Stephanie Moe, Marketing Strategy Manager, Bord Bia - The Irish Food Board
With many established categories seemingly sewn-up by a number of key global giants, it can be daunting for a new entrant to enter the fray. But despite the challenges, some brands are successful; few have caught established players off-guard better than Halo Top in the US ice-cream category.
Founder and CEO Justin Woolverton initially developed a healthy low-sugar ice-cream to address his own dietary needs due to hypoglycaemic diet restrictions. But he quickly felt that it might have a mass appeal. Conscious of the huge consumer demand for healthy products that don’t compromise on taste, he felt that there could be a market for his new healthy but delicious ice-cream that they could enjoy without the guilt they currently associated with the frozen treat. Deciding to establish a business, he roped in fellow lawyer Douglas Bouton as his partner, with the product launch in LA in mid 2012.
As any new food company looking to enter an established and highly competitive market, Halo Top faced considerable challenges in its early days:
- Production/Scale: Managing demand and supply fluctuations without direct control of production (outsourcing to contract manufacturers with other commitments)
- Financial: The pair maxed- out considerable borrowings from family and friends and came very close to bankruptcy early-on
- Industry understanding: Neither man had a food industry background. Among other challenges, both experienced the toxic effects of driving with a car full of dry-ice whilst transporting samples in the company’s early days!
Despite these early challenges, Halo Top had got a lot right. Once product started appearing on shelves and influencers (actively targeted by the company) began spreading the word on social media channels, the wheels of success began turning for Halo Top. A modest turnover of a quarter of a million in year 1 (2013) grew steadily and by year 3 the company had clearly gained unprecedented momentum, with 2500% growth to $130m. By 2017 this was over $340m (New Nutrition Business). There had been many ‘skinny’ ice-creams in the category before but none had gained this traction and ‘healthy ice-cream has seemed nothing more than a fad to the category’s brand giants (Bayer, Haagen Daas, Ben & Jerry’s etc). But Halo Top’s rise to success forced the big players to rethink this view; Halo Top had clearly exposed a blind-spot.
Halo Top appears to have changed the way that US consumers eat ice-cream, with its low calorie content (280-360 calories per tub) and other health claims (protein rich, some dairy free, vegan etc) giving people the permission to indulge where previously ice-cream was a guilt-ridden indulgence. Consumers apparently often a full pint-sized tub in one sitting….something the company encourages by suggesting they simply ‘stop when they hit the bottom’. Eating the product by the tub-load has of course led to people buying far more Halo Top than they ever bought of other ice-cream brands and stores often struggling to keep the product on-shelf. With the guilt removed, and consumers enjoying ice-cream daily, not just as a special treat, maintaining their interest and keeping them coming back is essential for continued growth. Boasting 25 flavours in the US including a range of both dairy and dairy-free tubs, as well as stick lines or pops and seasonal variants, Halo Top is ensuring that there is plenty to continually pique the interest and tickle the taste-buds of their loyal consumer base.
Their modern approach to consumer engagement has been a key to their success to date. Halo Top developed quirky videos highlighting its adult focus, referencing mortgages, death , online dating or even dispelling love. Offbeat advertising targeted at particular audiences (ad shown in cinemas before IT Horror movie; trade ad featuring angel & devil; ) has been tailored for memorability.
Growing from start-up to $300+m in over 10 markets in littleover 5 years, significantly disrupting the category in the process, the company got a lot right:
- Tapped in to a combination of strong consumer trends which show no signs of abating (Health & Wellness and Indulgence)
- Operate in a product category with a broad appeal –everybody loves ice-cream- and getting the product and positioning right (Focus on taste , quality and range, not just health)
- Engaging Packaging using clear and concise messaging to dial-up the nutritional benefits in a friendly and quirky way (shouting calorie count, ‘Guilt-free Zone’..)
- Publicly calling-out its point of difference (on website etc): direct comparison with other leading brands highlighting that Halo Top is lower in fat, sugar & calories but higher in protein ( compelling reason to buy)
- Clever use of limited budget at early stage –trade-off with buyers :spend on driving consumer to the store rather than pay listing fees.
- Exemplary use of social media channels Instagram wins –Targeting key influencers and using channels such as Instagram and Facebook, encouraging engagement and sharing by an a growing loyal consumer base. (‘Halo Top Hair’ is one fun example from 2018). Quirky targeted advertising to generate conversations around the brand.
Future opportunities clearly exist for Halo Top to build upon their success to date. They have a strong focus on continued growth in existing markets through NPD. Expansion into new markets is another focus area, seeing them develop partnerships to optimise the localisation of offer in each new market. Further opportunities to develop into new channels will doubtless also follow (building on limited forays into B2C and foodservice back in the US). Increased competition is likely from both branded and Private Label producers looking to tap in to the clear consumer demand for healthy yet indulgent ice-cream. There are many examples of health-focused innovation coming in to the category worldwide (Mintel, 2019) so watching developments play out is guaranteed to be interesting.
Halo Top tapped-in to a number of deeply-rooted consumer trends early on, focusing on these and communicating their value proposition in a simple and compelling way that clearly resonated with their target audience. In this way, they are an excellent example of well-considered marketing strategy in play. Bord Bia can support Irish producers in the developing a commercial marketing strategy so to explore this for your business visit www.plantogrow.ie or email plantogrow@bordbia.ie
References:
Halo Top Case Study, New Nutrition Business, 2018
Has ice cream got health licked? Ice cream category report 2018. O'Mahony, Ash. Grocer. 3/3/2018, p47-52.
May 2019 , WARC –What we know about Health and Wellness Marketing
A year of innovation in ice cream, 2019, Amrin Walji, Mintel, September 2019.
Financial Times, 2019 - Halo Top challenges big brands for scoop of ice-cream market