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Saturday, January 12, 2008

Ice Cream, Frozen Desserts Market Expected to Fatten to $27.6 Billion by 2012

Despite unchanging consumer demand and fickle consumer tastes, the market for frozen desserts is expected to grow by more than $4 billion by 2012, according to The U.S. Market for Ice Cream and Related Frozen Desserts, a new report from market research publisher Packaged Facts.

Dollar sales continue to grow annually, but not because Americans are eating more frozen desserts: instead, the population is paying more for what it eats. Prices of all dairy products are at an all-time high, and frozen desserts are no exception. Although these higher prices make shoppers hesitant about purchasing frozen desserts at the retail level, they sure don't hesitate at the foodservice level. This phenomenon is driving foodservice sales while retail sales are slowing.

Although ice cream accounted for 59.2 percent (or $13.8 billion) of all U.S. frozen dessert sales in 2007, ice cream's place at the dessert table dropped 0.3 percentage points from 2006. Sales likely went to frozen yogurt. Frozen yogurt's 4.1 percent CAGR from 2003 to 2007 is the highest of all frozen desserts categories. In 2007 alone, frozen yogurt sales grew 12 percent from the 2006 level. With consumers seeking better-for-you indulgence in a frozen form, frozen yogurt manufacturers have engaged in more innovation and new flavors, helping to revive the packaged frozen yogurt business.

"Because this is a mature market, growth for one marketer often comes at the expense of another. And within a company, growth of an individual product line or flavor often cannibalizes sales of another item. This is particularly true with frozen novelties, where product life cycles are extremely short," says Cathy Minkler, editor of Packaged Facts. "Shoppers tend to browse shelves, actively on the lookout for new tastes, informative and exciting packaging, interesting product innovations, or products offering a 'surprise' factor."

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