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SCOOPING OUT MORE PROFITS

Ice cream is up by 8%, and novelties are ahead by 13%. Here are ideas to help improve assortment and merchandising, to grow them even higher. 

Novelties climbed 13.4% to $1.62 billion across channels in the 12 weeks ended Oct. 30, according to IRI, the Chicago-based market research firm. As in other categories hit by inflation, units and volume slipped — by 2.5% and 2.0%, respectively. 

But if you take novelties in the ice cream/ice milk desserts and ice pop segments out of the equation, mainstream novelties jumped by 14.8%, with units down by 1.6% but volume up by 1.4%. Clearly, there’s lots of life in the segment worth capitalizing upon. 

Not that ice cream/sherbet is a slouch. During the same period, dollars rose by 8.0% to $1.71 billion, although units were down 3.2% and volume fell by 3.0%. And there were strong showings by sherbet/sorbet/ices, up by 12.5% and ice milk/frozen dairy desserts, ahead by 11.7%. 

A look at our chart should give you food for thought on your product curation and shelf space allotments. You can count on getting more promotion for ice cream than from novelties. In the period shown in the chart, ice cream/sherbet sales sold with marketing support hit 45.3%, down by 2.3 points from the year-ago timeframe. Novelties, by comparison, got 24.6% of their sales with promotional support, up by 2.4 points. 

So here are some questions for you: Are your average rings and penny profit taken into sufficient consideration at the SKU level? Are you pushing low-price points at inflation-ravaged shoppers so they’ll trade down to private label or lower-quality product? (Not a good strategy.) Have price wars in scoopable ice cream really done much for your profits or have you felt forced to put more allocation into brands (particularly those 48-ounce half gallons) that aren’t earning their full keep? Do you have enough innovation and excitement on display to keep shoppers coming back, or are they cherry picking whatever’s on sale? Are you avoiding out-of-stocks on core products while including enough innovation? Are you giving enough space to items with clean ingredients lists? Are you giving enough space to the deliciously indulgent? Shoppers want that, too. Are you keeping in tune with your shoppers in terms of ice cream pack sizes, as well as novelty formats such as cups, cones, bars and sandwiches? Finally, are your planograms set in stone for the full season? Can you squeeze in some hot new items before your competitor gets them? 

Exciting flavor combinations, particularly in superpremium pints and novelties, are gaining share, profit and loyalty for retailers giving them the right amount of space. 

Plant-based options are also growing faster than the category as a whole, as more manufacturers of every size jump onto the bandwagon. The products continue to improve in delivering an indulgent, flavorful experience, expanding beyond soy milk-based offerings into almond, coconut, cashew and oat milk. 

The global vegan ice cream market is projected to accelerate at a compound annual growth rate of 11.5% between 2022-2026, according to ResearchAndMarkets.com. Its “Global Vegan Ice Cream Market 2022-2026” study, released in October, says the market is driven by the expanding global vegan population base, new product launches and the health benefits of a vegan diet. Growing lactose intolerance worldwide is also a factor. The secret here is to know your customers and what the market will bear. Don’t be bashful to check out competing retailers for what they’re stocking, and what seems to be moving quickly. 


WALK YOUR STORES!
For trial and impulse sales, consider demos and grab-
and-go spot freezers near the checkout. Endcaps can produce spectacular lifts, but be sure to include some innovative, exciting items beyond just the same-old, same-old that’s being promoted by Manufacturer X. Don’t forget to cross-merchandise fruits, pies and toppings with your ice cream, both online and in-store. Above all, walk your stores regularly!

FR Buyer

FR Buyer

Industry news straight from the Frozen & Refrigerated Buyer publication.

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Paul Chapa, Co-Founder & Managing Partner
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