Buyer Q&A: super-premium is key to ice cream's growth

Meet the buyers…

Doug Thompson, ice cream category manager, Costcutter Supermarkets Group

Doug started his career in 2004 with BP’s Wild Bean Café before moving to Little Chef. Since then he has worked for 3663 Bidvest and Morrisons before joining Costcutter in January 2015 in his current role. He says he enjoys the fast pace of the category and reacting to consumer trends.

 

Matt Spivey, trading manager for frozen, Spar

Matt began his career in field sales for Nestlé before spending four years at Morrisons in various buying roles. He joined Spar 15 months ago, and was originally responsible for dairy before moving over to the frozen aisle. He says he enjoys the challenge of identifying and capitalising on the big trends of tomorrow in his current role. 

 

How would you sum up the past year in ice cream?

MS: The weather did not help impulse ice cream sales in 2015 with there being fewer sunny days than the previous year. In take home, supe- premium saw growth within Spar. In addition our Spar Brand range continues to be a fantastic success achieving double-digit growth.

DT: The weather is still a key factor for ice cream sales. Last summer’s weather wasn’t great so we introduced more occasions, including ice cream in meal deals and big night in ranges. We also upweighted activity around our premium and super-premium products to highlight to consumers that these are a treat to be enjoyed even if the sun isn’t shining.

What was the best launch in ice cream over the past year?

DT: At Costcutter we launched a full range of handheld and take-home ice creams as part of our Independent own brand. Consumer demand for quality own-brand ice cream continues to grow and the Independent own-brand launch has been really successful. Magnum’s new Expresso and Raspberry products were a very good launch last year and sales have been good across our stores.

MS: Magnum Pink has been a huge success in the past year and was one of our most successful impulse products. The marketing behind the launch seemed to resonate with consumers, leading to strong sales.

Ice cream sales suffer when the sun doesn’t shine. How can retailers overcome this?

MS: It’s a challenge, however ice cream isn’t only eaten when it’s sunny; 63% of customers eat ice cream on the sofa and a third of impulse sales occur in the winter months. Ensuring strong availability all year round and having the right selection of products can help sales when the weather doesn’t.

DT: There are no guarantees that the sun will shine in the summer so it is really important that ice cream is included with other occasions. Ice cream works very well as part of meal deals. With the breadth of range available, the product can work equally well within an affordable family meal solution or a more premium or adult offer.

Premium ice creams like Häagen-Dazs have always worked well with a big night in solution. We’re seeing more of our retailers actively promote ice cream within big night in offers and many installing freezers within their alcohol section to cross-promote offers.

Unilever, among others, is working to reduce the number of calories in its single-serve products by reducing the size. What are your thoughts on this strategy? Is there a risk sales will suffer as a result?

DT: Reducing calories and sugar is a hot topic at the moment and I can see why Unilever has taken the first step, particularly with children’s ice creams. The adult market demands more quality and luxury products, so as long as this is not sacrificed as part of the downsizing and calorie reduction, then consumers should be unaffected.

MS: Most customers understand that ice cream should be eaten as part of a balanced diet. It will be interesting to see if there is an impact on sales as a result of the changes. We need to carefully look at how customers will receive the changes.

Should ice cream manufacturers be worried about how healthy their products are, given that ice cream is often seen as a treat?

DT: The current trend in adult ice cream is for consumers to trade up to premium or super-premium ice cream, which tend to sell in smaller sizes anyway.

What potential does free-from, in particular dairy-free offerings, have in ice cream?

DT: The potential is there and there are some good brands and products available but it is still a very small part of the market and yet to go mainstream.

MS: With an increasing number of consumers buying into free-from products there are some potential opportunities for ice cream manufacturers. Nothing to date has made a real breakthrough into the mainstream but it may well be a growth area in the future.

What’s the best way for a supplier to approach you with a new product?

DT: Suppliers need to really understand our business and how their products can benefit our retailers. We’re very different to the mults and our retailers cannot stock metres and metres of ice cream, so knowing what our consumers want and how the new products can add value to our range is key.

MS: Provide a clear rationale about how the product meets the needs of our Spar customers or fills a gap in our current range. Demonstrate how the product can deliver value to our customers and retailers. Don’t try and over-sell the product. Be clear about its benefits but don’t try and hide any drawbacks.

Any pet hates when approached by a brand with NPD?

MS: Not providing a recommendation of what the NPD should replace. This is especially key for convenience where our freezer space can be extremely limited. Prioritise what is relevant to the Spar customer rather than selling in everything available.

DT: Talking to us in the same way they would to the mults. Everything we do is about supporting independent local retailers and suppliers need to understand the intricacies of our varied retailers and stores.

How will the ice cream market shape up in 2016? What are the key trends?

DT: The focus on premium ice creams will continue and with research showing that almost 40% of take-home ice cream and 30% of handheld ice creams sales are over the winter months the creation of other occasions and inclusion in meal deals will grow. This is certainly where we will be placing a great deal of emphasis for our Independent own brand.

The adult market and super premium products like Häagen-Dazs will be key, as consumers continue to see these products as a treat and not just for enjoying when the sun is shining.