Expansion of the Island Gelato Co. supermarket

With demand for artisan gelato rising, many New Zealand manufacturers have begun expanding into supermarkets for further growth opportunities. This entry into FMCG has also increased the production of upcycled ice cream from perishable products that do not end up in landfills.

A recent government report on the ice cream industry identified gelato as the ideal medium to utilize the country’s abundant horticultural produce.

Waiheke Island’s Island Gelato Co grew from a kiosk to a chain of five stores a decade ago and is about to launch six of its more than 70 flavors across all Farro supermarkets.

Ana Schwarz, Masterchef runner-up and co-founder of Island Gelato, said the strategic move into premium supermarkets and on-trade channels would be the first phase in the company’s five-year expansion programme.

With the latest sales during the peak summer season up 13 percent on the previous year, the new deal with Farro is expected to significantly increase awareness and deliver a further 15 percent annual sales growth for their manufacturing operations.

While ice cream still dominates the freezer aisles in New Zealand supermarkets, gelato has quickly evolved from out-of-home consumption to an at-home dessert. Island Gelato Co’s takeaway containers and special occasion ice cream cake formats have grown 147 percent in the past 12 months.

Schwarz added that as awareness grows through direct-to-consumer stores, this will naturally become demand within higher volume channels. However, they play an ongoing role in industry education in convincing consumers of other ice cream products.

Italian gelato uses milk and no extra cream in its production, which results in a lower fat percentage. Gelato is also churned more slowly than ice cream, so it contains less air, resulting in a richer, more intense flavor and denser texture.

“In this phase of our multi-channel expansion, we will expand further into premium supermarkets and retailers, as well as the higher-end hospitality industry – including catering suppliers and restaurants,” said Schwarz.

“From there we would look to grow the number of supermarket doors we are in, strategically selecting stores that have a similar target market to ours and then gradually moving into premium niche export markets where we can maximize our sales per kilogram, across the entire next three to five years.”

According to Schwarz, the key to success is protecting the brand through a highly selective distribution model.

“If we can identify well-aligned growth channels, we can ensure the brand maintains its premium positioning while maintaining strong annual growth.”
Island Gelato Co. is currently working with a food relief charity to manage the logistics of collecting, sorting and delivering fresh produce from a supermarket to the production facility.

While perishable fresh produce reaches a point where it is no longer suitable for sale on grocery store shelves, the softer texture of riper fruits and vegetables makes it ideal as an ingredient in gelato.

“One of the key benefits of this model, from a sustainability perspective, is that we not only save food from landfill, but we also extend the shelf life of highly perishable fresh produce from a few days to six months when stored. in the freezer as part of gelato.”

Island Gelato Co. won five gold and two silver medals at the Outstanding Food Producers Awards. All five gold medal-winning flavors are now available in Farro supermarkets: Mango, Lime and Passion Fruit, Blueberry, Pic’s Peanut Butter Caramel, Salted Caramel White Chocolate Swirl, Rich Chocolate and Spiced Cookie Tiramisu.