Ice Cream

It's peak ice cream eating season and, once again, there are plenty of exciting new products and variants to keep hot and hungry customers poring over the contents of the freezer.

That's probably just as well, as – apart from the Americans and the Kiwis – Australians are the biggest ice cream consumers per capita in the world. We love the stuff. And with the convenience channel 2.5 times busier in the summer than in winter, it's a crucial time for C-Stores to get things right.

The ice cream market in Australia is dominated by two big players … Streets and Nestlé Peters. Between them they account for around 80% of ice cream sales through Convenience.

Innovation the key to growth

Happily, recent data reveals that the ice cream category is growing in P&C in both value and volume, and both Streets and Nestlé Peters agree that product innovation is the key to maintaining this growth. It brings new users to the category and creates relevance throughout the day for all consumers.

Streets, which ranges classic best-sellers like Cornetto, Paddle Pop and Magnum, has been as busy as ever in the new product development department.

"Consumer trends are tending towards healthier snacking and this is the direction Streets has focused energy on with the development of new products and formats that satisfy this need," said Dan Bitti, Streets Assistant Channel Manager – Out of Home. "Streets Paddle Pop Moo launched nationally in March and was a fantastic product innovation driving the 'health and permissibility' direction of Streets product range."

Clearly, the health and wellness trend has had an impact on ice cream, as it has on every other convenience store category. Streets Paddle Pop Moo has all the calcium from a glass of milk, reduced fat, no artificial flavours and colours, and low GI whilst apparently maintaining a taste that kids love. Indeed, leading child nutritionist Susie Burrell and celebrity mum Antonia Kidman have endorsed the product as a more nutritional option than other snack foods on the market.

Last year, Streets also introduced its Calippo All Fruit Gelato, as part of its mission to drive healthier options into the individually sold impulse market. Mr Bitti said the product's unique attributes of being all fruit derived, and of having 0g of saturated fat per serve, was continuing to drive growth to the Streets Calippo brand.

The trend towards indulgence

But it's not all about health. Mr Bitti says that indulgence is actually one of the fastest growing segments in P&C. He says this has, in part, been bolstered by new Streets Magnum product development and associated promotional activity/support.

"Streets Magnum has innovated the ice cream category in Australia by understanding the growth areas of the confectionery category," he said. "Streets Magnum has seen the introduction of two new skus, Ecuador Dark and Colombia Aroma Choco Cappuccino."

The brand is also now into its second year of the national Gold Class promotion which has sparked fantastic growth since the launch of the two new variants.

Of course, Streets has not been the only one to identify the trend towards ice cream indulgence and premiumisation.

"Consumers are justifying more expensive treats and rewards for themselves and their families," said Nestlé Peters' Head of Sales, Damien Timmins. "People will only trade up if there is perceived value in the offer."

But Nestlé Peters, which makes products like Drumstick and Maxibon, has also identified another factor that has helped shape its new product development plans.

"Consumers and shoppers are living increasingly fast, cluttered and unstructured lives," Mr Timmins said. "People want product solutions that make life easier ... they want shopping to be easier."

Could this then be the rationale behind the introduction to the market of Maxibon Bits, which are designed to capitalise the growth of snacking, and expand ice cream into broader snacking?

"Maxibon Bits are snackable bite-size pieces that encourage mindless munching – like eating through a bag of chips or popcorn." said Mr Timmins. "They provide for snacking consumption by offering a solution in the ice cream category in a portable and convenient format."

Nestlé Peters says that, as young adults are heavy snackers and are time poor, the unique pack format of Maxibon Bits will increase per capita consumption and tap into new category users.

"It has changed the rules of the game," said Mr Timmins. "And Maxibon Bits broadens the appeal of the Maxibon brand and has the potential to deliver new consumers to the brand."

Nestlé Peters is also bringing back the Monaco Bar, which it says is something of an Australian icon.

"It is a proven ice cream category performer," said Mr Timmins. "The Monaco Bar will drive renewed interest in the ice cream freezer and generate incremental sales for the convenience channel with minimal cannibalisation."

