Walk into any convenience store, and chances are, one of the first things you’ll see is a chest freezer with a clear plastic top full of ice cream novelties, like ice cream sandwiches, drumsticks or popsicles. “We don’t have a freezer section and put the ice cream box right up front near the checkout,” said Davis Clark, vice president of Mac’s Food Stores, a four-unit chain based in Aberdeen, North Carolina. “The bright, colorful freezer catches the eye of customers, which helps sell the category.”

Since most ice cream sales are impulse-based, the location of the chest freezer can have a big impact on sales. “Having ice cream options in the front of the store during the summer months when children are out of school and families are doing significantly more traveling can help drive impulse purchases,” said Jayme Gough, NACS research manager.

Sizzling Sales

While the category makes up a small percentage of in-store sales (0.5% in 2019), ice cream/frozen novelties’ average gross margins of 50.33% in 2019 make it one of the highest merchandise category margins, according to 2019 NACS State of the Industry (SOI) data. “Because of these high margins, ice cream is a good profit generator in the summer months,” Gough said.

However, this summer was anything but normal, with many parts of the country slowly reopening after the coronavirus pandemic lockdown. Darin Copeland, public relations manager for Prairie Farms Dairy Inc., predicts that frozen novelties might experience a resurgence of interest as the pandemic continues. “Single-serve items which are individually wrapped are probably more appealing than handmade, scooped foodservice type items that were previously trending at c-stores,” he said.

The ice cream category saw some interesting innovations last year, including vegan and protein-enhanced varieties.

At Accord Kwik Mart in Accord, New York, ice cream/frozen novelty sales have fluctuated. “COVID-19 has made things a little crazier, and some weeks, our sales are up, and other weeks, sales are down,” said associate Jane Smith.

“Our ice cream sales are down because of COVID-19,” said Clark. “During the summer, we usually have very good sales in the category, but with traffic down a bit at our stores, sales haven’t been as robust. For example, our volumes in April and May were about half as normal and only started to pick back up in July.”

Ice cream/frozen novelty sales at Busti Country Convenience Store in Busti, New York, have been rockin’. “We’ve had good sales, probably because we’ve been busier, and the summer weather has been hotter,” said owner Barb Nygren.

Cold Innovations

While customers return again and again to the tried-and-true ice cream flavors and frozen novelties, the overall ice cream category has been experimenting with dairy-free versions in particular. “The ice cream category saw some interesting innovations last year, including vegan and protein-enhanced varieties,” Gough said. Dairy-free, coconut, almond, soy and even avocado-based ice creams have come on the market, while fruit and peanut bases for sorbet also have debuted. Alcohol-infused ice cream has appeared in some regions of the country as well.

Busti Country Convenience Store sells dairy-free ice cream in pints, which have sold well enough that Nygren will keep stocking the ice cream alternative. “We don’t have any alcohol in the store yet, but we will probably consider offering alcohol-infused ice cream in the future if it’s allowed,” she said.

“While the demand for better-for-you ice cream has grown assortment in grocery and other retail outlets, the category is not seeing the same level of demand in the convenience channel,” said Dave Wilcox, vice president of out of home sales for Wells Enterprises Inc., which makes the Blue Bunny ice cream brand. “Convenience store customers gravitate toward highly indulgent products, like our Blue Bunny Load’d Sundaes. … Indulgent novelties dominate dollar share in the convenience industry.”

Each spring as the weather begins to warm up, Nygren scouts out the new flavor trends at area supermarkets to see what she might want to add to Busti Country Convenience Store’s inventory. “I don’t have a lot of room in the ice cream freezer, so I want to be sure I have good sellers,” she said. She keeps up with the character-themed frozen novelties, such as SpongeBob SquarePants Popsicle Bars, Minions Ice Cream Bars and Despicable Me Minion Ice Pops. “These are very popular with kids and sell out fast,” she said.

Flavor mash-ups also are popular in ice cream. For example, Wells’ Bomb Pop with its three flavors in one stick “continues to be a leader in c-store novelties, in addition to being a nostalgic favorite,” Wilcox said. Wells also recently launched a mashup of cheesecake and ice cream with The Cheesecake Factory Ice Cream pints, which has proved popular in the convenience store channel.

Customers at Mac’s Food Stores haven’t embraced any of the trendy flavors or ice cream alternatives. “We stay away from specialty ice cream because our customers haven’t asked for it,” Clark said. “We stick with our popular sellers, like ice cream sandwiches, drumsticks and pints.”

A Cold Sell

While ice cream sales rise and fall with the outside temperatures, retailers can push interest with category promotions. “Due to their nature of immediate consumption, novelties tend to have a seasonality that leans toward the warmer months,” Wilcox said. “We recommend having a mix of both novelties and packaged ice cream to offset potential shifts to take-home packages during the cooler months.”

Indulgent novelties dominate dollar share in the convenience industry.

“With the summer travel season tapering off into the fall, retailers have an opportunity to advertise back-to-school promotions, sponsorships of local sports teams and fall seasonal flavors in the ice cream/frozen novelties category,” Gough said.

Busti Country Convenience Store positions its ice cream/frozen novelties freezer near the front of the store and stocks it with a dozen or so sandwiches, bomb pops, drumsticks, pints and 1.5 quarts. “We don’t have many choices, and the category basically sells itself,” Nygren said.

Mac’s Food Stores sometimes offers two-for deals, which are popular with families. “When we run those promotions, families tend to get the bundle because it’s a better value,” Clark said. “While we have ice cream year-round, we haven’t done a lot of promotions in the winter, but we may this year.”

Accord Kwik Mart puts its chest freezer in the center of the first aisle to catch the attention of customers entering the store, “We don’t do any specials,” said Smith. The store’s best sellers in the category include half gallons, pints, sandwiches and drumsticks.

Ice Cream Future

While generally small in terms of store footprint, the ice cream/frozen novelties category can boost a store’s bottom line. “Percentage-wise of total sales, ice cream/frozen novelties is pretty small, but the margins are good enough that it’s a category we’ll keep,” Clark said.

“It’s a good category, margin-wise, so we definitely want to keep it,” Nygren added.

For many customers, ice cream/frozen novelties at convenience stores appeal to their need for an immediate indulgent treat on a warm day. “Americans love ice cream, and they also love convenience, which makes this category a win for retailers,” Wilcox said.

The Power of CSX Data

CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.

The NACS Convenience Tracking Program (CTP) comprises consumer behavior analytics from more than 10,000 convenience store shoppers across 42 states, representing the most comprehensive consumer-driven metrics available to the industry.

To learn more about CTP and how to participate, contact Leroy Kelsey, director of industry analytics, at [email protected] or visit www.convenience.org/ctp.