Last week, I had the pleasure of attending the 2023 Private Label Manufacturers Association (PLMA) tradeshow in Amsterdam. With over 60 frozen dessert manufacturers on site, there were plenty of opportunities to talk – and eat – ice cream. (I probably had a year’s worth of ice cream in less than 48 hours!)
The tradeshow provided a great opportunity to connect in person with many of our ecosystem’s partners and meet new ones. At each booth visited, I asked the following two questions:
What’s the next trend that will drive growth in ice cream?
What are the biggest challenges the category is facing?
In the spirit of contributing to the category’s growth, each vendor graciously accepted that I share with you the consolidated results. Below, we’ve compiled the answers in order from most popular to least.
#1: What’s the Next Trend That Will Drive Growth in Ice Cream?
#1: Snacking
Whether it be for portion or calorie control or to reduce cost, snacking portions were often named the most.
Examples could be sampled on-site, from traditional mochis to cookie dough-coated bites to macaron ice cream sandwiches. We should expect more fun formats and concepts to come soon!
#2: Plant-Based
While it ranked second, some disagreed with the prediction that vegan frozen desserts would gain popularity. (Heck, we can’t even agree on a name: plant-based, vegan, dairy-free, or non-dairy?) We found that vendors were either part of the:
“it’s-only-a question-of-time” gang who believe that all ice cream will eventually convert to dairy-free versions,
“it’s-here-to-stay but...” group who recognize the trend but remain skeptical and will willingly explain what’s needed (lower prices, more demand, better taste, etc.) to really drive growth, or
“it’s-a-fade” team, also known as the “hard-core dairy” team.
If you ask me, I believe the category is experiencing a market transformation, and with it comes a mix of doubt, denial, and excitement in the air – an accurate representation of our consumer base’s perception of this segment.
It makes you wonder: Is the consumer trend causing our confusion as an industry, or is our misalignment confusing our consumer?...
#3: Back to Basics
Clean, pure, simple, free-from, just good old ice cream, classic, and nostalgic are a few examples of what manufacturers would use to explain what going back to basics meant for them.
Curiously, none could clearly explain why. Are retailers asking for this? Are consumer studies identifying this opportunity? Or maybe are we trying to counter the long ingredient lists that can be found in plant-based frozen desserts? Either way, I suspect more of it to show up soon.
#4: More Indulgence
This has been a key driver for the category in recent years, but it seems like we are not done being surprised. Indulgence promises to stay for a while, whether it’s products including small and large inclusions, inclusions in sauces, or sophisticated and intriguing flavor profiles.
#5: Sustainability
Everyone knows more needs to be done in the CPG world to improve our environmental footprint. So not surprisingly, most mentioned it as an important trend.
Sadly, the general feeling is one of being at a loss for ideas and options, and only a very few could share confidentially their concrete plans to achieve this.
With consumers continuing to refuse to pay more for sustainable options, it seems like manufacturers are left with the following problem: contribute to a better world and invest in sustainable ways, or go with the flow with a feeling of defeat? This is one good example of how more collaboration is needed to unlock new opportunities.
#6: Functional Better-For-You
The “nutritional functionality” wave that has been so present in the growth of beverage and other food categories has others wondering. Will this trend eventually migrate to the ice cream section? That has been on my mind as well. I guess time will tell.
#7: Alcohol
Alcohol as a trend did pop up occasionally, although not as much as I had expected. I suspect this might differ in a food show showcasing brands versus copackers such as the PLMA. Nevertheless, I did get to try a delicious prosecco-flavored pop which seemed straight out of a Sex-in-the-City episode!
#8: Low-Budget Ice Cream
In full transparency, this trend only showed up once in all my conversations. However, it captured my curiosity. The reasoning: the last few years have all been about indulgence and “premiumness”. Add to that rising inflation, and you find yourself with a shelf full of expensive ice creams (even private-label ice cream is costly today!).
We need to find a solution if we don’t want to erode our consumer base during these difficult economic times. Certainly, food for thought…
#2: What Are the Biggest Challenges the Category Is Facing?
#1: Rising Costs
I don’t believe this will shock anybody. One hundred percent of manufacturers interviewed named inflation within 10 seconds of me asking the question – indicating a “top-of-mind” concern for all. The fear they articulated, however, was not one of lowering margins but of category shrinkage due to higher shelf prices.
In other words, none of them can swallow additional costs, and all expect to pass the cost increase to the market.
Despite this clear and determined position, all share the same look of concern in their eyes.
#2: Skilled Labor
Finding skilled, reliable people continues to be a challenge. Some have tried different initiatives but with little success and all seem exasperated by the situation. The impact of this feeds into our third challenge…
#3: Lack of Capacity
From machine capacity to lack of labor, many are struggling to keep up or maintain their share of the pie. This was echoed by retail buyers (many from the United States) who were walking the floor hoping to find the right supplier to help them fill their shelves.
#4: Ingredients Supply Disruptions
It seemed to me, in comparison to my conversations with manufacturers in North America, that European manufacturers were still very much impacted by supply disruptions. From sugar to fruits, to water in some cases, it still feels like a scarce market with little relief in sight.
#5: Making Indulgence Healthy
“But how?” is the redundant question that manufacturers are asking themselves when considering the need to make indulgent ice cream healthier.
Due to the lack of ingredient options or the difficulty of communicating and, more importantly, convincing the consumer that better-for-you products will deliver on taste, this question continues to occupy manufacturers' thoughts but remains unresolved.
#6: Harsh Competitive Landscape
The combination of too many manufacturers, too many products, and too few refrigerated shelves contribute to what promises to become a climate of tense negotiations with retailers. With the risk of losing-it-all glooming over their heads, many manufacturers admit having reached a “take-it-or-leave-it” mentality.
On the bright side, this might help rebalance the negotiating power between manufacturers and retailers.
#7: Winning a Greater Share of the Stomach
While most challenges identified during my survey were inward-focused, this one captured my attention for being category-focused.
Here’s the thinking behind it: How can we leverage the manufacturing capabilities in place to produce other items that could be consumed at other moments of the day and for different purposes? Would it even be frozen desserts? What formats would these products have? Which consumer needs would they fulfill?
While there are no answers yet to these questions, I could not but wonder: Couldn’t this be the solution to many of our category’s challenges? That will be for us to define…
Conclusion
All in all, manufacturers at the show seemed actively engaged in determining how to contribute to the category’s growth, as I suspect most of you are.
To all of those who graciously shared their time, thoughts, hopes, and fears and who, like me, believe that collaboration over and beyond competition is what will help us all thrive: thank you!
See you at the next show!
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ABOUT INNODELICE
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 www.innodelice.com.