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Welcome to Near Future. In this weekly feature, The Current spotlights innovations powering the next wave of commerce.
When ecommerce successfully enables an item's fast journey from order to door, it can feel like magic. But for the humans making it all work, there are many problems to solve to get there.
One area that requires lots of innovation involves figuring out how to send items that don’t seem to be natural candidates for shipping and delivery.
Take frozen foods, like ice cream. Keeping the sweet treat cold during transport is the difference between a pint of joy and a melted mess.
However, one should never underestimate how much people love ice cream.
Ice cream ecommerce exists.
One of the companies at the forefront of this area is Unilever. The consumer goods company also happens to be the world’s largest ice cream company, per its own data, with brands in its freezer including Ben & Jerry’s, Breyers, Good Humor, Magnum and Talenti.
The company saw at-home ice cream sales rise 26% over the first months of the pandemic in 2020. And even before lockdown, Unilever was exploring new ways to get ice cream to doorsteps, from an instant delivery service called Ice Cream Now that piloted drone delivery service to a partnership with software company Deliverect that helped it connect with delivery platforms.
This summer, Unilever has a new way to bring the ice cream store to the doors of Los Angeles residents. It is partnering with Robomart, a store-hailing startup that sends a store on wheels to people’s homes, to deliver ice cream.
The companies will stand up a virtual storefront called The Ice Cream Shop on Robomart’s marketplace, where users can order ice cream via app. In turn, a fleet of ice cream-only Robomarts will be at the ready, available to deploy to a location when hailed. When one arrives, a customer swipes their app to open a van door. Then, they can pick out ice cream and walk away.
Think of it as a new version of the ice cream truck, minus the music.
“Putting a spin on the classic ice cream truck by bringing it to consumers on-demand, we have pioneered a new way for everyone to get their favorite ice cream treats in as little as two minutes,” Ali Ahmed, Robomart CEO and cofounder, said in a statement. “This rollout brings to life the original vision my cofounder and I had over a decade ago while working at Unilever to create ‘The Everywhere Store’ – the fastest and most accessible way to get all your essentials.”
Founded in 2017, Robomart launched in West Hollywood in 2021, and has a patent on “one-tap grocery ordering” technology. The ice cream Robomart will join pharmacy and snacks-focused mobile stores in the company's line. It says it is finding loyal customers, as users hail a store 2.3 times a week, on average.
The company said it has delivered items in as little as two minutes. It's an evolution of the quick commerce models popularized by Gopuff and Gorillas. Instead of sending one person out to deliver a few items, Robomart brings the store to its customers.
For Unilever, working with the startup on a pilot holds the promise of “making it even faster to get our beloved brands to our ice cream fans,” said Russel Lilly, general manager of North American ice cream at Unilever, in a statement. “What better way to shop for your favorite ice cream than just a few steps from your front door?”
Raising the temperature
By \u2018warming up\u2019 our ice cream freezer cabinets, we could use much less energy and reduce our carbon footprint. \n\nIt\u2019s part of our work towards net zero emissions by 2039. \n\nRead how we\u2019re testing this idea in Germany and Indonesia. \n\nhttps://www.unilever.com/news/press-and-media/press-releases/2022/unilever-warms-up-ice-cream-freezers-to-help-tackle-emissions/?utm_source=UT&utm_medium=Social&utm_campaign=OSM_AlwaysOn\u00a0\u2026\n\n#UniquelyUnileverpic.twitter.com/oXUNPCM6gT— Unilever (@Unilever) 1651829115
With a separate pilot initiative, Unilever is innovating with ice cream at the freezer level.
The company is set to explore how lowering ice cream freezer cabinet temperatures can reduce energy consumption.
It comes at a time when mitigating climate change is focal point of the operational plans at many companies. For its part, Unilever wants to get to zero emissions for its operations by 2030.
Freezers have a big environmental impact. Unilever said emissions from its retail ice cream freezers account for 10% of the company’s value chain greenhouse gas footprint.
Current industry standard calls for ice cream to be kept at -18°C (right around 0° Fahrenheit). The company is setting a target to raise the temperature to -12°C (about 10° Fahrenheit). Pilots in Germany and Indonesia will help to determine how to get there. If successful, the company plans to warm up its last-mile freezers through a phased-in approach.
"These pilots will provide valuable information on how much energy we can save and how our ice cream products perform in warmer freezers to ensure we deliver the same great-tasting ice cream,” Matt Close, president of ice cream at Unilever, said in a statement. “We’re actively seeking to collaborate with partners from across the ice cream and frozen food sectors to drive industry-wide change, so the collective positive impact is far greater.”
With the temperature a little higher, perhaps ice cream delivery will get a little easier, too.
Trending in Operations
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.