It’s a scientific fact. If you want happy customers, have plenty of ice cream on hand.
Research has found that noshing on ice cream activates the “happy zones” in the human brain. During a study sponsored by Unilever, maker of several ice cream brands, neuroscientists at London’s Institute of Psychiatry scanned the brains of people eating vanilla ice cream. They discovered that swallowing the frozen treat had an immediate effect on areas of the brain that indicate happiness.
“When people were forced to change their familiar routines and isolate themselves to avoid contracting COVID-19, c-store ice cream sales soared.”
A less scientific example of this phenomena was the 2020 pandemic. When people were forced to change their familiar routines and isolate themselves to avoid contracting COVID-19, c-store ice cream sales soared. That trend continued—to a lesser extent—into 2021.
“The ice cream category saw huge gains in 2020, up by double digits in both sales and gross profit per store annually,” said Jayme Gough, research manager, NACS. “Ice cream sales were 0.89% of all in-store sales, which was up 0.15 points from 2019. The total category brought in $26,033 sales per store in 2020, a huge increase of 21.4% year over year. Plus, the category averaged margins of 45.97% and accounted for an average of $11,967 gross profit dollars in 2020, an increase of 20.2% from 2019.”
Expect to see more consumers reaching for frozen treats in coming months, according to Zach Waite, director of strategic growth, Hershey’s Ice Cream. “Consumers have been eating at home a lot over the last two years,” he said. “I believe a shift back to more eating out and [selecting] items that are easy to eat on the go will be strong for the foreseeable future.”
HEALTHY OR INDULGENT?
When pollsters ask, consumers say they want healthier versions of their favorite foods. But “generally, indulgence wins when it comes to ice cream, with 75% of packaged ice cream and 62% of frozen novelties being indulgent offerings,” said Patricia Biswas, ALT channel marketing manager at Wells Enterprises, maker of Halo Top, Blue Bunny and other brands. “That’s not to say that there isn’t a focus on balanced indulgence.
JUST THE FACTS: The packaged ice cream/ frozen novelties category averaged margins of 45.97% and accounted for an average of $11,967 gross profit dollars in 2020, up 20.2% from 2019. Source: NACS State of the Industry Report of 2020 Data
“Health and wellness continue to hold an elevated status in our post-pandemic environment, which is why there are several new products in the market to align with consumers’ holistic approach to overall wellness,” she said. “Halo Top is the leading better-for-you ice cream brand, and Wells is evolving its selection to fit consumers’ wellness journey. We’ve expanded our low-calorie, high-protein pint portfolio to include nondairy, keto pints and bars, fruit bars and our new sorbet pints.”
Thanks to Unilever’s diverse portfolio of ice cream products, “we offer something for everyone to feel satisfied,” said Jena Sussman, senior manager of public relations at Unilever. “For those with dietary restrictions, this indulgence can be the better-for-you versions with low or no sugar or carbs, as well as our nondairy alternative and plant-based options.”
New frozen offerings—both indulgent and healthier versions—continue to appear in stores. Morgan Abraham, an electric engineer, was working to develop a unique smoothie machine for commercial use when a serendipitous encounter connected him with Pascal Kriesche, a mechanical engineer who was attempting the same thing.They combined talents, and the result is the smoodi, a wireless blender-plus-freezer combo that delivers healthy, fresh-fruit beverages at the push of a button.
Pre-packaged smoodi cups of flash-frozen fruits—strawberries, raspberries, bananas and more—are stored in the freezer. A customer selects a cup and puts it in the machine for about one minute. The result is a better-for-you treat made without purees, concentrates or added sugars, Abraham said.
“We get a great milkshake consistency, and each smoodi is under 100 calories,” he said. “Plus, everything is transparent. The machine is self-contained, self-cleaning and sanitizes on a daily schedule. The cup can be recycled, and the straw is biodegradable. We want every smoodi to be an amazing experience,” Abraham added. “We want it to touch all five senses.”
Because it operates using Wi-Fi, the machine collects information about equipment use and alerts store staffers in case of an issue. Currently, Quality Oil of Winston-Salem, North Carolina, is offering smoodis in its Quality Mart convenience chain.
PREPARE FOR THE SEASON
April through October are the busiest months for c-store ice cream sales. “The key to success is getting new items on the shelf before the season starts,” said Biswas. “Operators could lose up to 40% of their volume if frozen treats aren’t on the shelf before April.”
“Bars are the preferred format (52.3%), followed by sandwiches, cones and cups at 20.2%,15.7% and 5%, respectively.”
tores should stay well stocked in the items customers want most. “At c-stores, 96.3% of ice cream purchases are single-serve novelties,” Biswas said. “Bars are the preferred format (52.3%), followed by sandwiches, cones and cups at 20.2%,15.7% and 5%, respectively. In terms of packaged offerings, it’s a pint-driven business with 55.1% share versus scrounds at 21.3%. Having the right assortment of frozen novelties is important to bring variety and value to everyone.”
Because ice cream is usually an impulse item, “put the freezer near the register, and keep it stocked with the fastest moving items. And control retail prices to keep the volume going,” said Waite. “If you’re doing food beyond pre-packaged items, Hershey’s suggests offering scoop ice cream, making fresh milkshakes and creating a consumer experience that makes your store stand out and gives consumers a strong reason to return.”
Don’t hesitate to promote ice cream offerings with exterior store signage urging customers to come inside, Sussman advised.
“Make sure ice cream is visible in-store. Merchandise it close to other sweets, as close to checkout as possible, and have at least one stand-up freezer dedicated to ice cream,” she said. “For frozen novelty items—ice cream bars, sandwiches, cones and cups—try placing a frozen bunker case near the front of the store and near checkout to encourage those impulse purchases.”
Sussman added, “And choose the key national brands and their top-selling flavors, especially if you have a limited assortment. People are consistently purchasing the products they know and love, but we also see them buying new flavors and formats that pique their interest, capture their attention, and surprise and excite them.”
The Power of CSX Data
CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.