As the demand for artisanal gelato rises, many of New Zealand’s manufacturers have begun expansion into supermarkets for further growth opportunities. This entry into FMCG has also increased the production of upcycled gelato from perishable produce diverted from landfills.
A recent government report into the ice cream industry singled out gelato as the ideal medium to utilise the country’s abundant horticultural produce.
Waiheke Island’s Island Gelato Co has grown from a kiosk a decade ago into a chain of five retail stores and is set to launch six of its 70+ flavours in all Farro supermarkets.
Ana Schwarz, Masterchef runner-up and Island Gelato co-founder said the strategic move into premium supermarkets and hospitality channels would be the first stage in the company’s five-year expansion programme.
With the latest sales over the peak summer season up 13 percent over the previous year, the new deal with Farro is expected to significantly boost awareness and provide a further 15 percent revenue growth annually for their manufacturing business.
While ice cream still dominates New Zealand supermarket freezers, gelato has rapidly moved from out-of-home consumption into an at-home dessert. Island Gelato Co’s takeaway containers and special occasion gelato cake formats have grown 147 percent in the past 12 months.
Schwarz added that as awareness grows through direct-to-consumer retail stores, it will naturally become demand within higher-volume channels. However, they have an ongoing industry education role in converting consumers from other ice cream products.
Italian gelato uses milk and no additional cream in its production, giving a lower fat percentage. Gelato is also churned slower than ice cream, so it contains less air, resulting in a richer, more intense flavour and a denser texture.
“This stage of our multi-channel expansion will see us expand further into premium supermarkets and retailers, as well as upmarket hospitality - 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 our own and then progressively move into premium niche export markets where we can maximise our revenue per kilogramme, over the 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 retains its premium positioning while maintaining strong annual growth.”
Island Gelato Co. is currently working with a food rescue charity to navigate the logistics of collecting, sorting, and delivering fresh produce from a supermarket to its manufacturing facility.
While perishable fresh produce reaches a point where it is not suitable for sale on supermarket shelves, the softer texture of more ripe fruit and vegetables is ideal as an ingredient in gelato.
“One of the key benefits of this model, from a sustainability perspective, is that not only are we rescuing food from the landfill, but we’re also extending the shelf life of highly perishable fresh produce from a few days to six months when stored in the freezer as a component of gelato.”
Island Gelato Co. won five gold and two silver medals at the Outstanding Food Producers Awards. All five gold medal-winning flavours are now available in Farro supermarkets: mango, lime and passionfruit, woodland berry, Pic’s peanut butter caramel, salted caramel white chocolate swirl, rich chocolate, and spiced biscuit tiramisu.
