Fun and ice cream, too

Anywhere in the world, the three most popular ice cream flavors–in no particular order– are chocolate, strawberry, and vanilla. Not so in the Philippines where purple yam or ube is in the top three.

"Local knowledge is important but we are not in the business of selling ice cream. We are selling fun and pleasure across the world. Using a particular flavor such as ube or coming up with a concept such as an ice cream product that is heavy enough for merienda are local applications of selling fun and pleasure," said Rutger Boterenbrood, who was made Ice Cream Division head of Nestlé Phils. last September 2003.

Based on volume, Nestlé is market leader nationwide in impulse or novelty ice cream products and in the quick service/fast food segment. It shares market dominance with its nearest competitor in bulk products or ice cream packed in pint, half-gallon, and gallon containers.

"The Philippines has a history of consuming ice cream as a family. Ice cream is seen as a celebration food and the purchase decision is made by the mother. Bulk products, however, have limited growth potential as more consumers go to the mall," said Boterenbrood.

Growth

With a per capita consumption of only a liter, the Philippines is a small but steady ice cream market for Nestlé, in part because of a 2.7% annual increase in population that now number 85 million, about half of whom are below 21 years of age, and in part because ice cream is perceived as an affordable luxury by all income segments.

"Affordability is a key element in getting an increasing share of wallet or share of throat. Our challenge is to provide good value by delivering quality at a price that consumers equate with quality. That is relevance that consumers appreciate," said Boterenbrood.

Other major drivers in ice cream sales are top-of-mind brand recall and constant product innovation in markets that are increasingly segmented by age rather than by income or by gender.

"Kids are very demanding customers. They are always looking for something new to try. It is hard to keep their interest in, say, the flavor of the month. One of our best-sellers last year was a totally black fun product. We have also pushed goodness in ice cream by coming out with a Nido milk product that is similar to the Nido-based confectionery of a sister company," said Boterenbrood.

This year, Nestlé expects to further grow its market share by coming up with products that attract consumers inside the mall. Another business model being looked into how the phenomenal success of mobile phone companies (in generating repeat sales through the use of pre-paid cards) could cross over to ice cream.