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06/02/2022

Frozen treat sales heating up

Consumers’ desire for indulgence across a wide range of products will benefit retailers and manufacturers this summer
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Happy dark skinned millennial girl eats yellow ice cream of mango flavor, clenches fist with anticipation of something awesome happen, has toothy smile, wears bright summer clothes, isolated on green
Shutterstock/Cast of Thousands

The frozen treat category is heating up this summer with suppliers feeling positive about the season. Their optimism is justified. Last year, despite the pandemic, some makers say sales were robust as consumers sought comfort with sweet indulgences. It’s no wonder that Canada ranked sixth among top ice cream consuming nations.

In fact, sales of ice cream and frozen desserts in Canada hit $1.4 billion in 2021, according to Euromonitor International

Sweet indulgence

Unilever, the world’s largest ice cream company, is confident in the category’s growth, announcing it will roll out no less than 19 new frozen treats for 2022.

Its portfolio of superstar brands will grow with noteworthy mash-ups, like Breyer’s M&M’s Mini Caramel Fudge ice cream and two Klondike SKUs—Reese’s Peanut Butter Cones and Chocolate Cones. Of note is the bolstering of better-for-you options with the addition of Magnum Non-Dairy Hazelnut Crunch Bar.

BFY options

The healthy splurge trend has staying power. Chapman’s is introducing a 55 ml NSA (no sugar added) lactose-free bar to its roster, suitable for diabetics, those with a lactose intolerance or keto-diet followers. “Before now, these categories of guests rarely got a treat at these occasions,” says company vice-president Ashley Chapman.

Though healthy choices in frozen treats are expanding, ice cream still rules. “We’re seeing real ice cream items selling a lot more than frozen dessert items or water ice,” explains Mike Rogiani, president, The Ice Cream Depot, in Nisku, Alta. “We haven't seen a lot of new innovation in the category recently and what innovation we've seen, such as low calorie or non-dairy items, have captured only a very small market segment.”

He also notes that ice cream sales do well at the beginning and the end of the summer, with water-ice products doing well, especially in hot weather. To keep retailers engaged, the company will feature promotions for products it is focusing on. “We try to run promotions that ensure retailers are stocking up on items that sell best for the season,” he adds.

Supply issues, inflation and the cost of gas are threatening a meltdown for profits and may necessitate higher prices. “We’re watching closely and we’re hoping that these things won’t impact prices too much,” says Andrew McBarnett, CEO, Neale’s Sweet N’ Nice. “We’re having trouble getting some stuff into the country. It’s a challenge.”

Global flavours, local sourcing

Despite those pressures, he is looking forward to his brand having a presence at summer events. “Engagement is very important for us,” he says. “When we first started, it really helped us grow.” He feels his customers will welcome the introduction of soursop ice cream—a flavour they’ve wanted for some time.”

The launch is very on-trend as consumers show an interest in tropical flavour and global-inspired foods. McBarnett also sees how the buy-Canadian momentum is influencing shopping behaviours. As an Ontario-based, Canadian-owned company that uses 100 % domestic milk, Neale’s Sweet N’ Nice will trumpet its Canadian-ness even louder when it redoes its packaging this year and offers discount coupons.

The last two years have been kind to Kisko Products, makers of beloved brands like Mr. Freeze. It has seen a 10% to 15% lift in sales, according to its president Mark Josephs. He’s hopeful for another good year as people will be on the go and travelling more, which will mean more traffic and sales for convenience stores.

With 50% less sugar, its Mr. Freeze Jumbo Lite (150 ml) does very well in the space. All-natural Mott’s and Welch’s Juice Ice Bars will now be made with certified organic juices to appeal to better-for-you consumers.

Inflation threatens to cloud the sunny skies for frozen treats. Josephs says, between freight, labour and goods, that his costs have risen about 18%. “Manufacturers and processors are taking a hit to their margins and it hasn't stopped yet.” While some costs are being passed along to retailers and consumers, wholesalers will be offering deals throughout the year.

This article appeared in the May/June 2022 issue of Convenience Store News Canada