Ice cream, frozen novelty sales on the rise

According to recent Mintel research, in 2011, the ice cream and frozen novelty market emerged from two years of struggling sales and posted a 4.1% increase from the previous year (retail sales of $10.7 billion) and is poised for continued growth of another 4% in 2012.

September 12, 2012

According to recent Mintel research, in 2011, the ice cream and frozen novelty market emerged from two years of struggling sales and posted a 4.1% increase from the previous year (retail sales of $10.7 billion) and is poised for continued growth of another 4% in 2012.

“Aside from the flavor of frozen treats, price is the key factor in a consumer’s decision on what to purchase,” said John N. Frank, Mintel Food & Drink Analyst. “Price is more important than brand, quality, and health information, which makes it difficult for brands to break away from a price promotion strategy, but does give private label products a major opportunity for growth.”

When buying ice cream or other frozen novelties, 94% of people say they base their decision on flavor, while 83% look at price, and 72% look for a sale or promotion. When it comes to brand loyalty, slightly more than two-thirds (68%) of respondents make their selections based on brand alone.

According to Frank, new product development will play a large role in the continued success of the ice cream market in the coming years. New flavor profiles and ingredients, better-for-you (BFY) products, and new packaging concepts will be instrumental in its success.

The popularity of Greek yogurt spilling over into the ice cream and frozen novelty market could be one reason that total U.S. retail sales of frozen yogurt were up 9.7% from 2011–12. It demonstrates the highest growth percentage of the four ice cream and frozen novelty segments. Not surprisingly, reduced fat (38%), reduced sugar (38%), and reduced calorie (36%) are the most important claims consumers are looking for on the packaging of their favorite frozen treat. However, gluten-free and dairy-free products are rapidly growing in popularity with 14% and 15% of Mintel respondents saying they are “very or somewhat important” to them, respectively.

Container, or serving size, is important to 69% of survey respondents who buy frozen treats, and especially so among those ages 18–24 (74%) who are the most likely to eat it away from the home directly after purchasing it from the grocery or convenience store. Portion control containers would also fare well with those concerned with “low-in” claims.

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