Natural Foods Merchandiser

The cream of the case

The ice cream aisle has always been a place viewed with equal parts excitement and trepidation by consumers eager for frozen treats but wary of unhealthy ingredients. These days, manufacturers are viewing this part of the supermarket with the same mixed emotions.

The $12.1 billion ice cream and frozen novelty market is in danger of becoming stagnant, reports Chicago-based market research company Mintel, which notes that sales growth has slowed to 1 percent a year. At the same time, Mintel suggests, there’s potential for innovation and growth, in the form of healthy and natural frozen treats.

“Ten years ago, you could be a gourmet product with high fructose and triglycerides and nobody would blink an eye,” says Charlie Apt, president of Ciao Bella Gelato, headquartered in Florham Park, N.J. “Now, people are much savvier with regard to ingredients. It’s an ongoing trend that’s reached a climax now, and you can’t ignore it.”

As consumers scream for ice cream that’s as wholesome as it is delicious, here are frozen trends to look for.

Shrinking market for upstarts
It’s no secret that Nestlé, which owns Häagen-Dazs, and Unilever, which owns Ben & Jerry’s Ice Cream, dominate the ice cream case even in many natural groceries—and their aggressive pricing leaves little room for alternatives. “Ice cream is a real tough market to break into, and it’s getting harder,” Apt says. “It’s very hard for a small manufacturer to go in there and develop a quality product with natural ingredients. No matter how loyal a Ciao Bella customer is, it’s hard when you see Häagen-Dazs pints priced two for $4.”

Apt says successful new players will first need a deep capital cushion. His company, for example, spent 15 years focusing its product on restaurants and other foodservice locations before it braved grocery stores.

Basel Nassar, co-owner of Greek Gods Yogurt, a Mountlake Terrace, Wash., company that in 2007 launched Greek Gods Pagoto Ice Krema, sees the most potential in the superpremium ice cream market, which focuses on top-quality—and often natural or organic—ingredients. “Most people who purchase superpremium ice cream are not as concerned about price as they are about quality,” he says.

Ingredient innovation
While natural frozen treats have long shirked unhealthful ingredients, such as artificial flavors and trans fats, consumers are spurring ingredient-list makeovers that include even more healthy nutrients.

For example, Apt says Ciao Bella couldn’t just rest on its laurels for its product lines featuring zero artificial ingredients and high-percent fruit content. The company has replaced refined sugars in its sorbets with organic evaporated cane juice, switched from corn syrups to tapioca syrups in its gelatos and changed its milk source to one that does not involve cows injected with bovine growth hormones. “It’s an entirely natural product at this point,” Apt says. “I think we were really pushed toward it from the consumer base.”

Going all-natural may not be enough; ice cream shoppers are also looking for frozen treats that feature vitamins, protein and other functional ingredients. In response, Greek Gods is promoting the fact that its ice creams include mastic resin, a gum-like Mediterranean spice that’s been associated with gastrointestinal benefits for thousands of years. Nassar believes some ice creams may soon feature organic blue agave, which doesn’t raise blood sugar as much as conventional sweeteners, and inulin, which helps the body absorb certain nutrients.

Coconut milk on the rise
Mintel predicts robust growth in the nondairy ice cream market—and much of the action may be focused on products made with coconut milk, says Kevin Brouillette, vice president of sales for Eugene, Ore.-based Turtle Mountain, which produces the coconut ice cream brands So Delicious and Purely Decadent. Brouillette points to a report by Schaumburg, Ill.-based market research company SPINS that found that during a 13-week period ending in August 2009, sales of coconut ice creams increased 198 percent, while sales of other nondairy ice cream products like sorbets and soy- and rice-based brands dropped or stayed even.

The secret to coconut milk’s success, Brouillette says, is that it has a very similar color, mouth feel and consistency to milk. “From a consumer’s perspective, ice cream is all about taste and indulgence,” he says. “Coconut milk does that better than other dairy-free alternatives and in some instances better than milk.” Far from just being a solution for those who suffer from lactose-intolerance issues, Brouillette says coconut-milk products offer a healthy solution for everyone because they’re high in good fats and coconut’s nutrients are metabolized as energy rather than stored as fat.

Cutting-edge flavors
Brand loyalty is low among ice cream shoppers, Mintel reports. While natural and organic brands tend to boast higher brand loyalty, there’s still potential in the industry for manufacturers willing to make a splash with bold, novel flavors. Apt says some companies are experimenting with savory flavors, like rosemary and rose petal, and his own operation is dabbling in intriguing inclusions like malted milk balls and honey-roasted almonds.

Choctál, a boutique natural ice cream manufacturer in Pasadena, Calif., has been drawing raves for its single-origin flavors that highlight specific varieties of cacao and vanilla from places like Costa Rica, Ghana and Kalimantan. The payoff, says Choctál founder and CEO Marc Boatwright, isn’t just phenomenal tastes, but direct relationships with indigenous farmers that raise their incomes and highlight their plight in supermarkets half a world away.

For Boatwright, it’s a win-win, and consumers are increasingly willing to spend extra for it. “There is potential for chocolate and vanilla to go away if you ruin the rain forest,” he says. “The next level of ice cream is sustainability and ecology.”

Five Indulgent Products:

Greek Gods Baklava Pagoto Ice Krema
Greek God's signature ice cream flavor is made with natural ingredients and organic milk, and features walnuts, almonds, honey and cinnamon--everything that goes into real baklava, save phyllo dough.

So Delicious Coconut Almond Bar
Launched last year, this natural coconut-milk mini bar quickly topped the charts as Turtle Mountain's number-one frozen novelty.

Ciao Bella Prickly Peark Sorbet
This all-natural pink-hued sorbet, which debuted in February, features a sweet, earthy taste thanks to its main ingredient, a cactus plant.

Choctál Costa Rican Rainforest Chocolate & Vanilla
This is the only U.S. ice cream to use sustainably grown vanilla from Rainforest Alliance-certified farms.

Luna and Larry's Organic Coconut Bliss Cappuccino Ice Cream
This caffeinated offering from Luna and Larry's vegan coconut-milk product line features organic agave syrup and fair-trade ground coffee beans.

Joel Warner is a Denver-based writer who always screams for ice cream.

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