Although the ice cream and frozen novelties category appears to be grounded at home base, there is much more to the story. Despite changes in at-home consumption post-pandemic, the category could be ready for liftoff, and could go where no man has gone before.

The entire ice cream/sherbet category saw sales slightly uptick less than 1% to $7.67 billion in U.S. multi-outlets for the year ending Sept. 4, according to Chicago-based Information Resources Inc. (IRI) data. Although this is seemingly nothing to write home about (via intergalactic email, of course), an increase in sales is positive news. For example, as Dairy Foods reported in a similar story last year, this category suffered sales declines of 1.5% during the prior year. 

On a standalone basis, ice cream itself only eked out a small gain during the 52-week period ending Sept. 4 to $6.8 billion. But again, this compares to the prior year, when ice cream sales declined by 2.1%, IRI reports.

Unit sales in the ice cream/sherbet and ice cream standalone category did both decline by more than 4% year over year, perhaps impacted by inflation.

In terms of dollar sales, the one negative subcategory was frozen yogurt, suffering sales declines of 5.5% percent during the past year to $333 million, per IRI data. 

However, despite this one mechanical flaw in the engine, the frozen novelty rocket is running on all cylinders and is ready for takeoff. Ice milk/frozen dairy dessert sales rose 8% during the past year to $312 million; sherbet/sorbet/ices rocketed 10% higher to $232 million; and the entire frozen novelties category lifted off by 9% to $7.5 billion for the year ending Sept. 4, according to IRI data.

On an individual dairy processor basis, Tillamook had the best year on a dollar sales and unit sales basis of any Top 10 ice cream processor. According to IRI, its dollar sales increased by more than 19% to $251 million, while unit sales rocketed higher by 22 percent to 52.3 million.

“Our ice cream business has been very successful and has grown enormously over the past few years. Although our co-op is over 110 years old, it is only recently that we have expanded our ice cream distribution outside of our home in the Pacific Northwest, and that has been the biggest driver of our growth in the last year,” Ty Holden, assistant category growth manager, Tillamook County Creamery Association, tells Dairy Foods. “We know that we make the best ice cream (due to adding extra cream), so our focus is making it available to as many people as possible by expanding into new regions, channels, and retailers. In the future, we will continue to grow by increasing our assortment with exciting new flavors and by introducing new formats and platforms that reach incremental consumers.”

New ice cream brands star of the show 

New brands buoyed the ice cream market in 2022, with several enjoying early success. These include Madison Brown, a family-focused brand, which launched its line of premium ice cream. The company introduced six original ice cream flavors ranging from tried and true classics to decadent and innovative options alike. Flavors are: Vanilla, Chocolate, Cookies & Cream, Chocolate Chip Cookie Dough, Mint Chocolate Chip and Red Velvet.

“Inspired by my family, Madison Brown reminds me that a great scoop of ice cream brings people together,” says 19-year-old Jay Jay Brown, who founded the company and named it after his sister. “As I start my own business venture, my family is there every step of the way within Madison Brown’s origin story. I’m so grateful for our incredible retail partners from H-E-B in Texas to BevMo in Arizona and California, and, of course, Walmart.com for believing in this vision. After two years of developing the world’s most fabulous ice cream, we’d be nowhere without their enthusiasm for our brand and tremendous support.” 

Howdy Homemade Ice Cream, dedicated to providing job opportunities for individuals with intellectual and developmental disabilities through high-quality ice cream, also enjoyed early success. In just sixth months, its products were sold at approximately 125 H-E-B and 75 Brookshire Brothers grocery stores in Texas.

Each of its six flavors proudly features the face of one of the brand’s employees, internally designated as a “Hero” and the tagline “Every pint creates jobs for those with special needs.” Heroes are employees who have intellectual and developmental disabilities.

Since debuting in stores in January, the mission-based company shipped almost 70,000 units by June and expects to ship more than 100,000 additional units by the end of the year to keep pace with customer demand. 

Tillamook had had a relatively small number of new ice cream product launches in 2022, but one that it is “very excited about” is the new Butter Pecan Ice Cream in its Family Size portfolio. “We launched this extra buttery version of the classic flavor as a replacement for our former Caramel Butter Pecan flavor,” Holden explains. “We also reformulated our entire 48-ounce (Family Size) ice cream portfolio to remove all bio-engineered ingredients and only utilize cage-free eggs as part of our commitment to bringing consumers the highest quality ice cream. We also have a large number of exciting new ice cream offerings that will start showing up on shelves in early 2023, so stay tuned.”

