Ice Cream and Frozen Desserts in the United States: Opportunities in the Retail and Foodservice Markets

Ice Cream and Frozen Desserts in the United States: Opportunities in the Retail and Foodservice Markets

For the U.S. market, the ice cream and frozen dessert fight for brand loyalty is fierce. With nine out of ten households already purchasing frozen desserts, companies’ goals are not to bring new customers in, but instead they aim to attract existing customers and maintain their market share. On the ice cream aisle, being side-by-side in the freezer creates an equal footing for shopper’s attention, no matter the company. With foodservice operators, there too is little competitive advantage between global chains and independent ice cream shops.

For ice cream brands, opportunities for growth are hard to come by in this stable market. Consumers still welcome and purchase new exciting products, in turn generating sales for dessert companies. The trick, though, is to figure out which new dessert trends are going to allow one’s brand to stand out from the crows, catching the eye of the frozen dessert consumers. Will it be more Greek-style frozen yogurt? Hispanic frozen novelties? Trendier, healthy ice creams?

Packaged Facts’ Ice Cream and Frozen Desserts in the United States: Opportunities in the Retail and Foodservice Markets examines the changes that have taken place in the past two years in the frozen dessert competitive environment while also providing a basic review of market dynamics. This report inspects market size and drivers, new product introductions, the competitive efforts of all key brands in both the retail and foodservice sectors, advertising and promotional actives, the use of social media, and consumer trends.

Methodology and Sources

This report includes both primary and secondary research data. Primary research includes in-depth, on-site examinations of the retail and foodservice channels with interviews with industry participants. The secondary research consist of data-gathering from relevant trade and business sources including IRI’s InfoScan Reviews scanner data, which tracks retail sales in U.S. supermarkets, grocery stores, drugstores, and mass merchandisers (including Target and Walmart) with annual sales of $2 million; also print and trade publications such as Dairy Foods, Nation’s Restaurant News and DairyReporter.com; industry associations such as the International Dairy Foods Association; annual reports, 10Ks, and other financial releases from public companies; government data; and other reports by Packaged Facts.

The consumer data in this report was derived from two sources. One is a national online consumer survey by Packaged Facts, conducted in January/February 2014, which reflects a panel of 2,000 U.S. adults (age 18+) that is balanced to the national population on the primary demographic measures of gender, age bracket, race/ethnicity, geographic region, marital status, presence or absence of children in the household, and household income. The second is the Simmons National Consumer Survey for Summer 2013 and Fall 2013 from Experian Marketing Services.

Market Insights: A Selection From The Report

• In Packaged Facts’ January/February 2014 survey, 79% of respondents said they personally eat ice cream, or someone in their household does.
• Packaged ice cream was the largest among retail ice cream and frozen desserts categories in 2013, accounting for more than half of total retail sales through mass-market channels (supermarkets, drugstores, and mass merchandisers).
• Frozen novelties account for more than a third of the retail ice cream market.
• The U.S. retail market for ice cream and frozen desserts is extremely competitive with brands offered by multinational conglomerates going head-to-head in the freezer case with regional and locally produced favorites on what is essentially an even basis.
• The National Ice Cream Retailers Association has estimated that there are about 15,000 independent ice cream shops in the U.S. Packaged Facts estimates that there are about the same number of units among the larger chains (those with 50 plus units).
• Scoop shops account for nearly a third of U.S. foodservice frozen dessert sales, followed by mobile locations with close to 30%.
• On the retail side, supermarkets account for over 60% of frozen dessert sales followed by supercenters and mass merchandisers, like Walmart, with about 18% of frozen dessert sales.
• Ice cream and frozen dessert companies have never been among the most extravagant of spenders when it comes to advertising. Instead, the industry has largely relied on promotions in lieu of ad spending and that approach has proven very successful.
• One type of advertising that does appear to have some impact is in-store advertising which is close to the point of sale and more immediate than an ad in the general media. In-store advertising is also often used hand-in-hand with an in-store promotional effort, again adding to the immediacy of its impact.
• Consumers participating in the Packaged Facts January/February 2014 Survey indicated that sales and price promotions were highly influential in the purchasing decisions. Over half of the respondents indicated it was the most important or a very important factor in their purchasing decision in terms of the brand selected.
• Frozen dessert consumers do tend to have a high degree of brand loyalty but if a discount is substantial they are willing to take a break from the familiar.
• Sales and price promotions are the deciding factor in the choice of ice cream brands for about a quarter of the consumers surveyed by Packaged Facts.
• Frozen dessert companies tend to be heavily engaged in using the Internet and social media to put their products before tech savvy consumers.