ICE CREAM MARKETERS CHILLY ON AD SPENDING

$4.5 Billion Industry Spends Less Than $40 Million in Advertising

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NEW YORK (AdAge.com) -- It's nearly summer, and everyone is screaming about ice cream.

Everyone, that is, but ice cream marketers. The nearly

$4.5 billion ice cream industry spent less than $40 million on measured media last year, and this year doesn't seem to be shaping up much better.

Advertising as a percent of sales for food categories varies, with cereal marketers shelling out as much as 12%, confection marketers running 4% to 5% and cookie marketers roughly 2% to 3%, according to Credit Suisse First Boston analyst Dave Nelson. Ice cream, as a discretionary, news-driven market, would seem to benefit from higher media levels.

Razor-thin margins
But ice cream industry executives cite razor-thin margins, a reliance on trade promotions (mainly discounting) and a slew of private-label and regional competitors as reasoning for minimal spending. Private label accounts for 23% of ice cream sales, and for the branded premium players, "a large percentage of our volume is sold on deals such as buy one, get one free," said Nancy Curby, senior brand manager of ice cream in the Midwest for regional player Dean Foods Co. Another factor is the price of butterfat, which rose last year to an all-time high, causing marketers to cut back on ad spending.

Dean spent $2 million on measured

media last year for its various brands including Dean's in the Midwest and Mayfield in the Southeast, according to Taylor Nelson Sofres' CMR.

While superpremium ice cream marketers supposedly have the higher margins to do more advertising, they don't do much more than their premium counterparts. "It's hard to use mass-media vehicles when your household penetration is lower. ... [Y]ou have to be more targeted," said Ben & Jerry's Brand Manager Dave Stever.

Unilever Bestfoods' Ben & Jerry's did tests of TV advertising three years ago that proved "inconclusive," Mr. Stever said. "The amount of lift or volume increases necessary to make those [TV] buys pay off is quite substantial."

Dave Matthews Band
This year Ben & Jerry's launches its One Sweet Whirled flavor, which ties in with the Dave Matthews Band and advocacy group SaveOurEnvironment.org to help fight global warming. That effort is being supported with radio ads. For the debut of its Core Concoctions line, the brand is using outdoor ads in five markets from Havas' Black Rocket, San Francisco, as well as placing the same creative on grocery carts in 5,000 stores and mounting an actual pint on freezer doors.

Dreyer's Grand Ice Cream, the leading player with its Dreyer's and

Edy's brands, does spend a bit more on its Dreamery superpremium, putting $7.6 million toward it last year vs. the $1 million it spent on its premium brands, according to CMR. However, at $64 million in sales for the 52 weeks ended April 21, Dreamery still trails the $191 million Haagen-Dazs brand and the $166 million Ben & Jerry's.

Building brand
With limited resources to build the brand, "it's a challenge," said one executive close to Dreyer's. An animated TV campaign this summer from Omnicom Group's Goodby, Silverstein & Partners, San Francisco, will run on spot TV vs. last year's cable buy. It will focus on flavors (Coney Island Waffle Cone and Black Raspberry Avalanche) and ask, "What flavor do you dream in?"

Haagen-Dazs, now owned by Nestle's Ice Cream Partners USA, spent $10 million last year, mainly in print, and despite the new parent and new ad agency (WPP Group's J. Walter Thompson, Chicago), it is not expected to up efforts. "We considered TV for Haagen-Dazs, but decided against it," said a Nestle sales executive.

Unilever's Good-Humor-Breyers Ice Cream unit spent the most in the category, $14.5 million last year, CMR said. This year, it launched TV for Klondike, from WPP's Ogilvy & Mather, Chicago, featuring golf legend Chi Chi Rodriguez and Nascar great Jeff Burton.

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