Sweet spot for ice cream - what are the opportunities?

In the last year, as we have seen for many food and drink categories in retail, spend on ice cream has grown significantly (+6.9%).

However, this is driven by inflated prices rather than sales, as units are down -4.4% (Kantar, 52 w/e 9 June 2024). The number of households buying in to the category remains extremely high at 9 in 10, but high prices mean that they are having to shop the category less frequently, and when they do, buy less. This will undoubtedly be the continued impact of the cost-of-living crisis, negatively impacting treating categories like ice cream. However, with the frozen food category as a whole bucking this trend and seeing volume sale stability for the 12 w/e 9 June 2024, footfall in the area is high. So, what can we do to improve ice cream retail performance? And what new opportunities are there for frozen desserts? 

Will unpredictable summer weather de-seasonalise ice cream?

Unsurprisingly, sales of ice cream rise in the summer months, coinciding with warmer weather. However, volumes were even starker for summer 2023 with units down -15.1% (Kantar, 12 w/e 3 September 2023). However, the decline could have been predicted as we anniversarise on the heatwave summer in 2022, which saw record breaking temperatures. With summer weather becoming much more unpredictable, the focus should be on helping consumers view ice cream as less weather dependent. Processors and retailers could communicate ice cream as a year-round treat tapping into occasions beyond just a ‘cooling down’ treat on a summer’s day.

Will ice cream be a new dinner party essential?

68% of consumers who have eaten ice cream in the last 3 months often eat ice cream with a dessert and 63% often eat it when having an evening in (Mintel, Ice Cream – UK, 31 March 2024). Encourage evening consumption through in-store point-of-sale (communicating for example, ‘movie night’ or ‘date night’), pairing inspiration and co-merchandise with relevant complimentary products, such as desserts, fruit or meal deals. According to Mintel, 52% agree more retailers should offer ice cream as part of an evening meal deal, whether the main course is frozen or fresh.

Many consumers have turned to at-home socialising in recent years. According to Mintel, 46% of consumers who have eaten ice cream in the last 3 months often serve ice cream to guests when hosting at-home social gatherings. This means over half do not, highlighting a huge opportunity. The category, particularly the premium tier, could tap into this by dialling up the visual wow factor of offerings. Take inspiration from out-of-home, such as Chin Chin Ice Cream whose mission is to “make life more fun” through ice cream. Experimental flavours, toppings and accompaniments, such as biscuits, waffles and pancakes, can help target these special occasions. And why not take it one step further by encouraging sharing through ice cream sharing boards and sundae kits which are trending on social media.

Consider the sensory experience when innovating ice cream

Research from Tesco shows that classic vanilla remains the nations favourite ice cream flavour (Grocer Trader, 13^th July 2023), followed by chocolate and mint choc chip. However, the once-beloved Neapolitan no longer even features in the top 10, as consumer pallets widen and the shelfs make room for exciting stand out flavours. The growing demand for indulgence means ice cream enthusiasts are on the hunt for tantalising tastes that elevate their eating experience. Tapping into bright colours, different textures and sensory experiences may be the key to boosting sales. 2024 launches highlight this, with Ben & Jerry’s introducing Marshmallow & S’more Sundae and Oat of This Swirled Sundae, Haagen-Dazs incorporating macarons in a recent release and Magnum launching Euphoria Pink Lemonade with popping candy. Play on dessert flavours such as crème brulee, sticky toffee pudding or tiramisu, and brand extensions are always popular, with Terry’s Chocolate Orange and Ferrero Rocher moving into ice cream.

Test the trend towards more savoury tones and look to the foodservice market for inspiration. The Hindmarch’s Ice Cream Project returned to London for a second year in 2023 with consistent queues and social buzz surrounding its intriguing, quirky flavours, including ambrosia rice pudding, Blue Dragon Sweet chilli, and Branston pickle to name but a few. Tap in to world cuisines, as highlighted in our latest menu trends article, with Japanese matcha being an example of a trending ice cream currently.

Play on different formats to meet different needs

Format is another area for new product development, particularly for tapping in to snacking. Handheld products provide many opportunities with varying sizes, mini tubs, cones, bars, sticks and bites. “18% of ice cream consumption occasions are as a snack, up from 16% 4 years ago” according to Zak Dixon, Froneri Customer Marketing Manager (The Grocer, Focus on Ice Cream, 17 February 2024). According to Mintel ‘mini’ launches have gained momentum in 2022 and 2023 and ‘mini’ positioning is a communication opportunity. Recent examples include Solero Mochi balls and Aldi’s Cookies & Cream bites, which both utilise mochi-dough for containing the ice cream, and LiQ alcohol infused bites including Baileys and Malibu. Small bite size variants not only tap in to snacking but are also suitable for sharing and could be a great option when targeting the hosting occasion previously mentioned.

Shout about reputational factors such as sustainable dairy

As sustainability rises up the consumer agenda, highlighting relevant credentials is a way to connect with consumers. This could be via communication of high quality British sourced ingredients or sustainability goals. An example being Jude’s ice cream, which measures and sets targets for carbon footprint reduction. They not only show their target for 2030, but also state the exact progress so far. Another example is Unilever who is aiding the category by sharing a number of patents which help the industry reformulate ice cream products to remain stable at warmer freezer temperatures (for storage and transportation). Therefore, helping to tackle freezer emissions. Ensuring shoppers know about such initiatives may help consumer perceptions of ice cream production and quality.

Health is another reputational area AHDB pioneer. However, it is important to note that ice cream is seen as a treat and therefore health is not a high purchase driver, whereas indulgence, quality and ingredients are. The category is also subject to high fat, salt and sugar (HFSS) regulations which restricts promotional activity and store location. Saying that, if applicable, there may be an opportunity to play on health messaging such as gut health and high protein. 57% of people who eat ice cream say ice creams that are high in protein would appeal to them (Mintel, Ice Cream – UK, 31 March 2024). However, new ice cream product launches with this claim have dropped to only 2% in 2023 according to Mintel, with a discontinuation in the area potentially highlighting sales not reflecting this claimed need. Lower calorie claims spark even lower interest, again highlighting that ice cream is seen as a treat and the desire for ‘healthier’ or ‘diet friendly’ ice cream is very niche.

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