Novelties are no novelty

The aforementioned frozen novelty category is enjoying considerable strength. Last year, experts theorized the gains in this category were due to consumers seeking indulgence and decadence. This is certainly understandable, as at-home indulgence makes perfect sense during a global pandemic.

However, the most recent period tracked by IRI, from September 5, 2021 to September 4, 2022, reported sales of nearly $7 billion. Even after most lockdowns were eliminated, continued robust sales in this category have to be considered a positive sign.

Innovation is at the forefront of the frozen novelty category. Consumers have gobbled up a wide variety of new products that were introduced this year. Among these product introductions were Milk Bar’s Batter Bites, launching in three flavors: Gooey Butter Cake, Marshmallow Brownie and Peanut Butter Pretzel. These bites are ready to eat, are uniquely fudgy in texture, and are packed with their own “personality,” the company says. 

“There has always been something irresistible about taking a swipe at the batter bowl after a good day of baking. It’s an innate feeling that follows you from childhood into adulthood, and it’s something we as bakers at Milk Bar never get tired of. Batter Bites serves those feelings up unapologetically,” notes Christina Tosi, founder and CEO of Milk Bar, Brooklyn, N.Y. 

Byrne Dairy, Syracuse, N.Y., launched two new Bigwich flavors: Raspberry and Cocoa-Nilla. The two new varieties join the Vanilla Bigwich. The Bigwich offerings boast two freshly baked cookies and three times more ice cream than the traditional Cookiewich, the company says. The Raspberry Bigwich features black raspberry ice cream between two chocolate-chocolate chip cookies, while the Cocoa-Nilla Bigwich offers creamy vanilla ice cream and two rich chocolate cookies. The Vanilla Bigwich, which hit freezers in 2021, features creamy vanilla ice cream sandwiched between two chocolate chip cookies.

The trend of snacking has been a big driver of consumer behavior in many categories recently, but especially so within novelties, Tillamook’s Holden states. 

“There have been several ‘mini’ or ‘bite-sized’ launches in the novelties segment that take advantage of this trend, and I would expect that to continue in the future,” Holden notes. “Snacking-based products have the benefit of increased occasions and can be positioned as a better-for-you, portion-controlled indulgence. 

“The biggest trend we’ve seen in scoopable ice cream over the past few years has been the proliferation of plant-based offerings,” he continues. “However, we have really seen a pullback of those type of products and see consumers are returning to their dairy-based favorites which, simply put, just taste better. In the future, I expect to see brands leaning into indulgence and trying to deliver new eating experiences with unique flavors and textures.”

Seasonal favorites also contributed greatly to category growth. This included Ruby Jewel’s Campfire S’mores Ice Cream Sandwich in the summer. This seasonal, limited-edition favorite features chocolate marshmallow cookies with honey graham ice cream. The handcrafted chocolate cookies are baked with mini marshmallows in every bite, and honey graham ice cream.

More recently, Los Angeles-based My/Mochi released Pumpkin Spice and Apple Pie à la Mode ice cream flavors. My/Mochi Ice Cream is made with a scoop of premium ice cream and wrapped in sweet rice mochi dough, creating a portable, hand-held snacking experience.

Ice cream even forged a marriage with beer, when Tipsy Scoop joined forces with Miller High Life to offer dive bar-flavored ice cream. Specifically offered in each Ice Cream Dive Bar is premium ice cream infused with High Life (with a 5% alcohol-by-volume); a peanut swirl bringing the saltiness of the quintessential dive bar snack; a hint of tobacco smoke flavor reminiscent of that unforgettable dive bar scent; a caramel swirl to incorporate the distinct sticky dive bar floor feeling only the real ones know; and a sprinkle of carbonated candy. It is all dipped in dark chocolate to evoke the dark wood and dim lighting ambiance that all good dive bars share. Consumers must be 21 years old to purchase the item.

Then, there was an acquisition to help boost the frozen novelty category. J&J Snack Foods Corp., Pennsauken, N.J., in May entered into a definitive agreement to acquire Dippin’ Dots LLC, a Paducah, Ky.-based producer of flash-frozen beaded ice cream treats, for $222 million, subject to customary purchase price adjustments. 

