The price of family-packs of ice cream has plummeted in recent years due to the heavy competition between the two rivals in the field, Nestle and Strauss. A liter tub of ice cream which sold three years ago for NIS 19 now sells for only NIS 14.
To withstand this fall in price, the ice cream manufacturers have had to make changes, and one of the steps that has been taken has been to move from a cream-based product to ice cream based on vegetable fats, or at least has some vegetable fat component. According to U.S. and Israeli standards, though, true dairy ice cream by definition must have no vegetable fat.
This summer, the two leading companies will not be selling any family-sized tubs based on cream to the household sector. Such richer versions of ice cream will be available only in the wholesale sector, or from the smaller producers and importers, such as Ben & Jerry's and Haagen-Dazs, whose products are more expensive, selling for NIS 22 for half-liter tubs.
The competition between the major players has concentrated on the household sector, as the security situation over recent years has kept an increasing number of consumers away from venturing out for a scoop. According to a survey conducted by I.C. Nielsen for Nestle, the retail market for ice cream (not including for institutions, kiosks, restaurants and catering establishments) is split 54 percent to Strauss and 34.9 percent to Nestle. This sector, at NIS 300 million a year, accounts for 35 percent of all ice cream sales in the country.
Strauss denied that the use of vegetable fats significantly cut costs. "At most the fat accounts for 8 percent of the costs of raw materials," and added that, "Over the years, following the addition of vegetable fats to some of Strauss ice cream products, there has been an increase in quality and ice cream flavor." The spokesman added that they "always have, and always will use milk fats and vegetable fats in Strauss family ice creams."
Nestle noted that manufacturers the world over were moving to vegetable fats, "through advanced technological development... and that the ice cream based on vegetable fats is tastier today. Concerning price, there is no significant difference."
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