The multiples’ ice cream aisles are cut-throat and smaller players struggle to compete against giants. Authentic Italian gelato brand Joe Delucci’s is looking to change that
It’s enough to give Mister Whippy a coronary. The humble 99 Flake no longer cuts it - witness the rise of frozen yoghurt and specialist ice cream parlours across the country for proof. Businesses like Joe Delucci’s, a more than 20-strong chain stretching from Glasgow to Jersey selling imported Italian gelatos, including chilli & melon, cherry & custard and even parmesan flavoured varieties.
Now Delucci’s wants to become a national retail brand. Having become sole ice cream supplier to the 270 Nando’s restaurants in the UK this month, the brand is growing listings in independent retailers and in talks with all the major multiples. The Delucci’s team is confident it will soon be in supermarket freezers across the country following annual category reviews later this year.
Getting there is one thing, staying there another. Ice cream is dominated by giants: chiefly Unilever’s Ben & Jerry’s, General Mills’ Häagen-Dazs and own-label supplier and Nestlé licence-holder R&R. Smaller players get stamped out, as Loseley did last year. So what makes small fry Joe, which only achieved sales of just over £2m last year, think he can thrive in the supers?
“Other people have failed even with good brands because they haven’t offered particularly good deals so they weren’t able to compete with the Bogof and money off deals of Ben & Jerry’s and Häagen-Dazs,” says Nigel Langstone, who founded Delucci’s in 2006 with business partner Richard Pierce. “We don’t want to be just a shelf filler. We’ll be competing on price.”
To a point. The giants Delucci’s will be up against have considerably more financial muscle than them. If they see their share being eroded by a new upstart they will simply lower their prices for longer than Delucci’s, which has the considerable expense of importing all its gelatos from Turin, can sustain. Tactics like this - combined with pressure from increasing costs - helped drive Loseley into administration in April 2011.
Langstone reckons there are a number of factors that will help Delucci’s avoid the same fate. “We’re not desperate,” he says, adding that Delucci’s growing retail estate and supply deals with food service and indie retailers have laid sound foundations for the business’s growth. Even without winning any space in multiples’ freezers, sales are on course to pass the £3m mark this year.
“We don’t need the supermarkets. Of course we’d like to do a deal with Tesco or Sainsbury’s but it has to be the right deal. If there’s not enough money left to do any sort of promotions we won’t be able to compete and we will just be a bit player. That’s not what we want.”
Its presence in some of Britain’s busiest shopping districts - including a flagship store in London’s Westfield shopping centre - also stands in the brand’s favour, says Langstone. He claims the brand is currently worth in the region of £5m and says the retail estate will afford a level of in-store recognition usually only achieved through expensive ad campaigns.
The final front Delucci’s will be fighting the giants on another front: flavour. And Langstone says this is fight Delucci’s cannot lose. “Ice cream in the UK and the US starts lots of cream and then they add a flavour,” he says. “In Italy we start off with water and then add whole fruit of fresh chocolate. It’s not about flavouring and it tastes so much better.”
Even the parmesan variety, which goes well with a tomato salad and pine nuts apparently. But with Delucci’s retail range currently only comprising its five best sellers - Madagascan Vanilla, Nocciolata, Chocolate, Dulce De Leche, and Strawberry - you’re not likely to see this icy oddity in Tesco or Sainsbury’s.
For the time being at least.