THE CREAM DE LA CREME

They may only be be pint-sized, but superpremium ice cream brands are taking up a bigger share of space in many supermarkets today.Led by national manufacturers Haagen-Dazs and Ben & Jerry's, the superpremium segment is also scooping up an increasing percentage of ice cream sales, said 15 retailers and other industry sources contacted by SN."The category is growing in popularity because customers

They may only be be pint-sized, but superpremium ice cream brands are taking up a bigger share of space in many supermarkets today.

Led by national manufacturers Haagen-Dazs and Ben & Jerry's, the superpremium segment is also scooping up an increasing percentage of ice cream sales, said 15 retailers and other industry sources contacted by SN.

"The category is growing in popularity because customers find the flavors exciting and like to indulge in them," said Cheryl Robertson, manager of consumer affairs for Dominick's Finer Foods, Northlake, Ill. "The trend in sales is up."

Mounting sales of superpremium brands helped Bi-Lo, Mauldin, S.C., post record overall ice cream sales in 1993, said chain sources.

Total industry numbers back up such reports from individual operators. According to figures compiled by Nielsen Marketing Research, Northbrook, Ill., Haagen-Dazs posted a 12.6% increase in sales dollar volume for the 52-week period ended Sept. 11, 1993. Ben & Jerry's reported a 6.4% gain over the same period.

More supermarkets are resetting assortments and space allocations in the category to give the pints a bit more representation, said the industry sources contacted.

"They have been selling real well. We increased our space for them a little last year, and we're looking at next year now," said Gina Lindsey, perishables merchandiser for the 196-store Bi-Lo chain, which carries Haagen-Dazs and Ben & Jerry's. "We don't have a private-label superpremium yet, but we're considering it," she added.

"Haagen-Dazs and Ben & Jerry's have been running neck-and-neck," said Jerry Graham, vice president of grocery for Dan's Food Stores, Salt Lake City. "Sales of both have increased in the past two years. We've increased their space, too. They each have about a door now."

"Superpremium sales have climbed over the past couple of years," said Ray Mar, buyer for Jumbo Markets, Sacramento, Calif. "We've had to increase their shelf space, but some of that was because of the additions in the number of items available. They've introduced a lot of new flavors."

"We've had to increase our space [for superpremiums] by 15% to 25%," said Roger Cooper, buyer for Yokes Washington Foods, a six-store independent based in Spokane, Wash. "Part of that increase is due to the new flavors and part is in response to increased sales. We've been able to have them [distributors] take out some of the slower items when they've come in with new ones."

While the flavor assortments can be dizzying, retailers said that at the same time a steady flow of new choices appears to be an integral part of the appeal of superpremiums.

"The new product introductions help, and we think category expansion will continue. We think consumers like treating themselves," said Robertson of Dominick's.

Robertson said the chain carries Ben & Jerry's and Haagen-Dazs assortments, and also includes Dannon frozen yogurt items in its superpremium offering. Indeed, retail superpremium sections often include frozen yogurt items as well as the fattier ice cream. Haagen-Dazs and Ben & Jerry's, again, produce two of the more popular brands, while leading yogurt manufacturers Colombo and Dannon also have gone the frozen route with positive results.

At most stores, the category assortment boils down to a tug-of-war between the leading vendors. "We have Ben & Jerry's and Haagen-Dazs," said Jim Miner, president of Miner's, Hermantown, Minn., reflecting the two mainstays of most retailers' assortments.

The Nielsen numbers show Haagen-Dazs with $141.3 million in sales for the year ended Sept. 11, second only to Breyers at $266.9 million. Ben & Jerry's recorded $103.9 million in sales.

A number of retailers said they thought the upscale ice creams have been able to keep growing in part because they appear immune to economic pressures that have hurt other "luxury" items.

"With everything else, it's back to basics. People are talking about getting more for their money. But the superpremium ice creams are still doing well, in spite of the economy," said Pat Conte, a buyer for Tapps Supermarkets, Woodside, N.Y. "I don't really understand it. I guess there's no substitute for good ice cream. These products may have cut out a certain niche for themselves. I know I enjoy the superpremiums."

D'Agostino Supermarkets, Larchmont, N.Y., with units in Manhattan and other sections of the New York metropolitan area, has made a big push into superpremiums.

Scott Rzesa, director of dairy-frozen, said D'Agostino offers about 60 stockkeeping units of superpremium pints, including the major flavors of Haagen-Dazs, Ben & Jerry's, T&W, Edy's and a private label, D'Agostino's Select. He said sales of such brands account for more than 50% of ice cream sales throughout the 25-store chain.

D'Agostino's private label, introduced in June, has "done quite well," Rzesa said. "It's literally right up against the others in the case. We tried to find flavors that are different from what's already available. We've also done special promotions like limited editions and a 'flavor of the month.' Around Halloween it was 'Harvest Pumpkin.' Another month was maple walnut. The promotion is certainly working."

