Ice Cream Market

The global ice cream market is projected to register a notable growth rate during the forecast period. The growing number of specialty stores is a major factor driving the market growth. Additionally, the growth of the organized retail sector is boosting the sales of ice cream in the retail industry. Moreover, high preference for chocolate flavor, changing consumer tastes, and growing popularity of artisanal ice creams present profitable growth opportunities for the manufacturers. However, fluctuating raw material prices, high production costs, and rising health concerns are restraining the market's growth.

Ice creams are considered a delicacy, and sometimes, an impulse buy. Factors such as these are considered by market players when opening specialty stores or ice cream parlors in high visibility locations, with an expectation of high foot traffic. The popularity of specialty stores is increasing due to social media, flyers, and guerilla marketing activities. Market players are switching from conventional distribution methods to ice cream shops to increase the sales of ice cream. Furthermore, consumers' preference for specialty stores is increasing as ice cream parlors offer a range of flavors that can be artfully crafted and customized. Specialty stores also celebrate special occasions and offer special products to gain traction among consumers. For instance, Baskin-Robbins celebrated World Chocolate Day on 7th July 2017 and introduced a range of desserts that can be paired with several chocolate flavors such as Traditional, Chocolate Mousse Royale, Chocolate Almond, Peanut Butter ‘n Chocolate, and World-Class Chocolate. Thus, such developments by prominent manufacturers and the rising number of specialty stores are expected to drive the growth of the global ice cream market during the study period.

The demand for chocolate products has been growing over the last decade mainly due to rising awareness of the health benefits of certain types of chocolate. For example, dark chocolate is a rich source of antioxidants and helps improve blood flow and control cholesterol levels. Consumers of chocolate and chocolate-flavored products are considerably price insensitive. Factors such as urbanization and an ever-expanding middle-class population in emerging economies encourage the consumption of chocolate-flavored products. Furthermore, regional ice cream flavors and variations such as kulfi in India and matcha and azuki in Japan are being increasingly enjoyed with chocolate, thereby driving the popularity of chocolate ice cream. Due to the popularity of such chocolate flavor blends, market players are mapping the demand for chocolate ice cream, especially in Asia, to launch innovative flavors, which in turn is aiding the sales of ice cream worldwide. Additionally, market players are using chocolate sauce to flavor several frozen confectioneries such as snow ice and ice cream rolls, which are positioned and sold as chocolate ice cream. Thus, consumers' high preference for chocolate-flavored ice cream is expected to present lucrative opportunities for the manufacturers during the forecast period.

The primary ingredient used in the production of conventional ice cream is milk. The fluctuating prices of milk act as a major restraint for the market growth as it affects the prices of the final product. For instance, the table below shows the comparison of milk prices in the US monthly from 2006 to 2020.

The above figure depicts the fluctuating prices of milk in the European Union. The average prices ranged between EUR 32–36/kg in 2018, and it spiked at the beginning of 2017. The figure shows the comparison of cow’s milk prices between 2018 and 2021.

Moreover, the increasing health awareness among the consumers and the inclination of the manufacturers towards the production of frozen desserts have highly impacted the production cost. Frozen desserts, including specialty ice creams, are generally priced high due to the use of quality ingredients and the time-consuming production process. The use of all-natural ingredients in ice cream such as milk, butter, eggs, fruits, and real cream makes it a highly popular and trending alternative to traditional desserts. Moreover, specialty ice creams are healthier than mass-produced conventional ice cream since market players are required to follow the guidelines set by the US Department of Agriculture (USDA) and the European Commission (EU). For instance, according to USDA, ice cream must weigh at least 4.5 pounds/gallon and contain at least 10% fat from milk for artisanal ice cream.

Furthermore, artisanal ice cream is made in batches, unlike regular ice cream, where hundreds of gallons are produced at a time. This requires labor, energy, and time, thereby increasing production costs. Commercial producers make ice cream using continuous freezers, while artisanal makers use batch freezers where production is limited to a set amount. The batch production process is necessary to continuously monitor and maintain high-quality standards of frozen desserts. These factors contribute to the high cost of the final product, which is expected to hamper the growth of the global ice cream market during the forecast period.

Ice cream is generally high in certain ingredients that negatively affect cardiovascular health, leading to issues such as high cholesterol and diabetes. They are high in saturated fats, which increase blood cholesterol levels and the risk of Type 2 diabetes. Furthermore, the high sugar content in ice cream may contribute to weight gain and impact blood-glucose levels, resulting in diabetes. High sugar levels in the human diet cause health issues such as diabetes, obesity, non-alcoholic fatty liver, and heart disease. Growing awareness among consumers of the health issues caused by confectionery items is expected to limit the sales of ice cream across the world.

Moreover, several government organizations are taking measures to limit the use of harmful ingredients to an optimal level to reduce the effects on health. For instance, the American Heart Association recommends that men and women limit their daily sugar intake to 150 and 100 calories, respectively, to avoid several health setbacks. Hence, the rising health concerns among consumers are likely to pose a challenge for the vendors operating in the global ice cream market.