State of the industry: Frozen desserts

Dairy Field, Aug 2000 by Cook, Julie

Frozen dessert category banders to indulgent trends.

A well-appointed house, white picket fence, two cars in the garage, 2.4 children and a couple gallons of ice cream in the freezer door the American dream is alive and well. As consumers enjoy the prosperity of the early days of the 21st century, they are increasingly turning to indulgent ice cream and frozen novelty products to treat themselves after a long day at work or school. As a result, frozen dessert processors are enjoying growth in premium, superpremium and ultrapremium products offering the ultimate indulgent experience.

"Consumers feel confident about the economy, so they are pampering themselves and returning to indulgence," says Doug Ronan, director of HaagenDazs brand marketing for Ice Cream Partners, San Ramon, Calif.

"The idea of purchasing a super premium brand is more appealing, and that's the activity that Americans consumers have been doing," Ronan notes.

Fortunately for processors and consumers alike, last year's fluctuating butterfat prices seem to have stabilized for the time being, giving the category a more solid grounding on which to build product innovations and marketing initiatives.

"Volatile or very high dairy costs limit a manufacturer's ability to innovate and to advertise innovation and to really try to grow the top line of the business," says Terry Olson, vice president of marketing for Good HumorBreyers, Green Bay, Wis. "That's a real issue that the whole industry could benefit from if there were a more consistent raw materials side."

The current stability in butterfat prices is evident in ice cream category figures, which reached nearly $3.97 billion in dollar sales at food, drug and mass merchandising outlets for the 52week period ending May 21, 2000, according to Information Resources Inc. (IRI), Chicago. That reflects a 6.3 percent increase over the previous year's dollar sales, while unit sales exhibited a 4.3 percent growth.

Meanwhile, the frozen novelty category posted a gain of 4.7 percent in dollar sales for a total of $1.76 billion for the same IRI reporting period. Unit sales were up 1.7 percent. Ice pop novelties also enjoyed a prosperous year with dollar sales rising 7.7 percent to $45.1 million, while unit sales rose 6.8 percent. However, the fortunes of the frozen yogurt and tofu category were not so rosy. Once again, dollar sales plummeted, this time down 12.8 percent, while unit sales fell 14.7 percent, IRI reports.

Meanwhile, Rogers Yarnell, president of Yarnell Ice Cream, Searcy, Ark., believes consolidation will continue to accelerate in both the grocery industry and in the ice cream/frozen treat processing sector. "We must use information and technology to drive cost out of our selling and distribution processes," Yarnell says. "Having the right product at the right place at the right time at a better price-value relationship than our competitors is essential for us to thrive in a turbulent competitive environment of consolidation."

Yarnell is not alone in preparing for further consolidation. Eric Walsh, president of Good Humor-Breyers, notes, "We at Good Humor-Breyers are specialists - focused ice cream marketers - and we intend to use our specialist skills to grow our four strong brands in a disciplined way over the years ahead."

Indulgent Perception

A key factor driving the growth of the full-fat indulgent type ice cream products is the hustle and bustle lifestyle of most Americans today. After several years of settling for low-fat - and often tasteless - alternatives in the name of health, consumers have decided they deserve something better, something indulgent.

"If you are running around and you are so busy, when you do have time to enjoy yourself, you want 'go big or go home' as they say, so you are going to go for the full-fat and all the chocolate," says Michael Sands, chief marketing officer of Ben & Jerry's Homemade Ice Cream Inc., South Burlington, Vt., a recently acquired division of Unilever USA.

"People are saying 'When I have time to stop, I'm going to reward myself with something good.' Ice cream is the perfect way to do that," Sands notes.

Naturally, processors want to ensure that consumers have no lack of choices when they decide to seek out a cool and creamy reward. This year's offerings range from standard chocolate-y indulgent fare to far-out and wacky combinations unlike anything the ice cream case has seen before.

Leading the pack is a "bold launch" from Good Humor-Breyers in the form of Ice Cream Parlor, a line of 12 premium ice creams featuring a variety of toppings and mix-ins typically found in ice cream parlors. Chunks of cake, cookies, brownies, pie, nuts and candy are among the inclusions added to swirls of caramel, fudge and fruit.

"There is a whole set of consumers that buy ice creams for a bit of confectionery or bakery taste, more for what's in the ice cream than for the ice cream itself," says Olson. "As we did our research, they said `If Breyers did something like that for me, I would get the great-tasting Breyers ice cream along with those good treats.' That's what led us to Ice Cream Parlor."