Paris, June 5 - Consumer goods giant Unilever aims to earn more money selling ice-cream in France for the third year in a row in 2009 despite the impact of the economic downturn on consumer spending.
Ice-cream sales are resisting the crisis as purchases are still too infrequent to be significantly affected by a drop in purchasing power, the group's ice-cream managing director for France, Christophe Loison said.
But Unilever faces an uphill battle to encourage the French to change from eating the least ice-cream of any Europeans to as much as the Italians or Swedes, whose consumption is some 50 percent higher.
"Ice-cream is a product that I would define as an antidote to the crisis," Loison said in an interview. "We want to develop the frequency of consumption."
After almost a decade of dwindling sales when it lost 35 percent of its business, Unilever increased ice-cream revenue in France by 4.5 percent in 2007 and 2.5 percent last year and is aiming for growth of around 3 percent in 2009, Loison said.
Unilever plans to achieve this mainly through growing volumes whilst keeping prices flat following a 4 percent hike last year.
Its brands include Carte d'Or, Magnum and Ben & Jerry's. The group also wants to inch up its market share in France from 28.3 percent currently to 28.5 percent by the end of the year by spending more than ever on advertising with 16 million euros ($22.67 million), Loison said.
High fixed costs, such as electricity for refrigeration and logistics, mean volumes are key. Unilever also faces tough competition from supermarket own brands, as well as the world's biggest food maker, Nestle.
"The real question is to defend our volumes," Loison said.
Unilever is the world's biggest maker of ice-cream, which contributes around 5 billion euros to the group's 40 billion in annual sales. It sells around a billion Magnum ice creams a year.
NICHE MARKETS
The French consume six litres of ice-cream a year, compared with nine litres in Italy and Sweden, said Loison. Consumers buy ice-cream seven times a year on average in France, he added.
Loison's strategy is to target niches both at the high end and low end of the market as well as trying to provide more opportunities for people to buy ice-creams, such as at leisure parks, cinemas and service stations.
The pressure of the financial crisis on consumer budgets has seen rivals such as yoghurt maker Danone revisit pricing and supermarket group Carrefour try to change its expensive image with a new discount range.
Loison said Unilever did not need to add brands through acquisitions but that the group would continue to buy leading ice-cream groups in countries where it was not present.
Unilever bought Russian ice-cream group Inmarko last year and Romanian ice-cream brand Napoca earlier this year.
"In France, my job is internal growth, not external growth," said Loison, who previously oversaw Unilever's Lipton tea. "Today, I do not envisage buying complementary brands. I don't need more brands today, I need more points of sale."