How a flurry of new brands are shaking up the ice cream market

As consumers become more health conscious and ethically driven, the ice cream sector has seen a burst of innovation with new players entering the market and driving a change in behaviour.

The ice cream market has seen a flurry of new brands enter the sector as companies look to tap into consumers’ desire for healthier alternatives.

Take one look at the freezer aisle and there are now a multitude of new and interesting brands that break away from tradition, offering low-calorie, dairy-free, organic and healthy experiences, all housed within Instagram-worthy packaging. This burst of new brands has also helped push supermarkets’ overall ice cream sales over the £1bn mark for the first time this year, which is making more established players take note.

LA-based low-calorie ice cream brand Halo Top has played a large role in the explosion of craft ice creams, with Unilever and General Mills both noting the startup’s influence on the industry. Graeme Pitkethly, Unilever’s finance director, highlighted how “very, very quickly” Halo Top had grown taking “1.5 share points from us” while General Mills noted that Halo Top had influenced its own growth strategy.

But Halo Top is not the only one, with vegan, organic, gluten-free ice creams all becoming more common. According to research from Mintel, the number of dairy-free ice cream launches have more than doubled (up 166%) in the five years to 2017.

However, they still make up only a small proportion of the industry with the same research finding craft brands make up 10% of all ice cream launches in the UK. However, their impact on the wider industry shouldn’t be underestimated. Big players like Ben & Jerry’s, Häagen-Dazs and Magnum have all introduced either low-calorie or vegan ice creams.

Cecily Mills, founder of organic dairy-free ice cream brand, Coconuts Naturally, says since she founded the brand in 2015 “the market has blown wide open”.

Consumers are more discerning and people won’t just eat any old thing.

Louise Collins, Booja-Booja

She explains: “When we were at the food shows a lot of time was spent explaining the product and why we were needed. To say we were dairy-free, vegan and used coconut all took quite a lot of explaining but fast-forward three years and people just get that now.”

It’s not just large brands who are reacting to the rise in demand, retailers are also taking note. Mills says: “When we started we were targeting Planet Organic and Ocado and these more niche premium retailers, and we’re still targeting those customers, but we’re also in Morrisons and Asda now. The big multiples, they all recognise the need for different ice creams.”

Halo Top’s president and chief operating officer, Doug Bouton agrees. In 2015, the company was “hanging by a thread” and he was struggling to persuade retailers to keep stocking the product, but now the brand sells across the US and in most major UK supermarkets.

READ MORE: Halo Top on disrupting the ice cream market: We haven’t been trained to think inside the box

This is in part due to consumer demands for a healthier lifestyle. The food industry is experiencing rapid changes, from a rise in plant-based burgers to a decreasing interest in fizzy drinks, consumers want more nutritious options that still taste good.

“There has been an overall shift to people eating healthier and more plant-based foods over the past 10 years” explains Louise Collins, marketing manager of dairy-free truffle and ice cream company Booja-Booja.

“Consumers are more discerning and people won’t just eat any old thing. They actually want something that tastes amazing and is made with ingredients they understand and trust.”

Packaging fit for Instagram

However, it’s not just healthier ingredients and better taste that consumers are demanding; they also want packaging fit for Instagram.

Collins explains: “We think about the whole experience, not just eating. Packaging plays a key role. [Consumers] buy with their eyes and eat with their eyes [first]. If something looks beautiful you are more likely to trust that it’s going to taste beautiful.”

Halo Top’s Bouton says he too doesn’t underestimate the importance of packaging. He explains: “We loved the minimalism of Apple and we wanted to make sure [our packaging design] wasn’t too cluttered because when you say everything you say nothing. We put the calories front and centre as that’s the number one differentiator. Number two is the protein call out. It has to be Instagrammable and the packaging has to be pretty enough to catch somebody’s attention.”

Mills adds that Coconut Naturally is a recent investment boost to focus on marketing and rebrand its packaging next year: “It is so important to have eye catching branding when you’re in a freezer behind a glass door. Shoppers take seconds to look beyond a shop door so you need to stand out.”

READ MORE: How Häagen-Dazs is reimagining the brand for the Instagram generation

Traditional brands have also taken this on board, with Häagen-Dazs redesigning its packaging and stores to appeal to millennials. The brief for the new visual identity? “Instagrammable”.

Authenticity is key

As competition grows and big brands try to emulate niche players with their own low-calorie or dairy-free products, loyalty becomes critically important to ensure consumers don’t switch. For many smaller brands retaining authenticity is key.

Coconut Naturally’s Mills explains: “The consumer question is do they want brands made by the Unilevers of this world or brands with provenance?”

This is something Häagen-Dazs acknowledges with the brand’s vice-president and global brand director, Jennifer Jorgensen, telling Marketing Week in August: “You don’t want to be unattainable and I think that’s where we got to a little bit in the past…A little bit too unapproachable and unattainable luxury that lacked that personal connection. That’s where that balance works really well, when you’re iconic globally but have that personal connection.”

Halo Top’s Bouton argues that big brands will struggle to replicate the nimble marketing of startups like themselves. He says that its “playful” marketing has helped retain its fanatic fanbase.

“It starts with our authentic voice and means we have genuine engagement. Having fun with it and getting [consumers] to laugh. It’s ice cream – it’s playful, witty and fun. We’re not scared to take some risks and play and make mistakes.”

Coconut Naturally’s Mills agrees: “It comes down to the voice and the brand and how confident you are with your brand message. That’s how we’ve approached it. As long as we really know what we’re about and communicate that voice across all our social platforms. It’s about people buying into your brand and getting a feel for who you are.”

What consumers are buying into goes beyond the product, it’s a lifestyle. Many are attracted to these smaller brands because of their own lifestyle choices – be that healthy eating or veganism. This has helped smaller brands not only discover audiences but also ensure that they retain them.

Halo Top started by following hashtags like #FitFam on Instagram to target young health conscious gym-goers. While Booja-Booja says many of its consumers would choose their product over bigger brands’ vegan alternatives because they are attracted to the ethics of the brands.

Disruptor brands are also finding the category lends itself to experiential marketing. Booja-Booja has its own tuk-tuk truck that can be hired for weddings, while Halo Top used thousands of balloons to levitate a giant tub of ice cream to introduce new flavours to the UK range.

Bouton says: “Experiential marketing is as much about loyalty as it is about awareness. We find you can cast a wider net and be more cost effective by raising awareness on social and digital.

“[Experiential marketing] might be more geographically narrow but it becomes really important when it comes to loyalty and how people think about the big brands. We want to create experiences which are memorable and related to the brand.”

Capturing an older market

Much of the marketing that these brands do is digitally-led and is arguably one of the reasons they are popular among millennials.

However, both Halo Top and Coconut Naturally are confident they’ve captured the millennial market and are now trying to target older audiences.

Mills says: “We have a younger audience and now trying to target an older one. Our target customer is the mum in the supermarket who every week does the family shop and wants good food for her and her family. Parents who want to make healthy choices.“

Halo Top also now wants to appeal to over-45s. Bouton explains: “The goal for us is to be a household brand name. Our brand awareness continues to go up but there is still a lot of room for growth. We want 99% of people to know the name Halo Top.”

Halo Top may be selling a pint every nine minutes but – like all of craft brands – still has a long way to go before it rivals Häagen-Dazs. Jorgensen says that “despite all that growth… [these disruptors] had little impact” on its business.

The impact of these craft ice cream brands shouldn’t be underestimated, though. Together they have driven more established brands to keep innovating and stay on top of changing consumer trends.