Americans are eating less ice cream but are willing to pay more for premium varieties, according to new research from Mintel. Nine in 10 consumers bought frozen treats in the past six months; however, 22% said they are buying less. But while volume sales of ice cream products are declining, dollar sales are estimated to grow 1.8% over last year to reach $12.6 billion, buoyed by consumer demand for higher-end offerings.
Twenty-two per cent of consumers said they buy premium frozen treats, and 34% said they are willing to pay more for such products. More than a third of consumers agreed premium ice cream tastes better than conventional varieties, and 14% perceived such options as healthier.
“While little opportunity exists to acquire new customers in the universally penetrated frozen treat market, interest in premium and healthy options gives brands the opportunity to offer products that communicate health and wholeness, while also encouraging moderation, which can aid in increasing trials through smaller sizes,” says Beth Bloom, senior food and drink analyst at Mintel. “Putting a heavy focus on quality, taste and health will resonate with consumers, and emphasizing single-serving packs and messaging around the variety of products should appeal to Americans’ preference for snacking.”
Smaller formats are particularly appealing to target consumer groups, including millennials and buyers of premium products. A third of consumers reported buying single-serve frozen treat packages, up from 11% in 2013. Additionally, nearly half of consumers are eating ice cream as a snack, which compared with 55% of consumers who dig in for dessert.
Variety is another key driver of ice cream sales. More than a fourth of consumers have purchased a variety pack in the past six months, and 27% reported typically having more than one type of frozen treat or flavor in the freezer at a given time. Still, while consumers are more likely to purchase ice cream that features a single flavor, a growing number are interested in products with mix-ins, such as nuts or cake bits. Forty-one per cent bought such products, up from 24% in 2013.
“The wide range of single-flavor frozen treats and products with unique mix-ins are keeping consumers from becoming bored with the category,” Ms. Bloom says. “The rise of new, trendy flavors speak to the dual components nostalgia and indulgence play in the market, while internationally-inspired varieties like mochi ice cream and gelato are succeeding in flavor and format. For more traditional offerings, mix-ins can give treats an added boost, with fruit and nut additions potentially alluring health-focused consumers.”
Forty-three per cent of consumers purchased gelato, up from 39% last year. Aside from a dip in sales from 2011 to 2013, the segment is experiencing growth, though the growth has slowed in the past year. Retail sales of gelato and gelato-based novelties increased an estimated 32% over last year, compared with increases of 42% from 2014 to 2015 and 247% from 2013 to 2014. New gelato product launches fell 8 percentage points from 2015 to 2016 to 9%, Mintel says.
“Sales of ice cream and frozen novelties have kept up despite declining interest thanks to innovative new product development and continued interest in gelato,” Ms. Bloom says. “However, gelato may be nearing its peak, as sales increases and new product launches are in decline compared to recent years. It’s possible that gelato is going the way of Greek yogurt, and losing a little of its luster. That said, we predict that gelato will remain relatively popular as it carries strong appeal for indulgence and satisfaction, and delivers the cues of a premium product.”