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The global ice cream market size was USD 70.85 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with the ice creams showcasing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market will exhibit a slight decline of -1.49% in 2020. The market is projected to grow from USD 69.79 billion in 2020 to USD 91.90 billion in 2027 at a CAGR of 4.01% in the 2020-2027 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The increasing consumer expenditure on fast food, extensive research, and development activities for the production of innovative product variants, and easy availability of the product type is anticipated to drive the global market. Moreover, rapid urbanization and increasing disposable income are estimated to strongly surge the growth of the market in several emerging economies in the forthcoming years.
Disturbances in Supply Chain Management amid Coronavirus to Hinder Performance
The global ice cream industry is festering due to the novel coronavirus. Logistical restrictions and labor shortages have become top concerns for producers. Many producers have had to stop or halt their production, particularly small and medium-sized enterprises (SME). Presently, the situation has improved with the number of new confirmed cases falling. As the outbreak is well controlled and transportation restrictions are lifted in recent months, the demand will increase in the coming summer season. Some companies are focused on adoption and making the best of the altering market dynamics and demand drop of the product in the wake of the COVID-19.
For instance, though the world is learning to adjust to the challenges the COVID-19 pandemic has brought, India-based Amul Dairy is endorsing ancient ways of protecting immune systems, with the help of Ayurveda alongside practicing a healthy lifestyle. The company has declared the launch of a new Haldi ice cream, which is made with the goodness of Haldi (turmeric), pepper, and honey and the richness of dry fruits, including dates, almonds, and cashews. The clever marketing solutions and digitalization can help operating companies to sustain growth and revenue generation during this pandemic period.
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Premiumization of Products is a Prominent Trend
Currently, the rising demand from customers for healthier and functional food has led to products containing special ingredients with recognized nutritional and physiological properties such as probiotics, prebiotics, and natural antioxidants. A premium-sized product is usually made from luxury, rare, and expensive ingredients, using new, innovative production methods. Rapid urbanization, the rising popularity of the product among millennials, and increasing cafe culture are projected to support the steady growth of premium sized product options. Furthermore, the rising number of artisanal shops and increasing consumer expenditure on the product from the higher-end with a guarantee of producing a dessert using natural ingredients and traditional methods are predicted to boost the ice cream market growth in the upcoming years.
Continuous Innovation in the Industry to Spur Product Demand
Traditional ice cream has nutritional properties, but no health benefits. So, the increasing interest of market players in the fortification and addition of functional ingredients can encourage consumers to choose the product as a healthy snack option. Functional foods provide benefits beyond basic nutrition and may play a role in reducing or minimizing the risk of certain diseases. The rising production of fortified or functional products is expected to drive the global market.
Healthy product options, such as fortified, low-fat, and many others are easily available in the market as the producing companies have adopted proper branding techniques. These companies are reaching out to consumers with local distribution options, such as hotels, restaurants, and malls. The easy availability of the product coupled with the rising expenditure on such fast foods is anticipated to drive the market growth.
Rising Expenditure on R&D and Digitalization to Drive Growth
The rising expenditure by prominent players on the research and development of innovative products is anticipated to positively impact the market growth. For instance, in May 2020, Unilever Group’s brand Ben & Jerry announced the launch of its new ice cream. The product is launched in partnership with Netflix's baking show Nailed it, and it is made with chocolate, fudge, and potato chips.
Companies are actively investing in digitalization to increase their consumer base. The market players are focusing on digital channels to generate awareness of their brand and products. Major companies are planning to shun traditional media spend, as well as investing their finances into ads on social media platforms such as Instagram and Facebook instead. Besides, influencer marketing has been a significant strategy, which is used to reach the target audience. It mostly includes millennial and health & fitness-conscious consumers.
Low Shelf Life and Seasonality to Impede Performance
Ice cream is a frozen dairy product and is bound to spoil in a limited time (usually in 2-3 months), but if it is not stored in a proper place, then it can spoil within a few days. The product stored in a stale storage atmosphere will usually develop a foul smell and microorganisms. It can also pick absorbed volatile flavors from the storage environment such as paint and ammonia. So, the high storage cost of the product is expected to hamper the market growth. Furthermore, the demand for the product is usually at its peak during summer, but in winter and monsoon, market players can notice a sharp decrease in the product demand, which can further hinder growth.
Impulse Ice Cream Segment to Grow at the Fastest Pace in Near Future
On the basis of type, the ice-cream market is categorized into impulse and take home. The impulse segment held a dominant share of the market in 2019. The increasing popularity of convenient product packaging among consumers is predicted to support the steady growth of the segment. Customers are constantly on the move, demanding products that can serve them on the go. The emergence of take-out or portioned foods has also made it easier for brands to create ranges of products that target specific audiences and age groups, ranging from adults to teens to children. Furthermore, innovations in impulse packaging are also contributing to the growing demand for the segment as the new packaging is more convenient to carry and store compared to the old ones.
