The Cold Truth
January 1, 2007
The Cold Truth
by Lynn Petrak
Although sales dip slightly, diverse products continue rolling out to a splintered marketplace.
Ice cream has always had a certain sentimental cache in the world of dairy products. Legions of people have expounded on the comfort factor associated with ice cream, including the legendary poet Ralph Waldo Emerson, who once mused, “We dare not trust our wit for making our house pleasant to our friend, so we buy ice cream.”
The state of the ice cream category is akin to the eclectic array of product offerings available right now. Retail freezers are chockfull of indulgent flavors, cutting-edge flavors, varieties with some type of health and diet profile and options for those interested in the sourcing of ice cream ingredients.
Scoop shops and restaurants, meanwhile, are also getting rather prolific and creative, mixing up special and sometimes savory profiles.
According to Carl Breed, director of marketing for Brenham, Texas-based Blue Bell Creameries, such diversity has become crucial. “That’s why we have a no-sugar-added line, a light line, a yogurt line and a sherbet line in addition to all of our indulgent flavors,” he says.
|2005 Production of Frozen Desserts|
|Millions of gallons|
|Regular ice cream||953.0|
|Lowfat and nonfat ice cream||384.7|
John Pimpo, brand development manager for Cleveland-based Pierre’s Ice Cream Co., agrees. “There are as many types of ice cream consumers as there are flavors of ice cream, and we cater to each with varieties of ice cream for every occasion,” he says.
The folks at Smith Dairy Products Co., Orrville, Ohio, also have recognized the fact that consumers often talk — and eat — out of both sides of their mouths. “I believe there are conflicting trends in ice cream, with more indulgent flavors than every before, yet healthier choices with less fat, less calories, than ever before, too,” says Penny Baker, director of marketing.
The lines between segments can get a bit fuzzy. Sean Greenwood, spokesman for Ben & Jerry’s Homemade Holdings Inc., the South Burlington, Vt.-based subsidiary of Unilever, says that there is some crossover. “We find that, more and more, people kind of eat across the board,” he says, adding that sometimes consumers look for lowfat, no-sugar-added or low-carb profiles, while other times, they moderate intake by not consuming an entire pint at one sitting. And then there are the occasions, Greenwood notes, when ice cream aficionados decide to splurge.
Crunching the Numbers
As ice cream makers continue to introduce new products, production statistics reflect the industry’s earnest efforts to be more things to more people. According to the latest edition of Dairy Facts, published by the Washington, D.C.-based International Dairy Foods Association (IDFA) and Dairy Field, production of ice cream increased 0.9 percent in 2005 over 2004, to a total of 1.54 billion gallons. Within the total category, regular ice cream production rose 3.5 percent, good news for the segment that comprises nearly two thirds of the entire market.
|Total U.S. Production of Frozen Desserts
(Hard and Soft) 1995-2005 (in millions of gallons)
|Source: IDFA, received from USDA, National Agricultural Statistics Service|
The second largest segment, lowfat/nonfat ice cream, showed new life in the first part of 2006 with lowfat ice cream production up 2.2 percent. Still, as plants churn out the frozen goods, production doesn’t necessarily mirror consumption.
According to Chicago-based Information Resources Inc. (IRI), sales of regular ice cream dipped 0.4 percent to just over $4 billion from December 2005 to December 2006. Sales of frozen yogurt declined 0.5 percent, while sherbet, sorbets and ices lost 2 percent. The silver lining seems to be the frozen novelty category, which experienced a 1.7 percent increase to $2.25 billion. Sales of ice cream and ice milk dessert climbed a more substantial 7.8 percent.
|Ten Leading States in 2005 Production of Ice Cream and Related Products (Hard and Soft)|
|Millions of gallons|
The Splurge Factor
Indulgence has always been a term associated with ice cream, but the word has taken on a new meaning in recent years with a spate of superpremium and ultra-premium varieties.
Most recently, Americans’ ongoing love affair with chocolate is reflected in rollouts from national and regional ice cream manufacturers. “No question — chocolate is hot right now, especially premium chocolate,” says Malcolm Stogo, author and president of ice cream consulting business Malcolm Stogo and Associates in New York.
The Dove® line of superpremium chocolate-based ice creams from Mars Inc., Hackettstown, N.J., has expanded to include more tub products, with recent varieties like Unconditional Chocolate, Vanilla with a Chocolate Soul, Chocolate and Brownie Affair and Chocolate and Cherry Courtship, among others.
