When the outside temperature rises, so does consumer interest in packaged ice cream and novelties. “The packaged ice cream/novelties category is one that is largely impulse driven, especially on warm or hot days,” said Jayme Gough, analyst for NACS.

Convenience stores that offer single-serve ice cream and novelty options for immediate gratification can reap the profits from this high-margin category. “While the summer months traditionally see a spike in ice cream sales and profit generation, the other months of the year can also play a role, especially for retailers in the warmer parts of the country,” Gough said.

Hot Sales

In 2018, the ice cream/novelties category made up 0.5% of in-store sales, down slightly from 2017, according to NACS State of the Industry data. Sales and gross profit dollars both declined year-over-year. “However, margins of nearly 50% for this category make it a good profit generator, especially in the summer months,” Gough said.

Ice cream has been selling well in Twice Daily locations, which are owned by TriStar Energy. “Year-to-date in 2019, we are up 7.3% in ice-cream sales versus the prior year,” said Rick Staley, merchandising manager for the 89-unit chain headquartered in Nashville, Tennessee.

Beaudry Express in Elk River, Minnesota, has robust ice-cream sales. “We sell quite a bit of ice cream, from novelties to take-home packages,” said owner Josh Lund. The store has a standard bunker freezer for novelties and two freezer doors with pints and regional brands of half gallons.

At Eagle Run Crossing in West Fargo, North Dakota, ice-cream sales have been lackluster. “Unfortunately, our store is right next to a Dairy Queen, so we do not sell a ton of ice cream,” said Erica Eck, a sales associate. The store does stock pints, gallons and half gallons, as well as boxes of ice-cream bars and sandwiches, in addition to a single-serve novelty case.

Cool Trends

The healthier food trend has been slower to catch on in the ice-cream category at convenience stores. Although dairy-free, vegan and other special diet (coconut, almond, soy) ice cream and alcohol-based ice creams have gained in popularity with consumers, convenience stores don’t often carry many of those options because their customers want indulgent treats.

Instead, convenience stores usually stock single-serve options and smaller sizes to save on freezer space and to allow for that immediate consumption customers crave in the ice-cream category. “Better-for-you is capturing just 3% of all dollars for the ice-cream category in the convenience channel,” said Dave Wilcox, vice president of out-of-home sales for Wells Enterprise, which sells the Blue Bunny ice-cream brand. “Portion control is where we are seeing consumers moving.”

Portion control is where we are seeing consumers moving.

A couple of years ago, Lund tried better-for-you novelty options. “While we sold the healthier novelties at first, demand dropped off sharply,” he said. “People wanted ice-cream sandwiches and other classic novelties, not fruit bars.”

Indeed, frozen yogurt/sherbet/sorbet sales accounted for just 5.6% of ice cream/novelities category sales in 2018, down from nearly 10% in 2017, according to NACS State of the Industry data.

At Twice Daily, space limits the number of options in their ice-cream cases, and “we focus on the top-selling items based on our sales,” said Staley. “Therefore, we don’t currently carry any better-for-you products, as we don’t have the luxury of space to replace high-selling products with these new product introductions.”

Top sellers at Eagle Run Crossing include novelty classics, such as ice-cream sandwiches and orange push-ups, and Snickers ice-cream pints. “We don’t offer any better-for-you options, as our selection doesn’t often change,” Eck said. “We tend to stick with the tried-and-true novelties and popular flavors in our pints, half gallons and gallons.”

Doug Bolton, president and COO of Halo Top, has a rosier view of healthier ice-cream products at convenience stores. “We have seen an increased demand for non-dairy and vegan products across all categories, especially in ice cream,” he said. “More consumers are looking for healthier options, so it is important to have products available to meet their needs. We see the future of better-for-you ice cream as strong in convenience stores.”

People eat in the moment, and the c-store channel gives customers that immediate indulgence in the ice-cream category.

Premium Offers

Premium ice cream continues to generate sales at convenience stores as the largest part of the category (46.9%), followed by frozen novelties (31.8%). Premium ice cream sales edged up to $5,615 per store in 2018, compared with $5,452 per store a year earlier, according to NACS State of the Industry data from 2018. “Customers are looking for indulgence, and premium ice cream delivers that,” Gough said.

Premium ice cream has been selling well at convenience stores for Prairie Farms Dairy. “Sales are above last year’s levels over the past 90 days,” said David Znika, division general manager for Ice Cream Specialties. He attributes the spike to both consumer interest and the brand’s improvements to its premium offerings, such as adding more unique flavors.

Twice Daily locations have found success in the premium category, registering double-digit sales increases year-over-year. “When we first transitioned to the premium Blue Bunny line of novelties and ice cream in 2009, we experienced a 57% increase in sales,” Staley said. “Although there are always new products and innovation in the category, we have found that carrying traditional top-selling items, along with carefully selected new product entries, has served us well in meeting our guests’ needs and driving profitable sales in this fun category.”

Wells Enterprise believes that premium ice-cream sales will continue to strike a chord with consumers. The company launched a premium novelty line that “is driving category growth and incremental purchases at c-stores,” said Wilcox. “We’ve seen a shift back to indulgence, which our premium ice cream delivers.”

The higher-end ice cream sells well at Beaudry Express, too. “We have Ben & Jerry’s, Haagen-Dazs and name-brand candy ice cream, like Snickers and Twix ice cream,” said Lund. “We stay competitive on the premium pints and half gallons, and that makes it a pretty good category for us year-round.”

Cold Storage

Allocating adequate space to the category is key to driving year-round sales. “Having enough space for the premium pints and single-serve cups can help consumers find the right product quickly,” Znika said.

With ice cream/novelties being mostly impulse purchases, having the ice-cream chest located in a high traffic area will help drive purchases. “For example, having ice-cream options near the front of the store will increase visibility and sales,” Gough said.

We’ve seen a shift back to indulgence, which our premium ice cream delivers.

When customers enter Beaudry Express, one of the first things they see is the novelty case. “It’s close to the entrance to grab their attention,” Lund said. “We also pride ourselves on having a competitive everyday price for our pints and half gallons, which helps keep those items moving off the shelf.”

Twice Daily focuses on deals throughout the summer months, such as promoting a particular flavor with a two for $5 deal. “We advertise on our ice-cream case, which is always positioned in a high-visibility area near the store entrance and/or close to the sales counter,” Staley said. Twice Daily also puts ice-cream deals on its pump-top TVs “to help drive product awareness at our fuel islands for this high-impulse category.”

Wilcox with Wells Enterprise also viewed deals as “a great way to drive ice-cream and novelty sales. We’ve had some successes working with convenience operators to create meal deals to drive sales through in-store and mobile app promotions. … We believe retailers could really grow the category by adding visibility closer to the checkout and better execution with promotions and POS materials to make the category top of mind for customers.”

A Not-So-Cold Future

The future for ice cream/novelties remains bright for the convenience channel. “Americans have always enjoyed ice-cream products as a special treat or indulgence, and convenience stores that carry a premium line of popular products can capitalize on that,” Staley pointed out.

Convenience stores are positioned to offer consumers an option in the ice cream/novelties category they can’t get in many other places—a single-serve treat. “People eat in the moment, and the c-store channel gives customers that immediate indulgence in the ice-cream category,” Lund said. “You can’t get single-serve ice cream in grocery stores, but you can at your local convenience store. That gives us a huge advantage in this category.”