2. PRICE
Pricing usually follows after the product strategy. The price of the products must be considered very careful before they are given to the final products selling to the market. Understand how Haagen-Dazs’ pricing strategy working is not an easy task at all. It includes many different complicated aspects from customer perceptions of value, product costs, and other internal and external considerations.
Haagen-Dazs’ decision to introduce a more expensive line of ice cream set up the "premium" ice cream position for the brand and made Haagen-Dazs one of the enduring marketing successes of the past several decades. High price is only one of the open holes in the mind. Low price is another. What Haagen-Dazs did at the high end, brands like Walls, Magnum did at another end. Haagen-Dazs was launched at a price 20% to 40% higher than its closest competitors and many times higher than the lower-priced products. At this moment, most of Haagen-Dazs take-home ice creams in the Ice Cream line are selling at the price of US$ 6.99 for one pint comparing to US$ 6.79 for one pint of Ben & Jerry; it’s 20 cents higher than Ben & Jerry’s take-home ice cream. How did it succeed?
High cost of production due to the commitment of finest ingredients is a fact. Spending a lot of money and effort for searching new ingredients and new recipes around the world pushes up the cost for production processes. Haagen-Dazs’ marketers look at these actions as creating more value for their customers. Yet it is not the only reason for Haagen-Dazs setting its price higher than competitors.
Although it’s also dominant in Super Premium ice cream manufacturing, Ben & Jerry set their products a little bit lower than that of Haagen-Dazs. In marketing view point, we may explain this phenomenon as the pressure from competitors. In other words, Ben & Jerry is suffering from the pressure of pricing competition directly with Haagen-Dazs. However, looking at Haagen-Dazs pricing strategy, they still decide to set their price higher than that of Ben & Jerry. This phenomenon can be perceived as no pressure from pricing competition on Haagen-Dazs. Specifically, Haagen-Dazs believes the values they are creating for customers are far more from its competitors. No pressure from competitors, Haagen-Dazs set the price of the products fit to the value it creating for customers. Similarly, when Haagen-Dazs introduced the latest flavors “Reserve Series” at the early of this year 2007, they pressed the price at US$ 7.79. The 70 cents higher maybe come from the value they added to the new ones. These values include the new and unique ingredients which are scarce and expensive for exploiting, the special advertising programs, etc.
One of the advantages of Haagen-Dazs in setting the price is that the target market it is focusing is affluent adult. Adults are basically independent in their income; they have the right to spend for whatever they want. It seems not to be enough; Haagen-Dazs looks farther than normal income adults to affluent adults. The disposable income amount of this class is greater than that of normal adult. As the consequence, it set the high price without concerning anything for other segments in the market. This segmented pricing strategy proved to be working out at last.
It’s clear of what the brand stands for. The Haagen-Dazs brand means premium ice cream: thicker, creamier, and pricier than any other ice cream on the market; a uniquely sensual, self-indulgent, pleasurable treats targeted at sophisticated, affluent adult consumers. With strong brand equity, Haagen-Dazs is expanding the value through customer perceptions. The higher the value customers put on Haagen-Dazs brand name, the greater the price of the products Haagen-Dazs can charge its customers. In addition, the commitment also makes customers believe that it’s Haagen-Dazs responsibility to maintain a high production levels and consistent quality in order to keep its promise. Therefore, customer perception of Haagen-Dazs value is even higher than ever for this commitment. The coming result is the willingness of customers in paying such a high price for what they believe worthy.
Taking advantage of customer perception for setting its price, Haagen-Dazs seems to apply psychological pricing strategy here. Once again, this strategy is use effectively when setting at a very smart fractional price. Observe the prices of products offering at Haagen-Dazs outlets, we realize that they are ended with some nine numbers. As mention above, most of the Ice creams are selling at US$ 6.99 for one pint, US$ 3.99 for 4.23 oz, US$ 7.49 for 3 bars, and the latest Reserve Series are selling at US$ 7.79. Do these 9 numbers really make sense for the producers? Off course, they are just psychological pricing strategy that makes the buyers believe there are some discounts or promotion for the products. It’s more persuasive and attractive to set out such prices.