The Dreyer’s and Edy’s brands from the Nestlé-owned, Oakland, Calif.-based Dreyer’s Grand Ice Cream Inc. also recently unveiled more choco-centric flavors, including a new Choc’N Roll Caramel. Hot Chocolate is an increasingly popular variety, with Blue Bell Creameries and Smith Dairy launching their versions of Hot Chocolate ice cream in the last year and both reporting strong early consumer interest.
In addition to chocolate, the indulgent segment has also touched upon a trend by capitalizing on another favorite sweet treat: cake. Several ice cream companies have married cake and ice cream, including Dreyer’s, which offers a new Take the Cake flavor with yellow cake flavored ice cream combined with colorful sprinkles and a “frosting” swirl. At Blue Bell Creameries, Breed also reports a similar cakewalk, so to speak. “With over 80 percent of our ice cream sales coming from the indulgent segment, we spend most of our time on that,” he says, adding that in addition to other indulgent flavors, cake-based varieties include new Mississippi Mud Cake, a regional King Cake flavor for the Louisiana market and a soon-to-be launched flavor called Anniversary Cake, to mark the company’s centennial year in 2007.
Another all-American dessert, pie is in the mix as well. Smith Dairy developed a Grandma Ruggles Blueberry Pie variety last spring, made with vanilla ice cream, a blueberry swirl and sugar coated pie crust pieces. “The consumer response was amazing and we received lots of fan mail on that flavor,” Baker says. Blue Bell also has found a positive reaction to its Lemon Ice Box Pie flavor, Breed says.
Nestlé’s Häagen-Dazs brand garnered interest in one of its dessert-inspired flavors, too. Last summer, Häagen-Dazs appeared in a special Food Network television special called “Scoop,” in which consumers submitted their ideas and recipes. The winning entry was based on an English dessert, Sticky Toffee Pudding. “After that show, the flavor was such a success that we literally got thousands of calls from consumers saying they couldn’t find it on the shelf,” says Josh Gellert, brand manager. “We were able to ramp up production and meet demand.”
While dessert and ice cream go together, so too do sweets and coffee. On the new product front, the HP Hood-owned Kemps brand, based in St. Paul, Minn., added a new series of co-branded ice creams made with Caribou® coffee in 2006, including Caribou Blend, Java Chunk, Turtle Mocha and Caramel High Rise.
In the indulgent category, some flavors reflect the desire to capture premium ethnic flavors, like the now-standby Dulce de Leche. The Breyers® brand from the Green Bay, Wis.-based Good Humor-Breyers subsidiary of Unilever, for instance, now carries a special-edition Fried Ice Cream, based on the popular Mexican dessert and featuring cinnamon caramel light ice cream swirled with honey caramel and pieces of cinnamon tostada.
Breed agrees that certain ethnic flavors have come to the fore, but cautions that marketing certain flavors to appeal to distinct ethnic groups, like Hispanics and Asians, is not always a straightforward deal. “A few years ago, we introduced a line of Southwest flavors, inspired by dessert traditions from Latin America,” he says. “We learned a lot from marketing those flavors and mainly, it is that when it comes to ice cream, Hispanics are like most other consumers — they like ice cream that tastes good. It doesn’t have to come from Latin America.”
Playing to the Palate
It’s pretty much a given that Americans love chocolate and confections paired with ice cream. But as they develop more sophisticated tastes, new and intriguing types of ice cream flavors have emerged.
“In today’s age, the advent of the Internet as well as the Food Network have done a superb job of informing the consumer to what is new, exciting and flavorful,” says Gary Barron, president of SheerBliss Ice Cream, the Hallandale Beach, Fla.-based manufacturer of gourmet ice cream sold in signature cans. According to Barron, SheerBliss has found a following for its unique ice cream flavors, including its signature pomegranate with dark chocolate chips.
“The taste of pomegranate is new to the palate and the flavor notes suggest something in the raspberry family of flavor. It has a sweet-tart type of flavor,” he explains, adding that another customer favorite is the brand’s pomegranate ice cream bar dipped in dark chocolate.
Häagen-Dazs is also heeding such trends with a new line set to be introduced in 2007, called Häagen-Dazs Reserve. “This is about up and coming flavors, ingredients that are not as widely accepted but that are interesting to consumers in our group who are looking for something different out of ice cream,” Gellert says. Among the inaugural flavors in the Häagen-Dazs Reserve line: Pomegranate Chip, Brazilian Acai, Lehua Honey and Sweet Cream and Amazon Valley Chocolate.
