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Innovative new products lead the charge in ice cream price war waged across China.

Summertime, and the affordability of ice cream is easy for Chinese consumers rich and poor, thanks to an ongoing price war among the nation's producers of frozen confectionery and Nestle's further expansion into the bargain segment.

From Beijing to Chengdu and from Harbin to Haikou, an increasingly competitive environment among brand leaders has consumers smiling as they scoop up sweet deals both from street vendors and local supermarket outlets.

Nestle, with a 9.1% share of the PRC ice cream market, according to a national survey of 70,000 consumers conducted by China Marketing and Media Study (CMMS), rolled out more than 20 new products earlier this year in anticipation of hot seasonal sales.

"We are offering a wider range of products, including low-price and high-value items. This will meet consumer demand at every level of the market," said Ken Donaldson, head of Nestle's ice cream unit in China. "We will continue to strengthen our sales distribution in key cities with these new offerings, as well as in the second and third tier markets."

The Nestle assortment runs the gamut from Drumstick, X Crunch, Wonder and Mega lines, which range in price from RMB 1 to 5 (US 13 cents to 74 cents).

The company is zeroing in on the youth market with TV commercials aired during children's shows. Young girls are especially targeted with Hello Kitty Strawberry-flavored Milk Ice. The cutely designed 448-gram box of eight sticks, complete with an adventure board game inside featuring the popular cartoon character licensed by Sanrio of Japan, sells for RMB 20 (approximately US $2.50).

Arch-rival Unilever offers the Chinese kiddy market a 12-pack of Wall's brand Mini Cones filled with vanilla ice cream topped off with chocolate sauce and nuts. The 240-gram box, which comes with a Disney's Winnie the Pooh & Pals toy, sells for RMB 10.90 (about US $1.36).

Wall's, whose 12.7% market share is second only to Yili's 17% stake, offers a raft of adult-oriented multi-packs too. Among them are: Egg Tarts, featuring a chocolate base filled with yellow-hued vanilla ice cream (a 198-gram six-pack retails for RMB 19.50 (about US $2.45); Hazelnut Bars (RMB 4.80, or US $0.60, per 100-gram box of 10), Wall's 1+, featuring bite-size bricks of chocolate and vanilla ice cream accented with chocolate cookie crumbs (a 360-gram pack of eight pieces retails for RMB 10.80, or US $1.35); and Lovely brand Strawberry Cones (six units per 408-gram bag costs RMB 13.90 (US $1.74).

Unilever recently offered shoppers at the Wal-Mart Supercenter in Beijing's Haidian District a free insulated bag for ice cream in exchange for the purchase of Wall's products valued at RMB 18 or more per store visit. The bags really come in handy when transporting multipacks to one's home during hot weather periods.

The market leader of Chinas estimated US $3 billion ice cream industry is not a multi-national company, but rather the home-grown Yili Group, which has capacity to churn out 260,000 tons per annum and claims a 17% share of national sales. With numerous production units spread across the country, the company reportedly rang up sales of approximately RMB 2 billion (US $247 million) last year.

Capitalizing on the trendiness of coffee consumption among young people (the recently published China Undergraduates Consumption and Lifestyle Study of 2005 ranked brand name coffee at the top of the list of products that university students care about the most), Yili has launched Cappusnow Ice Cream. Manufactured in Inner Mongolia, the product features four 85 gram servings per box, which sells for RMB 11.80 (US $1.48).

Corn Ice Cream Bar is another item packed at the Inner Mongolia plant. Molded in the shape of cob corn and filled with yellow custard-colored vanilla ice cream [see package photo on page 34], ten 68-gram units come per box, which retails for RMB 10.60 (US $1.33).

In addition to Yili, Shanghai-based Bright Dairy, with a 6.6% share of the market, is among the domestic brands confronting foreign rivals head-on by rolling out higher-end products.

"Li Jinze, an official at Bright Dairy, says the company plans to improve its brand image and raise profits this year," reported the China Daily. Focusing on the expansion of sales channels, it established a network in 18 provincial-level cities in 2005. Approximately RMB 278 million (US $34.32 million) worth of ice cream was sold last year, an increase of 141% from 2004. Sales are expected to climb to RMB 400 million (US $49.38 million) this year, according to Li.

Ranking second among China's "Top 5" ice cream makers is Mengniu, with a 15.2% market share. It has benefited by investment from international consortiums such as Morgan Stanley, which pumped RMB 216 million (US $26 million) into the firm.

Other significant players on the highly fragmented PRC ice cream scene are Meadow Gold, Haagen-Dazs, Bud's, Wuyang and Wufeng.

Inventive Lady Finds Niche With Healthy Goat's Milk Ice Cream

Goat's milk ice cream? Yes, you read that right, and Petaluma, California-based Laloo's says it's no joke but another step forward in the cause of healthier eating.

Laloo's Goat's Milk Ice Cream is available in Whole Foods stores and other specialty markets on the US East Coast ranging from New York and Massachusetts to Pennsylvania, Washington, DC, Georgia, Connecticut, North Carolina, South Carolina, Florida and Virginia.

One-pint containers usually retail for about $6.49. Current flavors include Vanilla Snowflake, Deep Chocolate (made with Scharffenberger chocolate), Black Mission Fig, Pumpkin Spice, Strawberry Darling (with balsamic vinegar), Molasses Tipsycake and the newest addition, Lemon Chiffon.

Laloo's founder, Laura Howard, specifies the use of goat's milk produced near her home in Petaluma, where she knows the ranchers and shares their enthusiasm for sustainable farming.

"Of course, developing the recipes and sourcing the best natural ingredients was a challenge, but the hardest part has been all the taste testing," Howard said recently. "Based on the response received, I think a lot of people have been waiting for this product."

Howard gave up a career as a film producer in Los Angeles to make goat's milk ice cream professionally. A yoga and health enthusiast, she had embarked on a diet that allowed only goat's milk dairy products. It was a tough rule to follow, since her favorite treat is ice cream. So she started making her own goat's milk ice cream at home. It grew into a passion that melted her interest in the movies and led her north of Tinseltown to Sonoma County.
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Title Annotation:ICE CREAM SCOOPS
Publication:Quick Frozen Foods International
Geographic Code:9CHIN
Date:Jul 1, 2006
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