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Vanilla Segment to Hold the Major Share Backed by Availability of Premium Quality Products
Vanilla is the most preferred flavor among customers across the globe, followed by chocolate. It is a natural and expensive aroma and is often replaced by artificial vanillin in ice cream production, which causes different prices of the same-flavored products. The rising expenditure on premium quality vanilla-flavored products due to their great taste is anticipated to support the steady growth of the segment. Moreover, consumers are very attached to traditional flavors and are unwilling to select new, so far unprecedented, often unfamiliar, and innovative flavors of the product. Therefore, prominent key players are embarking on marketing activities, which would encourage consumers to purchase new types and flavors of the product.
Cup Segment to Emerge as the Most Utilized Packaging Form
Cup is known as the most popular type of product serving as it is a neat, clean, and easy-to-store option. Hence, it is the most convenient way of serving. The majority of the consumers prefer cups due to convenience but, serving in cups requires a spoon to eat, and disposal is a problem, so the demand for cones is predicted to increase in the forthcoming years as there is no necessity to have a spoon, and they are consumed along with the product, adding a crunchy texture to the product.
Online Retailers Segment to Exhibit Highest CAGR in the Forthcoming Years
The persistent increase in mobile adoption and broadband penetration, especially in emerging economies, has helped boost online sales. Ordering online for home delivery is the normally preferred flexible buying option across the globe. Henceforth, hyper/supermarket owners are introducing e-commerce models that make it even easier for tech-savvy, time-crunched consumers to get the items they need.
There is a great potential for online merchants that offer consumers a wide variety of good-for-you foods and provide guidance for customers aspiring to healthier lives. But, the obvious in-store benefits of fulfilling immediate shopping needs without paying shipping fees and powerful sensory experiences, such as feeling the vibrant color and texture of the product which is virtually impossible to replicate online, are expected to support the steady growth of hyper/supermarkets.
Asia Pacific Ice Cream Market Size, 2019 (USD Billion)
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The increasing popularity of fast food, coupled with the rising disposable income, rapid urbanization, and the impact of western cuisine and culture has supported the consumption of ice creams in Asia Pacific. Presently, the Asia Pacific market holds the major share and is projected to grow at a 4.28% CAGR during the forecast period. The growing product acceptability, stiff competition, and large consumer base have pushed operators to strive for competitive advantages through innovations with respect to product offerings and delivery of service. Major players are rigorously trying to strengthen their footprints in the Asian market through the acquisition of small local players. For instance, in September 2018, Unilever group signed an agreement to acquire Adityaa milk and an ice-cream business in India.
North America is likely to hold the second-largest ice cream market share. The increased number of fast-food chains across the region and the extensive utilization of natural ingredients in the production of frozen dairy products are driving the consumption of the product within the region. Premium products have become a popular choice among health-conscious Americans owing to the presence of high-quality ingredients and a lesser amount of aeration compared to the regular ones.
The market in Europe has been through an evolution as the prominent companies have changed their product portfolio according to the consumers’ interests and demands. Ice cream, which was considered as an indulgent category in the past, has now evolved to a stage where it is largely and happily perceived as a snacking option by consumers. With more money in their pockets, European consumers are increasingly allowing themselves to indulge, thereby supporting the steady growth of the regional market.
Focusing on Novel Product Launches to Help Companies Expand their Product Lines
The global market is moderately consolidated with the presence of several prominent global players. The increasing popularity of the product and easy availability of health variants, such as fat-free and sugar-free products, have significantly led to its increasing demand. Companies, such as Nestle S.A., Unilever Group, and General Mills, are concentrating on new product launches and joint ventures with relevant stakeholders for portfolio broadening and product marketing. For instance, in January 2021, Unilever Group announced the launch of the Double Red Velvet variant under its Magnum brand.
An Infographic Representation of Ice cream Market
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The ice cream market report includes quantitative and qualitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible market segments. Various key insights presented in the report are an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key Ice cream industry trends.
Value (USD Billion)
By Distribution Channel
Fortune Business Insights says that the global market size was USD 70.85 billion in 2019 and is projected to reach USD 91.90 billion by 2027.
Increasing at a CAGR of 4.01%, the market will exhibit promising growth in the forecast period (2020-2027).
Impulse ice cream is expected to be the leading segment based on product type during the forecast period.
Continuous innovation in the industry is the key factor driving the market growth.
Nestle S.A., Unilever Group, General Mills, Dunkin Brands, Dairy Queen, and Blue Bell Creameries are a few of the leading players in the market.
Asia Pacific dominated the market in terms of share in 2019.
The hypermarket/supermarket distribution channel holds the major share in the global market.
The premiumization of products is the key market trend.
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