“Dippin’ Dots aligns perfectly with J&J’s portfolio strategy by adding an iconic, differentiated brand that uniquely complements our frozen novelty and frozen beverage businesses,” Dan Fachner, J&J Snack Foods’ president and CEO, said at the time of the announcement. “With this acquisition, we can further leverage our combined strength in entertainment and amusement locations, theaters, convenience and supermarkets to realize added scale, operational and go-to-market synergies and create new selling opportunities among an expanded customer base. We are confident this transaction further positions us for accelerated growth across our business.”

Health in focus

Consumers continue to seek ice cream and frozen novelties for the health conscious, with many processors delivering on this request. One example is Los Angeles-based Halo Top, which earlier this year added two new flavors of both Keto Pops and Keto Series Pints: decadent Turtle Cheesecake and indulgent Mint Chocolate Cookie. The pops and pints are made with creamy, ultra-filtered skim milk, which delivers fewer calories than regular milk and is a good source of protein, the company says. Halo Top Keto Series pops and pints also feature fewer net carbs than regular ice cream, helping fans address a broad range of dietary needs. 

N!CK'S recently announced the launch of a limited-edition collection of light ice creams in collaboration with video gaming platform, Minecraft. The collection marries the innovation of two Swedish brands, merging N!CK’s patented food science technology and flavor expertise with Minecraft’s game elements to create treats that are a healthier alternative to the full-fat and high-calorie ice creams on the market, states the company.

Each of the keto-friendly flavors in this collection contain elements that are unique to the game, with each pint is packaged in distinctive square containers, a departure from N!CK’s traditional round pints, as a physical embodiment of Minecraft’s signature in-game blocks. 

And Chicago-based fairlife LLC, in partnership with Boardwalk Frozen Treats LLC, unveiled two new indulgent light ice cream flavors: Dark Cherry Chunk and Caramel Toffee Crunch. The lactose-free ice cream is made from fairlife’s ultra-filtered milk. Dark Cherry Chunk features cherry and vanilla light ice cream mixed with dark cherry pieces and chocolate chunks, the company says, and includes 8 grams of protein and 45% less sugar than traditional ice cream. The new Caramel Toffee Crunch flavor features vanilla light ice cream with chocolatey coated toffee pieces and a sea salt caramel swirl and boasts 9 grams of protein per serving and 45% less sugar than traditional ice cream. 

Future trends

Health is likely to continue be a key focus for ice cream processors. Do not forget about traditional products as well. But can the at-home indulge of these sweet treats continue if the world enters a post-pandemic period?

“Just like many other ice cream brands, we saw an increase in consumption during the height of the pandemic as people spent more time at home and ice cream shops and other public venues were closed. Everyone loves ice cream. It’s nostalgic and delicious and great to share with loved ones, so it wasn’t surprising to see that demand spike during such a time that was difficult for so many people,” Holden reveals. “As things have slowly returned closer to normal, we have seen some of that demand drop from the pandemic’s peak levels. However, demand is still well above pre-pandemic levels, and we only expect it to keep growing for Tillamook. For us, the challenge is making enough ice cream to keep up.”

The still-not-fully tapped ethnic frozen novelty could be another place where ice cream and frozen novelties could be ready for takeoff. Tropicale foods, manufacturer of authentic Hispanic-inspired frozen novelty treats under the Helados Mexico and La Michoacana is betting big to the tune of $75 million on the future with the recent announcement of a creation of a state-of-the-art manufacturing facility in Lubbock, Texas, via the renovation and retrofitting of an existing factory. Construction is underway and production is slated to begin by the second quarter of 2023.

The 227,000 square-foot facility supports a strategic growth initiative, as the company aims to expand capacity to meet the rapidly growing consumer demand for Tropicale’s portfolio of products. 

“Both the overall frozen novelty category and the ethnic subcategory have grown consistently for many years. With our new facility, Tropicale is well-positioned to support that category growth, and drive more growth with our unique paletas,” Steven Schiller, CEO of Tropicale Foods, tells Dairy Foods. “We’ll also look to innovate and bring new flavors to market, specifically with more bold profiles in mind, as the Tropicale brands and products offer a superior eating experience, one that can transcend barriers and grow the market.”

Schiller adds he is optimistic about the future of frozen novelties, even as the effects of the COVID-19 pandemic lessen.

“We do believe frozen novelties will continue to grow,” he concludes. “Novelties offer handheld small indulgences that are capturing more and more consumption occasions. Growth rates may slow, but growth should continue.”