SELECTION PROCESS

MARYELLEN LO BOSCO

As ice cream category management advances, retailers are paying closer attention to aisle resets.

"We reset our ice cream/novelty aisle each spring," said Gary Kaphing, frozen/dairy buyer/merchandiser at Cub Foods, Stillwater, Minn., a division of Supervalu, Minneapolis. Before the summer season begins, Kaphing analyzes performance of various items and weeds out slow stockkeeping units while adding new items.

"Additionally, we set our sections by movement of each SKU in order to maximize our holding power and reduce out of stocks," he continued.

This year, the ice cream aisle was set a second time at Cub Foods with the introduction of its private-label ice cream. Kaphing also added Land O'Lakes brand at the same time. Terry Bickers, buyer/supervisor for frozen food, dairy and grocery at Strack & Van Til Supermarkets, Schererville, Ind., said stores reset the ice cream cases twice yearly.

At Henry's Markets, La Mesa, Calif., (formerly Boney's), ice cream was recently switched from doors to coffin cases. Henry's is a natural-food chain that cultivates an open-market look in its stores, by having shelving no more than about 4.5 feet high.

"We switched to coffin freezers because they merchandise better in our stores. You can see completely across the store. There are no aisles to block the view," said Steve Fernandes, deli, dairy, bakery and meat director. "All our new stores are getting them, and also the remodels. We have only a few stores left with stand-up or wall freezers."

Save-A-Lot, St. Louis, also a division of Supervalu, has developed a "custom label" ice cream program and about five door upright freezer planograms, based on velocity, according to Jan Mandziara, vice president of purchasing.

Since Save-A-Lot began carrying its own private label, it has phased out direct-store-delivery ice cream in eight of its 10 divisions. DSD has been replaced with the chain's own brands, which has 18 SKUs of ice cream and seven SKUs of novelties.

"We have a unique merchandising technique because we utilize corrugated trays for our half-gallon squares and 4-quart pails. These trays are printed with a description of [the ice cream] on all four sides," she continued.

According to Mandziara, trays save labor in stores and keep the ice cream case organized, even after a strong sales day. One difficulty in managing ice cream is SKU proliferation. "Our biggest challenge is giving all the companies space and representation in our advertising," said Mark Polsky, executive vice president for buying at Magruder, Rockville, Md.

"Too many SKUs is always a problem," Polsky said. "Ninety percent of what we get is from DSD vendors, and they have a finite amount of space. If they have a door, or two or three, it's their space and they have to maximize it."

Magruder stocks a few regional brands and his wholesaler brand in the warehouse.

Kaphing of Cub Foods also agreed that his biggest hurdle is providing the broadest selection possible while ensuring that popular items are not out of stock.

SKU count at Cub has remained fairly constant since 1995, said Kaphing, when the number was reduced by 10%. "In smaller stores where difficult choices have been made, we reduce the number of novelties and increase ice cream," Kaphing said. Cub carries between 316 and 367 SKUs of ice cream in 10 brands, and between 128 and 157 SKUs of novelties in 14 brands.

Bickers of Strack & Van Til said that managing the number of novelties is tough, since there are so many SKUs. Further, since novelties are impulse items, it's hard to know which ones are going to do well.

"Companies are coming out with new items every year. You have to be on top of the new items, since they can really sell, and you have to have them on hand," Bickers said.

To make sure that the right SKUs are being stocked, the chain turned the novelty business over to DSD vendors about eight years ago, said Bickers, and concludes that it was a wise decision.

Milton Merl, president of Milton Merl & Associates, New York, a category management consultant agency, confirmed that an ever-expanding number of SKUs continues to put pressure on category managers.

"Proliferation has put tremendous pressure on space," he said. "But if you look at sales and volume, you see that core products sell the bulk of the business. If you walk the category, you'll see products frosted over, and others out of stock. There's a tremendous amount of disparate movement, driven by incorrect assortment."

Merl advises ice cream merchandisers at store level to target customer preferences when it comes to varieties and flavors. After that, retailers should organize their space for the highest profitability and turn-rate, and the best coverage for popular items, Merl recommends.

All the retailers SN polled said ice cream and novelty sales are strong. Moreover, all agreed that regular, or full-fat ice cream, still accounts for the best part of volume and sales.

"Ice cream and novelty sales continue to show double-digit increases over the Minneapolis market," said Kaphing. Full-fat continues to contribute to about 60% of category sales. Fat-free has shown an increase of 70% in the last year, but has a very small base, Kaphing said.

Kaphing said that better-for-you products may have reached their plateau in ice cream, as well as in most other categories.

Mandziara of Save-A-Lot noted that ice cream sales have grown tremendously in the last year in all segments, but that the largest volume is in full-fat, value-priced items.

According to Polsky of Magruder, full-fat ice cream is still most popular; low-fat is "hanging on" but not as good a category as it once was; fat-free is picking up; and frozen yogurt is "dying a slow death." He attributes the demise of yogurt to the fact that fat-free ice cream is more widely available.

Doug Kelly, a buyer for Affiliated Food Stores, Tulsa, Okla., noted that full-fat ice cream does well, but so do squares, rounds and sugar-free novelties.

"We've been getting a lot of phone calls from diabetics, so we've added a few extra lines to accommodate that," he said.

Retailers use a number of strategies to merchandise ice cream in a manner that makes the section easy to shop.

For example, Bickers keeps all better-for-you products in one section, regardless of brand. At Save-A-Lot, items are merchandised according to retail categories, which are 4-quart pails, half-gallon economy, half-gallon premium and half-gallon yogurt.

Most stores keep ice cream and novelties separate, but right next to each other. Most also use doors. At Cub Foods, novelties and ice cream are adjacent.

Then each subsegment is set by brand. Cub separates yogurt and other frozen desserts.

Kaphing explained that category reviews have shown that two different customer groups buy ice cream and novelties, and that premium and value-priced buyers are also two distinct groups.

"Based on this information and the goal of maximizing profits in the aisle, novelties are set first, flowing from price to premium. Next is ice cream, flowing from premium to price," Kaphing explained.