Monday, April 9, 2012

Not So Plain Vanilla: Ice Cream Prices on the Rise

The past year's vanilla pod crop was very poor, which means ice cream manufacturers (and anybody else that uses real vanilla) now face higher costs as they try to buy the quantities they need. In turn, this undoubtedly means higher prices at the ice-cream stand and the supermarket ice-cream freezer case.

Searching for "vanilla crop" turns up the news that vanilla prices can gyrate wildly, in part due to unpredictable weather and in part due to competition from synthetics. However, vanilla is only the latest in a series of ice-cream ingredients being priced higher in recent years.

Last year, price increases for butter, sugar, chocolate, and nuts put the squeeze on margins of ice-cream marketers. As one ice-cream store owner said, "There’s no way you could ever pass on the total increase to the customer." Instead, many marketers are accepting thinner profit margins to keep their customers.
Another option is to add a lot of value to make ice cream more of an experience, not just a sweet treat. That's what Treatbot is doing. Treatbot is one of the new crop of gourmet food trucks, combining karaoke and ice cream. Engaging customers helps: with about 2,000 Twitter followers, Treatbot is building its buzz in California.

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