Icon in Tip Top con­di­tion for sale

Ice­cream com­pany’s own­er­ship likely to move into over­seas hands

Hawke's Bay Today - - Business -

Tip Top’s next mas­ter would be tak­ing on one of New Zealand’s strong­est brands — and that mas­ter is likely to come from abroad, ac­cord­ing to an advertising ex­pert.

Vet­eran ad man Mike Hutch­e­son told the Week­end Her­ald yesterday that Tip Top’s own­er­ship looked likely to go over­seas.

“It will be some­one with deep pock­ets, and those deep pock­ets will most likely be in­ter­na­tional,” Hutch­e­son said.

Tip Top’s owner Fon­terra con­firmed this week that the ice­cream com­pany was up for sale as the dairy gi­ant seeks to re­duce its debt.

Hutch­e­son said that who­ever de­cided to take over the com­pany will in­herit one of the na­tion’s best­loved brands.

“It’s got pos­i­tive con­no­ta­tions for any­one who likes ice­cream,” Hutch­e­son said.

Tip Top has had sev­eral dif­fer­ent owners over the years, af­ter start­ing off as an ice­cream par­lour in Welling­ton in 1936.

By 1962, the com­pany’s Mt Welling­ton plant had be­come the South­ern Hemi­sphere’s big­gest ice­cream fac­tory.

Two years later, Tip Top had ex­panded and a par­ent com­pany — Gen­eral Foods — was formed.

The com­pany went to Good­man Fielder in 1987,

Heinz in 1992, West Aus­tralia’s Peters and Brownes in 1997, Kiwi

Dairy Co in 2000, and to Fon­terra in 2001.

In its var­i­ous in­car­na­tions, the com­pany has some­times strug­gled to per­form.

“As they have had this re­volv­ing door of own­er­ship over time, I think they have lost their way a bit in terms of what the brand is about,” Hutch­e­son said.

“One of the problems is that an iconic brand like that gets un­der the fief­dom of var­i­ous pub­lic com­pa­nies,” he said.

“The im­per­a­tives for pub­lic com­pa­nies are driven by ac­count­ing prin­ci­ples rather than mar­ket­ing prin­ci­ples,” he said.

“Costs are cut, things are shaved, and the brand does not get the love and at­ten­tion that it de­serves,” he said.

“It’s such a ubiq­ui­tous brand now and the qual­ity of the prod­uct seems pretty good, so there is no rea­son why it should not per­form well,” he said.

“There is no rea­son why it should not per­form, and I guess that’s why Fon­terra is look­ing to quit be­cause it’s such a good cash


Tip Top’s Mt Welling­ton fac­tory had fallen into a state of dis­re­pair be­fore Fon­terra spent about $40 mil­lion on spruc­ing it up over 2010-12.

From an earn­ings be­fore in­ter­est and tax per­spec­tive, the com­pany rates as “mid-range” in the so­called fast mov­ing con­sumer goods mar­ket.

In New Zealand, Tip Top com­petes with Streets, which is part of Unilever, but there have been myr­iad new­com­ers on the scene in re­cent years.

In terms of pro­file, Tip Top is the envy of the mar­ket­ing world, with 95 per cent brand aware­ness among New Zealan­ders.

The com­pany is in­wardly fo­cused, with ex­ports form­ing just a small part of its sales.

New Zealand is the sec­ond largest con­sumer of ice­cream per capita in the world, con­sum­ing a whop­ping 23 litres per year.

Fon­terra Brands is the largest player in New Zealand’s ice­cream and frozen desserts in­dus­try, hold­ing a 53 per cent share of re­tail value sales, ac­cord­ing to a re­port re­leased by Euromon­i­tor In­terna- tional last year.

Sum­mer is an im­por­tant time of the year for the brand, with 60 per cent of all of sales made through­out De­cem­ber, Jan­uary and Fe­bru­ary.

Cho­co­late Trum­pets, closely fol­lowed by Choc Bars and then Boy­sen­berry Trum­pets, are Ki­wis’ in­di­vid­ual ice lol­lies of choice, ac­cord­ing to Tip Top.

Pre­mium ice­cream brand Ha¨agen-Dazs is the new­est en­trant to New Zealand’s ice­cream in­dus­try and is set to take on Swiss ri­val Mo¨ven­pick.

Ha¨agen-Dazs launched in New Zealand last year and Fel­low US ice­cream brand Ben & Jerry’s launched in New Zealand two years ago.

The com­pany has also faced in­creased com­pe­ti­tion from a num­ber of lo­cal play­ers, who have en­tered the mar­ket with pre­mium or dairy-free al­ter­na­tives to the Tip Top range.

With con­sumer tastes con­tin­u­ing to evolve, this com­pe­ti­tion will only in­crease in the com­ing years.

Which is to say that who­ever takes over Tip Top bet­ter have the ap­petite for a com­mer­cial stoush.

"As they have had this re­volv­ing door of own­er­ship over time, I think they have lost their way a bit in terms of what the brand is about. "Mike Hutch­e­son (right)

Over the years Tip Top has be­come a sum­mer sta­ple for mil­lions and is now one of New Zealand’s best-loved brands.

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