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Ice Drug

Ice cream is by no means a new business for drug stores. But as drug chains continue to explore the newest new frontier in convenience retailing, ice cream and frozen desserts are a key component of the consumables offering and an element of the mix that brings drug retailers right back to where it all began. For just as the ice cream/soda fountain was a major draw for drug store customers half a century ago, the ice cream category today has the ability to drive customers into the store.

Ice cream is just one of those purchases that doesn't need to be planned; driving past the easy-in/easy-out parking lots of any of the assorted drug chains that have staked out the corners of Main and Main, the urge to run in and grab a pint of something to make the day a little sweeter is harder to ignore--especially as drug chains continue to beat c-stores to the best real estate in town.

Indeed, as customers continue to embrace drug stores as the most convenient channel to shop, categories like ice cream are destined for more of the same. For the 52 weeks ended Jan. 26, ice cream sales in drug stores reached nearly $107 million, up more than 12 percent over the same period one year ago, according to data from Information Resources Inc.

Add in the related frozen novelties segment--everything from such classics as the Klondike bar and Good Humor Toasted Almond bars to newer, more premium-positioned items from the likes of Haagen-Dazs and Ben & Jerry's as well as the sherbes, sorbets and other lo-cal frozen treats that share the same cooler space--and it is a business worth more than $150 million in drug. Drug retailers watched sales of ice cream sandwiches, chocolate-covered pops and the like climb above $35 million over the past year, up 6.4 percent.

And there is evidence that the category is evolving in drug stores, suggesting that the growth will continue for some time. For it is pretty clear from the growth among the top five brands in drug stores that flavors--the bolder, more multilayered and more inventive the better, sales suggest--continue to drive growth.

For such drug chains as Walgreens and CVS, ice cream has been an important part of the store brand program for consumables for some time. So it is no wonder that private label brands continue to occupy the top spot in IRI's category rankings, ringing in more than $36 million over the past year--almost twice as much as the biggest national brand. Such brands as Ben & Jerry's, Haagen-Dazs and Dreyer's/Edy's, with growth rates ranging from the low double digits to the high double digits, are leading the way, while private label sales retreated 4.1 percent--the only significant decline in the category for drug stores.

And with these brands now in the hands of much bigger companies--Unilever Foods, which acquired the Ben & Jerry's business in 2000, and Nestle, which last summer added Dreyer's to its ice cream business, which already included Haagen-Dazs and accounted for 13 percent of the global ice cream market even before the Dreyer's deal--and more able marketers, it is likely that this growth will continue in drug stores.

And the flavors keep coming. Ben & Jerry's has introduced a new flavor that a spokeswoman for the brand described as "our next cookie dough," according to the early buzz. Brownie batter is one of four new flavors, which also include uncanny cashew, oatmeal cookie chunk and chocolate, chocolate cookie. All retail for $3.59 per pint.

Not to be outdone, Haagen-Dazs is lining up with seven new flavors of its own, marketed under its Desserts Extraordinaire label--French vanilla mousse, chocolate mousse, chocolate raspberry torte, cafe mocha frappe, bananas foster, creme brulee and strawberry cheesecake. These retail for $3.39 a pint.

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