Sales of luxury lines soar 36%

Grocer, March 17, 2007

Luxury lines are the stars of the indulgent end of the ice cream market with sales up 36% year-on-year, according to TNS [52 weeks ending 3 December 2006].

At 62m [pounds sterling], sales for the luxury sector were less than half that of the premium sector, but they showed the fastest growth.

Indeed, premium sales only grew 0.7% to 140m [pounds sterling], according to TNS.

TNS splits the indulgent end of the market into two: premium, which includes brands such as Carte d'Or and luxury, which includes brands such as Haagen-Dazs.

Unilever ice cream business director Anuj Lal says 2006 was the fourth consecutive year of value and volume growth for Carte d'Or, thanks mainly to the level of new product development, with particular highlights including a Greek yoghurt and honey variant.

Yoghurt has become big news in the sector with another new product, Carte d'Or Strawberry & Yoghurt Delice--yoghurt ice cream swirled with strawberry sorbet--introduced early this year.

The brand will be supported by a 6.5m [pounds sterling] spend including TV and press advertising from May.

Me-too versions of premium ice cream have emerged in the multiples but Lal says there has been a "conspicuous decline" in own-label sales.

Suppliers have been quick to capitalise. "Consumers are switching to branded premium lines. Own-label has a role to play but it's a mixed bag with some own-label lines in decline and other doing better," he adds.

Ben & Jerry's is the star of the luxury or super-premium segment, which OK brand manager Caroline Simpson says has a 35.7% share compared with Haagen-Dazs' 33% [IRI 4 w/e 30 December 2006]. She adds that Ben & Jerry's value sales are up 26.5% so far this year.

"Last year we focused on getting the distribution right. We now have 99.7% distribution in Tesco and we want to ensure we maintain that," she says.

"Ben & Jerry's is more than just ice cream--there are layers to it. They include a Caring Dairy scheme to keep the cows happy and limit damage to the environment.

"Plus there's the launch of Fairtrade variants, introduced last summer. Two more flavours will go Fairtrade later in the year."

The producer says the flavours really define Ben & Jerry's ice cream. "The recall on our names is amazing," says Simpson." People don't say the chocolatey one, they say Phish Food."

The company's next plan is to introduce Bohemian Raspberry--sales of which will help to raise funds for the Mercury Phoenix Trust Aids charity.

Ben & Jerry's core consumers are students and young professionals aged 18-30 who are buying into the brand's ethical stance.

Ben & Jerry's has been positioned so it isn't regarded as part of a big corporate entity, but it still sits quietly under the Unilever umbrella. Simpson says the global giant is sensitive to this and tends to keep its distance.

Meanwhile, Haagen-Dazs, with its less quirky flavours, has a more upmarket following--typically urban ABC1s in their early 30s. Its latest flavour is the limited-edition mango & passion fruit.

Persuading a consumer who is used to buying a 900ml tub of Carte d'Or for 2.79 [pounds sterling] to trade up to something like Haagen-Dazs at 3.79 [pounds sterling] for just 500ml may seem a difficult task but Haagen-Dazs' marketing manager Mark Elderkin, says its advertising does the trick.

Previous advertising campaigns have resulted in sales uplifts of between 25% and 40% for the brand [IPSOS data].

And this year Haagen-Dazs will be helped by a 5m [pounds sterling] marketing spend.

The two big American brands have had the UK luxury sector of ice cream almost all to themselves, but Hill Station wants to change that.

It is relaunching Loseley ice cream with the emphasis on its Britishness--using high-quality British ingredients such as Jersey cream and Cambridge strawberries.

Ayesha Shah, brands director for Loseley Ice Cream, says: "We felt there was a gap in the market for a truly British premium ice cream."