3. PLACE
Product strategy and pricing strategy are showing their essence in the strategic competition with other companies, while marketing distribution channels give ways for the company to bring their created values to customers. Similarly, Haagen-Dazs is looking at distribution channel as important as any other marketing strategies.
Haagen-Dazs direct distribution channels indicate a successful strategy that company marketers have been applying for many years. Haagen-Dazs builds its physical distribution channels in the conventional distribution channel. According to Kotler and Armstrong (2007), conventional distribution channel is a channel consisting of one or more independent producers, wholesalers, and retailers, each separate business seeking to maximize its own profits even at the expense of profits for the system as a whole. The common model for conventional distribution channel usually begins from producer; the products will be passed through wholesalers, then retailers, and final point to consumers.
Due to the characteristics of ice cream, the distribution systems of Haagen-Dazs requires its wholesalers, retailers as well as any other kinds of resellers a very special refrigerators or special storage room to keep the ice cream always under -12oC, especially super premium ice creams. Distributing to normal warehouses or retailers who have had enough ability to store ice creams is very dangerous to guarantee the products’ quality. Therefore, Haagen-Dazs only has its partnership with those wholesalers who have expertise and well-established warehouses in distributing frozen desserts. Taking Japanese market as an example, Haagen-Dazs transports its products from the plant directly to the wholesalers such as Yikijirushi Access Company, Meihan Network Group, Dairy Foods Network Groups, etc. Through the systems of warehouses that already established by the wholesalers, Haagen-Dazs passes some of its responsibilities as well as distribution cost to wholesalers. The wholesalers will be responsible in delivering Haagen-Dazs ice creams to retailers in the some certain regions under their scope of operating. In this case, Yukijirushi is responsible for delivering ice cream received from Haagen-Dazs manufacturers to retailers in the region like Jusco, Dalei, Ito Yokado, and Wal-Mart. Finally, the retailers continue passing the products to smaller retailers or to end consumers. Absolutely, Haagen-Dazs, the wholesalers, retailers have subsequently been adding more value into its ice creams when reaching the final consumers.
Unified System of Ice Cream Distribution for Supermarket (Including Superstores)
Source: Katsumasa Hayashi and James M. Hagen, Cooperation Among Competitors: The Japanese Super-Premium Cold Chain, Working Paper, March 2001. Department of Applied Economics And Management, Cornell University, Ithaca, New York 14853-7801 USA.
Haagen-Dazs distribution system is really superior. The marketers wisely discovered the potential of convenient stores. To the end of their decision, Haagen-Dazs marketers made their relationship with 7-Eleven Convenience Stores system which has been spreading out all over the world to push up their products as fast as they can. This is not just only a strategy for gaining market share but also for gaining of brand equity, and positioning of the products.
Source: Katsumasa Hayashi and James M. Hagen, Cooperation Among Competitors: The Japanese Super-Premium Cold Chain, Working Paper, March 2001. Department of Applied Economics And Management, Cornell University, Ithaca, New York 14853-7801 USA.
Wholesalers and supermarkets seem not be enough for Haagen-Dazs, they have been continuously looking for new opportunities to expand their products in the exclusive and luxurious places like five-star hotels and restaurants, airports, conventions. In Beijing, freezers selling Haagen-Dazs ice cream stand proudly in the lobbies of five-star hotels. The price for a pint of Swiss vanilla: $10, compared to around $3 in the United States. Through this luxury distribution channel system, Haagen-Dazs is gaining its status in the perception of customers. More and more people believe that Haagen-Dazs means exclusiveness and even prestige.
In this technology and telecommunication echo, World Wide Web becomes one of the most exciting and cheapest ways for marketing “battle ground.” In fact, virtual distribution channel plays a very significant role in Haagen-Dazs distribution channel these days. The inventory management mutually through virtual system between manufacturers, wholesalers, and retailers is gradually proving its effectiveness and efficiency. The Just-in-time (JIT) philosophy can be done more perfectly through virtual management. As the result, reducing the storage and delivery cost is a fact that nobody can deny.
Furthermore, Haagen-Dazs also presents its strong distribution channels through vastly licensing to its franchises around the globe. Until today, Haagen-Dazs franchises hundreds of its outlet to many different countries.
