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Thursday, May 10, 2012

Ice cream as personal stimulus package

Despite the Great Recession, ice cream and frozen desserts are doing well for one simple reason:  they are comfort items that make people happy.  (Ditto for dogs.)  Edvard Munch's iconic "The Scream" recently sold for a record $120 million at auction in New York, but that's chopped peanuts compared with the $25.1 billion U.S. market for ice cream and frozen desserts, up 2.4% over the previous year despite the hard times.
This is nothing new.  Ice cream and frozen desserts have long provided “small indulgence” respites from economic woes, with some of today’s most popular brands and flavors having been introduced or popularized during the Great Depression.  Among these are Carvel, Friendly’s Ice Cream, Good Humor, and Rocky Road—a flavor created by Dreyer’s in 1929 and named “to give folks something to smile about." (Ditto for candy bars, which flourished in the Depression era—think Payday, introduced in 1932.)
Recession aside, ice cream and frozen desserts have long had a huge consumer following in the U.S., both at retail and on the foodservice side.  According to a March 2012 survey conducted by Packaged Facts, almost three out of four U.S. adults (73%) eat ice cream or frozen desserts.  Not surprisingly, consumers enjoy more of these treats in the summer, but the recent unusually warm winter boosted business during the first quarter.  Some 86% of adults who eat ice cream/frozen desserts have done so at home (or someone else’s home) within the last six months, two out of five have bought ice cream or frozen desserts at a scoop shop for take-out during this timeframe, and one out of four has enjoyed these products sitting down in a scoop shop and/or at a restaurant after a meal.
In the retail arena, recent launches making a big splash include frozen Greek yogurt, TCBY frozen yogurt,  Unilever’s Magnum ice cream bars, and NestlĂ©’s new Wonka Ice Cream brand.  That Mediterranean Diet to Willie Wonka arc tells the story: while households with children remain the heaviest consumers of ice cream, the industry continues to shift toward premium and superpremium formulations that target adult palates.  Store brands correspondingly have gotten more sophisticated—think Wegman's Food You Feel Good About Organic Dark Chocolate Ice Cream. The main reason, of course, is the aging of the U.S. population.  Older consumers might or might not count calories, but they are more likely to want their calories to count.   Another is that self-indulging adults are less sensitive to price changes.  Flavor is critical to product success, but witty product names and marketing campaigns don’t hurt, either.  And while comfort has been the name of the game during the recession,  consumers are likely to swing to celebratory splurges as the economy improves.

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