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2023/24 Ice Cream Outlook: What You Should Know

Like most other industries, mergers and acquisitions (M&A) within the ice cream and frozen dessert industry undergo periodic cycles. While overall M&A market volumes in the US have declined during 2023, the ice cream industry continues to pursue further consolidation through M&A activity.

This month, we sat down for a Q&A with Dillon Bowman, Investment Banker at Raymond James, to review current market conditions and M&A activity in the ice cream and frozen dessert industry.

During the conversation, we uncovered some strategic advice you could greatly benefit from.

Q: Looking forward to 2023/24, what do you anticipate for M&A activity within our industry?

A: Ultimately, 2023 is shaping up to be a pretty active year for M&A activity.

The current market conditions, such as higher interest rates and inflation, combined with the continuous hyper-competitive nature of the category, are driving further consolidation. Growth potential in specific sub-categories, such as better-for-you and frozen novelties, is creating strong buyer interest in the industry.

This year, we’ll see some business owners who have reached their strategic goals and will soon be looking for the right partner to take their company to the next level.

While we typically expect M&A activity to occur as all businesses scale, the current strategic focus gravitates toward those companies demonstrating strong distribution in the fastest-growing channels.

Q: Why does scale play such a significant role during the M&A process?

A: A four-phase cycle usually acts as the driving force for M&A transactions in the ice cream industry: growth, capacity, scale, and innovation.

The first part of the phase cycle is growth – when the seller must demonstrate the ability to gain market share in a highly competitive sector.

The next part of the phase cycle is capacity – when the seller must demonstrate the ability to secure the necessary manufacturing capacity (integrated or outsourced) to sustain and continue growth.

Brands that demonstrate the essential capacity for continued growth usually receive more interest from sellers and enhanced business valuations. This was recently reflected in the M&A activity during 2021 and 2022.

The next part of the phase cycle is scale, which is where the cycle currently sits. Buyers are focused on targets with substantial scale, as they can find efficiencies from critical mass and have the ability to exert influence with significant customers.

Large multinational ice cream businesses will look for brands that have the potential to achieve at least $100M USD in sales. An example of a large brand well beyond this threshold is the recent acquisition by Unilever of the Greek yogurt-based brand Yasso. Yasso has experienced substantial growth within the better-for-you novelty segment of the frozen dessert category, which made the company very attractive to strategic buyers.

Next comes an intense focus on innovation. In this phase, buyers favor companies that have created an innovation engine with unique ideas, a strong R&D team, and production capabilities to deliver high-quality items.

Together, this engine allows a brand to continue to shape its portfolio to maintain consumer relevance. As a result, the brand can differentiate itself from the competitive market and hit consumer hot buttons in line with evolving industry trends.

Usually, in the innovation phase, brands with the most innovative portfolios will command the greatest interest and strongest valuations from potential buyers.

As mentioned earlier, today, we see M&A within the ice cream industry focused primarily on gaining scale. However, we will see the M&A focus cycle through these different phases over time.

Q: How might this expected M&A activity impact the category players?

A: In such a competitive space, M&A can have many effects.

When an ice cream company is acquired, the new combined entity can leverage numerous business functions to enhance the overall brand, including manufacturing, innovation, distribution, and sales through crucial customer relationships. Competitors must pay attention to M&A and deliver strong results to stay in freezers.

Copackers and distributors can feel vulnerable when purchasing power is consolidated into fewer hands. To de-risk the business, having a diversified portfolio of customers is necessary.

However, copackers and distributors often work for a select number of prominent industry players. With one voice controlling multiple brands, the operations are simpler, and there are fewer customer touchpoints.

Retailers can benefit from supplier M&A activity. It allows for greater supply chain and accounting simplicity, fewer touchpoints for key items on shelves, and usually more promotional support for the acquired brand.

Consumers are often unaware of M&A within the industry, as they are more focused on the availability of their favorite brands and products. For that reason, consumers benefit from M&A, especially when their favorite brand is purchased by a larger company with greater capabilities to accelerate the placement of products.

Q: How can potential buyers position themselves for greater success in 2023/24?

A: Large buyers concentrate on acquiring companies that will enhance their growth and profitability. When looking at potential assets, buyers usually focus on:

  1. Growth – the target’s historic growth, future projections, how the new partnership can accelerate current growth, and the ultimate scale potential

  2. Scale that they can immediately leverage to better compete in the market, take advantage of synergies, and grow the overall combined entity

  3. Synergies that can be unlocked thanks to their own infrastructure. These could include:

    • Sales – capitalizing on crucial sales relationships to grow total points of distribution and get newly acquired brands into the current company’s retailers

    • Manufacturing capabilities – enhanced profitability from combined capabilities and scale

    • Distribution – consolidation of distribution network leading to improved profitability and larger runs

    • Marketing – increased marketing and promotional spending driven by the acquirer’s industry knowledge and additional cash on hand

4. Brand extendibility that will allow for innovation of additional adjacent products, leading to incremental growth

5. And, of course, in light of the above, proper valuation for the potential target, ensuring the acquirer does not overpay

Q: How can potential sellers position themselves for greater success in 2023/24?

A: To best position your company for a sale, spend time creating and executing a long-term growth plan.

Focus on growing overall distribution points, using immediate resources to win new customers with immense growth potential. Ensure that your company has the necessary manufacturing support to achieve projections. Focus on the overall scale, distributing products across critical customers in the most extensive and fastest-growing channels.

Create an innovation engine by spending time and resources on new product development, solidifying your company and brand’s continued relevance. It’s important to monitor your growth plan concerning consumer trends and the overall category, utilizing fundamental industry tailwinds to position your company successfully.

The Bottom Line

M&A is a critical strategic lever in the food industry and, more specifically, the ice cream industry.

No matter which end of the equation you’re on, a successful M&A transaction requires careful preparation, execution, and ultimately, integration.

As important ice cream industry players continue competing to maximize their market share, M&A is a critical industry growth engine.

Looking to purchase or sell your ice cream business? Let our valuable connections help ensure the process goes as efficiently as possible! Email us with more information to get started.



Founded by former executives in the ice cream industry, INNODELICE aims to create a worldwide ecosystem of solutions within the frozen dessert industry. Thanks to the relationships fostered by INNODELICE, manufacturers, brands, importers, distributors, and suppliers can discover, buy, and sell solutions to grow their businesses. These solutions include co-manufactured and branded products and innovative and competitive ingredients, packaging, and services. Our collaboration model generates lower costs and fewer risks for our participating partners while optimizing their time to market. To learn more about INNODELICE, contact Andrea Montreuil or visit

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