Is luck driving frozen dessert dollar sales in U.S. retail channels? That’s highly unlikely. Retail frozen dessert success this past year is more about offering the right product in the right place.
“Ice cream is a fun, happy, comfort food that makes you feel good when you eat it. In slower economic times, consumers may budget their money a little closer but they also like to reward themselves with ice cream,” says Carl Breed, director of marketing, Blue Bell Creameries, Brenham, Texas. “It’s a small price to pay for a product that provides such personal gratification during harder, uncertain economic times.”
According to Breed, this southwest ice cream giant enjoyed healthy sales growth in 2008. “We’ve found that consumers are eating out of the home less; thus, eating in home more often,” he says. “Our supermarket sales have seen a significant increase because of this change in purchasing behavior by consumers.”
Marketing Director Penny Baker at Smith Dairy Products Co., Orrville, Ohio, adds, “Our ice cream sales and volume have not yet been affected by the downturn in the economy. With more families eating at home, there may be a slight shift in volume away from foodservice to retail stores.”
One way many frozen dessert manufacturers are dealing with their own economic challenges is to downsize packaging without lowering product costs. Baker says that Smith Dairy currently does not plan on reducing the size of its 56-oz premium product, but does say package downsizing is a trend that will continue.
Some marketers are coming around with the size-price game, and want to offer struggling consumers more value. “We are sensitive to consumers during these tough times,” says Tom Wright, vice president of marketing, Turkey Hill Dairy, Lancaster, Pa. “As we see some of our raw material costs go down, we are working with retailers to lower product price tags.”
Does size matter?During the past decade consumers have seen many frozen dessert half gallons (64oz) turn to 56oz. In late 2008, Dreyer’s Grand Ice Cream Holdings, Inc., Oakland, Calif., took it down even further to 48oz. Other marketers followed suit.
“Turkey Hill made both reductions about six months after Dreyer’s,” says Wright.
Oregon Ice Cream, Eugene, Ore., views smaller sizes as a better size for consumers. “We are a leader in ‘right-sized’ to the current demographic trend,” says Tom Gleason, president. “We lead the industry in the 48-oz conversion.” Oregon Ice Cream has been packaging its frozen desserts in 48-oz containers for more than two years, and made the change based on consumer requests.
Smaller cartons are getting smaller, too. This past January, Dreyer’s changed its Häagen-Dazs-branded 16-oz cartons to 14oz, and this month all Häagen-Dazs-branded quart cartons will drop from 32 to 28oz.
All this downsizing is a result of escalating raw materials costs, particularly the all-natural ingredients used to make superpremium Häagen-Dazs. According to Dreyer’s, fresh eggs, premium fruits and natural vanilla have increased by an average of 25%. Further, the energy required to make and deliver ice cream has risen in cost as well, despite the recent dip in gasoline prices.
Unwilling to stray from the principle-using 100% all-natural ingredients-on which the Häagen-Dazs brand was founded and continues to provide a point of distinction in the crowded freezer, the company decided to offset increasing costs by slightly reducing carton sizes.
“Most companies continue to downsize packaging without reducing the price of their products,” says Breed. “Blue Bell has elected to keep our ice cream in a true half-gallon size. We state this claim on our packaging and we have recently introduced a new television commercial emphasizing this position.”
Blue Bell’s pints remain 16oz, too. “Our pint line has always been and still is an extremely popular packaging size for us,” says Breed. “Most of our new flavors will now be marketed in pints, also.”
Paul Kruse, Blue Bell CEO and president, adds, “We normally do not offer our ice cream in the pint size when it is first introduced. However, there are people who prefer a smaller portion, and the pint size is perfect if you want to sample the flavor before purchasing the larger carton.”
Blue Bell’s first new flavor of 2009 is Mocha Madness, which is a rich coffee ice cream containing roasted pecan halves and chocolate chips, surrounded by a smooth caramel sauce. “It’s a strong and distinct flavor, which is just right for a coffee-based ice cream,” says Kruse. “The caramel sauce and chocolate chips add a sweetness that balances the ice cream perfectly. We also added the pecans to give it a bit of a crunch.”
Breed adds, “Blue Bell will be rolling out a new good-for-you quart line, which includes light, no-sugar-added and frozen yogurts,” says Breed. “The new quart size should be welcome by anyone watching their waist lines. Consumers who purchase these products will like this size because it is conducive to smaller serving sizes and the product will stay fresher longer. Our sherbet quart line has been successful for many years and these should enjoy the same success.
“Further, consumers are well aware of sky-rocketing food prices across all supermarket aisles,” Breed adds. “They should appreciate the lower price point and value of our quarts. The lower retail price will allow the consumer to purchase their favorite flavor and stay within their food budget. Additionally, since our half-gallon size still has a tremendous following, we will keep select flavors of light, no-sugar-added and frozen yogurt in the half-gallon carton.”
