Product innovation and changes in consumer habits have paved the way for year-round consumption of ice cream in western Europe, according to a new report from market analysts Euromonitor.
While peak ice cream sales continue to be in the summer months, premium products and indulgent flavours have enabled manufacturers to capitalise on the 'sofa snacking' trend, boosting home consumption and making ice cream sales consequently less dependent on hot weather, the report claims.
Unlike in North America, where ice cream is a popular dessert and where home consumption outweighs out of home consumption, impulse ice cream continues to account for the bulk of ice cream sales in all other regions.
Nevertheless, manufacturers are naturally keen to develop take home ice cream, in particular in countries where the summer months do not always guarantee hot weather, such as in the UK.
A strong focus on adult-orientated premium offerings has enabled manufacturers to change consumers' perception of ice cream. It is thus moving away from being a pure impulse purchase to becoming part of the weekly shopping list as a special treat to be consumed in front of the TV or an after-dinner dessert. As such, the take-home ice cream market is driven by consumers' desire for indulging themselves, in particular among the single-household demographic, according to the Euromonitor report.
The indulgence factor has been the primary reason for strong growth achieved by super-premium brands such as Ben & Jerry's or Häagen-Dazs. In the UK, the continuous introduction of new flavours, the most recent of which has been Karamel Sutra, has enabled Ben & Jerry's (owned by Unilever) to steadily increase its share in take-home bulk ice cream. While Ben & Jerry's share increased by 0.8 percentage points in 2002, the standard premium Carte D'Or lost a 0.4 percentage point share in the same year.
Confectionery companies stir the market
Home consumption is also boosted by confectionery brands sold in grocery stores in multi-pack formats, the Euromonitor report said. Mars has been at the forefront in the development of extending its confectionery brands into ice cream, most notably Mars and Snickers.
The company's 2002 introduction of Maltesers sticks is claimed to have been the most successful UK ice cream launch ever. Chocolate confectionery manufacturers are keen to move into new product areas as sales growth is ever more difficult to achieve in the mature markets of western Europe and North America. On the other hand, these ice cream products are well received by consumers as they are very familiar with the brands and are attracted by their new format.
Having established a strong presence in impulse ice cream, chocolate confectionery brands are now increasingly moving into the take-home market through multi-packs. Being perceived as more premium than private label bulk ice cream, but not significantly more expensive due to supermarkets' low pricing policies, consumers have been encouraged to trade up. Furthermore, as they are individually portioned they offer a dessert solution which is perfectly tailored towards single-households, the demographic group with the arguably strongest tendency to self-indulgence.
Wall's loses out
Core brands of Unilever's subsidiary Wall's, such as Magnum, have been facing tough competition from confectionery manufacturers in both take-home as well as impulse ice cream. In the UK, Wall's total share within impulse single portion dairy ice cream declined by over three percentage points in 2002, the report said, while Mars' and Cadbury's shares increased by over four and one percentage points respectively.
Within impulse ice cream, Wall's has come under pressure from these brands as a result of the ruling by the Monopolies and Mergers Commission which opened up freezer space in impulse outlets to other manufacturers and which came into full effect in 2001.
In multi-pack, Wall's seems to have lost the battle for leadership with Mars. While its share declined by nearly four percentage points, Mars is now the clear leader with a near 40 per cent share, about 13 percentage points ahead of Wall's.
The company's Magnum Moments also failed to make an impact. Demand for the bite-sized Magnum, sold in multi-pack format, has not taken off because ice cream is an indulgence product and as such it does not lend itself to the sharing concept, according to Euromonitor.
Breaking the seasonal cycle in impulse
While the trend is towards indulgence, snacking remains an opportunity within the impulse market, and manufacturers are exploring various ways of also increasing out-of-home consumption beyond the summer months. Both Mars and Ben & Jerry offer ice cream in 100ml 'Eat Now' tubs, and Mars in particular has been focusing on identifying new outlets such as leisure centres in a bid to stimulate year-round consumption.
While Magnum might be finding it difficult to establish itself in the take-home market, Wall's '7 Deadly Sins' campaign is likely to boost sales in the impulse category, according to the report. The company fully embraces the self-indulgence concept by offering limited edition flavours of Magnum such as 'Greed' and 'Gluttony'. The campaign started in February and will last until September, and Wall's thus hopes to extend sales beyond the summer.
Impulse ice cream will nevertheless remain heavily reliant on good weather, and therefore the safest approach to take for manufacturers in the UK is to continue to capitalise on the 'sofa snacking' culture of today's consumers, Euromonitor concludes.
For further details of the Euromonitor report on UK Packaged Foods, click here.