What will Albertsons do with Thrifty ice cream after Rite Aid merger?
Through its purchase of Rite Aid, Albertsons is also acquiring the drug store's Thrifty ice cream brand and the El Monte, California, factory where the frozen dessert is manufactured, according to The Los Angeles Times.
Rite Aid executives said Albertsons intends to maintain the brand and sell it in the Albertsons family of stores, but it's not clear if manufacturing will be moved elsewhere or if the product will change, according to the newspaper.
Rite Aid acquired the ice cream brand in 1996 when it bought Thrifty PayLess Holdings. The pharmacy company said the product is made with California milk and from recipes that haven't changed in more than 50 years and is sold at more than 500 Rite Aid outlets on the West Coast. Retail cartons of the product are available at Rite Aid stores, and restaurants in the Los Angeles area can buy it wholesale.
The same concerns about the future of Thrifty ice cream surfaced in 2015 when Walgreens announced it would buy rival drugstore chain Rite Aid in a $9.41-billion cash deal. While some fretted the acquisition would result in a gigantic company with thousands of stores, others focused on what it would mean for their favorite ice cream, which is beloved for its cheap price, quirky flavors and widespread availability at the drug stores.
Walgreens ended up buying just part of Rite Aid last year in a $4.4-million purchase, and the anticipated loss of Thrifty ice cream turned out to be premature, yet the brand's future is still on the minds of its many fans. Now consumers are worried that Albertsons, which owns other supermarket chains including Safeway, Vons, Pavilions, Jewel-Osco and Super Saver, may decide not to maintain the iconic California ice cream.
As Los Angeles magazine pointed out, Albertsons owns two ice cream factories — in Phoenix and Bellevue, Washington — where its Lucerne and Signature Select brand are made. So even if the Thrifty brand name is retained, production could move out of the Los Angeles area to one of those other plants.
Albertsons could be taking a risk if it moves production to different state. Thrifty presumably wouldn't be made with California milk, fruit or other products — a big selling point for brand loyalists — and this could change the product's taste. Even if the flavor and mouthfeel of the ice cream is maintained, Albertsons could risk backlash because of perceived changes to the brand's history and integrity.
Given its popularity, it would make sense for Albertsons to retain the brand name and the stations where it's served within Rite Aid stores. It could also offer Thrifty in its own stores, plus other chains it owns, and see how it performs. It's possible the product might win new fans in other parts of the country and could also recapture nostalgic shoppers who have moved away from the Southern California area.
Consumer demand for brands with a storied history continues to grow, and Albertsons could play this up through in-store signage and packaging design if it sells the brand in its grocery outlets. The ice cream's nostalgia factor is already there for West Coast consumers — the brand launched in 1940 and regularly wins medals at the Los Angeles County Fair — but that value needs to be clearly communicated to all consumers for it to be successful across the new owner's chain.