Ice cream anyone? You can get it absolutely anywhere right now for absolutely any price. I’ve been researching ice cream for the past month—writing a trend report as well as a magazine article—and I have to say, the big grocery store brands we all love (Ben & Jerry’s, Dreyer’s/Edy’s and Breyers, to name a few) are in a challenging position for two reasons: cheaper private label ice cream and fast-food restaurants that have the scoop on ice cream as well.
The consumer research I’ve been poring over for weeks shows that consumers most of all love flavor, but almost equally, they love the best price, and that puts the store brand at an advantage. Nestle (with its Dreyer’s/Edy’s and Haagen-Dazs brands) sells the most ice cream, but even Nestle doesn’t have ice cream sales and thus market share higher than private label. In fact, Nestle has been losing sales over the past year, while private label has been gaining sales. That’s because the brands have to offer coupons and discounts or consumers aren’t apt to buy their product. Thus, the brands don’t make as much money as they could if we would just forget about price and dive in. But we won’t. I won’t. Nestle has said enough of promotions. It’s not going to focus on price deals any more. It needs to make a profit. I say good luck.
The other challenge facing ice cream brands is fast-food restaurants, and never mind the ice cream, yogurt, and custard shops. I’m talking McDonald’s, that has now added its ice cream cones to its dollar menu. Granted, we’re not talking quality here. But what about Burger King, that just announced it is putting bacon sundaes on its menu for the summer. That’s been all over the news, and I bet there are plenty of people who are foregoing the grocery store freezer aisle and heading out to try this interesting flavor. Jack in the Box did its LTO bacon and ice cream thing in February.
But what I really want to talk about is Sonic. Has anyone missed the TV commercials talking about getting milk shakes for half price after 8 p.m.? Brilliant move corporately. It claims it has really picked up sales for the slacking evening daypart. I also know from my research that many consumers eat their ice cream as a late night snack. And so, hello Sonic after 8.
It’s a great corporate strategy, but probably an operational nightmare. How would you like to be scheduled to work at Sonic after 8 p.m.? You’d need those roller skates. My husband and I have jumped in the car at 8 p.m. and screeched on over to Sonic—us and hoards of others. The other day it took us more than half an hour to get our two milkshakes. The place was a traffic jam. We had our windows rolled down, and I could hear others ordering—milkshakes—and nothing more. We would have been mad having to wait half an hour, but we felt so sorry for the servers who were probably wondering whose bright idea this promotion was: “Probably someone sitting in an office somewhere.”
But back to my point. The grocery store name brands have their work cut out for them trying to make a profit, at least this summer.
Tell me what you think.
Jody
Comments