How some Angry Birds flew in and conquered Israel's ice cream market
Winged victory for Nestle with an untested, but enormously successful tie-in.
How did a pineapple-flavored popsicle close the gap between leading ice cream seller Strauss and runner-up Nestle, despite being sold at double the price of other popsicles?
The answer lies in the collaboration between Nestle and PMI, which holds sole distribution rights for Angry Birds products. The collaboration has been so successful, in fact, that it has surpassed expectations in Israel and may now be applied to overseas markets as well.
The success of the Nestle-PMI venture can be easily observed in local stores. On Independence Day, two mothers entered a Yellow store in the south with their five children, and headed straight for the ice cream freezer.
"Mom, there are no Angry Birds here," howled the youngest of the lot, while the older ones mumbled their shared discontent. The vendor apologized, explaining that a shipment of 250 of the popsicles had indeed arrived the previous day but had rapidly "flown away."
One can also observe this phenomenon walking through Tel Aviv. In the afternoon hours, the streets near grocery stores are filled with kindergarten-age children eating bird-shaped pineapple popsicles and excitedly discussing the Angry Bird dolls contained inside, which they also proudly display.
Data provided by StoreNext Israel confirms that the Angry Birds phenomenon has accomplished what had been considered an impossible feat. In the "impulse" market consisting of ice cream bought "on the go," Nestle has managed to close the gap between itself and Strauss Ice Creams, which has traditionally ruled the local roost. Now Nestle and Rovio, the entertainment media company that invented the Angry Birds game, are considering marketing these products in other countries as well - and the fact Israeli-made Angry Bird dolls can be purchased on eBay for $19.99 seems to attest to its great potential overseas.
As part of the expanding campaign, these popsicles will soon begin to feature images from the new game Angry Birds in Space, which was launched four months ago.
According to statistics provided by StoreNext, in the first quarter of this year, Angry Birds was the largest money-making popsicle in Israel, making up 11% of the market. The data also show that, over the same period, Nestle controlled 74% of sales to youngsters - which, in turn, comprised 27% of total ice cream sales "on the go." Nestle sales to children grew by 93% compared with the same quarter last year. Strauss Dairies now controls 25% of sales to children, with a 12% growth since last year.
Ice cream sales to children grew by 61% since the first quarter of last year, with Nestle spearheading the growth. Sales are now estimated to total NIS 140 million a year.
The total ice cream market in Israel is currently estimated to be worth NIS 1 billion, up 10% from last year. Overall, Strauss still leads the market, with 46% of all sales; but Nestle is not far behind, with 41% of all sales.
The ice cream market is a seasonal one, with stiff competition between Nestle, part of the Osem Group, and Strauss Ice Creams, now part of the Unilever group. Although both companies do what they can to prolong the ice cream season for as long as possible, launching products as early as February, the bulk of sales are made between April and September.
The fierce competition in this market is evident in its production of novelty items. Traditionally, many of these items show up in the "impulse" market, with products bought for consumption outside the house. Companies come up with new ideas each year to attract customers, but many of these do not outlast the season.
Not so for Nestle and PMI's seemingly simple idea, conceived of by Zeev Kalimi, CEO of Nestle Ice Cream Israel, and Boaz Dekel, chairman of PMI, from the Bar Distribution Group, which holds the sole distribution rights for Angry Birds in Israel.
Kalimi and Dekel came up with the idea to make a popsicle in the shape of an Angry Bird, with a small Angry Bird doll on the inside, which children can collect. The product itself is a pineapple-flavored sorbet, with a retail price of NIS 4.5. Other similar sorbets usually cost NIS 3.5, suggesting that the dolls cost an extra NIS 1. However, groceries and fast food outlets sell them for prices ranging from NIS 7 to NIS 10, while other popsicles sell for only NIS 2.5 to NIS 3.5.
The product's huge success surprised even the people at Nestle.
After obtaining permission from Rovio, which holds the rights to all Angry Birds accessories, 4 million dolls were purchased and a similar number of popsicles produced. Following the initial success, millions more of these popsicles were made, and further interest was generated around the dolls.
In addition to the regular birds, some popsicles now contain dolls shaped like golden birds.
Rovio succeeded in transforming the success of Angry Birds into a whole host of accessories. Andrew Stalbow, general manager of North America at Rovio, says the company sells more than one million Angry Birds shirts and over one million fluffy toy birds a month. And according to Stalbow, the Angry Birds accessory market is still in its infancy. The game has a life of its own outside the digital universe, he claims.
"We have many accessories, and our goal is to link these with games, as we did with 20th Century Fox, around the game Angry Birds Rio. This collaboration gave Rovio support in marketing and gave Fox a new audience."
Strauss Ice Cream officials say that, as leaders in ice cream sales in Israel, they see themselves as an innovative company that specializes in developing products loved by children.
"We specialize in ice cream and not in toys, and our focus is therefore in that area," officials note, adding, "We intend to expand our offerings in the future, as we have already done with our Max series of five different ice cream bars."
Strauss Ice Cream offers slightly different statistics regarding sales, according to which they control as much as 58.3% of the total market, and 59.9% of all popsicle sales.