Going much further, café with comfortable seating for couples, bar tools, dim lighting, rich colors all help to create an ambience of intimacy & love. All cafes are located on prime streets, airports, or malls where young adults tend to hang out. Thus it enables maximum accessibility for the elite. Focus on this segment had moved away from actual cafes where they may be tempted by the non-low fat products and towards supermarkets, petrol pumps and other convenient areas.
Generally, the company has created more values for its products by a good marketing distribution channel. These strategies give ways for Haagen-Dazs values reach customers in very external systems which are believed more superior than other companies.
4. PROMOTION
Success of one company also depends on how they advertise their products, which sales promotion program they pursue, what public relation, personal selling and direct marketing plans for the company. All of these come under the promotion mix.
Going to the first aspect of the promotion mix Haagen-Dazs applying for its company, there are various advertising campaigns being pursued during the last few years. At the beginning of this year, Haagen-Dazs has introduced a new series of its printing advertising posters. These posters are designed with completely new color panels. If it used to be “indulged” in red, dark brown colors, the new prints are impressive with colorfully attractive ice creams on ivory backgrounds. This color mixing creates a strong feeling of a completely fresh and new ice cream, especially the Reserve Series, towards the adults. The slogans appearing on these prints extremely stimulate the curiosity and desirable senses on the viewers. Just as some slogans for the new products posted earlier in this year “even more de leachable,” “Lady Toffee meets Lord Pudding,” “gifts from the God,” or “last berry standing.” Using flavorful image and sensitive words on the printings has been committing to capturing the concern and gaining the perception of customers. Besides, Haagen-Dazs always negotiates for advertising spaces on street panels, cinemas, airports, universities, media, etc. These kinds of advertising can be caught everywhere in the U.S. Looking at them day by day, the public perception and adoption for new products raise up faster than ever.
The high prices of its products seem not easy for selling at all. However, Haagen-Dazs has succeeded in convince customers that it’s worth tasting via attractive sales promotion programs. Recent years, Haagen-Dazs has been lunching many interesting promotion under many forms. The “Banana Split Dazzler” and the 'Discover the Dazzler' online game brought to customers and franchisees not only the new innovative products but also exciting games. Haagen-Dazs was giving away more than $11 million worth of prizes, including a 3-year 2001 Jaguar XK8 lease, $5,000 shopping sprees, free ice cream for a year for another promotion programs. At the early of this May (2007), a lot newspapers and magazines simultaneously posted the hot promotion program “First Haagen-Dazs New Flavor Day FREE cone event” announced by Haagen-Dazs to ice cream aficionados. The attention was strong enough to lead to a small movement in ice cream lovers. Everybody was rush to Haagen-Dazs outlets in order to search and taste “the unique ice creams.” Spending a lot of money for sales promotions, sales revenues of Haagen-Dazs have been substantially pushed up. This may be a big and worthy reward for good sales promotion strategy.
Most of the marketers are conscious of how important it is to build strong public relations. Haagen-Dazs executives always remind this significant role to their marketing staffs. There are almost no Haagen Dazs products being introduced to public without the support from newspapers, magazines, television stations. Similarly to this year’s introducing of Reserve Series, it would have been very few people rushing to Haagen-Dazs outlets if there hadn’t appeared articles and announcements on the public Medias. One of the mottos of Haagen-Dazs is always active in public relations. Therefore, they set up separate Public Relation Departments in order to connect with the public. These departments regularly express the company’s image and commitments on newspapers, television shows. In addition, Haagen-Dazs often holds public event to get the attention of the public for their company. When introducing the Reserve Series, Haagen-Dazs Japan and Australia connected their product promotion with special music concerts with the title “laid-back approach to music.” Audiences listened to a violin concert on beds as they eat ice cream during the Dolce Heavenly Concert in Tokyo and Australia. They used to hold a contest in U.S as an event to show Haagen-Dazs prominent to other ice cream producers. In this contest, guests or passengers were invited to taste some unlabeled ice creams and gave marks for which they believed was the best. The result was Haagen-Dazs ice cream got slightly higher marks than its closest rivals Dreyers. This event gave not only reputation for the firms but also warns and insights. Haagen-Dazs based on the result to predict the tastes and preferences of consumers. More than that, they received the warning from the rivals earlier so that they could prepare new strategies for competing. Perhaps the most important public relation of Haagen-Dazs until this point is Haagen-Dazs Clubs which gathers a lot of its ice cream aficionados. This club is utilized to get the new ideas, complaints, and supports from supporters. Maintain a strong relationship with the public will provide the company a very competitive advantages to other competitors who lack of connection and support from the public.
