More demand for ice cream with functional use, natural ingredients

By Hal Conick

- Last updated on GMT

Consumers are looking for a healthier ice cream, according to Technavio.
Consumers are looking for a healthier ice cream, according to Technavio.

Related tags Ice cream Nutrition Corporation Us

The demand for healthier, more natural food has extended into the ice cream sector, according to a recent report from Technavio.

Vijay Sirathi, a food and beverage research analyst at Technavio, told DairyReporter that a growing consciousness of health has led to a change in consumer demands and manufacture offerings in ice cream, including smaller portion sizes, lower levels of fat and a desire for functional use and natural ingredients.

“Rising health-consciousness among US consumers is creating demand for low fat and fat-free products generating huge scope for manufacturers by launching [better for you] products with that come with fat free labeling, and also communicate strongly that they don’t lose any taste,”​ Sirathi said.

Market growth

Not only has the ice cream market become more health conscious, it has also become much bigger. The US market grew to $12bn in 2015, a 2.21% market growth. Technavio predicts it will continue its ascent over the next few years, reaching $13.31bn by 2020, with a 2.09% yearly growth each year until then.

The US is the biggest market in terms of volume, but it also has the highest per capita consumption, Sirathi said.

“The growth of the market is influenced by a range of positive macroeconomic factors such as infrastructural developments like warehouses, refrigerators, and manufacturing units, but the demand for affordable luxury is the major growth factor,​” according to the Technavio report.

Some challenges to the continued growth of the industry include growth from yogurt, unseasonable weather and the increasing consumer concern about abiding a healthy diet.

The next big thing

The Technavio report said there is a growing support for private label and premium brands, but large multinational corporations will still dominate ice cream sales, according to Sirathi.

“For instance, the US ice cream market is concentrated among large multinational companies, as well as a few regional companies​,” Sirathi said. “Private label quality is now perceived to be as good as brands, and also offers customers value for money as they are often priced lower than branded products. Ice cream as a product got commoditized in few countries such as the US where private label ice cream products are gaining importance and are poised for higher growth in the coming years.”

To keep consumers coming back, Sirathi said companies need to differentiate themselves from others in the sector by innovating packaging, position and formulation.

It may be useful to take a look at newer ice cream products that have attempted to meet consumer needs. Sirathi gave a list of some of these products, which included:

  • Häagen-Dazs range of vegetable flavored ice creams in Japan
  • Halo Top’s range of ice creams made with organic stevia
  • A2 range of ice creams that come free from A1 protein
  • Graeter’s low glycemic ice cream
  • Vice organic superfood paleo ice cream

In addition, it may be a good idea to invest in non-dairy ice cream, as Technavio’s report found the non-dairy ice cream market will grow more than 8% from 2015 to 2020. 

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