Company Watch: Unilever hopes to revive Western European ice cream market with healthier probiotic ice lolly

Author: Irina Kazanchuk

Date published: 16 May 2008

The probiotic ice lolly launched by Unilever UK as part of its Walls Milk Time range, should benefit from the health and wellness trend that is spreading across all packaged food sectors in Western Europe.

Old idea, timely launch

The milk and strawberry probiotic lolly made from probiotic yoghurt is targeted at parents, giving them the opportunity to offer their children a healthier type of ice cream. In addition, the low price of £0.30 per lolly represents good value for money, especially for a healthier product.

The world's first probiotic ice cream was launched in Sweden in 1999. The product was jointly developed by Probi and a Swedish ice cream manufacturer. It was a low-fat, probiotic ice cream available in different flavours. However, 1999 was probably too early for consumers to appreciate the benefits of such a product.

The Western European ice cream market saw a decline in value growth of 1.8% in 2006-2007. This was due to the relatively cool summer in many European countries as well as increased concerns over growing obesity levels in both children and adults.

Unilever is the global leader in ice cream with a share of 17.7% in 2006. Western Europe is one of the most important ice cream regions for the company in which it held a 25% share in 2006. Therefore, introducing new healthier ice cream options might help to turn the tide.

Experience in emerging markets

Major health and wellness food developments are usually attributed to developed countries. In the case of probiotic ice cream, local manufacturers in emerging markets already trialled the product. For example, Indian company GCMMF (Gujarat Co-operative Milk Marketing Federation Ltd)launched two probiotic ice creams - Amul Sugar Free Probiotic Frozen Dessert and Amul Prolife Probiotic Wellness Ice Cream - in early 2007. The former is targeted at diabetics with sugar replaced by artificial sweeteners while the latter is targeted at health-conscious consumers.

Consumers have previously not responded well to low-fat ice creams, with the failure of brands such as Amul Slim Scoop, Mother Dairy Dietz and Kwality Walls Lite over the review period, as the taste of these products did not go down well with Indian consumers. With new health launches in 2007 being positioned on unique benefits such as probiotic bacteria content and added calcium, these are likely to be more successful than previous attempts to interest consumers.

In Latin America, Chr Hansen has developed a probiotic ice cream together with Costa Rican ice cream producer Dos Pinos. The main characteristic of the new product is the ability to stimulate the immune system thanks to its probiotic cultures. Unilever, as the leader of the ice cream market in Latin America, might not enjoy “first mover advantage” but will most certainly try to introduce its probiotic ice lolly to local consumers.

Acquisition of Inmarco will help to catch momentum on Russian market Unilever's recent acquisition of key Russian ice cream player Inmarko (2006 market share of 10%) is likely to secure the company the leading position in this fast growing market.

Unilever's share in Eastern Europe was only 6% in 2006 and the new acquisition is likely to boost its sales in the region. Inmarko has a broad brand portfolio of innovative products such as San Cremo ice cream made with 70% live yoghurt. This is one example of a brand with health and wellness features that Unilever can build on.

Future is bright

The probiotic ice lolly is quite a niche product which will require intensive promotional support. Unilever has a vast distribution network that should allow it to reach a large consumer base in a short time. Moreover, the success of other probiotic products, such as Danone's Activia probiotic yoghurt which achieved a CAGR of 121% over 2001-2006, offer further hope for positive sales growth.

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