Although being considered as exclusive, Haagen-Dazs still develops strong personal selling. No consumer automatically comes to a company if the company doesn’t put out any effort. It’s not an easy task to persuade the buyers when the prices of its products are quite high. However, the personal selling force inside Haagen-Dazs is often trained for needed skills in approaching with its target market. Salespeople sometimes don’t need to hang out; they just walk around in the outlets and talk to those customers who are enjoying ice creams to persuade customers inviting more of their friends, relatives to enjoy Haagen-Dazs also in return for some promotions.
Both Ben & Jerry and Haagen-Dazs develop a very strong online marketing program. Lagging any efforts in direct marketing can be kicked out of the lucrative market. Cooperating with its wholesalers, and retailers, Haagen-Dazs appeared on most of the direct selling and buying webpage of its distribution channels inside and outside U.S market. Hence, Haagen-Dazs ice cream lovers everywhere are very easy to reach Haagen-Dazs products.
VI. RECOMMENDATION
Haagen-Dazs is a successful brand name in the ice cream industry, but that doesn’t mean Haagen-Dazs has nothing to do further to leave its competitors distantly behind its back. Ben & Jerry, Baskin Robbins are not the only competitors who exceed Haagen-Dazs in some important markets. Magnums, Wall, Dryer’s Grant Ice Cream follow these biggest brands step by step. In order not to lose in the race with its competitors, Haagen-Dazs needs to exploit effectively its inherent competitive advantages as well as new opportunities in the immense ice cream market. Considering the current market targets, marketing mixes which have been discussed above, obviously there are still widely opened opportunities waiting for Haagen-Dazs taking action to lift itself to a higher level.
Aiming at adults as the main target seems to be a wise strategy. Adults are independent in income; adults are delicate enough in their tastes to enjoy super premium ice creams of Haagen-Dazs, and adults are also considered as more loyalty than teenagers. Yet adults are also believed stricter in evaluating quality and specialties of products. They also tend to be difficult in approaching new products. Unlike adults, teenagers in Y generation are often less loyal. However, they seem to catch up with the new easier and faster than the older. They are the catalyst for the spreading of new movement. Thus, ignoring this segment may not be a good strategy at this moment.
Unfortunately, the “Romantic campaign” of Haagen-Dazs seems unsuitable for teenagers. They may be opposed by the public if the current luscious liqueur ice cream flavors are being introduced to teenagers. Haagen-Dazs needs to develop a new campaign aiming at this segment carefully. The strategy must be supported widely by the public, and not offense the morality and ethics of the countries where Haagen-Dazs are operating. Recently, the morality and ethic behaviors in the Japanese society have being debated on the political tables after several barbarous murders and slaughters among the young. If Haagen-Dazs can build a model or prompt a program to revive the morality and ethics in the young Japanese through its advertising and products, it would have been encouraged and supported by majority. As the result, Haagen-Dazs gains not only the market share but also the trustworthiness which builds up a strong customer relationship. Nevertheless, it should be kept in mind that broadening the target market must be followed by widely supported marketing strategies.
