Dairy products such as milk and ice cream remain indispensable in the convenience space, especially when it comes to single-serve products.
Global ice cream market value is expected to reach $89.5 billion by 2023, recording an anticipated compound annual growth rate (CAGR) of 4.9% during the period of 2018-2023, according to the latest report from market research firm Mordor Intelligence. Unilever dominates the global market occupying eight of the 15 top selling brands and a 22% share in the market.
Nestlé is the closest to Unilever, occupying four brands in the top 15.
Mordor notes the sales of low-quality ice cream have been declining, due to the increased preference for premium ice cream and frozen novelties.
“When indulging, consumers want full flavor ice cream,” said Samantha Overmohle, assistant category manager for Kum & Go LC. “We’re also seeing a shift towards low-calorie, high-protein ice cream snacks. Interestingly enough, we see these ice creams purchased more often as multiples because consumers feel they can eat these treats more often and still feel good about what they are eating.”
Kum & Go operates more than 450 stores in 11 states.
DAIRY MINDED
The proliferation of perishable milk, for example, delights consumers but may over-burden stores. “Milk is one of those categories now that people think carefully about unless they have little kids, in which case they just buy milk in bulk,” said Steve Barnett, the founder and president of Bardo Consulting in New York.
Des Moines, Iowa-based BW Gas & Convenience, which does business as Yesway, is seeing consumers migrate to healthier snacking alternatives.
“We expect sales and gross profit growth to come from functional and premium products, like Halo Top,” said Tony Sparks, vice president of merchandising. “We also see an increasing number of private-brand items in this category, especially in the premium and functional segments, and an expanded focus on novelties.”
American consumers’ growing healthier habits are also spurring demand for frozen yogurt and other frozen dairy offerings.
“Immediately consumable, healthier ice cream novelties that tend to be low-calorie, gluten-free or low-sugar alternatives will continue to drive change in this category,” Sparks said.
Last year, Yesway switched suppliers in order to increase product selection and lower costs, said Sparks. “We also upgraded all of our equipment and reallocated product assortment to be more heavily focused on immediately consumable items versus take home items.” Sales of novelty ice cream products grew the most, he added.
For the balance of 2018, ultra-premium ice cream and treats will continue to show growth, Kum & Go’s Overmohle is convinced.
