The Benito Belly Buster is back. Royal Scoop Homemade Ice Cream shop in Benito Springs, Fla., took the 15-scoop, six-topping, three bananas and a mound of whip cream mega-dessert off its menu five years ago after orders dwindled. But with ice cream sales rising recently — this May was 20% better than it was in 2009—and temperatures doing the same, owner Dave Zimmermann started offering the Belly Buster again last week. Call it an economic taste test. No one has bellied up and ordered one yet, but he's hopeful he will soon sell some of the $34.99 ice cream platters. "It doesn't seem like people are holding back on the culinary treats as a result of economic challenges," says Zimmermann.
While continued high unemployment is making economists nervous about the possibility of a double dip recession, there appears to be no recession in the business of double dips. Official tallies in the ice cream business are hard to come by but, anecdotally, the ice cream market appears to be hot. Shop owners around the country say they are packing more cups and cones this summer than last. What's more, the number of customers asking for a double dip, or two scoops, seems as plentiful as ever.
Lynda Utterback of the National Ice Cream Retailers Association says a number of members have told her that their sales are up 25% from a year ago. Dutch consumer products firm Unilever, which sells ice cream brands Ben & Jerry's, Breyer's, Good Humor and Klondike in supermarkets, reported that its first quarter ice cream and beverage sales rose 7.4%. "Looks like people are turning to ice cream in a big way this summer," says Harold Waxman, who owns industry newsletter Ice Cream Reporter. "When things are hard, ice cream is a relatively inexpensive way to feel good."
Still, some ice cream companies are adapting to tougher economic times. Soft-serve chain Dairy Queen recently began offering a mini version of its popular Blizzard desert, which is a blend of toppings and ice cream. The new size is about 6.5 oz., versus 12 oz. for a small Blizzard and 21 oz. for a large. "We are responding to two significant consumer interests, value and portion control," says Dairy Queen's chief brand officer Michael Keller. "I don't think people are trading out of ice cream." The mini costs between $1.99 and $2.49 depending where you are in the country vs. an average of $3.09 for a small.
Even before the economy softened, frozen treats have been no easy business to play in. Most "dip shops" remain small mom and pops, but corporations or private equity firms have swallowed up the chains, with varying degrees of success. Warren Buffett's Berkshire Hathaway, for instance, owns Dairy Queen. In mid-2007, private equity firm Sun Capital Partners bought ice cream chain Friendly's for $337 million. NexCen Brands, which franchises the superpremium MaggieMoos and Marble Slab Creamery ice cream shops, earlier this year told its investors that its cash and financial health "raise substantial doubt about our ability to continue as a going concern." In mid-May, the company struck a deal to sell those franchises and others to a private equity firm.
But for the most part it's been a good recession for ice cream makers and sellers. Market research firm Packaged Goods estimates ice cream sales in supermarkets and scoop shops rose 1.1% last year to $14.5 billion. And recent moves by ice cream companies suggest they see a sweeter future. Executives at Haagen-Dazs, which is owned by a subsidiary of food giant Nestle, have taken advantage of falling commercial rents. In the past two years, the company has opened more than 50 stores, boosting its outlets by more than 20% and expanding aggressively into malls for the first time. Late last year, Baskin-Robbins introduced the Double Header, which is the first cone "designed to hold a swirl of Soft Serve and a scoop of ice cream" side by side.
Top economic forecaster Mark Zandi of Moody's Economy.com says discretionary spending is typically a good measure of where the economy is headed. But he says you shouldn't read too much into the dessert market, which can be propelled by economic stress. "Ice cream sales could be a beneficiary of trading down," says Zandi. "People still want to treat themselves, and this is a pretty easy one to afford."
Nonetheless, Zandi is not predicting an economic double dip, which is when a recovery falls back into recession. While he believes the unemployment rate could rise again, Zandi says the economy will continue to grow in the second half of the year, probably around 2%. "The risk of a double dip is rising, but I still think it is less than even," he says.
