Frozen novelties are providing opportunities for growth in a mature ice cream market where there is little room for maneuver, according to a new report from Mintel.
The novelties, such as ice cream sandwiches or bars, meet consumer demands for convenience, portability and portion-controlled products which has fostered increased innovation and consumer interest, it said.
They are also the most flexible category in the market in terms of innovation and they appeal to a wide range of consumer groups such as children, adults, the diet-conscience and indulgence-seekers.
Ice cream sales accounted for nearly 60 percent of total sales from ice cream, frozen novelties, sherbet and frozen yogurt combined in 2007, while frozen novelties accounted for 36 percent.
However, sales of novelties grew 7.2 percent from 2002 to 2007, whereas the performance of "old-fashioned" ice cream was said to be "lackluster" and sales were 3.9 percent behind 2002 levels.
David Morris, senior analyst at Mintel, said: "Convenience and healthy eating trends drive more people to frozen novelties to satisfy cravings.
"These products are portable and portion-controlled. Plus, rapid new product development is giving consumers many new frozen novelty dessert choices."
He added as health-conscious consumer look for a balance between nutrition and indulgence, "options such as light, portion-controlled ice cream bars or lower calorie frozen yogurt are sure to resonate".
Nearly half of the ice cream and frozen novelties market is made up of brands from the top two manufacturers. They are Nestlé, whose brands include Häagen-Dazs as well as "standard" frozen novelties under Carnation and its trademark name, and Unilever whose top-selling novelties include Popsicles and Klondike.
Total forecast sales in the US of ice cream, sherbet, frozen yogurt, and frozen novelties at current prices is $12.8bn this year and Mintel expects the market to grow during 2008-12 by about 15 percent.
Ice cream remains one of America's favorite treats as research from Mintel showed that 89 percent enjoyed a scoop in the past year. In comparison 59 percent ate novelties, 37 percent ate sherbet and 34 percent had frozen yogurt.
The report said frozen yogurt had been experiencing challenging sales but in 2007 it reported modest growth as a result of innovation featuring functionality in the form of probiotics.
Meanwhile nearly eight out of 10 respondents reported eating gelato as a way to occasionally have something a bit different to ice cream.
Mintel said: "This is very strong penetration and would support more innovation and product development to bring gelato mainstream".
The report echoes a similar study from market research publisher Packaged Facts at the beginning of the year. This said that frozen desserts manufacturers must continue to develop innovation to get ahead in a competitive market.
One of the recent developments within the market came is Cargill, which joined with MolliCoolz to develop cryogenically frozen ice cream beads that do not melt and fuse together during distribution and storage using its proprietary Daritech stabilizer. The beads are small, individual pellets of ice cream in a variety of flavors and colors.