Mintel Says China Now Top Ice Cream Market

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New research from the Mintel market research company reveals that China surpassed the United States as the world’s biggest ice cream market in 2014 for the first time.

Between 2008 and 2014, the total market value for ice cream sales in the PRC nearly doubled, soaring by 90% to generate up $11.4 billion in sales. Meanwhile, the US market grew at a much slower rate, climbing by 15% over the same period to reach $11.2 billion.

Accounting for an impressive third of all ice cream products sold in 2014, volume sales of ice cream in China reached 5.9 billion liters in 2014, compared to 5.8 billion liters in the US. What’s more, in 2015 volume sales are set to increase even further, reaching 6.3 billion liters in the PRC. And the prediction is that sales will increase to $12.6 billion in China and $11.4 billion in the US in 2015.

While sales of ice cream in the PRC continue to skyrocket, US consumers are eating considerably more ice cream than consumers in any other country – 18.4 liters per person per year, compared with just four liters per head in China. The top five ice cream markets by volume globally are China (5.9 billion liters), followed by the US (5.8 billion liters), Japan (784 million liters), Russia (668 million liters) and Germany (545 million liters).

Volume consumption in the UK amounted to just 345 million liters in 2014. On average, Brits ate five liters of ice cream per person in 2014, compared with the 18 liters per person in the USA and 10 liters in Australia.

Overall, global sales of ice cream reached $50 billion in 2014, increasing by 9% from 2011 when sales were valued at $46 billion.

Alex Beckett, global food analyst at Mintel, commented:

“Rising incomes and an increasingly developed retail infrastructure and cold chain network are driving growth in the ice cream market in China. However, the vast array of locally produced, low-price brands present a challenge for global ice cream giants looking to develop there. China is now the powerhouse of the global ice cream market in terms of overall size, although for per capita consumption, it’s the Americans who tuck into the most ice cream each year. The pace of development, coupled with the immensity of the population, is having an increasing impact on the Chinese ice cream market.”

Yili-Chinese-ice-creamInner Mongolia Yili Industrial Group is the ice cream market leader in China, with a share of approximately 20%. Other major players on the scene include Inner Mongolia Mengniu, Unilever’s Wall’s brand and Nestlé, and a number of regional brands.

While rising global volumes of ice cream mainly reflect the category’s expansion in emerging regions, ice cream has encountered challenging conditions in more developed markets like Europe and North America, according to Beckett. Growth has been dampened by consumer diet concerns, competition from other categories, such as yogurt, and the perennial challenge of unseasonable weather.

“As the world economy’s center of gravity continues to shift away from the West, these challenges give ice cream giants all the more reason to extend their presence, and new product development investment, in more emerging economies, particularly in Asia,” said the Mintel analyst.

‘Better-for-You’ New Product Surge
According to Mintel’s Global New Products Database (GNPD), the world ice cream market witnessed a record high share of launches bearing low/no/reduced (LNR) allergen and fat claims, as well as gluten-free products, in 2014. The number of ice cream debuts with LNR allergen claims rose from 7% of global ice cream launches in 2012 to 15% in 2014, while LNR fat claim launches advanced from 6% in 2012 to 8% in 2014. There has also been an increase in gluten-free claims, which rose from 6% of global ice cream rollouts in 2012 to 13% in 2014. Across the planet, the US leads the way with these claims, accounting for 20% of all LNR fat claims globally, as well as 18% of LNR allergen claims and 18% of gluten-free claims.

Frozen Yogurt Revolution in Europe
Mintel research confirms that the frozen yogurt revolution has truly hit Europe, contributing to the global increase in low-fat ice cream innovation. According to Mintel’s GNPD, the region accounted for 41% of frozen yogurt new product development in 2013 and rose to an impressive 54% of global frozen yogurt new product development in 2014, which was followed by 29% in North America and 9% in Asia Pacific.

“Having enjoyed huge success in the US, Greek frozen yogurt’s high protein content is resonating among European consumers, although people are also waking up to its often high sugar content,” said Beckett.

Appetite for Artisanal Ice Creams 
There is a growing global appreciation of individuality and quality-over-quantity appeal in ice cream. In the US, for example, 61% of consumers of frozen treats claim to be willing to spend more on better-quality frozen treats, while 60% of daily eaters believe that local brands offer better quality than national brands.

Across Europe, there is strong interest in buying ice cream with locally sourced ingredients. In 2014, almost four in 10 ice cream and yogurt consumers in Italy (39%), France (38%) and Poland (38%) agreed that they are keen on buying ice cream containing locally sourced ingredients. This was followed by 33% in Germany and 28% in Spain. In addition, 39% of UK consumers agree that ice cream made using authentic production methods, such as handmade or slow churned, is appealing, rising to half (51%) of consumers over age 65.

“Hand-crafted ice cream, made with a homemade style authenticity, is well positioned to embrace the wider consumer interest in artisan-produced food and drink. Craft has become something of a buzzword in recent years, with everything from alcohol to pasta sauces, pizza and lemonade emphasizing their craftsmanship or origin stories on packaging to differentiate the brand from the competition,” Beckett concluded.