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April 04, 2012
The Inside Scoop
Though it's taken a beating since frozen yogurt came into the scene, ice cream hasn't lost its appeal as a summer treat.
Ian Carandang, owner of Sebastian's Ice Cream, said in an e-mail: "Ice cream got pretty beat up these past 2-3 years because of the frozen yogurt fad. Thankfully, though, the pendulum seems to have swung back again to our side. A lot of fro-yo places that opened up during the craze have now closed. [And] gelato never quite managed to take off as the second coming of frozen yogurt the way people [who were] selling it wanted it to."
Global market research company Euromonitor International expects the country's ice cream value sales to reach P9.5 billion toward the end of 2016.
"We Filipinos are known to have a sweet tooth," said Francisco Magsaysay, proprietor of Carmen's Best Ice Cream, in an e-mail. "Our local delicacies are proof of that." The country's diverse colonial history has also given the Filipino a taste for richer and heavier desserts than preferred by other Asians, according to Mr. Carandang.
Local palates and tropical weather aren't the only reasons for ice cream's popularity, however. "Filipinos have developed a special kinship with ice cream because we associate it with happy memories. When there is reason to celebrate, we make sure that ice cream is present," said Mr. Magsaysay, whose company is named after his only daughter.
According to a November 2011 Euromonitor report, local players in the ice cream sector are resorting to different approaches to reach yet untapped markets: More and more manufacturers are coming out with affordable sorbet products that offer value for money, while brands like Selecta Gold and Magnolia's limited edition line opt for "premiumization." Firms like Arcefoods and Better Than Ice Cream (BTIC), meanwhile, appeal to the health-conscious crowd.
Back in 2010, Unilever RFM's ice cream arm, Selecta, still had the lion's share of the year's ice cream value sales at 46%, amounting to P3.9 billion. To hold their own alongside the big-name brands, ice cream start-ups must find their own voice and niche.
"The playing field is level because daydreaming ideas is free," said Sebastian's head sorbetero. "Consumers are more open to higher-quality products and new flavor ideas... and are willing to pay more for them." For instance, Sebastian's Ice Cream is best known for its artisan flavors like pastillas de leche, blue cheese and kakanin.
On the other hand, those like Carmen's Best are touted as premium brands, catering to a higher-income bracket. The company takes pride in using no water or powdered milk in its formulation; it sources its milk directly from Holstein cows in its own dairy farm.
Mr. Magsaysay, who started Carmen's Best out of his own kitchen, said: "You lessen your risk of losing big if you start small." Another upside to a smaller operation is that it gives their owners more leeway to experiment with new flavors and a shorter lead time before introducing them to the market.
"Competing on price is a losing game," said Mr. Carandang. "You only end up with disloyal customers who will drop you the moment a cheaper brand comes along." Instead, the best ingredients can give start-ups that winning edge against their mass-produced counterparts.
It's also important to maintain a certain level of quality; Mr. Magsaysay pointed to consistency as the key to repeat business and winning over loyal clients.
"Proper marketing is crucial," stressed Mr. Carandang, whose own range of hand-dipped ice cream bars, Dive Bars, have risen in demand following the successful launch of Selecta's Magnum bars. In today's wired-in world, he suggested that his fellow ice cream entrepreneurs get with the times and use social media to connect with their target audience.
In the business of artisan ice cream, high-quality ingredients may mean slimmer profit margins, but one still needs to protect their bottom line, as Mr. Carandang shared: "It's good to be optimistic, but be brutally realistic as well." Like any venture, there are challenges that come with the territory: Unlike other desserts like cake and cookies, ice cream calls for more delicacy in the delivery and distribution chain, because of its temperature sensitivity — melted ice cream that's later refrozen loses its texture — and the potential spoilage of its dairy ingredients.
The local industry's best-sellers still include tried-and-tested classics like vanilla, cheese, and chocolate, as well as Filipino favorites like ube, but there's plenty of room for innovation. This is as much a science as a creative process, but ultimately, flavor has to come first. "That your product already tastes amazing only should be your starting point," Mr. Carandang advised aspiring sorbeteros. "Don't be too married to a concept that you forget that."
He also said, "Frozen yogurt forced me to break out of my own comfort zone and really re-examine and deconstruct what ice cream was all about. As a result, I learned a multitude of new techniques and ideas, all of which serve me very well now just as ice cream is becoming popular again."
While the ice cream industry is always looking for novelty, staying power remains more important. "People are always hungry for that next hot trend," said Mr. Carandang. "At the same time, everyone has their favorite food that is close to their heart. [That has] always my goal when creating flavors: to become someone's favorite that they keep going back to."
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