Promotions & POS

Mr Timmins says that ice cream is an impulse purchase and the convenience channel therefore provides a crucial outlet for these products. But supplying the right product is only one part of the equation for ice cream manufacturers. They also like to work with C-Stores to ensure that in-store promotions are tied in with above the line activities and to aggressively activate in-store POS materials. Mr Timmins urges retailers to build and learn from the suppliers' expertise in the category.

Among Nestlé Peters' recent and upcoming promotions are the 'Win $5,000 worth of Free Fuel' joint ice cream and confectionery consumer promotion at Coles Express, and the free Maxibon Bits offer to Caltex customers who upgrade their car wash.

For its part, Streets has also implemented quarterly activities to help drive brands during the most relevant sales periods of the year. Streets' big Cornetto 'Extreme Proof' campaign helped to make the brand a standout impulse ice cream performer, recording fantastic growth this year.

"Most consumers are looking for a snack or a beverage when they are picking up their destination purchases like fuel, bread and milk," said Streets' Dan Bitti. "Combo deals bundled in with beverages, or other destination purchases, to refresh over the hot summer months can help drive ice cream sales."

The importance of petrol and convenience to ice cream manufacturers can scarcely be over-stated.

"As a category we know 96% of consumers that visit the freezer purchase from the freezer," Mr Bitti said. "Placing freezers in the impulse zone or specifically in the fast lane in the path to purchase will interrupt and engage consumers, driving purchase."

He says incremental freezers for some of the best-selling lines, particularly during the summer period, can also help drive further sales.

Weis is another big ice cream player that will be hoping that a scorching summer and some well-positioned product deliver a good sales year.

The original Weis bar – Passionfruit, Banana, Pineapple and Cream – is still selling strongly after 50 years, and the Weis Mango and Cream product is still a major refreshment line after some 30 years.

The lust for 'Premium'

"Consumers are demanding more premium products and expect to find these in the convenience channel," said Weis Brand Manager, Simon Hambleton. "And with consumers increasingly searching for healthier indulgence, Weis is one product that delivers not only on this promise – due to its real fruit recipes – but also on a flavour promise."

He says that this is an important component in satisfying a consumer that is really looking for a treat.

"Weis is committed to combining unique and real ingredients to deliver a real flavour experience," he said. "We like to sum it up as real ingredients, real flavour, a real experience."

Mr Hambleton says the convenience channel is a place where manufacturers can trial new flavours and combinations but, at the same time, he acknowledges that it is an important element of total ice cream sales.

Accordingly, Weis has put two strategies in place to drive sales specifically for convenience outlets. It says it has identified that consumers want a premium offer across the category and it is therefore moving to create different ice cream experiences to satisfy the various moods or needs states of ice cream consumers.

"This summer – in February – we are launching another new Weis experience, different to anything we have done before," said Mr Hambleton. "A product designed to satisfy this snacking occasion but a flavour that will widen the appeal of Weis ... this new product Weis Coffee Almond and Cream will also drive ice cream sales in the March quarter, prolonging the summer sales peak."

Weis' initial research has indicated that the new product is going to be a winner with consumers.

" We all know that coffee is an ever increasing trend and coffee flavoured milk is one of the highest selling beverages," said Mr Hambleton. "So our new coffee bar is likely to be a hit to a wide audience base."

In order to fulfil the need for a premium offer and to fill the requests of convenience retailers, Weis is also going to make available its Premium 1L offer in the channel. The range consists of Weis Fruit and Cream Flavours and Weis Sorbet Flavours. The Weis Fruit and Cream range is simply described as a Weis bar in a tub. The Weis Fruit and Cream 1L range has a fruit side and a cream side to reflect the Weis bar format. The Weis Sorbet range is 99% fat free, dairy free, and gluten free, and made to a traditional sorbet recipe.

Mr Hambleton is convinced these tubs will work well in the convenience channel because they are: a last minute entertaining solution/dessert; a gelati style experience in a take home tub; a light and refreshing dessert/ treat; and a healthier option that delivers a full flavour experience.

