Consumers are increasingly enjoying the indulgence aspect of ice cream. Although most prevalent in the take-home sector, the latter half of the review period saw a concerted move towards premium status among impulse ice cream. This was most clearly illustrated by the launch of Magnum Seven Deadly Sins (Unilever), a range of seven limited-edition variants of this market-leading brand.

The move towards indulgence is encouraging consumers to regard ice cream as year-round treat, as opposed to a seasonal product. While summer still is the peak time for ice cream sales, consumption patterns are changing. Manufacturers are also exploring new formats, such as multipacks of snack-sized ice creams, and new channels of distribution, such as vending machines, in a bid to create more opportunities for consumption.

The development of packaging that meets the needs of changing consumer lifestyles is a constant theme in this market. In the United Kingdom, for example, single-serve 100-milliliter tubs grew in popularity in 2003, aided by trends towards on-the-go consumption and an increase in the number of single-person households.

While the dominant trend in the ice cream market during the review period was one of premiumization, diet-oriented ice creams gained momentum during 2002-03, as manufacturers began to target health-conscious consumers. Such activity was particularly pronounced in the United States, where common themes in such products included sugar-free formulations, fewer calories, lower fat, fewer carbohydrates and portion control.

Co-branding remained a significant trend over the 2002-03 period, as a number of ice cream companies continued to forge licensing agreements with leading confectionery and, more recently, fruit juice manufacturers. In take-home ice cream, however, such activity was not quite so evident as in previous years, as many confectionery brands have already been brought out in ice cream form.

During the 2002-03 period, manufacturers increasingly introduced a wider range of flavors to their existing brands in order to capitalize on the increasingly cosmopolitan nature of consumer tastes and to acknowledge the regionally specific tastes of migrant populations. In the United States, for example, Hispanic-based flavors were one of the prime growth drivers in 2003, as manufacturers tried to connect with one of the most rapidly growing ethnic markets in the country.

The ice cream market is becoming increasingly consolidated in the hands of a limited number of multinational players, with many of the smaller companies leaving the industry. During the review period, leading manufacturers Unilever and Nestlé both expanded their respective businesses via a strategy of acquisition, culminating in Nestlé’s purchase of Dreyer’s Grand Ice Cream Inc. in June 2003.

The major distribution trend in the ice cream market during the 1998-2003 period was growth in sales through multiple grocers and convenience stores, and the converse decline of sales through independent food stores and others. The increasing trend towards supermarkets is attributable to a number of factors, including one-stop shopping convenience, lower prices and a wider choice of branded and private label products.

Non-traditional retail outlets such as leisure centers, bowling alleys and cinemas are increasingly regarded as favorable channels for distribution of impulse ice cream. “Cash rich but time poor” consumers are increasingly willing to pay a premium for innovative, high-quality ice cream products that can be consumed at point of purchase or shortly after.

In emerging regional markets such as China, packaged ice cream is becoming more affordable, as intensified competition and increased production results in a fall in unit prices. Rising income levels and the growing penetration of multiple grocers have also contributed to this trend.