Figure 6 & 7, shows how various segments in the impulse market have performed in recent years.
Between 1997-2001, all segments except CONES have declined remarkably:
The chocolate snack segment has roots being one of the oldest products on the market being choc-ices. It contains the top-selling impulse ice cream, Magnum, as well as various confectionery-branded ice creams.
Chocolate snacks lead the wrapped impulse market with 16% of total sales and 40% of sector sales, despite a loss of sales in recent years.
The children's segment is the second largest in the wrapped impulse market, accounting for up to 10% of total sales and 24% of sector sales in 2001. The segment accounts for almost a quarter of wrapped impulse sales. There has also been a reduction of up to a third in value between 1997 and 2001.
Wrapped Cones registered an increase in sales between 1997 and 2001, even though, the growth is modest at 5%..
The scoop/soft ice cream market is estimated to be larger than the wrapped impulse market.
The refreshment products come in handy as they cool and quench thirst, however hot weather is essential for high sales, and it now accounts for only 15% because of bad weather.
MAJOR MANUFACTURERS
The wrapped impulse ice cream market is dominated by Wall's, with an estimated 63% share in 2001. Mars in second place with a value share of 13%.
Figure 8: Manufacturers' shares in the wrapped impulse ice cream market, 1999-2001
WALL’S dominates the wrapped impulse market with a value share of 63% in 2001, with a fall of 6% in 1999. Since 1999, an estimated fall in sales of 24.9% has been recorded.
MARS increased sales in the market since 1999 with more products launched and is now a strong contender in 2nd place with a 13% market share.
RICHMOND\Treats; manufactures more ice cream for the UK market than any other manufacturer. In August 2001, Richmond acquired the UK ice cream business of Nestlè, an international force but has struggled to rise in the impulse sector. Until recently, the branded side represented a small share of the company's output.
CADBURY'S has seen a healthy penetration in the cones sector but concentrates on the Take-home sector.
MAJOR PRODUCT BRANDS
This section talks about the major product brands, as consumers tend to prefer established names.
WALL’S
A few years ago, Unilever identified ice cream as a core category that would be the main focus of the corporate development in coming years. Unilever has built up a number of international brands. These are Magnum, Solar, Carte door and Vienna. The latter doesn’t have presence in the impulse sector.
MARS
Mars' strength is in the chocolate sector. It has five top products in the impulse sector. Four are among the top ten in the impulse market. In scales of order: Mars, Galaxy, Bounty, Snickers, and Twix. M&M’s also features in the cone sector. Mars is not a strong contender in the children’s sector.
RICHMOND/TREATS (Nestlè)
In 2001 Richmond acquired Nestlè. Nestlè main strength is in children products such as Fab, Fruit Pastille ice-lolly and Smarties with an impressive growth. These are its products in other sectors. Kit-Kat Chunky and Maxibon; launched in March 2000.
CADBURY’S
In venture with Federicks Dairies, Cadbury made further moves to develop the ice cream potential of its well-known confectionery brand. Capitalising on its recognised credentials as a chocolate manufacturer. Cadbury is penetrating the Cones sector.
Section 2: Purchase Trends of the United Kingdom by Segmentation.
The purpose of Section 2: Segmentation, is to inform our clients about the purchase trends of the population broken down into categories.
Traditionally and historically ice-cream purchases has been for children, So the level of children within society is of utmost importance to the future sales of ice-cream and newly developed product sales.
Chart 8: Population of the United Kingdom by Age Group, relays that the population has seen a decline in the birth rates of children. With a 6.4% decline of children aged 0 to 4 years, between 1996 and 2001
The table further projects a decline of 5.4% among the 5 to 9 year olds, between 2001 and 2005, ensuing a decline of children to be enticed with ice-cream products.
Table 8: Data of Population by Age within the United Kingdom.
Chart 9: Population of the United Kingdom by Age Group.
Segmentation of Population within United Kingdom Purchase Trends.
By, Table 9: Data of Childhood Preferences of Ice cream in 2001 identifies to our clients child preferences of ice-cream products. Children aged 0 to 4 years, prefer scooped wrap ice-cream, children 5 to 9 years prefer choc based ice-cream, scooped ice-cream or wrapped ice-cream almost as equally. Whereas, children aged 10 to 15 years, prefer the same ice-cream as children aged 5 to 9 years, extracted from Table 9: Data of Childhood Preferences of Ice-cream.
Table 10: Data of Childhood Preferences of Ice cream in 2001.
Chart 11: Preference of Ice-cream
Table 10: Consumer Trend of 15+ Age Group in 2001 and Chart 2c: Population by age group consuming these type Ice-cream products, expresses the preference of choc base ice-cream spans three age segments, those being 15 to 24, 25 to 34 and 35 to 44 age groups. It isn’t until the age groups of 45 to 54 and 55 to 64 that we see a shift of preference towards whipped ice-cream.
Table 10: Consumer Trend of 15+ Age Group in 2001.
Chart 11: Population by age group Consuming these type Ice-cream product
Regardless of the ages of people in the United Kingdom, all persons fall into a family category; here they have been sectioned under the heading of Life-stages, broken down in Table 12: Life-Stage Categories.
Table 12: Life-Stage Categories
From the Life-Stage Categories, we are able to break these groups further into Family Grids, see Table 13: Socio-economic Family Grid.
According to the data displayed in, we can see that up to 13 % of the population is in the midst of raising families and that 12 % of the population is still in the process of bringing up children due to leave home and begin families of their own.