At Doumar's in Norfolk, Virginia, which serves 300 cones a day, customer counts are up 3% this summer. Thad Doumar, whose family claims to have invented the first ice cream cone at the 1904 World's Fair in St. Louis, says even if the economy freezes up this summer he expects his sales to remain strong. "When people feel nervous they eat more ice cream," says Doumar. "I'm in the value business."
While continued high unemployment is making economists nervous about the possibility of a double dip recession, there appears to be no recession in the business of double dips. Official tallies in the ice cream business are hard to come by but, anecdotally, the ice cream market appears to be hot. Shop owners around the country say they are packing more cups and cones this summer than last. What's more, the number of customers asking for a double dip, or two scoops, seems as plentiful as ever.
Lynda Utterback of the National Ice Cream Retailers Association says a number of members have told her that their sales are up 25% from a year ago. Dutch consumer products firm Unilever, which sells ice cream brands Ben & Jerry's, Breyer's, Good Humor and Klondike in supermarkets, reported that its first quarter ice cream and beverage sales rose 7.4%. "Looks like people are turning to ice cream in a big way this summer," says Harold Waxman, who owns industry newsletter Ice Cream Reporter. "When things are hard, ice cream is a relatively inexpensive way to feel good."
Still, some ice cream companies are adapting to tougher economic times. Soft-serve chain Dairy Queen recently began offering a mini version of its popular Blizzard desert, which is a blend of toppings and ice cream. The new size is about 6.5 oz., versus 12 oz. for a small Blizzard and 21 oz. for a large. "We are responding to two significant consumer interests, value and portion control," says Dairy Queen's chief brand officer Michael Keller. "I don't think people are trading out of ice cream." The mini costs between $1.99 and $2.49 depending where you are in the country vs. an average of $3.09 for a small.
Even before the economy softened, frozen treats have been no easy business to play in. Most "dip shops" remain small mom and pops, but corporations or private equity firms have swallowed up the chains, with varying degrees of success. Warren Buffett's Berkshire Hathaway, for instance, owns Dairy Queen. In mid-2007, private equity firm Sun Capital Partners bought ice cream chain Friendly's for $337 million. NexCen Brands, which franchises the superpremium MaggieMoos and Marble Slab Creamery ice cream shops, earlier this year told its investors that its cash and financial health "raise substantial doubt about our ability to continue as a going concern." In mid-May, the company struck a deal to sell those franchises and others to a private equity firm.
But for the most part it's been a good recession for ice cream makers and sellers. Market research firm Packaged Goods estimates ice cream sales in supermarkets and scoop shops rose 1.1% last year to $14.5 billion. And recent moves by ice cream companies suggest they see a sweeter future. Executives at Haagen-Dazs, which is owned by a subsidiary of food giant Nestle, have taken advantage of falling commercial rents. In the past two years, the company has opened more than 50 stores, boosting its outlets by more than 20% and expanding aggressively into malls for the first time. Late last year, Baskin-Robbins introduced the Double Header, which is the first cone "designed to hold a swirl of Soft Serve and a scoop of ice cream" side by side.
Top economic forecaster Mark Zandi of Moody's Economy.com says discretionary spending is typically a good measure of where the economy is headed. But he says you shouldn't read too much into the dessert market, which can be propelled by economic stress. "Ice cream sales could be a beneficiary of trading down," says Zandi. "People still want to treat themselves, and this is a pretty easy one to afford."
Nonetheless, Zandi is not predicting an economic double dip, which is when a recovery falls back into recession. While he believes the unemployment rate could rise again, Zandi says the economy will continue to grow in the second half of the year, probably around 2%. "The risk of a double dip is rising, but I still think it is less than even," he says.
At Doumar's in Norfolk, Virginia, which serves 300 cones a day, customer counts are up 3% this summer. Thad Doumar, whose family claims to have invented the first ice cream cone at the 1904 World's Fair in St. Louis, says even if the economy freezes up this summer he expects his sales to remain strong. "When people feel nervous they eat more ice cream," says Doumar. "I'm in the value business."
