Fro-Yo Challenges Ice Cream Makers To Innovate

  • In case you hadn’t noticed, frozen yogurt shops have been popping up all over.  Gone are the days of the sole Canadian frozen yogurt chain, Yogen-Fruz, made available at malls throughout the country.

    Now, many other frozen yogurt companies have been emerging as the sector takes on a whole new popularity like it had seen back in the 80s and 90s.  As a result, ice cream makers are offering new, distinctive products in grocery stores in order to compete with this new trend.

    Frozen yogurt is offering a whole new product this time around.  An abundance of flavours, toppings, dips and sauces are available as customers are left with a self-serve model that lets them individually customize their own unique product.

    Yogurt is made available in soft-serve or hand-scooped, which resembles ice cream.  In addition, it is toting more health benefits than its cousin, with less fast and calories and all the benefits of yogurt.  It has a new, original tart taste.

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    Franchises such as Tutti Frutti and Menchie’s are starting to pop up all over and these stores offer cool store designs to entice customers.  Tutti Frutti boasts over 80 flavours and over one hundred different toppings and has over 680 locations in over 30 countries.

    TCBY is another frozen yogurt provider that can now be found at select cinemas across the country.  There are many other frozen yogurt providers and other chains and the industry are being swept up in the frozen yogurt craze.

    What does all this mean for ice cream producers?  It is time to innovate and compete harder with frozen yogurt.

    The latest figures by the government of Canada indicate that the three major ice cream producers, Nestle Canada, Unilever Canada and Chapman’s, hold a combined 64% market share in the ice cream market.  Private label and artisanal ice cream hold 12% and 1% shares of the Canadian ice cream market respectively.

    The government also reports that the most popular ice cream flavours are vanilla, chocolate, strawberry, butterscotch, caramel, coffee, mint chocolate chip and maple walnut.  The frozen yogurt segment in Canada is also reported to be growing.

    According to Euromonitor International, the Canadian ice cream category rose by 3% in 2013.

    Nestle Canada is a leader in the ice cream category and had a market share of 34% in 2013.  Much of this success can be attributed to the Drumstick and the mini drumstick, which was recognized as the best new product in 2012.

    Nestle also sells the premium Haagen-Dazs brand, which has been quite popular and some of its other brands include Skinny Cow, Parlour and Del Monte.

    Unilever sells Breyers, Popsicle, Ben & Jerry’s and Klondike.  These popular brands directly compete with Nestle and Chapman’s.

    Grocery stores such as Loblaw have also done a great job competing in the ice cream category by offering an increasing variety of unique products.

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    Some of the more unique ice creams the PC brand offers are: Red Velvet, Pumpkin Pie, P, B & J, Pecan Butter Tart, Pink Lemonade, White Chocolate Raspberry Treats. Under its PC Black Label it offered flavors like Toasted Coconut, Passion Fruit and Salted Caramel.

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    Other unique ice cream products are PC Black Label ice cream bars and mint chocolate ice cream cones.

    Ice cream producers will have to continue to provide new, unique and interesting products and products that tote health benefits as well.  Low fat or no fat ice creams will continue to be marketed in competition with frozen yogurt and brands such as Skinny Cow fit this bill.

    Ice cream is a very popular dessert for consumers and its continued success depends on innovation, variety and health benefits.

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