Private label shines in 2008According to trend data provided courtesy of the International Dairy Foods Association Ice Cream Market Research Report, retail dollars sales of ice cream were flat in 2008, as compared to 2007, but were up for the other three categories of frozen desserts: frozen novelties, frozen yogurt and sherbet/sorbet/water ice.
Each category has a unique tale to tell. With ice cream, total volume sales are down more than 5%, and more than 10% when it comes to branded product. Conversely, private label ice cream sales have grown significantly, suggesting that consumers are economizing their ice cream purchases. The story is similar for sherbet/sorbet/water ice, the category with the smallest share of retail dollar sales.
With frozen novelties, only branded volume sales are down. Private label is driving total dollar and volume retail sales of frozen novelties, which includes everything from single-serve cups and stick products to multi-serve cakes and value-packs of individually wrapped items.
Frozen yogurt was the star in 2008 and will continue to gain category share in the next few years. Both branded and private label dollar and volume sales have increased, with branded products driving total frozen yogurt growth. This is likely due to the fact that private label marketers took a wait-and-see approach with applying resources to developing and marketing frozen yogurt. However, with all the national brands experiencing noteworthy sales success in frozen yogurt, private label is entering the category.
For example, Super Store Industries, Stockton, Calif., is rolling out Sunnyside Farms Fat Free Frozen Yogurt to its private label dairy product lineup. Made with probiotic cultures and enhanced with the omega-3 fatty acids docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA), a half-cup serving contains a mere 90 calories. The new frozen yogurt comes in 56-oz containers in two flavors: Pomegranate Swirl and Mango Peach Swirl.
And here’s a new spin on private label fro-yo: Supreme Blend. Created by Brookshire Grocery Co.’s (BGC) manufacturing division in Tyler, Texas, this all-natural frozen dessert contains 20% yogurt boosted with probiotic bacteria. A half-cup serving boasts a mere 80 calories and only 2g fat. It’s also fortified with calcium, providing 20% of the Daily Value.
The pint-sized product debuted this month in three varieties: Chocolate Trails, Strawberry Delight and Vanilla Snowcap and is available through the company’s 150-plus retail stores throughout Texas, Louisiana, Arkansas and Mississippi.
Oregon Ice Cream, a leader in private label frozen desserts as well as branded products recently debuted Julie’s Organic Low-Fat Frozen Yogurt. The product is rich in prebiotic fiber and also contains six probiotic cultures. Together this combination of ingredients claims to enhance digestion and improve the immune system. The new product is sold in pints and comes in the following flavors: Blackberry, Blueberry, Chocolate, Cinnamon Apple, Lemon and Vanilla Bean.
Fro-yo in foodserviceWith consumers eating at home more, it’s not just fine-dining establishments that have taken a hit . . . so have the frozen yogurt shops that had been popping up all over the country. “The frozen desserts category is not growing and is flat at best, and the premium segment-the Cold Stones and Pinkberrys-has tapered off,” according to Darren Tristano, executive vice president of food industry research and consultancy company Technomic Inc., Chicago, as reported in the Los Angeles Business Journal. “In these recessionary times we’re not going after those indulgences as much. People consider McDonald’s to be recession-proof. I don’t think people think Pinkberry is recession proof.”
However, that has not stopped some frozen dessert marketers from adding soft-serve mix for foodservice to their product lineup. Darigold in Seattle recently introduced through Costco club stores a line of soft-serve ice cream mixes in half-gallon cartons. The mix is designed for independent chains who don’t want to deal with a distributor.
Smith Dairy is packing ice cream for a unique foodservice concept called f’REAL, which can be placed in outlets ranging from convenience stores to mini-marts. The machines work by placing an individual cup containing a small block of a frozen ice cream and milk mixture. The machine adds a small amount of hot water to loosen the frozen dairy mix to just the right consistency during mixing so the shake turns out like a milkshake and not an icy jumble. Smith Dairy didn’t invent the shake, or the machine, but Smith’s dairy products are in that cup.
Strauss Family Creamery, San Francisco, has just introduced the first organic soft-serve ice cream and frozen yogurt mix. Sold in 1-gal jugs, the mixes are shipped refrigerated and require no additional mixing or ingredients; simply pour into the machine and serve.
“Requests for an organic soft-serve ice cream and frozen yogurt keep coming in,” says Albert Straus, farmer and founder of Straus Family Creamery. The soft-serve ice cream is available in vanilla and chocolate varieties, while the nonfat frozen yogurt comes in three flavors: original tart, vanilla, and chocolate.