Indulgence aside, the better-for-you segment has become a force of its own in recent years. Here, too, varieties of ice cream and novelties are available that suit not only different palates but a range of dietary plans, spanning lowfat/no fat, no sugar added, low carb and lactose free.
Two decades after the first reduced-fat and -calorie ice creams arrived in stores, ice cream makers continue to develop better-for-you products, emphasizing the taste factor. Häagen-Dazs, which launched its Light line two years ago using a new proprietary technology, calls its lifestyle-driven product line its second-biggest business. “There are certain consumers who say, ‘I don’t care if it tastes exactly the same, I want regular ice cream,’ and we have a ton of flavors for that,” Gellert says. “There are other consumers who say if the taste is the same, they can have twice as much of the Light.”
According to Gellert, the success of any light or better-for-you product ultimately hinges on quality. “For consumers who enjoy a lighter ice cream, every single Light flavor we test goes against our regular lineup,” he says. “It has to be on par with or preferred to regular to get into this line.” In the next few months, Häagen-Dazs will introduce more Light flavors, including Mocha Chip, Rocky Road and a new chocolate version.
Pierre’s also has spent considerable R&D time on creating more better-for-you items that mimic the flavors and indulgent feel of regular ice cream. In early spring, according to Pimpo, the company plans to add three new flavors to its Slender® No Sugar Added Reduced Fat Ice Cream line, including Peanut Butter Cup, Black Raspberry Chip and an ice cream sandwich novelty.
Other major ice cream companies have geared up to meet demand with more better-for-you products as well. Dreyer’s/Edy’s has added a No Sugar Added series to its popular Slow Churned® line, in addition to a line of Slow Churned Yogurt Blends. Breyers now offers Double Churned Light, Double Churned No Sugar Added and Double Churned 98 Percent Fat Free.
Another trend worth watching in the ice cream category is the growing interest in organic products, with brands like Ben and Jerry’s and Breyers recently adding organic options to their stable. “We feel like we have a toe dipped in that pond. It’s a fraction of what we’re doing now, but it’s another area that we have a product line to offer,” Greenwood says of Ben & Jerry’s organic products.
According to Stogo, organic will be a big buzzword in the category. “Organic is leaning toward the more mainstream population. I think the (major) manufacturers of ice cream will have organic, if they don’t have it now, in the next year,” he predicts. Still, he cautions, like low-carb, there is a potential for this new segment to fizzle due to oversaturation.
While organic is tied to the notions of sustainability and corporate and consumer responsibility, Ben & Jerry’s has been working another responsibility-focused project. Last fall, the company added vanilla and chocolate to its line of “fair trade” products. “We were the first frozen-foods manufacturer and the first ice cream company to announce fair trade back in April. It’s one of those areas that we want to be able to pay farmers a better price for their product,” Greenwood explains. This spring, Ben & Jerry’s will roll out fair trade varieties in pint-size packages, in addition to its current bulk offerings.
Making it on Marketing
From a marketing perspective, ice cream brands have continued to double their equity by teaming up with other brands. Breyers, for instance, offers Bubble Yum® flavored ice cream and Dora the Explorer ice cream featuring the popular children’s cartoon character.
Dreyer’s/Edy’s has gotten extra mileage out of the wild success of the television show “American Idol” with limited-time flavors featuring that show’s logo and tied-in flavors like Hollywood Cheesecake and Soulful Sundae Cone, among others.
Other traditional marketing efforts still run the gamut from advertising, sampling and in-store materials to special offers and sweepstakes. After its successful “Scoop” program last year, Gellert says that for 2007, the company is teaming up with Gourmet magazine and is already soliciting entries via various channels.
Finally, as ice cream makers invest in new products and supporting marketing programs, what else can the category look to in 2007? Stogo, for his part, cites some non-dairy competition on the horizon.
“With what’s happening with organic, with shoppers liking Whole Foods and the organic selections at Wal-Mart as an extension of that, I think there is a trend going back to soy,” he says. “Soy has been flat for a couple of years and I think that trend will reverse itself — it will start to happen now and happen within two years.”
Lynn Petrak is a freelance journalist based in the Chicago area.$OMN_arttitle="The Cold Truth";?> $OMN_artauthor="Lynn Petrak";?>