It is absolutely clear that competitors always put their eyes on any tiny action of Haagen-Dazs. Whatever Haagen-Dazs is doing today will be imitated immediately. It’s nothing wrong if Haagen-Dazs also puts their eyes back on these rivals. With a long history operating in United Arab Emirates (UAE), Baskin Robbins is launching an aggressive expansion campaign in the area “which will see the rise of more special outlet stores in key locations, including new property developments and shopping malls.” The success of Baskin Robbins in this market is firmly asserted by Manoj Loya, General Manager - Operations, Galadari Ice Cream Company L.L.C., (UAE), the franchisee for Baskin Robbins in the UAE: “Consumers trust and love is something we have earned over the last 25 years. No premium or budget brand can attain that in a very short period of time. This is what makes Baskin Robbins unique. Our flavor library is the most extensive in the region and our products are some of the most exciting the region has seen. However we feel it is the love and trust that our customers have showered on us that makes us really unique.” Haagen-Dazs doesn’t lose Baskin Robbins in the products’ quality and the variety in the flavors as well, but the race into Middle East’s market seems to be a tough mission for Haagen-Dazs. In Middle East where Islam is the main religion, the luscious ice cream flavors as well as the romantic advertisements may not be welcomed at all. Although having taken some actions, Haagen-Dazs is still far behind Baskin Robbins’ success. Haagen-Dazs should do more researches on this market to find out what are the appropriate tastes, preferences as well as the acceptable images for Haagen-Dazs in this unique market. Specially, Haagen-Dazs should learn the effective franchising and distribution channels that Baskin Robbins applying over 25 years there. Through the domestic company, Galadari Ice Cream Company L.L.C., (GICC), who can understand clearly the culture and unique market of Middle East, Baskin Robbins opened 71 stores in the UAE alone with around 230 outlets across the GCC. Recently Baskin Robbins inaugurated its newest outlet in the UAE at Mall of the Emirates with plans for an even bigger store at Dubai Mall in the future. This is really a clever tactic that Haagen-Dazs’ marketer can take note for their actions later.
Besides broadening segments based on age, Haagen-Dazs should also look into income of consumers in the market. Most of Haagen-Dazs and Ben & Jerry’s product being sold around the world are classified as super premium that only the upper classes or rich people can afford. Even when penetrating into Chinese market where middle class and lower class are dominant, Haagen-Dazs still focus only on upper class or even merely foreigners in this lucrative market. As Eddie Lu, Marketing Manager of Haagen-Dazs in Shanghai stated: “In Beijing, freezers selling Haagen-Dazs ice cream stand proudly in the lobbies of five-star hotels. The price for a pint of Swiss vanilla: $10, compared to around $3 in the United States. People don't mind paying for prestige items, especially if they are foreign.” By this action, Haagen-Dazs is losing a big opportunity in the most potential market in the world. In reality, Haagen-Dazs hasn’t been the largest brand and taken the largest market share in China. Base on the China Marketing and Media Study's (CMMS) database, the top five brands in term of market share of ice cream in China recently consisting of Yili, Walls, Mengniu, Nestle and Meadow Gold hold 57 percent stake of the Chinese market. Foreign Giant Wall, Nestle and Meadow Golden own 30% while two domestic brands take another 27% of the total market share. Similarly, Haagen-Dazs has a stronger brand name in Korea but loses Baskin Robbins whose market share is claiming up to 60% of the total domestic market. However, Haagen-Dazs hasn’t been kicked out of this market. Despite expensive and limited in the numbers of stores, Haagen-Dazs is popular among young people. Consumers are not only attracted by its flavors, but also its fashionable environment and good service. Therefore, broadening its market in China by a good pricing tactic at this time will be a resounding victory for marketers.
Not only taking advantage of the immense Asian Market, but Haagen-Dazs should pay attention to research and develop for new recipes in this “Mysterious Orient” for its products. Ice cream mixed with liqueurs is really great, but it’s not always suitable to all people, especially to Muslims who cannot use liqueurs legally. In addition, the problem of healthy foods is rising in recent years. Consumers become more deliberate in choosing goods and services. Therefore, knowing how to make use of various herbal and traditional medicines of Chinese, Korean, and Indian into their product development can prolong the list of its currently attractive products. A successful strategy that Haagen-Dazs achieved in the last few years is introducing Green Tea Flavor into its bar ice cream sold in Japan. Recognizing that Japanese people advance in drinking tea, Haagen-Dazs quickly grasp this taste, preferences, and come up with a completely new product “Green Tea Bar”.
“The Haagen-Dazs brand is synonymous with fine ingredients and distinctive flavors.” However, this is also creating some obstacles for themselves. Since the resources of high quality ingredients that Haagen-Dazs using are filtered from the finest such as dark chocolate from Belgium, handpicked vanilla bean from Madagascar, the macadamia nuts come from Hawaii. These unique ingredients are really scarce and costly in exploiting. Hence, the prices of their products are often higher than their competitors. Especially for the new products being released this year 2007, the Reserve Series, Haagen-Dazs ice cream experts had to search the world over from the lush Amazon Rainforest to the warm Mediterranean to the volcanic slopes of Hawaiian Islands for the finest ingredients to perfect the flavor character in the products must. Thus, Haagen-Dazs should lunch a program to develop its plants in the place where there are plentiful of quality resources and most convenient for transportation to many different locations around the world.
