Chief executive Amit Pandhi told FoodNavigator-USA: “The frozen desserts category has been flat or decreasing for a long time, but we are growing because consumers want more than just cold and sweet; they want innovative products with creative flavors and natural and functional ingredients, and we are at the crux of that.”
Each half-cup serving of Arctic Zero - which was first launched by founder Greg Holtman in 2010 - has 35 calories, while a pint contains 150 calories, 12g protein (from whey protein concentrate) and 8g fiber (primarily from chicory root and sugarcane fiber). The products are sweetened with organic cane sugar and monk fruit concentrate.
“A lot of consumers have given up on ice cream or extremely limit their intake, and then they find our product and there is a sense of permissive indulgence,” said Pandhi.
“Some of our customers have specific health and dietary concerns such as lactose intolerance, but a lot of people are just looking for a low calorie treat that allows them to satisfy their sweet tooth.”
A lot of consumers didn’t know that our products are lactose free
However, the old packaging didn’t spell out clearly enough what Arctic Zero is all about, he said: “The product has been doing great and we’re predicting significantly higher growth this year based on retailer commitments. But the old packaging just states the low calorie piece.
“Our new packaging emphasizes how indulgent Arctic Zero really is, but it also explains all the other attributes and ingredients such as the protein and fiber. We had so much customer feedback asking us what’s in the product. A lot of consumers didn’t know that our products are lactose free, for example.
“Our new packaging has got hand-drawn illustrations, a word cloud and custom icons that lay out the benefits and attributes of the products, from low glycemic to GMO-free, fat-free, lactose free, gluten-free, no artificial flavors, sweeteners or colors, so consumers truly know what is and isn’t in them.
“We’ve also introduced flavor descriptions that are a little more playful.”
We’re in more than 12,500 stores nationwide from Walmart to Sprouts
So where will the growth come from in 2015?
“We’ve already got great distribution,” said Pandhi. “We’re in more than 12,500 stores nationwide from Kroger and Publix to Safeway, Sprouts, Walmart and Whole Foods, as well as Amazon.
“We’re in almost every national distributor, but we’re also one of the few non-Nestlé products on the Nestlé trucks; they saw something different in us, and they have been instrumental in helping us grow our brand and our distribution.
“Most of our growth in 2014 has been organic growth from rising consumer awareness. But for 2015 we’re getting some significant additional placement from retailers, so we are really poised for significant growth.”
We have new product that I think will be a game-changer for the category
While the initial focus has been on retail, there will also be opportunities in foodservice that the employee-owned company hopes to explore in future, he said.
“You’d be surprised how many schools call us and say they would love to stock our products, but we also think that Arctic Zero would do exceptionally well at hospitals and nursing homes.”
There are also some interesting developments in the product development pipeline, he said. “We launched 85 calorie chocolate dipped bars on the West Coast last year to gauge demand and we will launch them nationwide this year. We also added three new flavors, salted caramel, orange cream, and toasted coconut and they have been moving significantly.
“But we also have a surprise product launch that’s coming out in March that I think will be a game-changer.”
The US frozen desserts market
According to data from Chicago-based market research firm IRI, Arctic Zero is one of the few brands generating strong growth in the frozen desserts aisle.
Multi-outlet* data from IRI for the 52 weeks to November 2, 2014, shows that dollar sales in the ice milk/frozen dairy dessert category were down 8.71%; frozen yogurt sales were down 8.23%; and sherberts/sorbet/ices were down 6.68%.
Ice cream was up 2.4%, while dairy-free frozen desserts (which IRI includes in the frozen yogurt/tofu category) performed considerably better, with dollar sales of Almond Dream and So Delicious up 32% and 33% respectively over the same period.
* IRI is a Chicago-based market research firm. Its US Multi-Outlet data covers supermarkets, drugstores, mass market retailers, military commissaries and select club & dollar retail chains.