Innovation is Cool

Ice Cream

• The highest penetration for ice cream is between 6-8pm.
• Ice cream shoppers purchase 50% more items per visit that the average shopper.



Ice Cream – Top 10 = 45.9% of total Ice Cream sales and Top 15 = 57.6% of total Ice Cream sales.

Item Description	Manufacturer	Brand
Golden Gaytime Golden Gaytime 1pk	Unilever	Golden Gaytime
Magnum Reg Almnd 1pk	Unilever	Magnum Reg
Magnum Ego Caramel 1pk	Unilever	Magnum Ego
Magnum Reg Classic 1pk	Unilever	Magnum Reg
Magnum Gold Ice Cream 1pk	Unilever	Magnum Gold
Magnum Reg Big Choc Bikkie 1pk	Unilever	Magnum Reg
Maxibon Vanilla 1pk	Nestle	Maxibon
Magnum Reg Sandwich Almnd 1pk	Unilever	Magnum Reg
Magnum Reg White 1pk	Unilever	Magnum Reg
Magnum Reg Peppermint Envy 1pk	Unilever	Magnum Reg
Ptrs Ice Cream Monaco Bar 1pk	Nestle	Peters Ice Cream
Drumstick Reg Vanilla 1pk	Nestle	Drumstick Reg
Cornetto Vanilla Sundae 1pk	Unilever	Cornetto
Maxibon Honeycomb 1pk	Nestle	Maxibon
Bubble O Bill Bubble O Bill 1pk	Unilever	Bubble O Bill

Source: Aztec

AT A GLANCE • When it comes to new news, generating customer excitement in summer and adding interest to the freezer, ice cream simply has no equal. • Balancing the ice cream portfolio is absolutely essential for convenience and impulse outlets so that, for example, they offer both indulgence and fruit and vitality. • Smaller more portable pack sizes tend to dominate within the convenience, however the channel continues to offer larger pack sizes for emergency and impulse purchases. • . While the ice cream shopper is similar to the average convenience shopper in most areas, ice cream has a higher proportion of female shoppers.

Exciting new ice cream products mean summer sales should sizzle

Summer is upon us and the ever-innovative ice cream category is certainly helping sales and profits in the convenience channel to sizzle.

It is a happy fact that Australians can barely get enough of the stuff and, with an annual consumption of 18.5 litres per person, we rank third in the world behind only the Americans and the New Zealanders in our passion for ice cream. Importantly also, when it comes to new news, generating customer excitement, and adding interest to the freezer, ice cream simply has no equal ... and this season looks to be more interesting than most.

Leading the way, of course, are the two dominant players in the category, Streets Ice Cream and Nestlé Peters. And that means a new lease on life for established best sellers such as Golden Gaytime, Magnum, Maxibon, Monaco Bar, Cornetto, Drumstick and Paddle Pop. This year, the innovation stretches across all areas of ice cream … from adult indulgence and snacking to kids and refreshment.

“Balancing the portfolio is absolutely essential for convenience and impulse outlets so that, for example, they offer both indulgence and fruit and vitality,” said Streets Ice Cream’s Marketing Director, Andrea Martens. “With ice cream, it is important to remember that there are different occasions as well as different audiences.”

Indeed, the convenience channel attracts a huge number of people every day when they are out and about, perhaps on their way to friends’ houses or on their way home from work. As ice cream is such an impulsive category it would appear to be perfectly matched with convenience.

“The convenience channel is also primarily shopped by the target consumer for a number of the major ice cream brands making it the perfect outlet type for maximising sales,” said Camille Meylan, Nestlé Peters’ Head of Marketing. “Growth will continue with a strong summer full of activity aimed at driving consumers into store.”

This is particularly encouraging as ice cream is already the fastest growing category within the convenience channel over the last quarter (10.7% value growth v YA as at 1/8/10. Source: Nielsen Scan Data).

Understand your shopper

Of course, whether you are a manufacturer or a retailer, the key to maximising sales, and therefore profits, is to understand your customer. The age bracket of ice cream shoppers is predominantly 18-35 which is in line with the average convenience shopper. While the ice cream shopper is similar to the average convenience shopper in most areas, ice cream has a higher proportion of female shoppers.

