The FDM packaged ice cream market grew 17% in current dollars, or 3% in constant 2004 dollars, from 1999-2004, fueled by unprecedented levels of product innovation and the emergence of a better-for-you sector that transformed the look of the ice cream aisle. The $6.8 billion category comprises a wide variety of products including ice cream, frozen yogurt, frozen soy-based desserts, sherbet, sorbet, ices, and frozen novelties. The majority of product innovation that took place over the period was focused on ice cream and frozen novelties, leading those segments to steal attention and market share from frozen yogurt, sherbet, sorbet and ices.

The FDM packaged ice cream market grew 17% in current dollars, or 3% in constant 2004 dollars, from 1999-2004, fueled by unprecedented levels of product innovation and the emergence of a better-for-you sector that transformed the look of the ice cream aisle. The $6.8 billion category comprises a wide variety of products including ice cream, frozen yogurt, frozen soy-based desserts, sherbet, sorbet, ices, and frozen novelties. The majority of product innovation that took place over the period was focused on ice cream and frozen novelties, leading those segments to steal attention and market share from frozen yogurt, sherbet, sorbet and ices.

Ice cream, the largest segment which accounted for 59% of 2004 dollar sales, grew 14% over the period from 1999-2004, driven by an onrush of new products designed to meet the needs of both indulgence-seekers and health-conscious consumers. In the premium ice cream sector, manufacturers launched dozens of indulgent, new flavors--many featuring big chunks of popular candies, cookies, brownies--in an effort to defend themselves against the swift expansion of ice cream chains like Cold Stone Creamery and Marble Slab Creamery, where consumers choose their own concoction of candy, cookie, and other mix-in ingredients. On the other end of the ice cream spectrum, in the burgeoning better-for-you sector, manufacturers launched myriad low-carb and light ice cream products in response to the growing popularity of low-carb diets and heightened consumer concern about obesity.

The frozen novelties segment grew faster than any other segment over the period. Sales of novelties increased 30%, driven by an influx of new, better-for-you offerings, as well as a high level of co-branding that helped raise product awareness.

Share in the ice cream market became increasingly concentrated over the period due to a series of mergers and acquisitions. Two companies--Unilever and Dryer’s Grand Ice Cream Holdings--together accounted for nearly 43% of sales in 2004. Industry consolidation has resulted in an increasingly competitive environment where the market leaders are investing more in marketing and new product development in order to protect and grow their investments. Given this environment, Mintel expects that the category will continue to grow at a moderate pace over the next several years.

This report examines the U.S. market for ice cream and frozen novelty products that are purchased for home consumption. It does not include ice cream and frozen novelty products purchased from roadside stands, concessions, vending machines or kiosks. Also excluded are ice cream purchases at ice cream shops, soda fountains, fast food restaurants, or other eateries, which may be intended either for on-the-go eating or for at-home consumption.