Product Profile: Ice Cream
HS CODE: 210500
• The global ice cream market was valued at US$ 70.8 billion in 2019, and is estimated to reach US$ 97.3 billion by 2023, growing at a CAGR of 5.4% from 2017 to 2025.
• Ice cream is one of the oldest desserts with its commercial production dating back to the early 1850s, when the first large-scale manufacturing plant was established in Baltimore, Maryland.
• World exports of ice cream surged from US$ 3.65 billion in 2014 to US$ 4.41 billion in 2018 with a CAGR of 5.2%. Top exporters of ice cream are France, Germany, Netherlands, Belgium, Italy and US. On the other hand, major importers of ice cream are Germany, UK, France, Netherlands, Spain, Belgium and Iraq.
• India’s exports of ice creams proliferated from US$ 1.4 million in 2014 to US$ 6.6 million in 2018.
Ice cream is a sweet, frozen dessert made from a combination of milk, cream and artificial or natural flavourings. Some variants like frozen custard and French ice creams also use egg as one of the main ingredients. Ice cream is a rich source of carbohydrates, calcium, phosphorus, thiamine, riboflavin, niacin and folate, as well as vitamins A, C, D, E, K, B-6 and B-12. There are numerous flavors available in the market amongst which the most popular are strawberry, chocolate, and vanilla.
Ice cream is one of the oldest desserts with its commercial production dating back to the early 1850s, when the first large-scale manufacturing plant was established in Baltimore, Maryland. Since then, rapid advancements in logistics and production processes have enabled manufacturers to offer ice cream through nearly every restaurant, supermarket and corner store.
World exports of ice cream surged from US$ 3.65 billion in 2014 to US$ 4.41 billion in 2018 with a CAGR of 5.2%. Top exporters of ice cream are France, Germany, Netherlands, Belgium, Italy and US. On the other hand, major importers of ice cream are Germany, UK, France, Netherlands, Spain, Belgium and Iraq.
Manufacturers are increasing their product range by including functional ingredients, organic herbal fillings, and exotic flavors in product formulations to meet changing consumers’ demands. For instance, companies are including other exotic flavors such as tropical fruits, lemons, and coconuts to cater to changing taste of consumers. In addition, for health-conscious customers prefer a low-calorie and low-fat ice cream called Skinny Cow. In this way, innovations in ice cream products are driving growth and development of the market globally. Apart from this, retail channels such as hypermarkets, supermarkets, convenience stores, discounters, forecourt retailers, and grocery stores act as global marketing tools that assist in building an impressive premium image and increase brand exposure of a wide variety of ice cream products.
The ice cream market in Europe contributed more than one-third of the total market share in 2017 and is projected to retain its lion’s share through 2023. This is on account of the increase in off-season sales, rise in availability of premium offerings, and growing trend of eating ice cream as a snack. However, the Asia-Pacific region would register the highest CAGR of 6.5% from 2017 to 2023 due to the growing demand for innovative products in the Asia-Pacific countries such as India and China owing to the expansion of the retail sector and increase in disposable income.
High demand for ultra-premium ice-cream products consisting high-quality ingredients, surge in the number on online food delivery platforms, and increase in preference for lactose-free ice cream drive the growth of the market. However, growing health consciousness among consumers to curb sugar consumption and increasing incidence of lactose intolerance worldwide are expected to hinder the market growth. Conversely, expansion of retail channels such as hypermarkets, supermarkets, convenience stores, and grocery stores coupled with expansion of the cold storage industry would provide lucrative opportunities to the market.
Over the past few years, rising health consciousness and better knowledge have led consumers to shift toward upmarket treats, which are formulated with unusual and organic ingredients. Besides, several governing bodies across the globe are issuing new regulations pertaining to the labelling, ingredients and manufacturing of ice cream. For instance, the Food Safety and Standards Authority of India (FSSAI) is planning to introduce labelling requirements for frozen desserts in 2020. The norms will require Food Business Operators (FBOs) to prominently mention the percentage amount of vegetable proteins or vegetable fat/oil on the label. Apart from this, rapid urbanization has led to an expansion in modern retail formats such as departmental stores, hypermarkets, supermarkets and convenience stores, which is contributing to an increase in sales. Moreover, owing to the income elastic nature of ice cream consumption, rising disposable incomes and the improving purchasing power of consumers are escalating its per capita consumption in emerging regions like India and China.
Indian Ice-Cream Market
India ice cream market is projected to witness a CAGR of over 18% by 2023. Growth is expected to be driven by increasing household disposable income, changing lifestyle patterns and entry of various international ice cream players in the market along with rising availability of branded ice creams with different flavors at affordable prices. Moreover, India being the largest producer of milk, accounts for over 1/5th of the global milk production, thereby offering a large volume of raw material for domestic manufacturing of ice creams. All the above stated factors in addition to growing demand for innovative ice cream flavors are anticipated to positively impact the ice cream market in India during the next five years.
Source: ITC Trade Map
India’s exports of ice creams proliferated from US$ 1.4 million in 2014 to US$ 6.6 million in 2018. There is potential to explore in new markets. For instance, as observed in IndusFood, the Oceania region is intensively looking for ice creams as an end product from India which can be seen a long-term engagement. Indian exporters can explore such markets for escalating their business.