Through many summers, Haagen-Dazs is one of the official suppliers for Wimbledon Championship in Australia. Marketing managers agree that Haagen-Dazs gained at least 8% revenues during the summers which the Wimbledon happened. Vividly, branding strategies directly impact the profit of the company. If applying the same strategy for the coming Olympic 2008 in China, a golden opportunity for Haagen-Dazs strengthening its brand name throughout the world is only the matter of time. Hundreds countries will send hundreds teams of many different sports to China for this international competition. Accompanied by the fact that China has been costly and carefully preparing for this event many years, millions of visitors will be coming to China next year. A well–prepared branding strategy at this time can help Haagen-Dazs reach the highest position in the ice cream industry.
Last but not least, controlling the operating of its franchises should be put on the managerial table for serious discussion. In the competition race, Haagen-Dazs has been rushing in maximizing its outlets so as to gain the market share as fast as possible but forgot to control the services and products’ quality offered at foreign franchises. Recently, the Chinese authority in China has discovered unqualified and unsanitary ice creams being served to customers in some Haagen-Dazs outlets. As the result, bad words of mouth were quickly dispersed everywhere from inside of China to Europe, Japan, and home country. It harmed Haagen-Dazs reputation temporarily and the sales fell down unpredictably. A big lesson from this affair, Haagen-Dazs must gain its power in controlling international franchises stricter, setting up tougher conditions for franchising and outlets. At the same time, it should focus more on holding events that contribute to its inherent commitment and reputation so that it can gradually distract the public from such an affair.
VII. CONCLUSION
Ice cream is a very dynamic industry. The sales growth has been increasing day by day while more and more manufacturers are joining into this game. It becomes impossible for those who want to conquer this market without coming up with new ideas, and smart strategies. Haagen-Dazs has been taking advantage for many years, but there is nothing can be sure that Haagen-Dazs is still dominant as years before if the marketers don’t work their ways out for wining stubborn competitors who follow them tightly. By understands its strengths and weaknesses (internal factors) as well as opportunities and threats (external factors) deeply, Haagen-Dazs marketer team has built up a very impressive and attractive marketing mix that contributing directly to the successes of Haagen-Dazs times over times. Nevertheless, there are still many rooms for Haagen-Dazs to improve and take steps before its competitors grasp these opportunities and become violently threatening other players. Committing to its finest ingredients, best quality, or perfect marketing strategies are not enough for Haagen-Dazs to keep it position in this customer-oriented era. It should be kept in mind that whatever policies and strategies Haagen-Dazs are following must be conformed to ethical and moral norms believed by the public. Abiding to particular legal system of a nation is not necessarily true that it is practicing ethically and morally. Thus, correct actions would be a good ways to earn public support which is believed the most important element to keep one’s foot in a highly competitive market like ice cream market.
APPENDICES
ICE CREAM LABELING - WHAT DOES IT ALL MEAN?
There are many choices in today's ice cream case to suit a wide variety of consumer tastes. There is plenty of information on food labels, but what does it really mean? Here, the International Ice Cream Association sheds some light on how ice cream and related products are labeled.
Labeling Definitions
Here are some of the terms consumers are seeing in the supermarket, and exactly what those terms mean:
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Ice cream is a frozen food made from a mixture of dairy products, containing at least 10% milk fat.
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"Reduced fat" ice cream contains at least 25% less total fat than the referenced product (either an average of leading brands, or the company's own brand.)
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"Light" ice cream contains at least 50% less total fat or 33% fewer calories than the referenced product (the average of leading regional or national brands.)
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"Lowfat" ice cream contains a maximum of 3 grams of total fat per serving (½ cup).
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"Nonfat" ice cream contains less than 0.5 grams of total fat per serving.