“The Original Tart is a very popular flavor on its own,” says Mary Randolph and Alexis Beckman, owners of the Culture organic frozen yogurt shop in Palo Alto, Calif. “We also use it as a base to create our own unique flavors like tangerine and pumpkin.”
Organic trend continuesThe trend in going organic is spreading among traditional ice cream marketers. Perry’s Ice Cream Co., Akron, N.Y., has gone green with the introduction of Perry’s Organic Ice Cream in chocolate and vanilla flavors.
“The introduction of an organic ice cream line demonstrates Perry’s commitment to creating delicious, wholesome products to fit a variety of consumer lifestyles,” says Michael Brown, senior product manager. “Our organic ice creams fit into the larger move to organic foods and locally sourced produce.”
According to The O’Mama Report published by The Organic Trade Association in 2008, organic dairy is a fast-growing segment of the organic food industry. Organic dairy products have shown a growth rate of 20% to 30% over the past few years.
Other nuts debutAmong all the new products debuting in 2009, there will likely be one flavor that is not as popular as in previous years, and that is peanut.
A new national study conducted by the Harvard Opinion Research Program at the Harvard School of Public Health, Boston, finds that the vast majority (93%) of Americans have heard or read about the recent ongoing recall of peanut products. Among those who are aware of the recall, about six in ten (61%) say they have taken one or more precautions to reduce their risk of getting sick from contaminated peanut products. Specifically, one in four has thrown away foods in their home that they think might be on the recall list. Further, 28% stopped eating those foods they heard were in the recall, while 15% say they have stopped eating all foods containing peanuts.
“It is too early to tell if consumers will stop buying ice cream with peanut products,” says Wright. “Peanut butter flavors remain our biggest sellers, outside of vanilla. Further, we have not changed any marketing plans and peanut products will continue to be a part of Turkey Hill in the future.”
However, with the popularity of peanuts subsiding, marketers are appealing to consumer desire for crunch with all types of other nuts. For example, Tillamook County Creamery Association, Tillamook, Ore., introduces limited edition Black Walnut ice cream. This walnut-flavored ice cream is interspersed with crunchy English and black walnut pieces.
This past winter, Gifford’s Ice Cream, Skowhegan, Maine, brought pistachios to the freezer. Not only does it taste great and have crunch, the generous helping of pistachios in every serving of new Pistachio Nut should appeal to health- and wellness-seeking consumers, as pistachios are being touted as nutrition powerhouses.
The frozen dessert industry might consider itself lucky to be weathering the recession, but at the end of the day, it’s the consumers who really are the winners. They have yummy treats to make their life just a little bit better.
A Look Back at Last Year . . . and a Glimpse into 2009by Krista Faron, Senior Analyst, Mintel International, and Donna Berry, Product Development Editor
Many characterize 2008 as a year of decline-for stock prices, home values, employment rates, and more, including U.S. ice cream introductions. New product launches of dairy-based frozen desserts decreased in 2008, falling 15% from the previous year, according to Mintel Global New Products Database (GNPD).
Although deceleration in the ice cream market might suggest that processors were focused on low-cost offerings and value positioning, new product introductions show otherwise. However, what consumers were purchasing this past year, as discussed in the main part of Dairy Foods’ 2009 Ice Cream Outlook, is another story.
Indeed, the second most popular ingredient-related claim among dairy-based frozen desserts launched in 2008 was premium, appearing on nearly 25% of all new products. (See table.) Only kosher claims appeared on more ice creams and frozen novelties. More than 60% of all 2008 introductions were kosher, allowing this claim to retain its top position from 2007. Consumers’ emphasis on better-for-you indulgences and product naturalness were drivers of the remaining top claims. Low-/no-/reduced-fat, all-natural and low-/no-/reduced-calorie rounded out the top-five most popular frozen dairy claims in 2008. Other key trends focused on the absence of ingredients such as preservatives, allergens, gluten, trans fats and sugar. All of these trends are projected to continue with 2009 frozen innovations.
Another driver that shows no signs of abating is products designed for Hispanic consumers-a group that is expected to grow at 12.9% from 2008 to 2013, compared to only 2.4% growth for the rest of the population, according to Mintel Oxygen. Leading manufacturers recognize opportunities for sales growth with Hispanic consumers, and a handful have responded with new formats and flavors to appeal to this group.
For example, there has been a great deal of activity with mass-producing a traditional homemade Mexican dessert-the paleta. Sold in both water-based and milk-based forms, these Mexican stick novelties are distinguished by their use of whole fruit. In both Mexico and the States, paletas have traditionally been sold from street vendors. Now they are available through the retail channel.
Pierre’s Ice Cream Co., Cleveland, launched ¡Hola Fruta! Pure Fruit Sherbet Bars in Pomegranate & Blueberry, Piña Colada and Mango varieties. Although the sherbet base is not traditionally Mexican, the association with traditional paletas is made clear with the Hispanic brand name and on-pack messaging that has been translated to Spanish.