There is a 50:50 split between male and female ice cream shoppers whereas the convenience channel is slanted 60:40 in favour of men. It all means that ice cream can play an important role in converting female fuel shoppers into store purchasers as well.

“Obviously fuel outlets will attract impulse customers who are predominantly there to buy fuel,” said Streets’ Ms Martens. “However, with the right Point of Sale (POS) material, ice cream can become a planned purchase … it can stimulate other sales.”

Ms Martens says visibility is crucial and signage can be used to entice the customer to purchase. She says that Streets POS material can be used to take advantage of the company’s above the line campaigns and to send out a continuous message.

“Retailers really need to look at availability, visibility, portfolio and maintenance to make the most of the potential of ice cream,” she said. “They don’t want to create a barrier to purchase so the portfolio range really is vital and they need to have something for everybody.”

Streets recommends C&I outlets stock its core range and the seasonal range so that they have both the products and the price points to suit different needs.

“You need kids’ ice creams to be available as much as indulgence ice creams,” said Ms Martens. “A mum who is out with two kids may be happy to spend only $5 or $6 for everybody … especially in difficult economic times … so you need to have options available.”

Look after the freezer too

And of course, she says, basics like freezer maintenance need to be taken care of.

“No one wants to see an icy freezer that is not stocked up properly … it doesn’t lead to sales,” Ms Martens said. “And the cabinet needs to be placed in the hot zone so that it is there stimulating impulse purchase.”

Nestlé Peters’ Camille Meylan agrees.

“The key to maximising sales is to have the freezer in the right place close to the counter, keeping the baskets fully stocked and to have plenty of stock under the baskets ready for those summer heat waves,” he said. “Having POS visibility both outside the store and inside the store is a key factor in enticing people to enjoy an ice cream, and is another way that store operators can increase sales.”

In the end though, it is primarily about product and satisfying the Australian consumers’ seemingly insatiable demand for new and different ice cream experiences.

“The cut in of new lines marks the most exciting time for the ice cream category and kicks off the season in earnest,” said Mr Meylan. “The onset of warmer weather is definitely a critical time for ice cream and the Nestlé Peters team counts down the days until our new lines arrive on shelf.”

New launches, more sales

The company says this summer is particularly exciting with the launch of some great category expanding initiatives from its key power brands: Drumstick, Peters, Billabong and Frosty Fruits.

“With more than $13 million invested in media and brand activation we expect this summer to be our biggest yet,” said Mr Meylan.

The sense of anticipation is shared by Streets, which is equally excited by its own innovations and marketing initiatives across brands such as Cornetto, Magnum, Paddle Pop and Splice.

“These are very interesting times and this innovation is crucial to help drive growth in this category and entice the consumer,” said Streets’ Andrea Martens. “It takes a lot to make me go ‘wow’ as I love my ice cream, but I am really, really excited by this summer.”

So, what is getting everyone so worked up? Well, the global macro trend of premiumisation has certainly made its mark on the ice cream category and, consumers searching for products that meet this need, are in for a veritable treat.

Indulgence ice creams are really aimed at adults looking to sit back and take a little time out for themselves and so have a significantly higher price point than other segments as well as being one of the least seasonal lines.

While Ms Martens says that Streets’ Magnum Gold is already one of the most indulgent products ever, she believes the new Magnum Temptation is taking indulgence to unprecedented levels.

“It is presented in a jewellery box full of cookie inclusions and with real Belgian chocolate,” Ms Martens said. “One of the keys in the category is to get customers trading up and this has a 30% higher cost than the average core range and so will retail at about $4.40.”

Over at Nestlé Peters, they say that the launch of Heaven Chunky Cookie, described as an indulgent stick with huge cookie inclusions, has helped grow the Heaven brand over 70% YTD (value sales v YA as at 29/8/10.Nielsen Scan track).

“Consumers are increasingly looking for value added products that take ice cream enjoyment to a whole new level and Chunky Cookie has raised the bar in terms of value add,” said Nestlé Peters’ Mr Meylan. “Heaven Chunky Cookie has tapped into this desire for more and has delivered one of the best product innovations in the category over the last 12 months.”

It seems then that in terms of adult indulgence ice creams, both consumers and C&I operators can look forward to very good times indeed.

