AP­PETITE FOR HEALTH­IER ICE CREAM,

LOW-CALO­RIE BRANDS EX­PAND­ING IN CANADA

National Post (Latest Edition) - - FINANCIAL POST - ALEK­SAN­DRA SAGAN

An in­flux of lowcalo­rie, low-sugar ice cream hit Cana­dian gro­cery store shelves last year in bright pack­ages that put the calo­rie count front and cen­tre as pro­duc­ers try a new strat­egy for the beloved guilty plea­sure.

While the ice cream in­dus­try may be de­clin­ing in this coun­try, ex­perts and in­dus­try in­sid­ers be­lieve com­pa­nies serv­ing less sin­ful scoops may have found a niche prod­uct that ap­peals to health-con­scious con­sumers

In March, the first pints from Los An­ge­les-based Halo Top Cream­ery went on sale in Canada. The com­pany brought only half of the 24 dairy flavours it sells in the U.S., in­clud­ing birth­day cake, and pan­cakes and waf­fles. A few months later it in­tro­duced four of its 14 Amer­i­can dairy-free pints. In Septem­ber, it added a lim­ited edi­tion pump­kin pie — the com­pany’s first sea­sonal flavour in Canada.

“With the de­mand that we had and the prox­im­ity, we thought it made a lot of sense to start in Canada as we look to ex­pand in­ter­na­tion­ally,” said pres­i­dent Doug Bou­ton, adding a Cana­dian ex­pan­sion was the No. 1 con­sumer de­mand.

Also in March, Mon­tre­al­based CoolWay started sell­ing its re­branded low-calo­rie ice cream in gro­cery stores. The com­pany, pre­vi­ously named CoolWhey, sold high­pro­tein ice cream in gyms and sup­ple­ment stores be­fore re­al­iz­ing more op­por­tu­nity lay out­side the gym rat niche. It cre­ated a new recipe and plas­tered the calo­rie con­tent on its bright blue pints. The eight flavours range be­tween 280 calo­ries at the low­est for vanilla bean and 390 at the high­est for the sea­sonal spe­cial gin­ger­bread cookie.

“It didn’t make sense to be in gro­cery stores for like just a few peo­ple who re­ally look for pro­tein. So, in or­der to cap­i­tal­ize on a big­ger mar­ket, our only op­tion was to go after the calo­rie trend,” said mar­ket­ing di­rec­tor and co-founder Ben­jamin Out­mezguine.

The found­ing trio no­ticed the shift to low-calo­rie south of the bor­der and de­cided to go after that seg­ment in the Cana­dian mar­ket.

There’s an over­all de­cline in the Cana­dian ice cream mar­ket. Rev­enue for the pro­duc­tion in­dus­try fell at an an­nu­al­ized rate of 0.1 per cent be­tween 2013 and 2018, ac­cord­ing to es­ti­mates from a re­port by IBISWorld, a mar­ket-re­search firm. It an­tic­i­pates 0.1 per cent growth be­tween 2018 and 2023.

Low-sugar treats “ab­so­lutely” present an op­por­tu­nity, said Joel Gre­goire, an an­a­lyst with mar­ket re­search firm Min­tel.

Cre­at­ing an ice cream that is a bit more per­mis­si­ble to eat any time dur­ing the day, not just in the evening when tired adults look for a re­ward from a tough day, can be a way to drive sales, he said.

The prod­ucts’ health claims can also al­le­vi­ate peo­ple’s guilt about con­sum­ing snacks, he said, point­ing to CoolWay’s 28 grams of pro­tein per pint.

Peo­ple are also in­creas­ingly look­ing for health­ier op­tions. Seven­teen per cent of Cana­di­ans find low or re­duced calo­ries an im­por­tant fac­tor when choos­ing ice cream and 23 per cent want to try one high in pro­tein, ac­cord­ing to find­ings from an on­line sur­vey in the com­pany’s 2016 re­port on the coun­try’s ice cream and frozen nov­el­ties mar­ket. Light­speed GMI sur­veyed 2,000 Cana­di­ans 18 years or older.

“If you were to cap­ture 17 per cent or 23 per cent of a mar­ket, you’d be do­ing pretty well for most com­pa­nies,” said Gre­goire.

He com­pares the niche to plant-based food of­fer­ings. The num­ber of con­sumers in­ter­ested in al­ter­na­tive pro­tein may ap­pear low, but big com­pa­nies are watch­ing the space as an emerg­ing op­por­tu­nity.

Ice cream for the health­con­scious crowd is not nec­es­sar­ily new. Skinny Cow, for ex­am­ple, has been sell­ing low-calo­rie ice cream in var­i­ous forms since the ’90s.

But those prod­ucts were tar­geted more as a diet ice cream for women, he said. The com­pany’s logo once fea­tured a car­toon cow in a se­duc­tive po­si­tion with a tape mea­sure loosely wrapped around its trim waist.

What makes com­pa­nies like Halo Top and CoolWay stand out is their fo­cus on qual­ity in­gre­di­ents and in­dul­gent flavours, while still manag­ing to limit calo­rie and sugar in­take, Gre­goire said.

“The one thing that I think ice cream mak­ers will never be able to sell is that this is purely a health food,” he said. “If you want to eat healthy, you’re prob­a­bly go­ing to look for kale or other foods.”

Even big, in­ter­na­tional brands are en­ter­ing the space. Nes­tle re­cently launched its Good­north brand which makes four flavours rang­ing be­tween 360 and 380 calo­ries per pint — all with more than 20 grams of pro­tein.

Both Halo Top and CoolWay see room for ex­pan­sion in Canada and be­yond.

Halo Top’s Bou­ton be­lieves 14 dairy flavours and four to seven dairy-free flavours will be the sweet spot for Canada, and the com­pany is de­vel­op­ing some uniquely Cana­dian ones it hopes to launch this year.

He wants to get the pints into even more gro­cery stores, as well as other chan­nels, like con­ve­nience stores.

The com­pany runs three scoop shops in Los An­ge­les, and de­pend­ing on their suc­cess is open to test­ing the model in Canada.

CoolWay’s founders, mean­while, also have plans for re­tail stores, said Out­mezguine, as well as over­seas ex­pan­sion.

The com­pany is look­ing at adding new flavours in 2019 and mak­ing their prod­uct avail­able in more stores, he said.

“We have a lot of plans and we want to ex­pand much more and we want to make CoolWay into a much big­ger thing.”

THE ONE THING THAT I THINK ICE CREAM MAK­ERS WILL NEVER BE ABLE TO SELL IS THAT THIS IS PURELY A HEALTH FOOD. IF YOU WANT TO EAT HEALTHY, YOU’RE PROB­A­BLY GO­ING TO LOOK FOR KALE OR OTHER FOODS. — JOEL GRE­GOIRE

RYAN REMIORZ / THE CANA­DIAN PRESS

Noah Ber­nett, left, and Ben­jamin Out­mezguine, co-founders of the Mon­treal-based com­pany CoolWay, which makes a low-sugar and low-calo­rie ice cream, are look­ing to ex­pand their busi­ness to more re­tail out­lets across the coun­try.

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