Meadow Gold Dairies, a business of Southern Foods Group, Dallas, took a more classic approach with its La Micha Paletas introduced in a Pecan Cream flavor. Made with water, cream and nonfat milk, this paleta mirrors what consumers might find from a roadside stand.
Just as demographic shifts are driving ice cream innovation, continued emphasis on health and wellness is also guiding new product development. For the past several years, lower-calorie “churned” formulations and 100-calorie packs have been the biggest stories in better-for-you ice cream. While these products continue to be introduced, new concepts are refreshing the marketplace, many going upscale, such as the Skinny Cow Truffle. Expect to see more marriages of indulgence and portion control, because if there’s one constant among Americans, it’s that ice cream temporarily makes the woes go away.
One of the year’s most innovative launches came from retailer Safeway, Pleasanton, Calif., and its successful Eating Right private label brand. Light Ice Cream Cups contain a special blend of five probiotics to help regulate the digestive system and enhance immunity, according to the company. The product is also enhanced with the omega-3 fatty acids docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA). Sold in packs of four, each cup contains a handy spoon under the lid. While it remains to be seen if consumers will respond to such a functionally rich product, Safeway’s launch manages to combine three of today’s most important health trends-100-calorie packs, probiotics and omega-3s.
Ice cream innovation often comes in the form of unique flavors, and 2008 was no exception. Without a doubt, superfruits such as pomegranate, acai and blueberry were among the more popular fruit flavors to show up in ice cream products, particularly those with a better-for-you positioning. Adding whole fruit to ice cream is a trend that will continue to boom as consumers seek out options to help them achieve their daily dose of fruit. (See this month’s Lab Talk on page 76.)
Among national brands, dessert-inspired flavors continued to be the source of innovation. Banana Split was a new flavor for a number of brands including Ben & Jerry’s, Edy’s (in a limited edition ice cream) and Food Lion (in an ice cream sandwich). Fried Ice Cream was also popular and found its way into ice creams under brands such as Dean’s, Breyers Overload and Wal-Mart’s Great Value line (in an Apple Fried Ice Cream variant). But one of the most unusual dessert-inspired treats came from KB Treats, Elmwood Park, N.J. Designed to resemble a Rice Krispies Treat, QB’s Crispy Vanilla Ice Cream Cubes combine vanilla ice cream, marshmallow and crispy rice-puffed cereal.
But 2008’s most interesting flavors didn’t just come from classic desserts. Some came by way of remote, exotic locales and touted their unique geographic credentials. In particular, Choctál’s Exotic Chocolate Ice Cream Collection stands apart by its positioning based on the cocoa’s country of origin. The variants include Costa Rican Chocolate, Ghana Chocolate, Dominican Chocolate and Kalimantan Chocolate.
Other flavors were inspired by non-traditional gifts from natures. For example, Minneapolis-based Target Corp.’s private label brand Archer Farms used a botanical for flavor differentiation in Blueberry Lavender sorbet. Häägen Dazs turned to a classic French combination: caramel and fleur de del salt. And the Ciao Bella sorbet line now includes a pairing of dark chocolate with jalapeño peppers.
Flavor inspirations come from all over the world. In particular, unique spices have been the impetus for ice cream innovation in Europe. In Greece, Kayak Ice Cream recently introduced a special edition range with bold spice ingredients. Mastic Pink Pepper and Lemongrass are among the variants. In 2008, an ultra-premium range of ice cream in the United Kingdom was also inspired by global spices. Espice Luxury Ice Creams are made with exotic spices sourced from around the world. Flavors include cardamon, allspice, clove, nutmeg and star anise.
Others formulators are motivated by trends in the beverage category. In Southeast Asia, green tea is among the most popular ice cream and frozen novelty flavors. But recently, consumers have been able to find frozen treats inspired by milk tea-a blend of milk and black tea that is ubiquitous in Japan. (For more ideas, see this month’s Ingredient Technology feature starting on page 58.)
But beverage-inspired ice cream flavors don’t just stop with non-alcoholic drinks. Wine became a source of intense ice cream flavor in 2008. Mercer’s Dairy launched a Wine Ice Cream range in the Netherlands. The products contain up to 5% alcohol and are available in Ala Port, Cherry Merlot, Peachy White Zinfandel, Red Raspberry Chardonnay and Royal White Riesling variants. For something even more decadent, consumers in France can treat themselves to a sorbet made with Grand Cru champagne from Glaces Erhard. For the truly adventurous, there are smoked salmon and foie gras ice creams sold under the same brand.
Analysts predict that 2009 will continue to bring all types of innovation to the freezer. The only ingredient noticeably missing will likely be peanuts.