Is America's love affair with superpremium ice cream coming to an end? Probably not, but lately the relationship has been getting a bit more frosty.
In frozens departments across the country, consumers are increasingly flirting with the premium level of ice cream, and apparently they're going home more often with those brands in place of the pricey superpremiums in which they had been indulging.
So is this a temporary fling with premium ice cream, and where does it leave superpremium brands?
The consensus among supermarket frozens executives is that while the superpremium category is not likely to be abandoned, it looks like the honeymoon is over.
Since their emer-gence in supermarkets in the early 1980s, superpremium brands have been growing at an amazing rate, retailers said. Now it's become clear the love affair was too hot not to cool down. Premium brands have positioned themselves to benefit, while superpremium brands are being faced with a situation they'd not experienced before -- declining sales.
That trend is reflected in the numbers from the top two superpremium players, Haagen-Dazs and Ben & Jerry's. According to scanning data from Nielsen North America, Schaumburg, Ill., Haagen-Dazs, Teaneck, N.J., was down 6% in unit volume and 6.1% in dollar volume for the 52 weeks ended Sept. 10.
Ben & Jerry's, Waterbury, Vt., was up 10% in unit volume and 10.1% in dollar volume for that same period. However, it forecast a sales decline for its just-ended fourth quarter, and said it expects to report its first quarterly loss since it became a publicly traded company in 1985.
"That's exactly right," said Pat Redmond, grocery merchandiser at Rosauers Supermarkets, Spokane, Wash., when asked if there was a shift in ice cream movement. "The premium level is doing well."
"That's what we've found in our area," concurred Mort McKillop, grocery merchandiser at G&R Felpausch Co., Hastings, Mich. "I don't know if it's been for a long period of time, or if it is just the time of the year right now. I think superpremiums will come back again in the warm weather," McKillop said. This anticipation has kept him from changing his company's ice cream sets to reflect the trend toward premium varieties.
That's not the case at The Mad Butcher, Pine Bluff, Ark. Roger Burks, the chain's frozen food buyer, said a meeting with representatives from Well's Blue Bunny Ice Cream showed the need for a change.
"We've been doing a study for the last three months in ice cream to see what we need to do, because we're tight in space. What I thought might need to be done was a complete reversal of what the figures show," he said. "The study showed we need to pay more attention to the premium level. I thought we were doing a pretty good job, but it showed we weren't. It looks like premiums are coming back."
The operator has decided to expand its offering to attract more of a good thing. "The premium ice cream [brand] that we did have, which is based in Arkansas, is the one that was kicking everybody else in the case," Burks said, referring to the Yarnell's brand. "Blue Bunny has a premium ice cream, too. In fact, we're just going to take it on."
Dave Roth, frozen food buyer at Holiday Cos., a Bloomington, Minn.-based wholesaler, said premiums historically have been solid players in the ice cream category, and the segment's current strength is no big surprise to him.
"We've had half-gallon premiums out here in the Midwest for a while. Blue Bunny and Kemp's have always had the half-gallon premium; they're pretty good items."
But why the most recent surge by premium brands? For one thing, regional brands such as Turkey Hill, Friendly and Kemp's have begun to exert a little more marketing force, retailers said.
"They have gotten more aggressive," Burks said. "They've also started issuing new flavors. Some are even coming out -- Blue Bell and some others -- with monthly features. Of course, Yarnell's has increased theirs because they've put nuts in some of their ice creams at no additional charge to the customer."
"I've seen a backslide on the pints," said Jim Roesner, frozen food and dairy buyer at Clemens Markets, Kulpsville, Pa. "It's [the premium level] catching up. Breyers has put on a really big push since the sale [of the company to Good Humor in 1993]. They want to protect their home territory."
Roesner added that Edy's, which entered the Philadelphia market in January, and Turkey Hill are two other premium-level brands doing well in his stores.
Another reason the premium brands have done well, at least in The Mad Butcher's nine units, has been positioning, albeit unintentional. "What we thought was last position is first position. So we're looking at repositioning all of the ice creams," he said. Yarnell's, however, will stay where it is, on the left of the aisle.
