With ice cream remaining a hot commodity, there is opportunity in this category for convenience stores that make the necessary space commitment.
By Lisa White, Contributing Editor
Ice cream is no longer a seasonal indulgence, which makes it an even more viable category for the convenience channel.
A recent survey for National Ice Cream Day by Cumberland Farms, a 726-store convenience store chain based in Framingham, Mass., revealed that 95% of respondents indulge in ice cream all year long, while 46% eat the dessert 2-3 times per week in the summer and 70% prefer to indulge in this treat between 5 p.m. and 11 p.m.
According to the survey, the most popular flavor is peanut butter cup, followed by cookie dough and fruity flavors.
In addition to cartons of its Ultimate Scoop and Farmhouse Creamery ice creams, Cumberland Farms recently added Farmhouse Premium Ice Cream Sandwiches in Blissful Chocolate Brownie and Rapturous Black Raspberry Chocolate to its lineup.
Offering the appropriate selection is key. A study conducted by Northbrook, Ill.-based market research firm Dechert-Hampe & Co. shows 28% of ice cream consumers will leave the category and 11% will leave the store if the item they are looking for isn’t in stock.
“This category is all about customer loyalty, whether a store is bringing in a novelty item like Dippin’ Dots or new flavors,” said Terri-Lynn Woodhouse, a Toronto, Canada-based convenience store consultant who has worked with Hess (now Speedway), Stripes and MAPCO Express.
SAVORY PROFITS
Packaged ice cream novelty sales in convenience stores totaled about $1.3 billion in the 52 weeks ending July 2, 2016, according to New York City- based Nielsen, an increase of 3.5% from the same period in 2015. This includes frozen novelties, which totaled close to $710 million in sales, and premium ice cream, accounting for almost $446 million.
Realizing the potential of this category, NOCO Express LLC, based in Tonawanda, N.Y., offers ice cream all year long in most of its 35 stores, which are located throughout the western part of the state.
“Although about 90% of our stores carry ice cream, the rest don’t have it at all,” said Heidi Rembecki, NOCO’s director of merchandising.
The chain’s offerings don’t change throughout the year, but single-serving lines tend to pick up in velocity during the warmer months.
It’s the quick-consumable ice cream bars that experts say are best suited for the convenience channel.
“It’s all about ease of eating, so these retailers should not carry anything that’s too messy,” said Woodhouse. “Also, incorporating new and innovative items, as well as exclusive lines, can position a c-store as a third option for ice cream [behind supermarkets and ice cream shops].”
For some locations and stores, ice cream may not be a good fit due to limited retail space. For example, freezer space in Amarillo, Texas-based Pak-a-Sak Inc.’s 37 locations has been eliminated for the most part.
“We needed more medium temperature space for beverages, since we’re getting more dollars out of these displays,” said Gary Tabor, director of marketing and sales for Pak-a-Sak. “The profits on our low temperature items didn’t even pay for the electricity to run the freezers in some cases.”
At NOCO Express stores, ice cream remains a strong seller, with larger sizes offered eight months out of the year. Single-serve bars are merchandised out of coffin displays in high-traffic areas. The stores also regularly run special promotions on quarts of Edy’s.
“We will show the cheaper price point, rather than advertise the ice cream as a two for,” Rembecki said.
She noted that manufacturers of these products are creating more premium offerings in place of traditional chocolate and vanilla varieties, for example.
“With that comes smaller packages, such as a one-quart size rather than 1.5 quarts,” said Rembecki.
According to Woodhouse, summer is best for implementing limited time offers, which can make c-stores more of an ice cream destination.
“Distributors are open to working with retailers to help create buzz and drive sales for these products, as well,” said Woodhouse.
