Ice cream lovers get guzzling

Johannesburg - A premium product with a low entry-level price is how Grand Parade Investments (GPI) hopes to melt the hearts of South African ice cream lovers when it introduces the mind-boggling array of Baskin-Robbins ice cream flavours in South Africa for the first time this week.

GPI, the gambling and fast food group, will open the first Baskin-Robbins ice cream parlour in Cape Town’s Canal Walk mall on Friday, bringing South Africans a taste of the more than 1 300 flavours offered by the iconic US ice cream brand, which has become a favourite across 50 countries.

The company made the announcement at its head office in Cape Town this week, and the media were invited to try a selection of favourite flavours.

Although South Africans consume almost 60 million kilograms of ice cream a year, according to Euromonitor figures cited by GPI, and have a number of premium and artisanal brands to choose from, GPI’s Grand Foods is not shy to enter a tightly contested fast food market.

With Baskin-Robbins, the company will be up against the likes of Häagen-Dazs and Gelato Mania, and a growing number of artisanal brands such as The Creamery and The Nice Company.

Baskin-Robbins SA’s chief operating officer, Sean Dearham, believes Baskin-Robbins’ range, which will be rotated through parlours 31 flavours at a time (one for each day of the month), together with a product price of R19 for a scoop, will see them attract customers.

“There are a lot of local and international competitors pitched at premium brands,” admits Dearham, “but we’ve noticed they price them uncompetitively, so they’re almost inaccessible to most people.”

Additionally, he says, they’ll offer milk shakes and provide bespoke ice cream cakes to order.

Despite the number of brands on the market, he believes there is still “an appetite for ice cream”.

“There are queues outside competitors’ doors at 8pm in Sea Point,” he says.

However, Peter Koehorst, who has owned the popular Ice Cafe in Kalk Bay for 16 years, believes it’s all about having the shop in the right position.

“Ice cream is fickle. It melts, you lose it, it’s disposable. It’s all about position – people walking past continually until they can no longer resist it.”

Koehorst says he’s not worried about competition and that there is probably space for something new.

Part owner of artisanal ice cream manufacturers The Nice Company Cherylle Cowley says they are not concerned about the competition because they have a niche artisanal market, and people are accustomed to their custard-based ice cream, in which they used real Belgian chocolate, and they pulp their own berries rather than relying on flavourings and milk powders.

“I thought that when Häagen-Dazs came to South Africa, that was the end of us, but it didn’t actually make a dent at all,” says Cowley.

Baskin-Robbins, which started out in California in 1945, is renowned for taste innovation – it developed flavours such as lunar cheesecake for the moon landing in 1969 and Shrek swirl in 2002 to commemorate the hit animated movie.

GPI is looking to set up outlets in suburban nodes after establishing itself in regional malls.

While GPI has to set up a minimum of six outlets within the first year, the 10-year deal with the California-born brand, for which GPI paid a country entry fee of R3.4 million, requires that a further 65 stores and 850 retail points be established by 2026, says GPI CEO Alan Keet.

On top of the entry fee, GPI pays the global brand a once-off fee of R200 000 per store, netting Baskin-Robbins in the region of R14 million over the 10-year period. Between six and 10 people will be employed per outlet.

To honour the retail requirements, Keet says GPI is still deciding whether it is better to give one large retailer an exclusive deal to sell the ice cream, which has to be imported, or choose a “strategic retailer and a petrol station partner”.

Read Fin24's top stories trending on Twitter:

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 2052 votes
I am taking a hit, but should be able to recover in the next year
23% - 2667 votes
My finances have been devastated
35% - 4003 votes
It's still too early to know what the full effect will be
25% - 2869 votes