Ice cream parlour sector trends

(last updated July 2019)

What has been happening in the ice cream industry

The market for ice cream in this country has expanded greatly over the past couple of decades as different types of ice creams have been introduced by manufacturers. This increase in popularity has led to a growth in the number of different outlets that now sell ice cream. As well as providing a healthy sector for your business, it also means more competition. There has been a huge growth in supermarket sales of ice cream (now approaching £1bn) and there has been an increase in the number of small businesses run by farmers selling ice cream made from their own milk - it is estimated there are about 1,000 artisan ice cream makers in the UK. In addition, there has been a significant increase in the number of ice cream parlours themselves.

Even though the average consumption of ice cream stands at about 9 litres per person, there has been a reduction in the amount of ice cream sold due to concerns about health, and in particular obesity, because of the high sugar and fat content of ice cream. The trend has been for consumers to cut back on the quantity of ice cream they buy, with the worst affected product being family packs. However, expenditure levels have held up reasonably well as people have traded up to premium and luxury products, particularly desserts. The most popular flavour is chocolate. Despite the reduction in ice cream sales overall, one area of growth was children's ice creams and lollies.

Weather has a marked effect on the market, with sales affected by:

  • hours of sunshine
  • temperature
  • rainfall

So as you would expect, sales of ice cream are most buoyant in a warm, dry, sunny summer.

The vast majority of ice cream products can be divided into two main sectors - 'impulse' and 'take home'. Impulse products include cones, bars, small tubs and stick products (like lollies), while take home products include large tubs and multi-packs. Both the impulse and take home sectors have benefited in recent years from:

  • the increased popularity of adult and premium products. Once ice cream was thought of more as a children's product but manufacturers have launched new lines, mostly with a high dairy content, that appeal to adults as a sophisticated dessert or snack
  • ice cream becoming somewhat more popular all year round
  • strong and growing demand for 'healthy eating' products like frozen yoghurt

The economic downturn which began in the late 2000s and continued into the early 2010s hit the catering and hospitality sectors hard, while rising ingredient prices made things even more difficult for the industry. However, even at the most difficult of times people like to cheer themselves up with a treat, so ice cream parlours which got their menu and prices right and served tasty ice creams generally continued to get customers in through the door. The economy began to pick up during 2013 and the recovery continued throughout 2014 and into the first half of 2015. Unfortunately the recovery stalled in the second half of 2015 and into 2016. Further economic uncertainty followed the vote in June 2016 to leave the EU. Although consumer expenditure held up in the second half of 2016, especially expenditure on entertainment and experiences, there was little growth during 2017, and growth in 2018 and 2019 is expected to be low due to continuing uncertainty over the Brexit negotiations, inflation and a lack of confidence in the economy and job prospects.

At the end of 2014 food labelling regulations which set out special minimum content requirements for products labelled as 'ice cream' and 'dairy ice cream' were scrapped, leading some in the industry to express concerns that bulk producers would start selling 'artificial' ice cream products made from cheap ingredients and containing little or nothing in the way of dairy products. Others, however, point to the opportunities for manufacturers to introduce healthier low-fat ice cream products, and suggest that UK manufacturers will switch to using the Euroglaces Code for Edible Ices that has been in use throughout much of the rest of Europe for many years.

At the same time as scrapping the minimum content requirements for ice cream, the government implemented new EU food information labelling regulations which require catering businesses like cafes and ice cream parlours to provide information for their customers about any specified allergens which are used in their dishes and products. The list of specified allergens includes nuts, eggs, milk and milk products.

One trend which has had a huge impact on catering and hospitality businesses is the rise of review websites - particularly TripAdvisor. A good rating on TripAdvisor is now very important to the majority of businesses like cafes and ice cream parlours, with some finding that a poor review and rating can have a very serious negative impact on trade. Businesses which are listed on TripAdvisor can take certain steps to manage and enhance their listing, as well as responding to customer feedback.

Keeping up to date with developments

Joining a trade association is an excellent way of keeping up to date with developments in your industry. The catering industry in general - and the ice cream industry in particular - are represented by several national associations, including:

  • The Ice Cream Alliance
  • The British Hospitality Association
  • Nationwide Caterers Association (NCASS)
  • The Institute of Hospitality

You can find out more about these organisations and get contact and membership details on their websites.

The Ice Cream Alliance publishes Ice Cream magazine, a regular trade journal for the ice cream industry and another excellent way of staying up to date.

Trade shows and exhibitions are another good way of keeping in touch with what's going on. There are several annual exhibitions for the catering industry - you can find out about dates and details on the Exhibitions UK website. The Ice Cream Alliance also organises specialist exhibitions and other events including Ice Cream Expo.

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