According to Mintel, the ice cream market is expected to decline by 3.7% this year compared to 2020, and a slower return to pre-pandemic growth will continue into 2022.
Consumers are gradually stepping back from indulgent foods post-pandemic and many ice cream brands will be challenged to maintain their appeal, notes Kaitlin Kamp, consumer insights analyst on the Food and Drink Reports team at Mintel.
"As consumers slowly emerge from the pandemic in 2021 with renewed health goals and financial concerns in mind, frozen treat brands will need to speak to indulgences differently – prioritizing value where possible and investing in better-for-you improvements to keep health-conscious consumers from cutting ties to the category.
"To keep frozen treats in their repertoires, brands can provide permissibility through nutritional improvements, such as no added sugar formulations or added protein, or simple ingredient lists," she said.
The first area of nutritional improvement brands should target, according to Kamp, is sugar content, as more than half of US adults are cutting back their sugar intake, according to Mintel.
"While it will be important that brands not lose associations with indulgence and comfort, sugar improvements can provide much-needed permissibility as consumers aim to eat fewer indulgent foods. More than a third of US adults would be motivated to try a new frozen treat if it featured natural sweeteners like honey or maple," said Kamp.
According to Mintel research on sugars and alternative sweeteners, consumers perceive sweeteners like honey, raw cane sugar, and dried fruit as more natural and more acceptable than refined white sugar or zero-calorie sweeteners.
Plant-derived sweeteners (e.g. monkfruit, stevia) also scored well in being seen as natural and received low perceptions of being bad for you.
Brands such as NadaMoo!, for instance, are utilizing sweeteners such as agave and molasses while lactose-free dairy brand Fairlife is using a combination of cane sugar and monkfruit in its 'light' ice cream line.
Next-wave of non-dairy ice cream innovation
Non-dairy frozen desserts are continuing to gain momentum and have the potential to be a long-term driving force in the category with dairy-free claims growing 8.8% from 2019 to 2020, according to Mintel.
"The relatively low interest in soy milk as an ice cream ingredient, in contrast with a strong interest in newer options, such as oat milk, cashew milk and sunflower butter, suggests that consumers can be fickle in their search for the next big thing," said Kamp.
Mintel reports than more than half of frozen dessert buyers expect the products to be healthier than their dairy counterparts, and two in five agree that non-dairy frozen dessert products are too processed.
"While indulgent non-dairy options can cater to consumers with dairy allergies who simply want to indulge without risk, non-dairy brands will be challenged to continue innovating with ingredients and bring health to the forefront for those who seek out non-dairy options because they perceive them as healthier," said Kamp.
"Clear nutritional benefits and simple ingredient lists will be important to meeting consumers’ expectations."
Leaning into indulgence
In the face of permissible indulgence, there's also an opportunity to fully lean into the decadence of ice cream to appeal to consumers as 64% of ice cream purchasers say they enjoy both better-for-you alternatives and regular dairy options.
"Mimicking foodservice-inspired desserts by incorporating mix-ins and toppings into frozen treats is an opportunity to strengthen retail value propositions," said Kamp, calling out Gelato brand Talenti for its layered gelato products with various mix-ins including frosting and cookies.
Other examples of brands offering fully-loaded decadent packaged ice cream options include Ben & Jerry’s, which introduced its 'Topped' product line in 2021, which it calls “an ice cream sundae in a pint."
Frozen desserts brand Blue Bunny offers a line of Load’d Sundaes that provide a package sundae experience for consumers.
"Value will be important over the next year as consumers continue to navigate economic uncertainty, especially considering that consumers who identify as financially struggling are more likely than average to be reducing frozen treat purchases," added Kamp.