A Spoonful of Innovation

Although consumers cut back on discretionary spending after the economy tanked in 2008, the ice cream and frozen novelties category actually has experienced some solid growth since then. According to “Ice Cream and Frozen Novelties — US,” a July 2013 report from global market research firm Mintel, the category expanded 9 percent between 2008 and 2013, reaching $11.2 billion, and is projected to reach $12.8 billion by 2018.

And another Mintel report, “Category Insight: Ice Cream,” published in August 2013, notes that innovation in the North American market rose a healthy 28 percent during the 12 months preceding June 2013 as brands looked to engage a consumer base open to new products.

Innovation meets indulgence

Simona Faroni, vice president of Fort Walton Beach, Fla.-based G.S. Gelato, notes that this innovation is spurring retailers to launch some rather indulgent store brand products across the entire category.

“We are seeing a continuous trend of dessert-inspired flavors for ice cream, gelato and frozen novelties — common dessert flavors like raspberry cheesecake and brownie swirl are a market staple,” she says. “However, the trend continues to evolve into more unique flavors, including Bananas Foster, s’mores, chocolate coconut macaroon and crème brûlée.”

And although many consumers continue to watch what they’re spending, Frank Elliott, vice president of sales with Cleveland-based Pierre’s Ice Cream Co., notes that retailers shouldn’t be afraid to charge a little more for a higher-quality product.

“Increased quality may cost a little more,” he states. “However, consumers appreciate the added benefits and recognize the difference in quality. Sourcing the highest-quality recipe is important when creating a super-premium product.”

Speaking of high-quality products, gelato — an Italian word for “ice cream” but a different kind of product in North America — is one particular indulgence that’s moving into the mainstream, Mintel’s August 2013 report says. Not only does it contain less fat and cream than traditional ice cream, but it also is churned at a much slower pace, giving it a denser texture. And Americans love it.

“Over the last few years, the number of gelato launches in the region [has] grown, with 26 percent of dairy-based frozen products in the U.S. during 2012 carrying this descriptor,” compared to 11 percent in 2011, the report says. The report also explains that brands could increase gelato consumption by offering products in new formats — such as ice cream bars.

Sorbet is another area open for growth, says Darryl David, CEO with Darryl’s Ice Cream Solutions, St. Petersburg, Fla. In particular, he has been witnessing an uptick in retailer demand for sorbet blended with pieces of fruit and vegetables.

Matthew Thornicroft, Pierre’s assistant marketing and communications manager, also sees sorbet’s increasing popularity on the private label end of business.

“Sorbet lends itself to creative, bold flavors like passion fruit, mango and raspberry,” he explains. “Naturally fat-free and cholesterol-free, sorbet is also dairy-free and is a very delicious alternative [for] people who enjoy frozen treats but are seeking to avoid dairy products or looking for better-for-you options.”

More than an indulgence

But “better-for-you” products aren’t limited to the sorbet subcategory. Mintel’s August 2013 report explains that although ice cream is an indulgence, many North American companies are developing healthful options to keep the category in line with the wider “better for you” food trend.

“In the 12 months to June 2013, almost a quarter of all ice creams had a minus claim, with no/low/reduced fat launches … responsible for close to a fifth of innovation,” the report says, noting that “no/low/reduced fat” is the second most common marketing ice cream claim (behind “kosher”). “Positive health indicators — such as low protein — have a more niche role but could potentially have stronger appeal long-term, as they do not compromise the enjoyment of the product.”

Free-from offerings also are in vogue in the ice cream category, with retailers seeking high-quality products that are both indulgent and dairy-free, vegan, non-GMO or gluten-free, David says.

“The customer is looking for a high-quality product in both pints and stickless novelty with the flavor and texture of a super-premium product,” he states, pointing to DreamKream — a coconut-based vegan frozen dessert that tastes like premium ice cream but is made with fortified soy protein — as an example on the national brand side.

Speaking of protein, Mintel’s August 2013 report notes that brands could leverage consumers’ booming interest in it through the use of Greek yogurt in ice cream and frozen products. Doing so would enable retailers’ store brand products to tout positive health benefits rather than focus on reductions.

Make it appealing

Turning to packaging, David notes that consumers want simple-looking labels that are easy to read, — “without all the distraction of graphics” and too much text.

But retailers might not want to strip packaging of product visuals, particularly with indulgent products. In the gelato subcategory, for example, packaging should either be clear — allowing consumers to see the contents — or sport appetizing product imagery, Faroni says.

“As they say in Italian, we eat with our eyes first,” she states. “We believe this is key to driving sales.”

And don’t be afraid to describe your products’ quality and variety on packaging to grab shoppers’ attention, Thornicroft says.

“Ice cream and frozen treats are about experiences,” he points out. “You want your consumer to feel that purchasing your product will help them create the best experience possible — and that the flavors you’re offering were created just for them and are something they can’t purchase anywhere else.”

Looking specifically at frozen novelties, retailers should consider offering products in squeezable tubes, David says, which are trending in the category. Typically, these tubes have a round opening at the top and a toothpaste-tube-style sealed bottom — and contain a 3- to 4-ounce product serving.

As for merchandising, great shelf-positioning is critical — as is cross-promotion, Faroni states.

“In a world where consumers need inspired solutions, the combination of a cross-promotion with complementary products — for example, gelato and a frozen pasta entrée, or gelato and pizza, etc. — has resulted to be very effective and brand-building,” she explains.

It’s also important to market your line of ice cream, gelato and frozen novelties as a true brand, giving it a unique feel.

“Create a program that positively emphasizes the store brand’s personality, product quality and assortment,” Thornicroft explains. “Trial is important, as [is] creating recipes and serving ideas that allow a consumer to ‘experience’ a brand — especially if what you offer is exciting and unique.”

David agrees about the importance of serving ideas and sampling. He says retailers should consider building an in-store gelato bar, which gives shoppers a chance to try different own-brand gelatos before they buy and interact with the employees serving them.

And don’t be afraid to connect your brand with consumers outside of the store. Websites and social media are a perfect avenue for doing so, Thornicroft notes.

“Consumers are always online looking for serving ideas and recipes that are different,” he says. “Positioning your website or blog as a resource for them is an effective way to emphasize store brands.”

Do offer a variety of store brand gelatos, as the gelato subcategory is now accepted as mainstream.

Don’t be afraid to charge more for super-premium products.

Do consider building an in-store gelato bar to allow shoppers to sample products before they buy them.

Don’t clutter packaging with overdone graphics or text.