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Ice Cream Industry Aust Essay

6080 words - 24 pages

1. EXECUTIVE SUMMARY The following report is mainly based on the ice cream industry's manufacturing output and refers to ice cream mixes, soft serve mixes and ice confection, produced and sold to the domestic and export market.The industry is generally growing slower than the economy so its life cycle is in a decline phase, but has been stable for the past 5 years and is forecast to grow inline with the economy. Over the past 5 years there has been considerable development in new products more so towards the premium end of the market, but generic branded products still are the largest sellers within the grocery industry. The key industries that purchase the output of ice cream are Supermarkets, Food service, Route Trade and Export.The top 5 manufacturing companies are estimated to hold approx 40 to 55 percent of the market share. The number of establishments in the industry increased from 40 to 95 within the last 5 years, which comprises of relatively small number of large producers and a large number of small producers.Competition is intense and increasing due to competition between ice cream and the dessert market. Also imports are a threat to the industry, which prominently come from New Zealand.Seasonal conditions strongly influence the industry, unseasonable conditions during the warmer months and drought can have effect on consumer demand and costs. Producers manufacture the majority of their product through the cooler months in readiness for demand in the warmer months.A full analysis of the industry is detailed in various parts of this report. 2. HISTORY In the late 1980s the ice cream industry decreased by an average of 1.6 percent per annum. Ice cream manufacturers started to look at different ice cream products to raise revenue in the face of declining sales, with one of the first products to be introduced was high margin premium ice cream. In 1986 Kraft was one of the first company's to introduce a super-premium ice cream range Kraft's Plumes, this was released for sale mainly through supermarkets. This caused other producers to introduce high quality, high priced products also, but they had mixed success. Streets introduced the Caprice D'Or range of exotic ice creams and sorbets in 1988, but they failed and were dropped in September 1989. In the same year, Streets purchased the Plumes range from Kraft, but this had mixed success also and subsequently failed. With the deterioration in economic conditions in the early 1990s, it appears that consumers switched to lower quality products and to iced confection, which to the consumer this was a low cost affordable product. So due to the adverse economic conditions producers switched from the higher margin product lines to lower margin products.In 1989 ice cream versions of some major confectionery lines were launched in Britain and the United States therefore in November 1990, Mars launched ice cream versions of its Mars Bar and...

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