Tip Top is celebrating nine decades of ice creams, popsicles and slushies with the return of a fan favourite for a limited time.
Putting nostalgia aside briefly, chief executive Ben Schurr said the business is continuing to invest and innovate as it heads towards 100 years.
Tip Top started as a small Wellington milk bar in 1935 run by Albert Hayman and Leonard Malaghan, but has grown to become one of New Zealand’s biggest corporations.
The business has a presence throughout nearly every supermarket and dairy across the country, but it also exports to Australia, Japan, Taiwan, Malaysia, Indonesia and the Pacific Islands.
“When you think back to 1935, if you talked to the guys back then when they opened the milk bar and said what Tip Top was going to be and what it would become, they would have had no idea,” Schurr said.
“Our biggest challenge at Tip Top is to make sure we keep making ice cream that Kiwis love, and that people eat. We’ve always got a changing demographic here in New Zealand, so you’ve got to stay in touch with that.”
According to Schurr, the business represents over 50% of the New Zealand ice cream market, making around 40 million litres of ice cream per year.
Tip Top employs about 300 people across its Mt Wellington factory (once the largest in the Southern Hemisphere), sales, operations and business teams.
The business has gone through several owners, from General Foods in 1964 to Goodman Fielder in 1987, Heinz in 1992, West Australia’s Peters and Brownes in 1997, Kiwi Dairy Co in 2000 and Fonterra in 2001.
Perhaps the biggest change in its recent history, though, was its sale by Fonterra to global dairy giant Froneri for $380 million in 2019.
At the time, the sale represented a gain of around $100m on book value for Fonterra, which sold the business because it had reached maturity as an investment for the co-operative.
Schurr, who worked on Tip Top’s sale as part of Fonterra’s merger and acquisition team, said ice cream had never suited the New Zealand dairy giant’s focus.
“It’s something to be celebrated as a treat, and that didn’t really fit with the concept of dairy nutrition, dairy for life, and all that Fonterra is about. Even though we do use a lot of fresh milk and cream, of course.
“Within Fonterra, being a tiny little ice cream company within the big chilled dairy business, which is within the huge ingredients and commodity dairy business, it was always last in line in terms of investment.”
Schurr said Froneri had invested in the business significantly, particularly in and around its factory.
Over the last six years, the business has replaced almost all of its production lines, and the remainder have been given a complete overhaul with upgraded technology.
He said it had spent roughly tens of millions each year on its factory, with greater outlay in Froneri’s first few years in charge to replace ageing machinery. More recent spending has been focused on site services and improvements behind the scenes.
Schurr said price increases had been necessary recently as the cost of ingredients has risen, with “extremely high” dairy prices in particular – milk prices are up 16.3% in the 12 months to August, according to the latest Stats NZ Selected Price Index.
“It’s a real challenge to us to manage the efficiency of our operations and make sure we can continue to make products of the quality that people want, but also at the prices that people are willing to pay.
“Everybody knows the New Zealand economy at the moment is really tough. Kiwis are really scraping by week to week in terms of what they can spend on anything, and especially food.”
As for the recent performance of the business, Schurr said it had been “quite a challenging year” and expected revenue to be down year-on-year.
In Froneri’s last financial result for the year ended December 31, 2024, it reported total revenue of $207.8m, up from $186.4m the year prior. Profit for the business also grew, up from $14.4m to $18.9m.
Schurr said this year’s performance has come down to a combination of changes in some of Tip Top’s export markets, as well as Kiwis spending less in supermarkets and out-of-home stores like petrol stations.
He said the company remained focused on the domestic and Pacific Island markets in the near term.
“Tip Top’s been the category leader in New Zealand and ice cream for decades. In terms of driving new innovation and driving excitement to everybody in New Zealand and ice cream, it’s really up to us to do that. To an extent, we’re just trying to catch up on lost ground in terms of what we’re doing.”
Schurr revealed the business is celebrating its 90th birthday by bringing back the Toppa, the ice cream most requested by New Zealanders for a return to production since being discontinued in 2014.
“Many people say it’s their favourite ice cream, so we’ll see if they love it by bringing it back just for a little bit of nostalgia and excitement.
“Celebrating the 90th birthday is really important because we respect and we want to acknowledge all the love that Kiwis give to Tip Top every day. It’s important for us to celebrate that with all our Kiwi consumers.”
Regarding Tip Top’s future, Schurr likened its age to his upbringing playing cricket, and the common feeling during the “nervous 90s” before reaching a century.
“When you reach 90, everything changes and you become so worried about stuffing things up and stumbling at that final hurdle that you lose focus on why you’re at the crease to start off with. I’m really focused on making sure that we don’t do that.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.