Premium and indulgent ice cream is driving sales

Category Focus: Ice Cream

Ice cream sales declined last year as a result of the poor summer in 2007. The impulse market bore the brunt of the sales fall, while in-home consumption was partly lifted by the trend for premium and indulgent lines. Fiona Briggs reports

Pity the buyers for ice cream and barbecue coals – both have to manage the volumes for products in extremely weather dependent categories.

Get it right, and with favourable sunny conditions behind them, they are the seasonal stars. Get it wrong, and with cooler and wetter weather, they are left with unsold stock and out in the cold.

Unfortunately for the ice cream category, 2007 favoured the second scenario as one of the wettest summers on record followed a record-breaking hot summer in 2006.

As a result, the total take-home ice cream market declined by 1.6% to £610m (TNS Worldpanel 52 weeks ending 28 March 2008).

According to TNS, the key reason for the decline, versus growth in the previous year, was the disappointing summer in 2007.

Analyst Jason Weir reports: “It affected the seasonal and weather-dependent ice cream category. And, despite a slight increase in the number of households purchasing ice cream over the year, this has been offset by shoppers buying less ice cream per trip, less often over the year.”

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Take-home grocery ice cream market
Source: TNS Worldpanel 52 w/e 28 March 2008

Value £000s Share £% %Yr/Yr

Total Grocery ice Cream 610295 100 -1.6

Dessert Ice Cream 304023 49.8 0.6

Standard Ice Cream 57965 9.5 -8.7

Premium Ice Cream 149004 24.4 3.5

Luxury Ice Cream 64516 10.6 4.4

Family Ice Cream 19233 3.2 -6.4

Individual Ice Cream 13304 2.2 7.3

Hand Held MultiPacks 306272 50.2 -3.7

Choc Snacks 143959 23.6 -2.3

Filled Cones 66367 10.9 -6.4

Children's 61207 10 -9.9

Adult Refresh 34739 5.7 8.8

Source: TNS Worldpanel

Grocery Ice-Cream market

Hand held is the largest sub sector in ice cream

Impulse ice cream
Figures supplied by R&R Ice Cream, a leading player in the impulse category with a 21.8% market share, show the UK impulse ice cream market is worth £242m, a decline of 12.9% on the previous year (Nielsen scanning data, Manx, R&R 52 w/e 8 September 2007).

According to R&R, this highlights how the impulse market is even more reliant on good weather to drive sales.

Ice-lollies, for example, were the hardest hit by the poor weather of 2007, declining by 15%.

The individual hand held category – the largest sub sector of the ice cream market – showed a lesser decline but sales still dipped by 2.6%.

Top 10 take-home ice cream brands
Source: TNS Worldpanel 52 w/e 28 March 2008

This Yr Last Yr

1 - Private Label

2 + Wall's Magnum

3 - Wall's Carte D'Or

4 - Cadbury's

5 + Ben & Jerry's

6 + Haagen-Dazs

7 - Wall's Cornetto

8 - Wall's Viennetta

9 + Wall's Soft Scoop

10 - Mars Choc Ice

Source: TNS Worldpanel

In-home consumption

According to TNS Worldpanel, in-home ice cream consumption continues to be most popular among children, especially those aged 6-10 years.

No surprise there then.

However, adults aged 45+ are also classed as core consumers along with children, and consumption among young adults (those aged 17-24 years old) is reported to have grown on the previous year.

TNS reports key motivators for in-home ice cream consumption revolve predominately around the area of 'enjoyment', accounting for 80% of all consumption occasions.

Within dessert ice cream, the core premium and luxury ice creams registered the strongest growth over the year, supported by an increase in promotions.

This growth, however, was offset by declines across the standard and family ice cream sectors as shoppers traded up to more premium offerings.

Growth in premium was offset by declines in standard and family ice cream

Handheld multipacks
Handheld multipacks have been driving the total market decline in take-home ice cream, according to TNS data.

Total sales fell by 3.7% to £306m.

Children's multipacks and filled cones multipacks recorded the biggest declines in the category – 9.9% and 6.4% respectively.

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Retailer performance
Among the major retailers, Tesco, Asda and Sainsbury's all under trade in take-home ice compared to total grocery. However, they are closing the gap.

Among the smaller retailers, Iceland and Farm Foods overtrade in take-home ice cream as a consequence of specialising in frozen food. Iceland, in particular, has increased its share of the ice cream category in the last year.

Take-home grocery ice cream market retailer share
Source: TNS Worldpanel 52 w/e 28 March 2008

Retailers Total Grocery Value Shares % Grocery Ice Cream Market Value Shares

Tesco 31.4 26.5

Asda 16.8 14.8

Sainsbury's 16.2 14.2

Morrisons 11.3 11.6

Co-op 4.4 5.8

Iceland 1.7 5.8

Total Hard Discounters 5.5 5.4

Somerfield 3.8 3.9

Waitrose 3.9 3.9

Farm Foods 0.5 2.6

Source: TNS Worldpanel