives category growth through increased APP. These premium ice cream segments are also at the forefront of shifting consumer behaviour, with more and more consumers opting to order premium ice cream from convenience outlets via online delivery apps.”
Take home tubs are also an important way for brands to tackle the semi-seasonal nature of the product, as is NPD. While 30’C plus days can see sales of water ice-based products such as Paddle Pop Cyclone, Paddle Pop Icy Twist and Calippo spiking by 300%, in winter, take home packs, particularly in premium brands are a way to drive sales through the cooler months. It’s a successful strategy according to Unilever, who reported a 53.2% increase in take home tubs in P&C in a four week period between April/May this year.
Ice cream is also a category that is seeing a lot of investment in NPD. Where once the choices were between vanilla, chocolate or strawberry, the plethora of options filling the freezer chest now caters to just about every taste preference and dietary requirement.
And there have been some exciting and innovative brand collaborations, mash-ups and adventurous flavours.
One trend identified by IRI as having huge growth potential and which has seen a lot of NPD in the last two years is vegan and dairy free ice creams, which are proving popular with consumers both for health perceptions and dietary requirements. IRI found Magnum Dairy Free, launched in February last year, has seen an incredible 97% value growth compared to a year ago. Cornetto Vegan is also a strong performer. The recently released line has already generated more than $90,000 in just the convenience channel since launching, according to IRI.
Another trend IRI says we may see more of is ice creams that are specially formulated with less sugar, fat and calories and increased protein and fibre. As well as those developed to aid sleep, through added minerals, amino acids and digestive enzymes.
NPD typically makes up 10-15% of dollar sales in the channel each year and the category is reliant on NPD to generate excitement and to attract new consumers, said Unilever’s Ice Cream Marketing Director Lilian Geijsen.
“This summer we are celebrating Streets’ 100th Birthday and have invited a whole host of exciting innovation to the party to cater to different consumer demographics and need states in the convenience channel”, Ms Geijsen said.
“We have created a multi-coloured Birthday Cake-flavoured Golden Gaytime, a Koala-shaped Paddle Pop with proceeds of sales supporting WIRES and we have partnered with everyone’s favourite friends the Minions on Paddle Pop Minions Icy Blast Off, just to name a few. By activating these new and exciting innovations in store, we will drive new consumers to the freezer.”
Bundle buys are also important for driving sales. Close to 20% of ice cream purchases include another product, such as coffee and cola, chips and chocolate. Impulse too is important, as an estimated 54% of ice cream sales in stores are unplanned. Close to a third of consumers on a shopping mission make their choice in store, making the impulse zone crucial for ice cream placement.
“Interestingly, when shoppers do know that they want to purchase ice cream, 70% know exactly what they want to purchase. Therefore, it is critical that we work with retailers to ensure that they have availability, assortment and adequate stock weight of
both core and NPD to maximise satisfaction of their customers”, Ms Towley adds.
Peters Ice Cream Category Manager, Convenience and Specialty, Marylyn Navarro agrees encouraging impulse behaviour is crucial to driving sales in convenience channels. Sales of impulse ice cream lines make up 77% of value sales for the category and are growing +1% compared to a year ago, Ms Navarro said.
“Our category is highly impulsive, and seeing point of sale, the freezer or other marketing activations in store can help trigger the desire for ice cream. It’s a channel where our ice cream is often eaten immediately after purchase, so it is imbued with a sense of joy and anticipation even at the point of purchase.”
“Most recently, the P&C channel has also become a place where shoppers are looking to purchase items ‘for later’, which has seen a lot of growth coming from our Take Home tub offers,” Ms Navarro added.
“The Take Home segment is growing +12.7%, and Peters Take Home growing +63.1% (value growth, MAT). This has been aided by the emergence of home delivery within some retailers that sees products delivered straight to people’s homes, many of which are adding ice cream tubs, sticks and cones to their order.”
Maxibon, Drumstick and Connoisseur and the Milo cup are particularly strong performers for Peters in the P&C channel. The Snacking segment is performing very well in the channel with major brands Drumstick and Maxibon in growth – Maxibon is up +6.3% and Drumstick +11.6% in the latest quarter. Core flavours such as Drumstick Vanilla and Super Choc, as well as Maxibon Vanilla and Monster Cookie are SKUs that constantly rank high in the list of SKUs purchased in store, Ms Navarro said. Maxibon has a highly engaged consumer base that frequently purchase in the P&C channel. The introduction of the Cadbury range into the channel has also added more exciting options in the freezer to accommodate that snacking occasion.
NPD is also important for the category and recent launches of brand-collaborations such as Maxi-Dare and Cadbury Cherry Ripe have been very successful.
“NPD provides the opportunity to provide consumers the chance to discover new flavour combinations, ingredients or textures, and sometimes even bring consumers who previously may have avoided the category into the fold. For example, Drumstick Vegan Affogato and Proud & Punch Choc Banana Almond Pop, both launched within the last 12 months, cater to shoppers looking for dairy alternatives,” Ms Navarro said.
“Peters look to launch NPD that taps into local trends and insights, and are all developed for an Aussie palate in house at our commercial and manufacturing site located in Mulgrave, Victoria.”
Another brand looking to shake things up in the freezer aisle is Super Cubes. The brand, part of Omni Brands, has introduced a Superfood Puree range of frozen fruit that can be scooped straight from the tub and added to smoothies, juices or enjoyed on their own just like ice cream and offers an alternative to health conscious consumers, said Head of Sales at Omni Brands, Ash McMillan.
The Super Cubes Superfood Purees went from concept to store in under four months.
Three of their 1L flavours are now ranged nationally in Woolworths and the brand are working closely with Drakes, Romeo’s, Ritchies, Karrellas Group, The Hopper Group, Ryans and other independent groups to expand their stockists.
“I think the lovers of traditional recipe ice cream will continue to consume them and the sweet spot for us will be those that are looking for an all-natural, dairy free, gluten free guilt free alternative to the traditional (offerings),” Mr McMillan added.
“This is where Superfood Puree range fits and will drive incremental sales. Our Superfood Puree range scoops straight from the tub, eats just like ice cream and offers those looking for a genuine healthy, natural fun alternative to the norm. This is where I feel we can offer disruption for buying groups, retailers, wholesalers and ultimately support our endeavours to continually drive trust, flavour and variety for our customers.”