"Consumers will be continuing to watch their spend so it will be up to the brands to tempt consumers and stimulate trial, and for stores to help support these initiatives," Mr Hambleton said. "This summer Weis' aim will be to drive sales of refreshments products and we will be rewarding loyal Weis consumers, tempting new consumers to the brand, and reminding those who haven't thought about Weis for a while."

The company hopes that a major on-pack promotion will also help drive sales this summer. It will give consumers the chance to instantly win a holiday to Orpheus island on the Great Barrier Reef, and one in five bar buyers will also win a free Weis bar.

"This promotion is sure to draw attention to the ice cream freezer and it will promote ice cream sales for the stores," said Mr Hambleton. "The instant win mechanics and high chance of winning will draw consumers to this promotion but to be successful stores need to highlight the promotion and put up point-of-sale material."

The WA focus

The Perth-based Fonterra Group is also gearing up for a big summer. Its Peters ice cream products are household names to generations of Western Australians, and it also manufactures the Cadbury ice cream range and the Connoisseur Super Premium ice cream tubs.

In the convenience channel in Western Australia, Fonterra has the number one selling product with the iconic Giant Sandwich and is also in the top 10 with its Peters Vanilla Choc Wedge and two Memphis meltdown skus, Big Bikkies and Big Nuts.

In WA, Convenience value sales are growing at 14.4% which is well above the national average and Fonterra says one of the key factors behind this is the unique product offering it puts in the marketplace. Products such as Peters Twin Pole, Giant Sandwich, Peters Freeza, Hazlenut Roll, Memphis Meltdown and Cadbury Picnic, Flake and Crunchie simply don't exist in the category outside of the state.

"Peters ice cream has been a part of the Classic WA summer experience since 1929, and with the level of brand support this summer will see more West Australians eating more Peters ice cream than ever before," said a Fonterra spokesperson. "This summer will see a focus on the products that set Western Australia apart from other markets, and that set Peters and Cadbury apart from the national ranges of other companies.

Fonterra says West Australians will be treated to a new flavour within the Trumpet brand.

"Trumpet Strawberry Swirl is the only strawberry product in the market and is made with real strawberries in a sauce that is swirled through real Peters Ice Cream," the Fonterra spokesperson said.

And, in keeping with the recognised ice cream premiumisation trend, the Connoisseur Super Premium ice cream range is to launch a new flavour. Joining Classic Vanilla, Café Grande, Cookies and Cream, Caramel Honey Macadamia, Chocolate Obsession, Summer Strawberry, and Chocolate Honey Nougat will be Chocolate Brownie.

"Connoisseur's brownies are made the way you remember them with rich, dark chocolate and Australian pecans," said the spokesperson. "These are then crumbled lovingly and folded through a creamy, rich French cocoa chocolate ice cream."

Fonterra says Australian consumers are very discerning about their choice of ice cream, which is why the highest quality ingredients from all over the world are sourced to produce Connoisseur.

"In our never-ending quest for perfection, Connoisseur packaging design is also evolving to ensure it looks as good as it tastes," said the spokesperson. "The new look dials up taste appeal, as well as improving the appearance and ensuring it stands out on shelf so that consumers can find Australia's favourite gourmet ice cream with ease."

As well as launching new products and new packaging Fonterra also plans to make targeted consumer offers available through the convenience channel.

"Focusing on the heritage of the Peters brand, consumers will be offered free premium-style offers when they purchase two participating products," said the spokesperson. "The offers will be redeemable at point of purchase to ensure maximum sales uplift for those stores that participate ... this summer we will again see the achievement of our mission to sell more ice cream and to keep growth in WA ahead of the national average."

So, the ice cream manufacturers have come up with some innovative new products that they think will be well received by the public and also some interesting promotions. Now it's up to C-Store operators ... and the sun ... to do their bit. One way or another, it certainly looks like being another interesting summer in and around the ice cream freezer.