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$3 billion frozen novelties market expected to heat up by 1993.

After several years of relatively stable sales, new products are reviving excitement in the frozen novelties market, according to the latest report by leading consulting and research firm FIND/SVP.

In the mid-1980s, the introduction of adult-oriented premium novelties spurred the market to phenomenal growth but later reached a plateau, and actually dipped slightly as consumers reacted to the declining economic environment. However, "the frozen novelties market is once again poised for growth, stimulated primarily by new light products," says Peter Allen, FIND/SVP's Vice President, Market Research Reports.

In fact, FIND/SVP forecasts that total retail sales of frozen novelties will rise from approximately $3 billion in 1991 to $4.2 billion in 1996. This reflects an annual growth rate of more than 6% for that time period. The greatest increase is expected to occur in 1993, when the new designations of non-fat, low-fat, and reduced-fat ice cream should gain FDA approval.

Frozen novelties include all individually packaged single servings of a frozen dessert or snack. They consist of dairy products such as ice cream, yogurt, sherbet, and pudding, as well as non-dairy products such as tofu, sorbet, gelatin, and fruit ices.

Total production of all frozen desserts reached approximately 1.5 billion gallons in 1991. Novelties are projected to grow at the same rate as the overall frozen desserts market. Their share of the market increased from 12% in 1981 to 31% in 1991. This level should continue through 1996.

In 1991, about 86% of the novelty introductions were dairy products and only 14% were dairy-free. The share of water and juice ices decreased, and low-fat dairy dessert items and frozen yogurt increased dramatically.

Major Trends

The most important trend expected in frozen novelties during the first half of this decade is the reduction and/or elimination of fat and cholesterol. The new categories of "ice cream" should appeal to health-conscious, aging baby boomers. Single-serve novelties will also aid in portion control for many dieters. Paradoxically, consumers are also seeking to satisfy a craving for indulgence. Therefore, premium-quality novelties continue to be popular.

Marketers of frozen novelties can target consumers who demand convenience in order to accommodate a more active lifestyle. In addition, manufacturers can cater to the primary consumer base for frozen novelties--children, whose numbers will grow throughout the decade.

The Competitive Scene

The four major producers of frozen novelties are Nestle, Gold Bond, Mars, and Kraft General Foods Inc. (Philip Morris Companies). They account for more than half of the total food store sales in the category. In 1991, Nestle acquired the Dole line of frozen desserts and thus became the U.S. leader in frozen novelties, with revenues totaling $216 million. This included sales of popular brands such as Drumstick and Nestle Crunch Bars, in addition to Dole products. Nestle's share of the market was 15.8%.

Unilever, the international conglomerate that owns Gold Bond, held a 14.4% share of the frozen novelties market with sales of Gold Bond, Good Humor, and Popsicle branded products. Mars placed third, with 12.4% of supermarket sales. Kraft General Foods Inc. products claimed 9.6% of the market.

With continued industry consolidation and the increasing number of large food companies participating in this market, aggressive advertising spending is becoming more and more commonplace. Novelties are supported primarily by television and print advertising, but most product launches are currently accompanied by widespread and varied media campaigns.

"The vitality of the novelties market depends upon the ability of manufacturers to come up with new products that capture the fancy of the American consumer as reflected in current trends," notes Allen. "The winner is the marketer who offers a tasty, nutritious food that is of premium quality and comes in a recycled, recyclable single-serve container."
COPYRIGHT 1992 Frozen Food Digest, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:Frozen Food Digest
Date:Oct 1, 1992
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