From Our Print Edition

Sales are up 14.7%, but improved assortments, better merchandising and more frequent reviews could extend growth beyond the pandemic.

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As the pandemic stretches into its ninth month, ice cream lovers reluctant to visit scoop shops and restaurants continue to grab their favorite comfort food from supermarket freezers instead, extending the traditional summer selling season way past Labor Day.

During the 12 weeks ended Oct. 4, ice cream sales jumped 14.7% versus the same period a year ago to $1.57 billion across channels, according to Chicago-based market research firm IRI (iriworldwide.com). However, units and volume were up only 9.3% and 5.8%, respectively, highlighting not just a reduction in promotional activity but a continued shift to higher-priced superpremium pints, including both indulgent and better-for-you options.

SIZE MATTERS

But in many stores, traditional half gallons (now 48 ounces) still take up a disproportionate amount of freezer space. The problem is compounded by the fact that there’s not a lot of brand loyalty in that segment, so consumers tend to buy whichever of the top four or five brands are on deal that week — while those off-promo just take up space that could be given to hot-selling pints, single-serves and novelties.

One solution is the “accordion approach”: limit everyday offerings to core SKUs that represent the bulk of sales (or those that are truly unique to the category) but give an endcap to whichever 48-ounce brand is on sale that week — with the option to bring in additional flavors during the promotion, if necessary. Yes, you may need to cut back space for some legacy brands, but your assortment needs to reflect new consumer buying patterns.

On the flavor front, layered and “deconstructed” varieties are on trend. “Texture is hot,” says one manufacturer. Alcohol-infused and drink-inspired flavors are also on the rise. You can’t carry them all, but limited edition and seasonal offerings are a great way to bring excitement to the category, particularly during non-peak months. “But don’t limit it to just the holidays,” says one manufacturer. “There are so many opportunities to create buzz with in-and-out flavors.”

While decadent superpremium pints are driving much of the growth in the ice cream category, retailers are also making room for a slew of new plant-based offerings. However, manufacturers caution against bringing in too much too fast. Despite all the new entries, the segment represents only about 3% of total ice cream category sales (versus 14% of the milk category), suggesting it’s over-spaced in some outlets. One manufacturer reports 70% of first-time plant-based ice cream buyers don’t return to the category, mostly because of the taste. But watch out for the next generation of non-dairy ice creams! Because they’re made with animal-free dairy proteins, they look and taste more like “real” ice cream than their predecessors, which could provide the boost the segment has been waiting for. However, proper merchandising is key.

Instead of placing plant-based/non-dairy ice cream and novelties in a separate section, manufacturers suggest merchandising them alongside other better-for-you items like Greek frozen yogurt, low-cal ice cream and keto offerings in an expansive “healthy ice cream” section. “You don’t have to be vegan to want a non-dairy ice cream or frozen novelty,” explains one. “If retailers start to treat plant-based items like other better-for-you products in the category they would see some significant growth.”

FLEXIBILITY KEY TO SUCCESS

Thanks to rapid-fire changes in the ice cream segment recently combined with the need for constant innovation, manufacturers say it’s long past time to scrap rigid annual review periods. If the Halo Top explosion taught them nothing else, retailers should know by now that when a hot product hits off-cycle, they cannot wait six months to bring it in. Biannual reviews would be a great start — one in spring/summer, one in fall/winter — but an extra mini-review coming out of summer would be even better. Does your team have the flexibility to add hot new items before customers head to your competitors to find them?

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