New research into ice cream reveals consumer desire for indulgent ice cream products has gone from strength to strength. However concerned we are to eat a healthy diet, it seems there’s always room for an ice-cream treat, as Euromonitor reports.

Ice cream manufacturers are capitalising upon a growing consumer desire for high quality, indulgent foods, which has helped to fuel increasing sales, according to global analyst Euromonitor.

This tendency, most clearly visible in the developed markets of North America, Western Europe, Australasia and Japan, is driven by increasing average disposable incomes, and a growing consumer desire for “rewards” or “treats” for good dietary habits maintained throughout the rest of the daily routine. Also contributing to the premiumisation trend is a high degree of product innovation, with manufacturers continuing to develop new formats and flavours.

The best things come in small packages
The rise of the snacking phenomenon is well documented, both in the US and on an international scale. With the breakdown of traditional mealtimes, consumers increasingly require portable, convenient snack-style food products, which can be eaten on the go.

In the ice cream market, manufacturers are actively exploring new formats in a quest to create more opportunities for consumption. Two results of their endeavours are mini snack versions of existing products (Maxibon Mini, Magnum Sandwich Snack Size) and single-serve 100ml mini-tubs of bulk ice cream (Häagen Dazs). Single-serve portions benefit from higher profit margins than their ‘family’ equivalents, aiding value growth in the market as a whole.

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Non-traditional retail outlets broaden consumption opportunities
Besides packaging innovation, manufacturers such as Nestlé and Unilever are also taking advantage of growing trends towards impulsive, on-the-go consumption by expanding the availability of their products into “non-traditional” retail outlets, such as convenience stores, leisure centres and cinemas by placing freezers in these locations.

Single-serve portions, which are the key format sold in these alternative outlets, serve a number of purposes, including maximisation of freezer space, increased profit per unit and maintaining retail price per unit at affordable levels for all types of consumer.

Scope for “better for you” products
In spite of the trend for indulgent products, the report identifies there is potential for ‘healthy’ ice cream products. With growing waistlines and little time for exercise, consumers are increasingly looking for short-cuts to improved heath. While convenience and indulgence are the top priorities, diet-oriented ice creams are growing in prominence, particularly in the developed regional markets of Australasia, North America and Western Europe. Common themes in these products include lower calories, lower fat, dairy-free, low-carbohydrates and portion control.

Fighting the cold war
The ice cream market is becoming increasingly consolidated in the hands of a limited number of multinational players, with many of the smaller companies leaving the industry. During the review period, leading manufacturers Unilever and Nestlé both expanded their respective businesses via a strategy of acquisition, culminating in Nestlé’s purchase of Dreyer’s Grand Ice Cream Inc. in June 2003.

In 2002, Unilever’s global share of the ice cream market stood at 19% while Nestlé lagged at 10%, according to Euromonitor. However, with the acquisition of Dreyer’s, Nestlé should look forward to an increased share of around 13% in 2003. The newly merged company will also hold the number one spot in the US market, and the report hyperlinked below examines how it will now be a serious global contender to Unilever.

The next big thing
The development of exotic flavours and ingredients is likely to be an important theme over the forecast period, as multinational manufacturers attempt to win share from regional producers by catering for particular ethnic groups. This trend will be most prevalent in Asia-Pacific, where a wide range of both Western and Asian-influenced flavours are already available to entice consumers. One manufacturer that is likely to be particularly active in this respect is Unilever. In March 2003, the company announced that it was looking into the development of savoury ice cream flavours such as curry or cheese.

Chart 1 Total ice cream: Volume sales by region – % Growth 1998/2003

Source: Euromonitor

Chart 2 Ice cream: Global company shares 2002

Source: Euromonitor

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