U.S. Ice Cream Manufacturers Create a Market for Future Success

Being the largest ice cream market in the world, the U.S. prior to 2015 had relied heavily on the status quo for continued future success despite changing consumer expectations. According to Euromonitor, the ice cream market saw a zero growth rate or even a decline. The decline was evident when consumers saw ice cream options as unhealthy and not fitting into their diets. Due to a few unforeseen consumer preference changes, ice cream manufacturers responded with persistent determination and moving into 2018 have set this market up for long-term success.

In the last three years, consumer expectations started transitioning from “healthy” being only low-fat and restrictive diets to more well-rounded and wholesome food choices. Consumers still wanted ice cream, but they wanted to not feel guilty after eating it; or they knew that ice cream was a treat and, therefore wanted super-premium indulgent options. At the same time, fat, was proven to not make people fat and once again embraced by consumers. Both of these consumer preference shifts were in favor of the ice cream category.

In 2015, there were two small category disruptors – Halo Top and Arctic Zero – that pushed the ice cream market to re-think innovation, opened minds to new product offerings and, in turn, new consumers. These two companies continued to drive the healthy ice cream charge through 2016 and 2017. Not only do these companies have large followings on social media because of their low calorie, pint-sized format, they also boast natural sweeteners and clean label ingredients. These brands were so disruptive and successful that the larger companies started to take notice. In 2017, Breyer’s launched a low calorie, pint-sized ice cream to try and compete. These healthy, natural options have sparked renewed interest in this part of the market and now consumers can find high protein ice cream, new flavors, and probiotic-infused ice cream.

With the renewed love of dairy fat, the indulgent part of the category has also grown with gelato product launches – butterfat contents 14%+, indulgent flavors and inclusions, and artisanal positioned packaging and manufacturing. In 2017, Breyer’s and Friendly’s used indulgent inclusions with their gelato and sundae products; Tillamook launched a product line with very simple artisanal-style packaging that focuses on the flavor and special batch positioning; Haagen-Dazs launched new alcohol-inspired flavors such as “whiskey chocolate truffle”. As in beverages, coffee-infused flavors were also prevalent in the indulgent category product launches.

This inspired category has also recently started reviewing their standard products and seeking new snacking opportunities for ice cream. Blue Bunny launched Bunny Tracks in 2017, novelty ice cream squares with a snacking positioning. As individually wrapped squares, this new format promotes convenience and portion control. We expect to see more ice cream manufacturers seek out additional eating occasions with creative formats into 2018.

The new dichotomy, healthy versus indulgent, of the ice cream market has set it up for success to meet future consumer expectations. It has generated a renewal of great innovation in a traditional dairy category.

Blog post written by Kate Sager, U.S. Marketing Manager. Contact Kate on LinkedIn or by email, k.sager@ingredia.com.