Category Focus: Ice Cream

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.”

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%.

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.

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.

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.