Wednesday, October 9, 2013

Where is the ice cream industry going? (Hint: Away from nostalgic memories)

Things change as we grow up. And its not just us, its also the things around us. So why are we always surprised? 

I am a foodie in disguise. Or perhaps not so much, as evident from my food blog. But above all, I specialize in desserts. And being wired into marketing and trend-watching, I have wondered many times about where the ice cream industry is going. Witness it in Where's my Ice Cream again, mommy? An ode to nostalgic ice cream.




Classic ice cream, as we knew of it as kids, has now evolved into a whole new plethora of ice cream treats. From meaty to vegetably, from spicy to cheesey, and from an entire meal to a teatime substitute, I have identified several trends that I have tasted, relished, appalled, and naturally, documented. Kids, to whom ice cream is conventionally marketed, may no longer be the target segment for the out-of-the-box flavors, explaining the namesake title of this article. Like many businesses, the ice cream business has to also grow and stretch beyond traditional norms, which is why brands like Haagen daaz choose sexual connotations to position themselves as an adult brand, or why the existence of an evolution of ice cream trends exists in the first place. The  new target market comprises of invidividuals that are not segmented by age or demographics, but by tastes and mindsets. I feel that my Mindset Framework applies best to ice cream eaters, driven so strongly by the emotional connection with this delectable treat!

The ice cream market itself can perhaps never decline; it has however reached maturity, thus explaining the many trends that ice cream makers have taken to keep it alive. My curiosity about how this happened has led to a mapping of the evolution of ice cream, and what may lie in store! Though the trends are not distinct from each other, with various combinations that give rise to even more diversity, the following figure maps the evolution, trying to grasp the strategy behind each phase.


Business Management
At the onset, generally ice cream companies behave like a business. They make something, sell it, keep selling it, see what sells, and continue selling more of it. Kaboom, you have a market, a business, profits, and ultimately, the economies of scale make the ice cream somewhat commoditized. This explains the variety in quality amidst so many classic makers.

Infiltration
On loving vanilla ice cream, who wouldn’t love it with chocolate chips? Or walnuts? Or a swirl of chocolate? Thus begins an era of infiltrating ice cream with other favorites, at the time limited to things like chocolate chips or gooey swirls of caramel and chocolate. Ice cream floats can fall into this category too, which interestingly are making a comeback, as witnessed by the street long lines outside Philadelphia’s Franklin Fountain.

Skinny and Healthy
On seeing the expanding waist sizes and increasing health concerns, fat free and sugar free versions of aforementioned ice creams begin to hit the market in this phase. The target market here is those consumers who want the indulgence, but want to walk out wearing the same pair of pants. This is a profitable way to diversify the product, as it targets a large and growing segment. Less sugar, sugar substitutes, smaller portions, and sometimes misleading claims rule the roost here.

Super-premium Difference
Realizing the commoditization of the business, which rightfully erupted from the business management phase, naturally ice cream creators in this phase look for a way to better differentiate their product. So, taking inspiration from luxury products, super premium ice cream is introduced, to give consumers the ultimate indulgence, a divine treat, at a higher price point. Lovers of ice cream inevitably fall for the trick, and at times, the taste is indeed to swoon for! Today every brand has this, with much competition and merger activity on the battleground, but the classic Dove visuals of rich melting swoops and rings strike a recollective memory bell. And when the Godivas and Ghiriadellis begin to enter the ice cream market, its easy for any marketer to see that the industry is booming.

Co-branding Smartness
Isn’t it nice when you can dive into two indulgences with one scoop? Friendship blossoms between brands of chocolate, cookie dough, cookies and candy, and the world of ice cream, and the infiltration phase is repeated, this time with infiltrants that actually come with brand baggage. Co branding becomes the smart, creative and breakthrough business model. Although perhaps an extension of diversifying from the business phase, this is a new enticement for hungry consumers who can get their Snickers and their ice cream all in one! And hey, its not bad if ice cream makers can share their costs and profits alike with Reeses peanut butter pieces, since the more eggs there are in the basket, the more likely it is that they will be safe together, or crack together. Cannibalization? Brand competition? Leave these worries to the corporates while we lick on.

Inspired Flavors
This is probably where we are now, given the recalls on Nestle Toll House cookie dough and the overdose of co-branding. Similar to the diversification of food inspired body care products, this is perhaps an era of drawing inspiration from the unlikeliest of foods, ranging from rose petals, basil and cinnamon, to pumpkin, cotton candy and bubble gum. Toss in a bit of the original fragments, be it mint leaves or petals or strawberry pieces, and the experience is authenticated. While the flavor craze is probably restricted to boutiques and ice cream parlors, it may not be long before wacky combinations begin hitting grocery stores, which are already densely packed with flavors ranging from watermelon and grapefruit to all the aforemnetioned trends, so gleefully glaring out of identical packaging and confusingly similar artwork.

Meal inspirations and Combinations
This is what I have noticed a surge in globally. One may call it the Willy Wonka Phase. Instead of simply having flavors, and pieces of other infiltrants, entire meals are being combined to give you an ultimate ice cream experience. Peanut butter and jelly ice cream sandwiches replace the classic sandwich; bourbon ice cream with crunchy corn flakes are akin to a breakfast; and as already discussed in the predecessor of this article, these can foray into the savory category too! Ice cream made with salad ingredients, vegetables, sesame seeds, combined together with trends from previous eras, all formulate a world that Tim Burton would enjoy crafting into a whimsical sattire.


 
Makes you wonder what happened to good old ice cream right? After all, where's my ice cream, mommy?


Sourabh Sharma, Communication & Social Media Research Expert at SKIM, an international consultancy and marketing research agency, has a background in engineering, marketing and finance from the University of Pennsylvania, and the Wharton School and Rotterdam School of Management. Having worked in marketing and product development at L’Oreal, followed by a stint in management consulting, he now passionately enjoys the world of social media, and can be found on every platform with his alias sssourabh. He is a food critic and a fashion writer, and documents these alongside strategy on his blog called 3FS. He may be reached at s.sharma@skimgroup.com. Follow him on @sssourabh.
 

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