The Love/Hate Relationship Continues

2. The Love/Hate Relationship Continues • The ice cream industry continues to suffer from many of the same challenges of recent years, but shrinking consumer demand is the biggest. Of the 7 categories in the table on page 1 of the Profiler, 5 recorded decreases, and some substantially. • Recent Mintel research found that 19% of consumers are buying fewer frozen treats because of continuing health concerns, choosing fruit and yogurt alternatives instead. • Upsides for the industry are research sources that report approximately 80% of adults eat frozen treats, people would rather eat ice cream than pie and Millennials claim ice cream is their favorite summer food.

3. Sales in Small Scoops • Ice cream production decreased 0.8% through August 2015, before the slight rebound of +0.7% three months later, as indicated in the chart on page 1 of the Profiler. • Dollar sales did increase 2.5% for the 52 weeks ending August 9, 2015, but were solely based on a 9-cent average increase in price, not an appreciable increase in units sold. • Private label ice-cream brands had the largest dollar sales for the 52 weeks ending August 9, 2015, at $1.125 billion, but Talenti scored the greatest 1-year change in dollar sales, 57.0%, and unit sales, 54.4%.

4. Frozen Yogurt Meltdown • Although recent consumer research revealed that 78.9% preferred frozen yogurt compared to just 8.8% for ice cream, dollar sales and units sales for the top 10 brands declined significantly, according to the table below. • The 7 largest frozen yogurt franchises added a net of 25 new locations from 2014 to 2015; however, the largest, Yogen Fruz had a net loss of 117 while Red Mango increased 57, Rita’s Italian Ice, 42, and Menchies, 39. • Private label frozen-yogurt brands were also #1 in this category with $64.42 million in dollar sales and 21.2 million in unit sales for the 52 weeks ending August 9, 2015, but Dannon Oikos was the big winner with 86.0% and 84.7% increases, respectively.

5. Other Categories Given the Cold-Shoulder • Although not spectacular, the frozen novelties section, with a 3.5% increase in dollar sales and 0.6% increase in unit sales, performed better than frozen yogurt and sherbets and sorbets, which had a 2.7% decline in dollar sales and 4.7% decline in unit sales. • Among frozen novelties, private label brands led with $459.8 million in dollar sales and 155.8 million in unit sales, but Nestle Drumstick was a much closer second than in other categories, at $420.5 million in dollar sales. • Although dollar sales and unit sales declined for private label sherbets/sorbets brands, their dollar sales and unit sales were both more than 300% greater than #2 Häagen-Dazs. Again, Talenti was the big winner in this category with 49.6% and 49.8% increases, respectively.

6. Top Shops • In Nation’s Restaurant News’ 2015 Top 100 Restaurant Chains, Dairy Queen was 20th ($3.2 billion in total sales), Culver’s was 47th ($1.0 billion in total sales) and Baskin-Robbins was 79th ($544 million in total sales). • Baskin-Robbins added the most franchise units (+223) from 2015 to 2016, but Dairy Queen is still the #1 ice-cream franchise chain by total units (4,451). • Two frozen treats shops – Ben & Jerry’s and Häagen-Dazs Shoppe – topped Nation’s Restaurant News’ Consumers Picks of Limited-Service Restaurants (LSR). In addition, Bruster’s Real Ice Cream was #7 and Red Mango, the yogurt chain, was #8.

7. Advertising Strategies • Help supermarkets and ice cream shops to plan promotions that maximize sales during July and National Ice Cream Day. These could include a free scoop with a three-scoop cone or dish or a low-carb cone to balance the fat content in ice cream. • To continue to drive sales during the remainder of the warm season, stores and shops could consider a discount for any day when the temperature exceeds the average by X number of degrees or a free scoop during any day when the temperature exceeds 95 or 100. • Promote and distribute free bottles of water during a hot day in support of keeping people hydrated and to generate traffic entering the shop.

8. New Media Strategies • Promote an Ice Cream Selfie Day, inviting customers to photograph themselves and their children enjoying ice cream: babies’ ice-cream-smeared faces, someone chasing a drip on the cone with his/her tongue, someone trying to balance a multi-scoop cone, etc. • Host a contest asking for social network visitors to post their favorite ice cream story with 25 words or fewer. Invite everyone to vote for the best. The winner has a new flavor named for him or her for a month. Give each voter access to a mobile coupon. • National Ice Cream Day is the perfect occasion to use Meerkat or other live streaming apps, to “broadcast” an hour or more of the day as a live event. Interview customers about the flavor they chose and the owner/manager about new flavors and healthier choices.