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Ice cream is a sweetened frozen food, commonly made out of milk fat, milk protein, cream, and is flavoured using sweeteners such as sugar, or sugar alternatives, and toppings such as cocoa or vanilla. Colourings are usually added, in addition to emulsifiers and stabilizers. Ice cream itself forms about 60 percent of the frozen dessert market, alongside confectionary items, frozen yogurt and candies.
The global ice cream market was worth an estimated USD 61 billion in 2019, growing at a CAGR of 5 percent during the forecast period 2016-2025. The growth of the ice cream industry is driven by the demand for various flavors and types of ice cream, that come at various price points. The rising income levels in regions like APAC is expected to drive the growth of the ice cream market in that region, while the preference for healthy, nutritional, and premium-priced ice-cream are expected to drive the demand and growth in developed regions such as North America and Europe.
North America is the largest market by GMV, and the US emerges as the leader, accounting for 90 percent of the ice cream market share in North America. It is estimated to be growing at a CAGR of 3 percent for the forecast period 2016-2025. Due to rising health concerns in the US, there is a demand for naturally flavored, organic, vegan, plant-based frozen dessert options, which come at a bit of a premium. Ice-creams are also being consumed as snacks, given the changing nature of snacking, as we’ve seen in our earlier blog. The average American consumes more than 23 pounds of ice cream per year, and they seem to take-home ice cream more often than they buy impulsively. The share of take-home ice cream consumption exceeded impulse ice cream consumption by more than 200 percent. The Japanese dessert Mochi ice cream is among the fastest-growing categories in the ice cream market as of 2018. It has become so ubiquitous that it isn’t uncommon to spot it on the shelves of Walmart or Target.
Europe trails North America in terms of ice cream market size but is growing faster, at a CAGR of 5 percent for the forecast period 2016-2025. Similar to the US, the demand for natural and handcrafted ice cream products with natural sweeteners are on the rise. The availability of alternative products such as frozen yogurt has also affected ice cream sales, as both ice cream and yogurt become a part of the snacking trend. Sweden and the UK are the most attractive markets for ice cream manufacturers in the region.
APAC is one of the fastest-growing regions for ice cream. The APAC ice cream market share was estimated to be worth USD 19.2 billion in 2019, growing at a CAGR of 7 percent. The rising income levels among the middle-class population in countries like India is expected to increase the demand for innovative food products, and the growing social consciousness of healthy alternatives such as plant-based products and the use of natural ingredients is expected to spike the demand for premium ice cream products. APAC slightly speaks of a different trend, where the share of impulse buys seems to be increasing, compared to the US and Europe. Australia is the most attractive country for ice cream manufacturers in the region. Ice cream accounts for about 10 percent of the entire country’s food industry. Latin america or LAMEA is expected to show a growth rate of 5 percent during the forecast period 2017-2023. Brazil accounts for 50 percent of the LAMEA ice cream market. In the middle east, UAE is expected to be the fastest growing market for ice cream with a growth rate of 10 percent.
Broadly, the ice cream market is divided into take-home, impulse and artisanal. The impulse buy segment includes single-serve ice cream tubs, packaged cones ice cream sandwiches, and chocolate-coated ice creams. The impulse buy segment overtook the take-home segment (multiple-serving ice cream tubs and ice-cream cakes) a couple of years ago. The take-home segment is growing at a 5 percent CAGR. The reason for this seems to be consumers' aversion towards mass-produced, artificially sweetened products and a conscious move towards fresh, handcrafted, naturally flavored products (both dairy and water-based). 40 percent of ice cream companies are seeing an increased demand for premium ice cream versus 17 percent seeing an increase in gelato demand followed by 15 percent for sorbet. Demand for low-fat or non-fat ice cream ranked the lowest at just 4 percent.
The channels that lend themselves to the sales and growth of ice cream products are hypermarkets, supermarkets, convenience stores, cafe/bakery shops, discount retailers, grocery stores, and eCommerce sites. Supermarkets, Hypermarkets and Cafe/Bakery shops account for more than 50 percent of sales of ice cream products while eCommerce stores outpace convenience store sales marginally.
A majority of US ice cream and frozen dessert manufacturers have been in business for more than 50 years and many are still family-owned businesses.Unilever is a major player in this market and owns 8 of the 15 top-selling ice cream brands, including Magnum, Ben & Jerry’s, and Cornetto. The company reportedly holds about 22% of the global ice cream market share. General Mills, Mars, Blue Bell Creameries, Lotte, Wells Dairy, Turkey Hill, Meiji Holdings are some of the other major competitors in this market. Amul is a major competitor brand in India and APAC.
The ice cream market is poised for growth across all the regions in the world, thanks to rising income levels in certain regions like APAC and a global shift towards healthy dessert options among particular cohorts like the Millennials and Gen-Z ers. Leading CPG brands such as Unilever, LOTTE, and Mars will continue to dominate the industry, trying to keep pace with the changing preferences of consumers in various parts of the world.
Welcome to the @withassembly family, PipeCandy! #innovation#ecommerce#technews
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