Local ice cream producers do not join multinationals in promotion budget war

The biggest Romanian ice cream producers are expecting 10 to 30% increases in sales this year, even though their promotion budgets seem insignificant compared with the investments of Unilever, the newest player on the market, which became an adversary to be reckoned with for local companies.

Unilever started a strong campaign to promote the ice cream on TV shortly after announcing it entered the Romanian market with its Algida division, that is early this summer. At this moment, Unilever is the only player on the ice cream market that promotes its products on TV, having four campaigns in progress for Big Milk, Carte D’Or, Magnum and Napoca – the Romanian brand it bought from Friesland Foods this year. To carve out a slice of the market, the consumer goods giant is thus betting on TV, the most expensive promotion channel, which local companies rather avoided because of the high costs. Its investments in promotion are in the range of millions, according to ZF’s estimates. The other producers have promotion budgets of up to one million euros, with most of them investing less than 500,000 euros in it. Nestle Ice Cream has not revealed the value of the investments in promotion this year but the company officials said that they would be over 10% higher than in 2008. Nestle does not have any ice cream TV spots for the time being. The officials of the Swiss company stated that they targeted development of the business on the on-premise segment by investments in the La Cremeria brand and by expanding distribution to the entire country. As for local entrepreneurs, Vasile Armenean, owner of Betty Ice, the biggest Romanian ice cream producer says, ” We have a promotion budget of about 300,000 euros for this year. We do not have any TV spots planned.” He anticipates that the companies held by local investors will see their market share, put at around 70% in 2008 go down. The entire market is put at 120-140 million euros. “I estimate we will see a slight increase in our market share, by one percent, this year compared with 2008, when we had 20-21% of the market. We want an over 15% increase in sales in 2009,” says Betty Ice’s owner. In turn, Ioan Istrate, owner of the Alpin ice cream producer, with 15 million-euro sales in 2008, estimates promotion spending will amount to less than 300,000 euros this year.