Quality Segments
In addition, there are commonly used marketing phrases that describe ice cream products in terms of quality segments, such as "super premium," "premium" and "economy." Several factors can contribute to a product's quality segment, such as price, brand positioning, product packaging, quality of ingredients and the amount of overrun (air) in the product. Overrun refers to the amount of aeration the ice cream undergoes during its manufacture that keeps the mixture from becoming an inedible frozen mass. Overrun is governed by federal standards in that the finished product must not weigh less than 4.5 pounds per gallon.
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"Super premium" ice cream tends to have very low overrun and high fat content, and the manufacturer uses the best quality ingredients.
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"Premium" ice cream tends to have low overrun and higher fat content than regular ice cream, and the manufacturer uses higher quality ingredients.
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"Regular" ice cream meets the overrun required for the federal ice cream standard.
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"Economy" ice cream meets required overrun and generally sells for a lower price than regular ice cream.
Source: IDFA, .
JUST THE FACTS: ICE CREAM SALES AND TRENDS
Overview
- Total U.S. production of ice cream and related frozen desserts in 2005 amounted to about 1.54 billion gallons, an increase of 0.9% over 2004. Source: U.S. Department of Agriculture (USDA)
- Based on ice cream consumption figures, the top five individual flavors in terms of share of segment in the United States are: vanilla (26%), chocolate (12.9%), neapolitan (4.8%), strawberry (4.3%) and cookies n' cream (4.0%). Source: The NPD Group's National Eating Trends Services
- In 2005*, total U.S. sales of ice cream and frozen desserts reached $21.6 billion. Of that total, $8.2 billion was spent on products for "at home" consumption, while $13.5 billion was spent on "away from home" frozen dessert purchases (scoop shops, foodservice and other retail sales outlets.) Source: 2006 Dairy Facts/International Ice Cream Association
- Ice cream and related frozen desserts are consumed by more than 90% of households in the United States. Source: Mintel
- According to 2005 U.S. production, regular ice cream accounts for the largest share of the frozen dessert market, at 63.8%. Reduced-fat, light, lowfat and nonfat ice cream account for 23.5% of the market, followed by frozen yogurt (4.3%), water ice (4.3%), sherbet (3.6%) and other (0.5%). Source: USDA
Production
- In 2005, California once again produced the largest volume of ice cream and related frozen desserts in the United States, followed by Indiana, Texas, Minnesota, Illinois, and New York. Source: USDA
- The United States leads the world in annual production of ice cream and related frozen desserts at about 1.6 billion gallons in 2005. Source: USDA
- In 2005, about 8% of the milk produced in the U.S. was used to make frozen dairy products. Source: USDA
Sales
- In 2003*, about 86% of packaged ice cream retail sales happened in supermarkets. Convenience store sales were second at 11.4%, drug stores were third at nearly 2%, with 0.6% occurring at other locations. Source: Mintel
- Based on supermarket statistics in 2001*, ice cream volume sales by quality segment were: super premium (3.5%), premium (51.5%) and regular (45%). Source: IRI
- Nearly 80% of supermarket ice cream sales are packaged in half-gallon containers. Source: IRI, 2001*
Novelties
- Novelties are separately packaged single servings of a frozen dessert - such as ice cream sandwiches, fudge sticks, fruit and juice bars - that may or may not contain dairy ingredients.
- The total frozen novelty market in 2004 was valued at $2.4 billion, up 1.3% over 2003. Source: IRI Magazine
- In 2003*, about 62% of American households purchased novelties. Source: Mintel
- Mirroring a similar trend in ice cream, vanilla is the top flavor for novelties, with more than 27% of the volume share. Fudge is the next highest stand-alone flavor share, with nearly 8%. Source: IRI, 2001*
- In 2001 supermarket sales*, ice cream bars (25%) were the largest dollar market share of the frozen novelty market, followed by yogurt novelties (20%) frozen ice (14.1%) ice cream sandwiches (13.5%), and ice cream cones (10%). Source: IRI
International Review
- Total U.S. exports of ice cream reached nearly 26,000 metric tons in 2005 - worth about $57 million. Source: USDA/International Ice Cream Association
- In 2005, Mexico was the single largest market for U.S. frozen dessert exports, with an estimated value of almost $24 million. Canada was the number two destination for U.S. frozen dessert exports, valued at $5.6 million. Japan ($4.1 million), United Kingdom ($3.6 million), and Hong Kong ($2.8 million) are third, fourth and fifth respectively. Source: USDA/International Ice Cream Association
Source: IDFA, .
