Could ice cream hotties reinvent the category?

Articles
July 16, 2009

Could ice cream hotties reinvent the category?

We accept that people and water run hot and cold. But ice cream? Want proof? Watch consumers dash around Boston to the select restaurants, wine galleries and dipping shops that sell limited quantities of hot, spicy flavors of the cool treat. Here's a taste of what they can score if they time their visits right: a "curry and coconut haute glace made of thick layers of cumin, ginger and chili, smoothed out by the coconut cream. It makes a heavenly banana sundae, striped in chocolate and caramel sauce," the Boston Globe described in its coverage of the new flavor trend. How about chocolate ice cream with cayenne pepper, a salty caramel blend, or a banana-flavored ice cream with black pepper, to name a few other hotties circulating around Beantown? If and when such flavors (or other chef-inspired creations) migrate to the supermarket shelf, they could conceivably bring in new users from a broader demographic and expand usage occasions, especially if home entertainment is still high on America's list at that time. F3 envisions how more sophisticated desserts could help re-energize a category that is as classic, and often as mundane, as apple pie. The ice cream category could use some new vigor. This past year was characterized by price increases disguised as package shrink in order to not look extreme. Ice cream manufacturers gave their half-gallon containers a tumble in the dryer, and they came out as 48-oz. to 56-oz. packages. Consumers got less ice cream for their money, but at least manufacturers and retailers didn't raise prices in the most blunt, visible manner during a recession when basket size means a great deal to shoppers, and non-staples are being cut from household to-buy lists.

We accept that people and water run hot and cold. But ice cream? Want proof? Watch consumers dash around Boston to the select restaurants, wine galleries and dipping shops that sell limited quantities of hot, spicy flavors of the cool treat.

Here's a taste of what they can score if they time their visits right: a "curry and coconut haute glace made of thick layers of cumin, ginger and chili, smoothed out by the coconut cream. It makes a heavenly banana sundae, striped in chocolate and caramel sauce," the Boston Globe described in its coverage of the new flavor trend.

How about chocolate ice cream with cayenne pepper, a salty caramel blend, or a banana-flavored ice cream with black pepper, to name a few other hotties circulating around Beantown?

If and when such flavors (or other chef-inspired creations) migrate to the supermarket shelf, they could conceivably bring in new users from a broader demographic and expand usage occasions, especially if home entertainment is still high on America's list at that time. F3 envisions how more sophisticated desserts could help re-energize a category that is as classic, and often as mundane, as apple pie.

The ice cream category could use some new vigor.  This past year was characterized by price increases disguised as package shrink in order to not look extreme. Ice cream manufacturers gave their half-gallon containers a tumble in the dryer, and they came out as 48-oz. to 56-oz. packages. Consumers got less ice cream for their money, but at least manufacturers and retailers didn't raise prices in the most blunt, visible manner during a recession when basket size means a great deal to shoppers, and non-staples are being cut from household to-buy lists.

This shift was significant. Dollar sales of 64-oz. bulk ice cream containers fell by 15.9% to $828.9 million in U.S. food, drug and mass merchandiser stores (including Walmart) in the 52 weeks ended May 16, 2009, according to Nielsen data. Concurrently, sales of the 56-oz. size jumped by 18.8% to $1.07 billion, and sales of the 48-oz. size rose 3.4% to $1.35 billion.

The masking of price rises didn't prevent price from affecting consumers' ice cream purchase decisions.  The private label share of bulk ice cream dollar sales rose to 25.7%, from 23.2% a year ago, and 21.4% a year before that; it achieved this on the strength of two successive annual gains, 8.7% and then 12.6% to $1.15 billion, the data show.  On an equivalized unit volume basis (16 oz.), PL commands more than one-third of market share: 35.9%, following a gain from 32.4% a year ago and 30.5% the year before that.

These three pack sizes (48-, 56- and 64-oz.) comprised about two-thirds of the nation's total sales of bulk ice cream in these retail channels. In all, bulk dollar sales moved up by 1.6% to $4.46 billion in the year, following flat performance in the prior year.  The smaller cubic requirements of these packs helped create space for stores to display more specialty varieties and single-serve sundaes that appeal to taste experimenters, smaller households and the economical. 


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