Rob Michalak, a spokesman for Ben & Jerry's, said the progress of the premium brands has not gone undetected by his company, and he agreed with retailers that the premium vendors are working harder at marketing.
"One thing the premium brands did last year was a lot of promotions, which brought attention to the category. It doesn't necessarily mean people have abandoned the superpremium category. It's just that the premium category was doing a lot of work in terms of bringing attention to its products. We'll have to see how that sugars off over time. "That's good work by the premium brands -- getting some energy and bringing some attention to the products in its category. That's where the superpremium brands need to continue to do their work," Michalak said.
Dick Newman, vice president of marketing at category-leader Good Humor-Breyers, Green Bay, Wis., said his company will continue to do its work as well. Good Humor-Breyers is introducing more than 50 new products across its ice cream and novelty lines in 1995. All will be backed with consumer and trade promotion, Newman said.
In addition to reports of increased activity from manufacturers of premium-level ice cream, industry players named the new nutrition labels and pricing as responsible for the segment's recent good fortunes.
"When you look at the price of a pint of ice cream, if you play your cards right, every week you can buy a half-gallon for the same price that they're selling the superpremium pints for," said John Rotelle, president of Rotelle Inc., a Philadelphia-based distributor.
"Acme's got Breyers on this week for two for $5, and pints are bringing anywhere from $1.99 to $2.49. If you've got kids, you're going to buy them a half-gallon.
"We've found in our ice cream business, whatever is on sale is what we sell. There's not too much brand loyalty in the ice cream business."
A buyer with a Mid-Atlantic chain agreed with Rotelle on the pricing issue.
"If people are looking to cut back on expenses, they're going to eliminate their purchase of Haagen-Dazs or Ben & Jerry's and substitute it with a Breyers or a Sealtest, especially when there's advertising or promotions on those items."
Jim Booz, a frozen food/dairy specialist with Genuardi Super Markets, Norristown, Pa., has the same opinion.
"In this area the move is away from pints. More people are buying half-gallons and it has to do with pricing. We sell pints for about $2.79 and you have a half-gallon of ice cream on sale every week for less than that."
Rosauers' Redmond said the fat content of the superpremiums may also be having an effect, "especially because the people who can afford to buy that type of ice cream are older people and they of course are the ones on restricted diets. It probably does limit them."
Ben & Jerry's Michalak, however, said the impact of the nutrition labeling law ultimately will be minimal.
"There's been a lot of speculation on that. Again, we've still had some increase -- even though it's a smaller increase -- in our original product. I think if we were the main course, it might be a little bit more cogent."
Felpausch's McKillop said the improved quality of some of the premium products may also have had an adverse effect on the superpremium category. "Homemade and Hudsonville have tried to get into the markets with premium. Everyone wants to upgrade their ice creams to a better quality and still give that good price value to the consumer," he explained.
In spite of the recent popularity of the premium level, most retailers expressed confidence in the superpremium segment's ability to woo consumers, especially when peak season comes.
"The Haagen-Dazs is doing OK, but not doing that great right now; not compared to the Yarnell premium," said Burks of The Mad Butcher. "Haagen-Dazs: You'll see more of that in the summer."
"They'll be back," said the Mid-Atlantic retailer. "It's not like they've really gone anywhere. It's just a matter of things leveling off. They couldn't keep growing at the pace they were. I bet we'll see another slight rise in superpremium sales by the summertime. Again, I think things will stay pretty much the same from then on; little spurts here and there, but in general, staying the same in terms of market share."
New-product introductions on the superpremium level will most likely create a surge for that segment, said Redmond of Rosauers. "There are some of these liquor-flavored items now; Amaretto and Bailey's. They're very expensive, but the Bailey's in particular is doing very well." No-fat and low-fat products are becoming plentiful in all segments of the category. But retailers said the increasing availability of such products in the superpremium class should also help to bring some people back.
"The superpremium companies aren't living in caves," said the Mid-Atlantic retailer. "They know people are looking for low-fat and no-fat alternatives, and they're responding."
