“We have seen overall prices are up around 12%, and so the dollars are up. When you look at actual total category dollars are up about 9.4% ... but the volume, the units themselves are down about 2%. And it's just one of the things that we are seeing consistently across the store, especially in ... discretionary categories where people could say, ‘Okay, I can maybe purchase that less often or purchase a smaller size.’”
Classic flavors remain on top, fruity flavors rise
Though vanilla, chocolate, and strawberry remain the top ice cream flavors, flavors like peanut butter, caramel, and chocolate chip are growing as well, based on data from the 52 weeks ending July 29, 2023, Frey said. But beyond those sweeter flavors, fruit flavors like peaches and cream, pumpkin, banana ice cream, and blueberry are growing, she added.
“Peaches and cream, we saw 9,000% growth. Now, that also means it's on a smaller basis, but it's at the same level ... as peppermint ice cream.”
While seasonal flavors are popular in a host of product categories, the ice cream category has seen fewer LTO launches with eggnog being a breakout flavor but still representing a very small portion of the overall market, Frey explained.
“Eggnog is ... becoming the new pumpkin spice, where we're seeing eggnog everything. And so that is a seasonal element that we're starting to see in ice cream as well, but it's smaller.”
Health-conscious consumers push sorbet growth, consumers still want sugary delights
Fruity flavors are also driving growth in sorbet and sherbet, partially because they're a bit healthier than traditional ice cream, Frey said.
“We actually saw sherbet dollars growing but not the volume, but [with sorbet], we actually saw both dollars and volume growth,” Frey said. “There's fewer calories; there's no fat, and also obviously, this is dairy-free. So, it kind of hits on some of these other health-oriented trends.”
However, in other health-related trends, the plant-based ice cream segment is seeing some steep declines, Frey shared. “It is again down about 2% in dollars, 10% in volume, so there [has been] a hit in particular in the last 52 weeks,” she said. Despite these declines, the category has “some really strong penetration, and there's a high level of repeat” purchase, she added.
“We're seeing oat milk growing four times faster than almond milk, coconut is growing eight times faster than almond, so it's this shifting of the actual plant-based ingredient... In terms of flavors in nondairy, at the top and really seeing some great growth was coffee.”
And while across the food and beverage industry, CPG brands have released and reformulated a host of low- or no-sugar products in response to consumer demands, the ice cream category hasn’t really seen much movement in that space because consumers expect these products to be sugary, Frey said.
"We do know sugar is one of the top things consumers are looking at when they're looking at labels, [and] there's been a lot of focus in particular on added sugars ... We see consumers looking for this more in the categories [where] they aren't expecting sugar. They are a little mad it's snuck in condiments."
Ensuring CPG’s ice cream growth doesn’t melt away
To resonate with consumers today, ice cream brands are focusing on natural, free-from, cage-free, and other claims, and boosting packaging sustainability, Frey explained. Sustainable, recyclable, and compostable packaging claims are also becoming more common, she said.
Ice cream manufacturers are also "leaning into things like quality ... [and] sourcing" to tell their brand story, Frey said. By combining these efforts with flavor innovation, ice cream brands have a great chance to win in today's marketplace, she added.
“Manufacturers have ... continued opportunity around flavor innovation, at the same time, recognizing that a lot of the basics are where a lot of the growth is too, the core flavors we all know and love. But in terms of also, how those products are being produced, so whether it’s under the umbrella of social responsibility or sustainability or just the caliber of the production and the ingredient sourcing.”