4 trends to watch in frozen treats
As the hot summer months approach, the landscape of cold treats is changing. While overall unit sales of ice cream and frozen novelty sales have declined over the past year, operators say customers are flocking to their scoop shops and buying more frozen dispensed beverages.
C-store ice cream sales rose 1.8% for the year ending April 21 even though units dropped around 1%. That’s because of an average price hike of over 2% per unit over the past year, according to Chicago-based research firm Circana. Similarly, frozen novelty sales grew 1% while units decreased 3.3%.
The price increase was not as high as last year, when it grew 15% in c-stores and over 12% in multi-outlet stores, which include grocery, mass market, club stores, e-commerce and drug stores, according to John Crawford, senior vice president of client insights for dairy at Circana.
“Price increases have softened but are still growing,” Crawford said. With prices soaring 7% in the past year and twice that the year before, unit declines have accelerated a bit in c-stores, though unit declines have moderated in multi-outlets, where inflation has been lower on average.
Stewart’s offers both individual servings of ice cream and pints.
Permission granted by Stewart’s Shops
Scoop shops see increased attention
While packaged ice cream and novelty unit sales are lagging in c-stores, some operators report increased traffic to their ice cream shops or dispensed offerings. Sales of those products should perform even better this summer, with projected heat increases across much of the country.
Pontiac, Illinois-based Wally’s, which operates two massive travel centers, runs hand-scooped ice cream shops. Over the past year through April, sales at Wally’s ice cream shops were up 15%.
“It’s that old-school experience of going into the mom and pop shops and getting the scooped ice cream — you don’t see that anymore, especially in a c-store,” said Tim Good, director of store operations at Wally’s.
Ice cream makes up more than 87% of the global frozen dessert market according to data from insights company Future Market Insights, presenting a big opportunity for companies that can take advantage.
Ballston Spa, N.Y.-based Stewart’s Shops’ scoop shops — which feature both individual cones and pints for sale — is drawing attention for its hard ice cream. The company’s ice cream won several awards at the 2023 World Dairy Expo, and for the sixth year in a row, Stewart’s recently won the “Best Place for a Frozen Treat” in the Albany Times Union’s annual Best of the Capital Region competition.
It recently rolled out its latest flight of limited-time flavors to draw customers in: Tropical Passion, Win-Place Dough, Brownie Cheesecake, Peanut Butter Pie, Hip! Hip! Churray, and Boston Cream Dream.
Frozen beverages in the spotlight
In addition to scooped ice cream, self-serve frozen drinks — especially sour and unique flavors — have been selling well in c-stores.
Spicewood, Texas-based TXB is seeing double-digit growth in frozen dispensed beverages and expects the trend to continue through the summer, said Benjamin Hoffmeyer, vice president of marketing and merchandising.
“Frozen Drinks are included in our monthly Chug Club Drink subscriptions and our guests are taking advantage,” Hoffmeyer said.
Frozen beverage sales at Wally’s have also soared 27% over the past year, but Good attributes that to inflation since units are flat. The company increased prices around 20 cents each across all hot and cold beverages starting in February.
Wally’s also offers proprietary Sloosh frozen dispensed beverages. One of the most popular flavors is Psycho Orange Cream, according to Good — a flavor that appeals to customers across demographics, according to Good.
When it comes to frozen drink flavors, sweet and sour profiles have been popular with TXB’s customers. Jolly Rancher Sour Apple, Minute Maid Strawberry Lemonade and watermelon are favorites during the summer months.
Additionally, Hispanic brands like Jarritos are gaining momentum and are on trend, according to Hoffmeyer.
Wally’s offers its Sloosh frozen beverages.
Permission granted by Wally’s
Mainstream picks dominate novelty brands in c-stores
The top frozen novelty brands in c-stores are dominated by mainstream, premium and candy/cookie themed items, according to Crawford. The top brands in c-stores include Oreo, which realized a sales increase of 16% for the year ending April 21, followed by Blue Bunny (up 8%), Drumstick (up 3%), Haagen Dazs (up 3%) and Snickers (up 2%).
Brand tie-ins are also trending in c-stores, with Reese’s, Oreo, M&M and more “seeing strong growth,” Crawford said. Additionally, Mini-Melts beaded ice cream “are a hot c-store item with a number of the top growing UPCs,” he said.
Even though 1-count novelty items sell well in c-stores, Crawford has noticed a “bit of a trend” toward larger packs. Oreo King Cone, Good Humor Giant, and Blue Bunny Big Bopper are realizing strong growth, he said.
Once area where c-stores might be able to grow is store-brand frozen treats. While private-label frozen novelty is the top seller in that category in multi-outlets, it is much less of a presence in c-stores, ranked 23rd according to Crawford.
Hot weather, other broad trends should boost sales
Prices have moderated over the past 13 weeks ending April 21, with total frozen dessert prices rising 4% in c-stores, compared to over 7% in the past 52 weeks. However, units of ice cream sold still dropped 3.4% and novelty sales dropped 4.7% in c-stores, according to Circana.
This summer, Crawford expects units will start to rebound as prices continue to moderate.
“Gas prices and weather will play a big part in how c-store ice cream and frozen novelties perform this summer, with low gas prices and hot weather being the recipe for growth,” he said. “We should expect units and dollar growth to return to some sense of normal with moderate growth in both units and dollars.”
Additionally, predicted hotter-than-normal temperatures for most of the lower 48 states should boost interest in frozen treats.
In other positive news for ice cream sales at c-stores, AAA projects a 4% increase in travelers for the Memorial Day weekend, which could be a positive harbinger for summer travel. AAA said that 43.8 million travelers will head 50 miles or more from home over the Memorial Day holiday travel period, which comes close to matching 2005’s record of 44 million Memorial Day travelers.
Source: fooddive.com