But that is not the only area where there is exciting news. Streets is very confident that its new Cornetto Choc Obsessions product, which promises a delicious combination of chocolate mud and white chocolate, will be a big hit.

“It is not all about sheer indulgence however,” says Streets’ Andrea Martens. “There is also the health and wellness trend and we see that on some occasions parents are looking for fruits for the kids, something offering vitality and refreshment.”

To meet this need, Streets has released Splice Real Fruits in tropical and strawberry flavours which contains real fruit pulp and sells for about $2.

“This product contains real fruit and offers something to both adults and children,” said Ms Martens. “It is like the difference between fruit juice from a bottle and freshly made fruit juice.”

Streets’ ever popular Paddle Pop brand has recently seen the introduction of the Solar Flare variant and it is still benefiting from the decision to re-size it last year, making it more of an occasional treat.

The Paddle Pop ‘lick-a-prize’ promotion is also back again, offering consumers the chance to win active play items such as scooters, water blasters and walkie talkies. The promotion, which also offers some two million free Paddle Pops and the chance to win a family holiday, is a proven sales driver.

Ms Martens says that Streets has a dominant share of the market in convenience and that C&I operators should think carefully before offering smaller players too big of a presence in the freezer.

“They need to look at the sell through, at who has got strong campaigns, and who has got the above the line spend across the whole portfolio rather than just one segment,” she said. “In terms of smaller operators you have to ask what other value do they offer, where are the gaps in what is already being offered, will they drive business, and what is missing … if there is something then great but, if they aren’t going to lift sales, then why bother.”

Pack size & innovation

No doubt, these are sentiments shared by the other big ice cream player, Nestlé Peters, which says packaging as well as product innovation can boost ice creams sales.

“Smaller more portable pack sizes tend to dominate within the convenience, however the channel continues to offer larger pack sizes for emergency and impulse purchases,” said Nestlé Peters’ Camille Meylan. “Activating these segments in the right way is a huge opportunity for retailers.”

Clearly having the right pack and packaging design is critically important for a product’s success, particularly in the convenience channel where brand communication is very limited.

“Nestlé Peters invests resources into both packaging design and shopper research to ensure that we are not only capturing shopper attention but also communication the right product attributes and benefits,” said Mr Meylan. “Getting the mix right is a fine art and is the difference between success and failure.”

Nonetheless, new product development is still ultimately completely crucial and these are exciting times for Nestlé Peters’ products such as the iconic Drumstick cone.

“Drumstick continues to lead category thinking in 2010 by delivering a revolution for the cone segment with an innovative indulgent offer – Choc Shock.” says Mr Meylan. “Drumstick Choc Shock blurs the lines between the indulgence and cone segments with a thick real white choc confectionery crown adding to the great taste that consumers have come to expect from this much loved brand.”

Drumstick Kit Kat is another new offer which promises a choc cone topped with a Kit Kat finger and is being very well received.

The launches come with a massive $8 million dollar support package. TV and outdoor play a key role but the company says it is investing a lot of effort bringing the launch to life within the convenience channel.
Innovation is also evident in the important children’s segment with the Peters Billabong Spinner promising to create category interest and excite kids’ imaginations. The raspberry and pineapple flavoured water ice comes with the added value of a free helicopter toy.

In refreshment, Nestlé Peters is launching its new Frosty Fruits Mango and Passionfruit Sorbet Cup into stores.

“Available in a 170ml single portion cup this new and unique offer is the perfect solution for beating the summer heat,” said Mr Meylan. “This is a convenience focused launch that comes with a support package valued at $2 million aimed at driving consumers in to store to try this deliciously refreshing product.”

Summer then is shaping up to be an incredibly interesting one in the ice cream freezer. The two big players in the marketplace have each come up with some innovative and exciting products and marketing campaigns that will get consumers shopping and ice cream sales soaring.

Aztec data shows that the top 10 ice cream skus account for some 44.9% of sales in convenience, and the top 15 skus a staggering 56.6%. With huge marketing support behind them, C&I outlets clearly need to make sure these leading brands are well stocked, well presented and well signed. With the temperatures already soaring, so too could the profits from the red hot ice cream category.