U.S Ice cream trends - Dairy Market Trends - Brief Article
Geographic Sales of Ice Cream/Sherbet
Dollar Sales % change Pint Sales % change
Region (millions) vs. YAgo (millions) vs. YAgo
California $564 1.2% 468 -3.9%
Great Lakes $704 4.7% 741 -0.5%
Mid-South $627 10.8% 638 0.4%
Northeast $862 3.1% 824 -5.2%
Plains $324 9.8% 398 7.7%
South Central $456 3.4% 470 -1.0%
Southeast $601 4.6% 652 -3.4%
West $541 4.5% 517 -2.0%
Total U.S. $4,681 4.9% 4,709 -1.6%
For 52 weeks ended Jan. 27, 2002
Source: Information Resources Inc.
Top Ten Ice Cream Brands (Supermarkets Only)
Dollar Sales % change Pint Sales % change
Vendor (millions) vs. YAgo (millions) vs. YAgo
Private Label $992 4.4% 1,385 -4.6%
Breyers $520 $5.4% 487 -0.4%
Dreyers/Edy's Grand $367 3.7% 334 -0.6%
Blue Bell $229 2.6% 198 0.0%
Haagen Dazs $190 3.3% 61.9 -0.6%
Ben & Jerry's $160 5.0% 49.7 1.1%
Well's Blue Bunny $113 2.5% 133 -2.5%
Healthy Choice $97.6 8.5% 90.2 8.7%
Turkey Hill $96.4 -0.5% 109 -11.6%
Dreyers Edy's $94.4 23.6% 85.1 19.2%
Total Ice Cream $4,208 4.0% 4,304 -2.1%
For 52 weeks ended Dec. 2, 2001
Source: Information Resources Inc.
Top Ten Frozen Novelty Brands (Supermarkets Only)
Dollar Sales % change Volume Sales % change
Vendor (millions) vs. YAgo (millions) vs. YAgo
Private Label $337.0 10.8% 258.0 3.0%
Klondike $143.0 15.9% 75.3 7.1%
Nestle Drumstick $105.0 7.1% 39.5 4.0%
Popsicle $91.5 -1.9% 52.8 -3.8%
Haagen Dazs $52.4 0.4% 8.7 -0.9%
Well's Blue Bunny $48.1 6.2% 29.0 -0.5%
Dole Fruit and Juice $43.6 -4.8% 15.8 -8.3%
Silouette $42.7 408.6% 14.4 415.6%
Fudgesicle $42.6 10.3% 19.0 7.8%
Blue Bell Novelties $42.1 3.9% 27.7 2.6%
Total Novelties $1,939.0 7.2% 1,017.0 2.8%
For 52 weeks ended Dec. 2, 2001
Source: Information Resources Inc.
Frozen Novelty Retail Dollar Share -- 2001
Total frozen novelty retail dollar sales: $2.1 billion (+7.1%)
Novelty Type % Dollar Share % Change vs. 2000
Ice Cream Bars with stick 17.9% 2.2%
Sandwiches 13.5% 19.8%
Frozen Ice 12.5% -2.7%
Ice Cream Cones 9.8% 15.7%
Fruit/Juice 9.5% 9.4%
Ice Cream Bars without stick 7.0% 6.5%
Fudge Bar 5.9% 9.7%
Cups 3.9% 6.2%
Push Tube 3.0% 17.8%
Cream Bar 2.4% -1.3%
Cookie Sandwich 1.7% 22.6%
Italian Ice 1.6% 24.2%
Bite Size 0.8% 3.4%
Sorbet 0.6% -19.4%
Frozen Yogurt 0.2% -17.7%
Other 9.7% --
Total 100% --
Source: Information Resources Inc., courtesy IDFA
COPYRIGHT 2002 Business News Publishing Co.
COPYRIGHT 2002 Gale Group
CHINA GAIN REPORT
Retail Value of Processed Foods 2000-2004 (RMB millions)
Growth Rates in Products Types
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from the Iowa Farm Bureau Board of Directors, July 7, 2006.
