R&R Ice Cream ‘Takes the Cake’;
Rolls Out World Cup Football Treats
Reported by John M. Saulnier and Ted Shoemaker

Black Forest is one of the new ice cream cakes available from R&R in Germany under its Botterbloom brand.

Weltmeister sticks show the German national colors in celebration of the World Football Cup playoffs in South Africa.

R&R Ice Cream is claiming a first for Germany in combining cake with industrial ice cream. It’s among several new products recently introduced by the Osnabrück-based firm, a unit of Oak Tree Capital Management.

The company’s Botterbloom range has come out with two flavors made with a technique, perfected by a sister operation in the United Kingdom several years ago, that permits the wrapping of a layer of soft cake around a cylinder of ice cream.

One of the ice cream rolls, Schwarzwälder Kirsch, uses Germany’s celebrated Black Forest cherry cake to surround a mix of ice cream, cherry sauce and crunchy chocolate bits. The other, Lemon Cream, uses a light colored cake to surround lemon ice cream and lemon sauce. The two rolls can be cut into six slices.

A pair of other products, distributed under the Botterbloom brand name, marked this summer’s World Cup Football championships in South Africa. Weltmeister features the German national colors on a stick: black as in black currant, red as in strawberry, and gold as in lemon. Each pack contains eight 65-ml fruit ices.

The other World Cup special is called Halbzeitpause. It’s a sandwich of two round cookies with soccer ball markings and a filling of vanilla ice cream with chocolate bits. There are four 80-ml sandwiches to a multipack.

Meanwhile, R&R has decided to close at the end of the year the Nord-Eis ice cream plant in Strückhausen, near Hannover, that it has been leasing since 2005. It blames the lack of a timely agreement to purchase the facility. Production and investment will henceforth be concentrated at in Osnabrück,

“We didn’t reach this decision lightly,” said Dr. Ibrahim Najafi, CEO Europe for the R&R Ice Cream Group. “Since we unfortunately couldn’t acquire the land and buildings on a timely basis before the new season, we had to find other solutions. Investment must be made long before the ice cream season, so that we can be ready to produce in the spring and fulfill delivery agreements for customers.”

The bankrupt Nord-Eis operation was taken over in 2005, at which time the jobs of 84 employees were saved. In the last three years R&R has invested 4.2 million euros in production and technology there. Some 150 workers were producing 60 million liters of ice cream annually at the Strückhausen site.

R&R, which is the third largest ice cream producer in Europe, ranks number two in Germany, with a market share of 23%. That includes output of private label and licensed products as well as proprietary brands, with private label accounting for 70% of volume.

Approximately 33 million euros have been invested in the Osnabrück plant during the past three years, with another EUR 14 million budgeted for computer and production system upgrades in 2010.

Modernization efforts are also ongoing at the firm’s factories in the United Kingdom, France and Poland.
Underscoring the advantage of having a network of factories strategically situated in key European locations, Najafi stated: “This enables us to produce innovative ice cream varieties close to consumers at low cost. New products and innovations are the core of our company.”

“We are working hard to come out with exciting new products, and to boost consumption of ice cream in Germany,” Robert Augustin, marketing director, told QFFI.

He pointed out that while the domestic market has been relatively flat for the past five years, sales in 2009 were up and down with the temperature. In the end, heavy brand promotions ultimately succeeded in pushing the market forward a bit.

Hoping for a long, hot summer in 2010, Augustin noted that the weather generally has a bigger effect on ice cream sales in Germany and Europe than do economic conditions. Indeed the recession may even be having a positive impact on volume, as consumers increasingly indulge in comfort foods at home during times of uncertainty. Rainy days, on the other hand, definitely put a damper on outdoor impulse buying.
“Per capita consumption in Germany reached a high of 8.7 liters in 2003,” said Augustin. “From 2005 to 2007 consumption of 8.1 liters remained stable, before declining slightly to 7.8 liters in 2008.”

The marketing director figures that there is ample room for growth in the years ahead. While Germany currently ranks near the European average, its per capita consumption rate is well under the high of 14.77 liters valued at EUR 53.95 in Norway, and 14.13 liters worth EUR 46.48 in Finland.