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Karan Chechi - Research Director Techsci Research

Ice cream is a frozen dairy dessert made by freezing the ice cream mixture for hours. It consists of milk products, sweetening materials, flavors, preservatives/stabilizers, etc. Ice cream initially originated in Europe and was later introduced in the United States and other parts of the world. Ice cream is suggested as a decent delivery medium of probiotic organisms to the human body. The significance of ice cream is its protein and handily absorbed calcium content. Ice cream is a good source of vitamins A, B-6, B-12, C, D, E and vitamin K which prevents blood clotting.

The leading players in global ice cream market are Breyers, Magnum, Wall’s, Baskin Robins, Cold Stone Creamery, Dreyer’s, Movenpick, Haagen-Daz, Nestle Ice Cream, Nestle Extreme, etc. There are various trends in the ice cream industry which are, wellbeing consciousness among consumers being the driving force for low calorie ice cream, high demand for non-dairy ice cream as they have fewer calorie and less fat with added functional benefits such as protein, fiber, calcium, etc. Loaded with indulgences, ice cream is offered as a fully loaded luxury treat with layers, textures, toppings and filling and consumers are attracted towards flavor mash up such as Unilever’s Breyers’ “Breyers Oreo & Chip Ahoy 2 in 1” variant which gives you the richness of vanilla ice cream with a mix of pieces of real oreo cookies and chip ahoy cookies. Nowadays, dairy ice creams are less consumed on the account that they include artificial flavors. Unilever has started increasing its plant-based innovations after the Nielsen Company (US), LLC named Unilever’s brand Ben & Jerry’s non-dairy ice cream among top 25 breakthrough innovations in Europe in 2020. The companies are shifting their focus from dairy ice creams to the non-dairy ice creams. On the other hand, Nestlé, a huge manufacturer of ice creams, on the occasion of 85th birthday celebration of its chocolate brand KitKat launched KitKat ice cream variant to stay determined and enhance its customer experience. Initially, this new wafer-enhanced ice cream with finely squashed KitKat wafer pieces in the chocolate covering was launched in Malaysia, and since then it has witnessed an increasing demand from customers all around the world.

Ice cream market can be segmented based on category, product type, and distribution channel. Category segment can be further divided in impulse ice cream, take-home ice cream and artisan ice cream. Impulse ice cream is single serve ice cream bought for instant consumption which comes in cups, sticks, and cones, take-home ice cream refers to ice cream which can be brought to home for consumption for example ice cream brick and tubs. Artisan ice cream is made up of natural ingredients, free from preservatives, artificial flavors, stabilizers. Amongst all, take-home ice cream segment had a lion’s share of approximately 48% in 2020 in the global market. It was also stated in the Unilever’s annual report of 2020 that people bought less ice cream to eat on the go, while they preferred purchasing ice cream for their homes, as the sales of take-home Magnum and Ben & Jerry ice creams jumped by 25%. Artisan ice cream segment is growing swiftly as health awareness among consumers is rising and people are focusing more on natural and organic products. Ice cream is widely distributed by distributional channels such as supermarkets/hypermarket, convenience stores, speciality stores, online and others. Supermarkets/hypermarkets are largely associated with distribution while a high rise can be seen in online sales due to soaring digitalization and the facility of home delivery provided by online e-commerce platforms.

Companies are coming up with sophisticated flavors which are unique, refined, and complex. These flavors are more likely to be seen in small brands and include more premium ingredients. Some of these flavors include ethnic flavors, alcohol, tea, or spices. A brand-named Humphry Slocombe provides unique flavors of dairy free ice cream such as ginger, hibiscus beet sorbet, fudge sorbet, coconut sherbet, carrot mango sorbet and many others. Unilever’s innovation partners are helping it to produce planet friendly products and ingredients. They are working with Evonik on biodegradable cleaning ingredients and with SABIC to develop recycled plastic tubs for Magnum ice cream. COVID- 19 also impacted the whole ice cream industry in 2020 and the most heart wrenching thing was that the pandemic resulted is the loss of lives of many workers in the industry. The widespread pandemic made the world go into lockdown and resulted in a very sudden and drastic fall in sales of businesses including the ice cream industry. It also affected retailers of all types in many ways. The supply chains were disrupted, and employees were made to work from home. With nations going into lockdown and individuals remaining at home, every day propensities changed drastically: from eating out to eating at home, from shopping in stores to shopping on the web, and from working in workplaces to working from home.

In the global ice cream market, North America is the dominant region with maximum market share and Asia-Pacific is the fastest growing region. The Asia-Pacific ice cream market is led by China, India, and Japan. As the population rises, urbanization increases, economies develop, and the demand for luxury products, frozen desserts such as ice cream growth is seen prominent in the forecast years. India is the largest producer of dairy products across the globe, ice cream is the most loved dessert among people in India. Amul ice cream is first choice of ice cream lovers in India, Unilever-the biggest FMCG company in India, has few brands producing ice cream in India, among those Cornetto and Magnum are the most preferred brands, Vadilal is another well-known name in Indian ice cream industry, Mother Dairy, Cream Bell, Havmor are another big players in the industry. A more premium ice cream is offered by Baskin Robbins which is an American brand established in 1993 in India, it has a global fan following as it offers the best quality of ice cream with a variety of flavors. COVID-19 has tremendously affected the market as the industry players stated that 2020 had been a year of disappointment for them as the consumption had drastically fallen by 60-80% in India. The targets which the companies had set for 2021 looks impossible to achieve as this year also COVID-19 has adversely affected the Indian Market. People are less likely to consume ice cream as this can cause sore throat leading to illness. Sudhir Sitapati, Executive Director Hindustan Unilever, Co-Chair CII Food Processing Committee and Author of 'The CEO Factory: Management Lessons from Hindustan Unilever,” said: “The ice cream industry was worst hit among the food industry as the whole year was a washout. The COVID-19 crisis has shown us the weakness in our category and the need to change perception.”

The ice cream industry is doing exceedingly well in comparison to other sectors in the food industry, despite suffering a major setback due to the pandemic. Several companies such as Havmor, Mother Dairy and others have said that the silver lining in the industry is the initiative of opening the e- commerce channels and home delivery of ice creams. The growth in this is prominent and the companies are coming up with new innovative ideas to compete in this competitive market.

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