Happiness comes in cups and cones

November 06, 2012

Supermarkets should try dipping counters, with ice cream sales on the rise again.

Is ice cream our secret weapon for shrugging off years of bad news—from the recession and its aftermath to the latest blow by Hurricane Sandy?
Hardly. But to see the sheer pleasure of kids’ smiles when they enjoy ice cream is to acknowledge its emotional benefits. Could this accessible, low-cost treat, consumed a few times a week, help American adults cope with daily stresses that melt the fun from routine activities?
Supermarkets that pursue a higher-profile ice cream effort—perhaps with a dipping counter—could help make their stores happier places and generate new trips, we feel at The Lempert Report. Our idea isn’t conventional business as usual. Rather, it is business on a happier plane.
Why not borrow a page from retailers Thrifty Drug Stores and Walgreens, which made ice cream a calling card?
The timing couldn’t be better. According to Mintel, the ice cream and frozen novelty market emerged from its deep freeze in 2011 with a 4.1% rise in U.S. retail sales to $10.7 billion, and a forecast of another 4% gain in 2012. This follows a period of food-price volatility in which ice cream containers sold in supermarkets typically shrank from 64 ounces to 48 ounces, and consumers stuck with staples. It seems ice cream is back, however.
Supermarkets with their own dairies that produce private label are in a unique position to formulate exclusive consistencies and flavors. They could brand these as signature products. Depending on climate and local activities, the dipping counter could become a destination for families and youth sports teams after games—a more affordable alternative than the high-price, super-premium ice cream shop. A walk-up or drive-thru window, or an outpost ice cream shed in the parking lot could help alleviate congestion and speed up service.
The private-label edge in margin percentage could be key, we feel, because Mintel food and drink analyst John N. Frank says, “aside from the flavor of frozen treats…price is more important than brand, quality and health information.”
Moreover, “new flavor profiles and ingredients, better-for-you products [such as frozen Greek yogurt], and new packaging concepts will be instrumental” in the success of ice cream and frozen novelties, he adds. There’s lots of potential:  the U.S. eats the most ice cream per capita in the world—17 liters per person, notes Mintel.