How Mars transformed the ice cream market
A Masterfoods case study

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Page 2: Change in the ice cream market

The ice cream market provides us with a fascinating example of a transformed market. In the late 1980s, Walls ice cream stood as the established market leader. Walls is a household name, with a long-established reputation for providing family ice cream. It was able to produce large quantities of ice cream at low cost. In business we talk about firms developing a competitive edge through 'the experience curve' i.e. businesses with the largest market share are able to produce large outputs at relatively low costs.

It must have appeared to Walls at the time that its position could not be threatened. However, it had not accounted for the way in which food technology is transforming food production in this country. Who would have dreamt in the late 1980s that you could transform chocolate bars into ice creams. The market for confectionery ice cream did not exist at the beginning of 1988. Today it is the fastest growing sector of the ice cream market.

In 1994 the total market for ice cream was worth £908 million. It is in this market's fastest growing sectors that the confectionery manufacturers Mars and Nestlé are having the biggest impact.

Masterfoods | How Mars transformed the ice cream market