What are the motives behind Unilever dropping the unit price of Cornetto and what it could possibly means for the local impulse ice cream market?, asks Lianne van den Bos, Senior Food Analyst, Euromonitor International.
Take-home ice cream is the dominating category for Australasia, North America and Western Europe where manufacturers' efforts lie in making ice cream a year-round treat – and thus a planned purchase. For the remaining regions, impulse ice cream is most popular and underscores the fact that ice cream consumption is traditionally linked to warm weather and is thus bought on impulse.
In markets such as Australia, where consumers on average buy the most ice cream in the world, the top three players capture over 64 per cent of ice cream sales, with the retail landscape geared towards the ice cream powerhouses Unilever and Nestlé.
However Unilever’s market share in Australian ice cream has dropped by 4 per cent over 2010-2015. As a result, the company has developed a new strategy for its Cornetto brand, not only in Australia, but also across a number of other countries.
Unilever’s new strategy for the Cornetto brand looks to be making the brand a snack that competes directly with chocolate confectionery countlines by lowering the unit price significantly.
In fact in Australia, Unilever has announced it will reduce the brand from a recommended AUS$3.20 to just AUS$2, in line with the average threshold of around AUS$2 per serving in chocolate countlines. With this drastic reduction Unilever wants to ‘unlock growth for Cornetto and bring new consumers to the category through this ‘loose change’ offer’.
By lowering the price of Cornetto to something in line with a standard chocolate bar, Unilever is positioning its ice cream as a much more affordable impulse snack. This tactic is an interesting way of growing the share of impulse ice cream in a market facing a dominant but stagnating take-home ice cream sector, which is typical across several large developed markets.