See Table 13: Socio-economic Family Grid
Grid 13: Purchasing Trends of Socio-economic Family Grid, 2001. Conveys ice-cream is popular among all family groups, that ABC1, household currently raising young children are the best consumers of ice-cream products.
Grid 13: Purchasing Trends of Socio-economic Family Grid, 2001.
Chart 14: Purchasing Trends of Socio-economic Family Grid 2001.
SECTION 3: IDENTIFY THE LIKELY LEVEL OF DEMAND FOR THE NEW PRODUCT MARKET ASSUMING A UK WIDE LAUNCH.
The performance of the major brands has been affected by various factors in recent years. These major factors determine the level of demand in Chocolate snacks, Refreshments, Cones and the Children’s sector.
To indicate the likely level of demand of the new product in the above mentioned categories, Mintel’s market research was used.
The year 2001, has seen the launch of various new products by these major players Walls, Mars, Richmond/Treat (Nestle), Cadburys Their products fall into the segments detailed in Table 15: Major Manufacturers New Product Development
Table 15: Major Manufacturers New Product Development
The likely level of demand can only be based on the recent performance of the product. Statistics have shown from various angles of the market what the performance has been, based on findings from a review period between 1996 and 2001.
Findings : (Note based on review period)
Reference to figure 3 shows the United Kingdom retail sales of impulse ice cream by volume. This indicates a steady decline in sales volume in every year with an insignificant increase in 1997 and 1999 at 3% and 4% respectively.
Ref. to fig 4 depicts United Kingdom sales of impulse ice cream by value, an indicator of a steady decline every year during the review period.
Ref. to fig. 5 and 6 indicates the United Kingdom retail of wrapped ice cream by segment.
This table is a clear indicator to which segment is worth consideration. During the review period Cones has been the single bright spot with a modest increase of 5.6% (1997 –2001).
Reference to figure 7indicates manufacturers share of the wrapped impulse market. This table indicates the level of market shares and a pointer to which products consumers prefer. A clear indicator Walls is the market leader, with the best selling brand in this sector.
Ref to figure 9, this table shows the population per age group in the United Kingdom. This is very important because statistically, families with children are high purchasers of impulse ice cream. Note that the decrease in ages 5-9 (2001 –2005) may have a negative impact on the market.
Deductions from the overall performance of these sectors suggest a decline with a few products dominating their segments. The three major factors for the decline are:
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Poor summer weather: Sales have been dropping since the poor summer weather in 1998.
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PRICE: This has facilitated the significant switch from Impulse to the Take-home sector. Even at full price, it is still less expensive to buy multi-packs from supermarkets than to buy single impulse items. The constant promotional activities like buy one, get one free offers have made impulse purchases seem even more expensive.
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Healthy eating habits: Due to new health conscious habits individuals have reduced their intake of what is considered to be unhealthy foods such as ice cream products.
CONCLUSION
A clear analysis of the competitive Nature of the product shows that although the impulse market is in decline, there are some segments of it that manufacturers can exploit. For example the Cones and Soft/scoop segment are potential markets for good sales.
The consumer group to be most targeted is the children and household with children. As explained in section 2, the household with children and children are the major consumers.
Children sales are highy depended on innovative and novelty ideas. Consumers are known to stick with well know brands, so it is important to diversify on well known brands. Especially the fruit based ice cream.
Recommendations:
Based on the Report compiled, Datacom, advise the next stage of the market research plan to be a Qualitative and Quantitative survey. This would provide a wider information on the following:
- Target Markets not identified in the Mintel Report.
- An in-depth information in relation to the direct launch of their product.
- An recent information of this product market. As our source of information (Mintel) was last compiled February 2002.
We would also want our clients to employ our service to carry out the QUALITATIVE Approach, which is conducting a survey using the Focus Group Module, that is a small group of people from the target market. Whereby these people are interviewed one to one, using a semi-structured questionnaire in addition to a product sample survey. And the second phase of this would be a:
QUANTITIVE Approach, This will involve a large number of people from a cross section of the target market. The questionnaire will be closed, whereby people are given specific or multiple choice questions.
Enlisted in the Appendix is an approach sample questionaire; this would take into consideration the specified population below
- 25% School aged Children
- 25% Individuals working in the W1 area of London
- 25% Families
- 25% Teenager
Sample Questionnaire
(Please Tick Applicable Box)
1) Gender. Male • or Female • 2) Do you have children? Yes • No• 3) Are you? Single • Married • Divorced • Widowed •
4) What age group are you in? 9-12• 13-29• 20-34• 35-44• 45-54• 55-64• years 5)Do you eat dairy products Yes• No•
6) Was your last leisure day out within a week •, month• or 6months• 7) How often do you eat ice cream in a month? _____
8) Do you have ice-cream for desert Yes• No• 9) How often do you have leisurely days out Weekly •, Monthly •, Yearly •
10) Do you buy on impulse: Cone• Ice Lolly • Confectionery brands (e.gMars/Galaxy) • or other • _____________________________.
11) Do you think the price of ice Cream is Fair• Inexpensive• Expensive• 12) Do you purchase ice cream by brand? Yes• No •
13) Are you willing to pay 50p• 80p• £1.00• for a single serve ice cream? 14) Do you work in the W1 area Yes• No•
15) If so which brand: Walls • Nestle • Cadbury’s • or Other______________ 16) Do you eat ice cream at lunch-time Yes• No•
17) Should single serve ice cream be available in multi-packs Yes • No• 18) Do you receive pocket money Yes • No •
(if applicable) Do you get 30p• 40p• 50p• £1:00• or £2:00• or more.
