Cold Treats, Hot Opportunity
While many consumers habitually stop at convenience stores for a snack or beverage, more are visiting to buy a frozen treat than one may expect. According to new data and analysis provided to Convenience Store News from Nielsen, 42 percent of U.S. consumers ate ice cream in the last 30 days, with residents of the South being the biggest consumers.
“Whereas the overall consumer marketplace for CPG [consumer packaged goods] items is growing approximately 2 percent in dollar sales in early 2015, ice cream-related categories represent a significant growth opportunity for convenience stores and are outpacing sales across total food, drug and mass,” said James Russo, senior vice president, global consumer insights, at Nielsen.
It’s important for c-store operators to capitalize on ice cream and related items during the summer, as May through August are consistently the strongest months for sales. In 2014, the four-week period that ended July 7 was the most important period during the full year.
Based on the 52 weeks that ended March 14, frozen novelties and premium ice cream are enjoying a turnaround, with dollar sales increasing by nearly the same percentage that they declined the previous 52 weeks. However, unit volume only grew 1 percent for novelties and declined by 0.4 percent for premium during the same time, indicating price increases may have driven the dollar growth.
Frozen yogurt saw the biggest swing of all the category’s segments in dollar sales and unit volume when comparing the two years’ worth of Nielsen data, dropping considerably in both metrics. However, the sizeable swing may actually be due to its small size as a segment.
Overall, dollar sales in the packaged ice cream and novelties category went from decreasing 2.7 percent two years ago to increasing 2.8 percent in the 52 weeks ended March 14, while unit volume went from a 3-percent decrease to a 0.6-percent increase. Dollar sales at food/drug/mass stores meanwhile increased by just 0.44 percent comparatively.
Residents of the South are the biggest consumers of frozen treats, making up 35.8 percent of dollar sales and 39.9 percent of unit volume during the year that ended March 14. This is likely due to longer periods of warm temperatures in this region of the country. The Northeast comes in second despite difficult winters, possibly due to greater population density. All regions, though, saw little change in category share in the last year compared to the previous year.
On a month-by-month basis, while dollar sales of packaged ice cream and novelties swung predictably up and down depending on the season at both convenience stores and food/drug/mass-merchandise stores, c-stores saw slightly higher highs and lower lows.