Rising disposable income in Poland is boosting consumer spending on indulgence items, and the ice cream category is benefiting – and becoming less reliant on the peak summer season. However, while Poles are increasingly enjoying ice cream all year round, Francisco Redruello of Euromonitor International found that they remain comparatively unadventurous in their tastes.
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Given its associations with sunshine and the outdoors, the seasonal element to the ice cream sector is, obviously, significant.
But, the degree of seasonal variation is diminishing in Poland, as the take-home market, which is less sensitive to seasonal fluctuations, grows.
As underlined by trends in the bulk ice cream sector, the market in Poland is benefiting from the influence of Western consumer habits, which favour the consumption of ice cream throughout the year and not only in summer.
Poland’s sustained economic growth over the last two years, rising per capita income and purchasing power have also contributed to growth in the ice cream market, as consumers have more money available to buy indulgence products.
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By GlobalDataRetail sales of ice cream in Poland grew by over 8% in 2007 to reach PLN1.07bn (US$436.2m), with the impulse category accounting for over 50% of the total market. This year, rising milk costs have resulted in moderate rises in retail prices, particularly in the artisanal and impulse categories. Take-home and artisanal ice cream represented 32% and 18% of total retail sales respectively, according to Euromonitor.
However, while it may be showing healthy growth the Polish market is notable for the reluctance of consumers to try new flavours, with the traditional standbys of chocolate and vanilla still accounting for the vast majority of sales. Polish manufacturers have tried to extend their premium ranges in the past by launching such exotic flavours as cucumber, rhubarb, white grapefruit and oyster, but with little commercial success.
Independent food stores remained the most important retail channel in 2007, accounting for 44% of total retail value sales. Supermarkets/hypermarkets are the second most important retail channel, accounting for 26% of total retail value sales in 2007. The choice of ice cream available in supermarkets, however, remains very limited. Ice cream products are typically placed just by the checkout, targeting the impulse buyer.
Unilever Polska is Poland’s leading ice cream manufacturer by some margin, accounting for 22% of total retail value sales in 2006. According to Euromonitor International, Unilever has managed to maintain its lead as a result of sustained advertising investment, a strong distribution network and a wide product range across different ice cream subsectors.
Overall, the Polish ice cream market is fairly consolidated, with the top five manufacturers accounting for over 65% of total retail sales in 2006. The most important local players are PPL Koral and PPUH Ice-Mastry SC, with respective retail market shares of 17% and 8% in 2006.
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In terms of product innovation, an interesting development in 2007 was Nestlé Ice Cream Polska’s introduction of Maxibon Pops, a new concept which comprises small “pops” of ice cream in a plastic jar. The product aims to combine fun and convenience; children can play with the ice cream balls and the new line is ideal for sharing amongst friends. Products which combine indulgence with an opportunity to socialise with friends have already made an impact in gum and sugar confectionery, and Euromonitor International expects this to extend further into the ice cream category.
Euromonitor International forecasts retail volume sales of ice cream will grow by 28% over the period from 2007 to 2012, far outstripping growth in developed markets such as Western Europe, where sales are forecast to grow by just 12% over the same period. Economic growth and the increasing consumption of ice cream during off-peak seasonal periods will continue to be key factors in the predicted growth.
Volume sales in the take-home category are forecast to rise by 44% between 2007 and 2012, with growth also forecast for premium lines.
However, in spite of the forecast growth for the take-home category, Euromonitor believes the continued impact of seasonality on sales remains the principal threat to ice cream’s future sales performance in Poland. Furthermore, there is still a relatively limited tradition of ice cream consumption in Poland, with lower per capita consumption than developed markets in Western Europe. However, low per capita consumption can equally be seen as an opportunity.
Euromonitor International emphasises the importance of aggressive marketing strategies to increase Polish consumer awareness of ice cream. According to the company’s latest Travel and Tourism research, a greater number of Poles are holidaying abroad, in countries such as Spain, the UK and Germany. As foreign travel grows, new flavours that consumers have tried when on holiday might gain increased appeal in the home market.
Furthermore, supermarkets and hypermarkets still have significant potential to expand their ice cream offerings. Increased dedicated merchandising of ice cream in-store, with investment in specific freezer display units for ice cream products, might help to increase the range of flavours and formats available to consumers. A wider choice of brands and the expansion of private label within the category would also help boost demand.
