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Don’t miss tomorrow’s food industry news

by Assessor

Dive Brief:

  • Halo Top, the hugely popular lower calorie, lower sugar and higher protein ice cream, opened two scoop shops in California and recently offered a four-day pop-up location on Manhattan’s Lower East Side. According to Eater, the company is considering more brick-and-mortar locations, depending on how these first ones do.

  • The Westfield Century City Mall location in Los Angeles, which opened in April, and the Westfield Topanga mall shop in Canoga Park, which debuted last November, serve scoops, soft serve, sundaes and ice cream sandwiches in cups, cones, puffles (a type of waffle) and tacos. An array of toppings is available since, as the company notes on its website, “With Halo Top, you’ve got calories to spare!”

  • The company boasts the top-selling pint of ice cream in the U.S. According to Eater, Halo Top sold 13.5 million of them in 2016 worth $66 million. Last year, sales were closer to $100 million.

Dive Insight:

After crushing the grocery game, Halo Top is seeing whether the personalized retail experience will provide more flexibility and bring in consumers who appreciate indulgence — but not the fat and calories of other premium ice cream brands.

So far, the California scoop shops seem to be doing well. The majority of Yelp reviews are positive, and the critical ones mainly complain about the service or the prices, which are higher than retail. A Halo Top pint costs about $4 at Walmart, while a soft-serve cone with one topping in a scoop shop is about $7 — and the tab goes up from there.

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Halo Top President and COO Doug Bouton pointed out to Eater that every scoop shop will be different, which creates an exclusive atmosphere for customers, and may make them want to check out the others to see how they vary. The company provides intriguing displays, such as a wall of copper spoons and a sign stating, “GUILT-FREE ZONE,” both for decoration and for Instagram opportunities.

Fans anywhere near Southern California or New York City may want to try the scoop shops for the novelty effect if nothing else. But if more locations aren’t forthcoming, they aren’t likely to seek them out except as an occasional treat. It would be easier — and cheaper — to buy a pint or two at the grocery store, put a couple of scoops in a dish and toss on some nuts and syrup.

Another California ice cream brand, Rori’s Artisanal Creamery, started out producing for wholesale markets and then opened scoop shops, finally ditching the distribution side and focusing on retail. Rori’s found that its higher-quality ingredients and locally produced products made it easier to compete with big-name brands like Baskin-Robbins and Cold Stone Creamery. Others, such as Ben & Jerry’s and Jeni’s Splendid Ice Creams, started with scoop shops and then developed wholesale businesses.

Halo Top has little to lose by trying scoop shops and pop-ups. If they don’t work, the company can fall back on its profitable wholesale business. Meanwhile, its profile is elevated, people become fond of certain flavors and may seek them out at the store.

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Boulton told Eater the company isn’t wedded to opening up a lot of storefront locations. “We’re opening up a few of these, and we’re continuing to analyze in terms of cash flow, profitability,” he said. “If they go as well as we hope they will, then yeah, there might be a hundred of these things. If it’s more of a marketing expense, maybe we adjust strategy. We just have to wait and see.”

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