Ice Cream and Frozen Desserts in Norway

PROSPECTS

Ice cream sales continue to be heavily affected by the weather

Seasonality remains a key challenge for ice cream manufacturers in Norway. In 2018, the country benefited from an extraordinarily long and warm spring and summer, with this substantially driving up both retail volume and value sales.

Manufacturers focus on product innovation in an effort to drive value sales

With the category’s volume sales hampered by inclement weather, manufacturers in 2019 focused on new product development to try and at least boost value sales, particularly in the areas of vegan, high protein and low calorie ice cream, with health and wellness offerings having largely previously been seen only in the areas of frozen yoghurt and sorbets. While over 2017/2018 Diplom Is introduced an organic variant under its Diplom Is Døla Is brand and a free from gluten and lactose variant called Diplom Is Fri, in 2019 it launched a vegan almond-based ice cream in chocolate flavour as well as high protein options with an indulgence positioning in American-inspired flavours such as cookie dough, salted caramel and chocolate brownie.

Ice cream could be affected by changes to the sugar tax over the forecast period

Although ice cream is a sugarised product, it was unaffected by the significant increase in sugar tax at the beginning of 2018. However, the tax hike was heavily criticised by manufacturers and industry associations as favouring certain products and disadvantaging others, leading to the government appointing a committee to look further at the issue.

COMPETITIVE LANDSCAPE

Ice cream in Norway remains a duopoly as smaller players struggle to gain share

Hennig-Olsen Is and Diplom Is together continued to dominate ice cream and frozen desserts in 2019, leaving only a small share of sales for other players. The leading player Hennig-Olsen Is further grew its value share over the review period thanks to widening its distribution network but primarily due to its focus on new product development, with its new launches being well-received by consumers.

Diplom Is banking on innovation in vegan and high-protein ice cream in an effort to regain lost share

Second-ranked Diplom Is, a fully-owned subsidiary of the domestic dairy giant Tine, led ice cream and frozen desserts up until 2016 but was then overtaken by Hennig-Olsen Is, losing share to the new leader as well as smaller niche and premium players. The company has sought to try and regain lost share through a focus on innovation, especially under its frozen yoghurt and sorbet brand Diplom Is Dream, and new product launches such as Diplom Is Døla and Diplom Is Fri in 2017, with these followed over 2018/2019 by the launch of a vegan almond-based ice cream in a chocolate flavour as well as high protein ice creams with an indulgence positioning under the Lohilo line.

Private label bucks the trend in 2019 thanks to the addition of an organic ice cream

Unlike the two ice cream giants Hennig-Olsen Is and Diplom Is, which both suffered a similar decline in retail value sales in 2019, private label recorded solid value growth, albeit still accounting for only a marginal share of sales. Norwegians generally prefer high quality and well-known brands when purchasing indulgence products such as ice cream.

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