Rzesa said the majority of category growth is still in the full-fat ice creams, despite some consumers' professed concerns about fat consumption. "The impact from the health-drive issue is small in ice cream. Sales of low-fat brands are entirely added sales. They're not taking away from anything," he added.

Other retailers echoed Rzesa's assessment.

"Superpremiums are making a bit of a comeback," said Curt Lerew, senior vice president of the food group at Fred Meyer Inc., Portland, Ore. "It seems those who switched over to frozen yogurt the last couple of years have switched back."

Lerew reported Haagen-Dazs, Ben & Jerry's, Breyers and Dreyer's as the superpremium and premium brands that are doing best. He added that Ben & Jerry's is coming out with Smoothies flavors in which the chunks of chocolate and other items are eliminated.

Graham of Dan's Food Stores said he expects high-fat -- and premium-priced -- superpremiums will continue to sell strongly. "I don't think their price matters too much. They're quality products and come in a variety of flavors. I think their unique flavors have them doing well."

For other retailers, however, the price points for superpremiums seemed more of an issue, in some cases restraining sales growth compared with a few years ago. Still, those retailers considered superpremiums "must have" items, even if budget ice creams dominated overall category volume.

"Superpremiums have their market. But it's limited because of their price," said Lonnie Johnson, pricing manager for Harp's Food Stores, Springdale, Ark.

"The superpremiums were doing well at the end of last year, but since the first of the year, budget-priced ice cream is doing better than it had been," said Scott Beuhler, frozen food buyer for Beuhler Food Markets, Wooster, Ohio, which carries only Ben & Jerry's in the superpremium segment. Budget-priced brands "will always account for the bulk of ice cream sales," he added.

"It's still a recession. Price is a sensitive issue," said Michael Kennedy, director of operations for Super Place Supermarkets, Mansfield, Mass. "People can obviously do without a pint of ice cream at $2.69." In spite of concerns about the cost, however, Kennedy says there is enough consumer demand for indulgent ice cream to warrant giving superpremium brands a full door of space.

Kennedy added that, in his market, he has seen a slowdown in the level of promotions supported by the leading national manufacturers, which he said is also limiting the segments' impact.

"They're very promotion-sensitive," he said. "At times the bigger companies get a little lazy. They've gone in and out with promotions, but I don't see the frequency I used to.

"I've always been one to take advantage of the benefits of dealing with smaller companies. You're seeing more and more local premiums. Cape Cod Ice Cream has some good pricing, for example. We've done some buy-one-get-one-free promotions with them."

Johnson of Harp's in Arkansas has also found dealing with smaller vendors can be beneficial addition to his retail program.

"Local companies promote you and work with you," Johnson said. "Yarnell's is an Arkansas company. We carry their ice cream and some of their low-fat products. They've done real well and they're good to work with."

Yokes' Cooper said there's room for both high-priced and budget-priced ice cream items. "The superpremiums are mostly added sales. People who were buying a half-gallon of vanilla regularly are still going to do that; they're buying that for the kids. The Haagen-Dazs is for mom and dad; or for young couples."

He added that sales of premium brands such as Dreyer's and Breyers were up as much as 10% to 12% last year, while local products and private labels were up about half that amount. Cooper said Haagen-Dazs outperforms Ben & Jerry's in his stores, but noted Ben & Jerry's is extremely popular in college areas.

Promotional activity has helped the superpremiums, Cooper said, noting that he's seen promotional efforts increase recently.

"They've been willing to put endcaps in all six of our stores, and pay for them. They've got a good building program and have been very willing to work with us," Cooper said.

Tim Wells, vice president of development for Haagen-Dazs, said his company is creating a shelf merchandising system to help improve retailers' superpremium sections.

"The average return on a pint of Haagen-Dazs is $1.04 per package, compared to 59 cents for nonpremium brands," Wells told SN. "Our position is to show that to retailers.

"The items with all the profit in the section often have very little space. Haagen-Dazs, in terms of Direct-Product-Profit dollars per week per square foot, has an average return of $17 in profits, twice the average of other ice creams, and compared to $6.37 for all frozen items."

He said superpremium sales could be improved by more aggressive in-store attention. "People pick up a pint of ice cream, then often put it back in the wrong place when they decide on another flavor. That makes it difficult for customers to get a good, quick look at what's available."

Wells said one of the features of Haagen-Dazs' new shelf management plan is a molded plastic display with channels for SKU placement. "In front of the channels will be tabs for flavor identification. We think this will help the consumers have an easier time identifying the flavors they want.

"Look at how many other companies have shelf management plans," he added. "More and more companies are trying to do things to maximize their shelf space."