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Artisanal Gelato Entry Into Supermarkets Set To Reduce Food Waste Volumes

Growing mainstream demand for artisanal gelato has seen one of the country’s largest manufacturers expand into supermarkets, as it eyes future domestic and export growth opportunities.

The entry into the FMCG channel will also pave the way for an increase in the production of upcycled gelato - made from perishable produce diverted from landfill.

The upcycled gelato may then be sold to the supermarket and other channels as a new product - reducing the amount of food waste and expanding production volumes of upcycled foods.

Manufacturer and retailer Island Gelato Co, which grew from a single Waiheke Island kiosk a decade ago into a chain of five retail stores with a wholesale supply arm, will launch six of its 70+ flavours in all Farro supermarkets.

Ana Schwarz, Masterchef runner-up and Island Gelato co-founder, says the strategic move into premium supermarkets and hospitality channels is the first stage in the company’s five-year expansion programme designed to see their high-value range exported into key offshore markets.

A recent government report into the ice cream industry singled out gelato as the ideal medium to utilise the country’s abundant horticultural produce - with free trade agreements in Australia, China and the UK offering export access pathways for New Zealand made product.[1]

She says the company is growing rapidly with the latest sales over the peak summer season up 13% over the previous year. The new deal with Farro is expected to significantly boost awareness of the category and provide a further 15% revenue growth annually for their manufacturing business.

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Schwarz says while ice cream still dominates New Zealand supermarket freezers, gelato is rapidly moving from out-of-home consumption into an at-home dessert, with their takeaway containers and special occasion gelato cake formats growing by 147% in the past 12 months.

She says as awareness grows through direct-to-consumer retail stores it will naturally progress into demand within higher volume channels, however, they have an ongoing industry education role to convert consumers from other ice cream products.

“Gelato, which means ice cream in Italian, uses milk and no additional cream in its production, giving you a lower fat percentage in gelato than ice cream. Without the additional fat to coat your palate the flavour of gelato is more immediate. Gelato is also churned at a slower rate than ice cream, so it contains less air, and the resulting product has 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, and upmarket hospitality - including catering suppliers and restaurants.

“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.

“We believe the key to success will be the protection of our brand through a highly selective distribution model, as we evolve within New Zealand and beyond. If we can identify well-aligned channels to grow through, we can ensure the brand retains its premium positioning while still maintaining strong annual growth,” she says

Schwarz says they are currently working with a food rescue charity to navigate the logistics involved with collecting, sorting, and then delivering the fresh produce from a supermarket to their manufacturing facility.

According to latest research, around 60,500 tonnes of food is unsold by supermarkets annually. Around a quarter (23%) of this is landfilled with three-quarters diverted, mainly for use as animal feed. Fresh fruit and vegetables make up around 44% (26,600 tonnes) of this waste volume.[2]

“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,” she says.

Schwarz says Island Gelato picked up five gold and two silver medals at last week's Outstanding Food Producers Awards, with all five gold medal-winning flavours 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 in a 475ml commercially compostable container.

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