3 The market for impulse ice cream [per] - Competition Commission

More documents

Recommendations

Info

3.35. Table 3.1, based on Nielsen data, shows how, following the entry by Mars, the market share of BEW inthe wrapped impulse market measured by value fell between 1989 and 1990. In 1991 BEW's market share fellagain before a strong recovery in 1992 which is partly explained by the difficulties encountered by Lyons Maidduring its brief ownership by Clarke Foods. Table 3.1 also shows how Lyons Maid saw its market share shrinkfrom nearly one-quarter to one-tenth within the four years after 1988.TABLE 3.1 Market shares in the wrapped impulse marketper cent by value1988 1989 1990 1991 1992 1993*BEW 67 68 62 59 67 67Lyons Maid 23 23 21 18 10 11Mars 0 † 11 12 11 14Others 10 8 6 11 12 8Total 100 100 100 100 100 100Source: BEW based on Nielsen Audit data.*Estimate.†Less than 1 per cent.3.36. Mars told us that in 1991 and 1992 the NMRA audit indicated a higher market share than the numbersshown in Table 3.1. It claims a market share of 15 per cent in 1991 and 16 per cent in 1992. It told us that itsshare of the chocolate bar market was 20 per cent (see paragraph 3.54).3.37. Market share data on scoop ice cream are not available because sales of this type of product generallyare not branded. BEW estimates its market share of scoop and soft mix ice cream as a combined market to havebeen about 12 per cent in 1992.3.38. For multi-packs, retailers' own brands accounted for over 40 per cent of sales measured by value in1992, while BEW accounted for one-quarter. Table 3.2 shows how the rapid growth of Mars in the two years1989 and 1990 has subsequently been sharply reversed as other manufacturers and retail multiple chains havedeveloped alternatives to Mars' new brands.TABLE 3.2 Market shares in multi-packsper cent by value1988 1989 1990 1991 1992 1993*BEW 25 29 28 26 25 25Lyons Maid 2 5 3 3 2 4Mars Nil 13 21 16 13 11Other brands 28 14 10 16 16 15Retail own brands 45 39 38 39 44 45Total 100 100 100 100 100 100Source: BEW based on Nielsen Audit data.*Estimate.21
Small-scale manufacturers3.39. Table 3.1 indicates that between them the three largest suppliers account for about 88 per cent of salesof wrapped impulse products. A large number of small manufacturers together supply the remainder. Some ofthese suppliers are of quite recent origin as in the case of Häagen-Dazs but others have been in existence formany years.3.40. Many members of the Ice Cream Alliance (ICA) trace their origins back to immigrants from Italy. Forexample, Louis Granelli arrived in Manchester from Northern Italy in 1889 to begin making Italian ice cream.His firm gained a reputation for a quality product. The family business, now called Granelli McDermott Ltd,never sought national distribution. Antonio Frederici was another immigrant from Italy who started an ice creambusiness near St Helens on his arrival in the UK in 1896. His grandsons have now expanded the company,Fredericks Dairies Limited (Fredericks), to be the largest producer of ice cream chocolate bars in the UK.Gaetano Mansi left Italy in 1900 and the third generation of his family continue to make Italian ice cream for arelatively local market. This firm, Marine Ices, is based in north-west London.3.41. There are currently 367 members of the ICA who manufacture ice cream, many of whom have beenmaking ice cream for many years operating on a craft basis using little sophisticated equipment. The ICAestimates that there are around 1,000 manufacturers in the UK manufacturing from basic raw ingredients, if oneincludes the very smallest sized supplier. 13.42. Given that milk and skimmed milk are basic raw materials to manufacture ice cream it is not surprisingto find that dairy farmers have been a prominent source of new entry into the industry. Loseley began making icecream in 1977 using the cream and milk of the Jersey cows on the Loseley House estate. The company wasalready making cream, yoghurt and cheese. Its successful expansion into ice cream manufacture culminated inthe Loseley Estate selling Loseley to Booker PLC in 1987. The new owners renovated a frozen food plant inAlton, Hampshire, in order to maintain high-quality production to satisfy the requirements of the leadingsupermarket chains, health food stores and independent grocery outlets. For the impulse market Loseley suppliesice cream and yoghurt desserts in 100ml tubs and produces a larger size, 500ml, for the take-home market. Thecompany produces own label but this is a less important part of turnover than the branded Jersey ice cream line.Loseley achieved national distribution of its range of impulse and take-home products in 1992.3.43. Like Loseley, other family-run farm businesses which entered the industry in more recent years, such asLangage Farm Dairy Products located near Plymouth, and Childhay Manor of Crewkerne, produce a restrictedrange of ice cream. Such firms generally make tubs, not chocolate- coated bars, filled cones or ice lollies. Farmbasedmanufacturers tend to concentrate on premium ice cream that consumers associate with a locally-basedfarmhouse supplier.3.44. In 1984 milk quotas were introduced in order to reduce production of milk. As a result some farmersdecided to make ice cream and frozen yoghurt as a means of using milk in excess of their allocated quota. Bypurchasing a pasteurizing plant, a batch freezer and cold store dairy farmers were able to enter the premium icecream market. Such entrants have not found manufacture of ice cream difficult but told us that they haveencountered problems in securing an adequate number of retail outlets when competing with national supplierslike Wall's. Examples of such recent entrants to the impulse market are Purbeck Ice Cream, based in Wareham,Mackies Aberdeen Dairy Company Limited which started in 1986 near Aberdeen and the Castle Dairy in WestSussex.1A search of the 71 Yellow Pages directories for Great Britain supports the view that there are many manufacturers of ice cream that do notbelong to the ICA.22
Page 1 and 2: 3 The market for impulse ice creamC
Page 3 and 4: Other ice cream products3.5. Soft m
Page 5 and 6: The structure of the industryThe MM
Page 7: 3.28. Treats seeks to compete with
Page 12 and 13: TABLE 3.4 Annual rates of change in
Page 15 and 16: (o)Cups comprise paper or plastic c
Page 17 and 18: mobile ice cream vans which are ser
Page 19 and 20: 3.70. Less than one-fifth of respon
Page 21 and 22: TABLE 3.8 1993 RRPs of brands of im
Page 23 and 24: TABLE 3.9 Recommended retail sellin
Page 25 and 26: 3.89. Table 3.11 indicates that in
Page 27 and 28: £3 million marketing support for t
Page 29: indicated in paragraph 3.52. Even i

3 The market for impulse ice cream [per] - Competition Commission

Create successful ePaper yourself

Delete template?

Save as template?