Four Trends Driving Growth in China's Ice Cream Market
According to Euromonitor, the Chinese ice cream market continues to experience steady growth since 2015, with retail value sales increasing by 4% in current terms in 2022 to reach CNY52.3 billion (around GBP6 billion). While China's per capita consumption of ice cream is higher than that of the Asia-Pacific region, it still falls short of the global average, indicating significant room for growth in the Chinese ice cream market. In light of this, not only are established ice cream brands constantly innovating and incorporating traditional Chinese elements, but other industries, such as tea and liquor companies, are also entering the ice cream market, contributing to the diversification, innovation, and healthiness of the entire industry. This article will explore four emerging trends that are shaping China's ice cream industry.
“Guochao” raises consumers’ interest in domestic ice cream brands
The trend of "guochao" is increasingly being observed in a variety of consumer products, including ice cream. The number of consumers of ice cream who are interested in products with Chinese culture and tradition, or the so-called “guochao” trend, is on the rise. To cater to these shifting consumer needs, many manufacturers have developed corresponding strategies and products. For example, Bright Food (Group) Co Ltd has announced a "one produce per town" strategy, whereby they incorporate one new locally sourced ingredient into their products each year starting in 2021. Specifically, in 2021, Bright's product featured single portion water ice cream made from speciality waxberries from Xianju County in Zhejiang Province. In 2022, Hong Bao Lai Group Co Ltd partnered with Changbai Mountain Resort to launch snowflake-shaped ice cream, providing consumers with a unique experience. Currently, many tourist attractions throughout the country offer their own uniquely shaped ice cream, including building-shaped, flower-shaped, or animal-shaped, attracting both tourists and locals who enjoy purchasing and taking pictures.
Premiumisation prevails and manufacturers emphasise product quality
In 2022, the ice cream market continues to witness the trend of premiumisation, with several brands such as Chicecream, UBest, and Meiji introducing high-end products. In 2021, UBest, a subsidiary of Bright Food (Group), collaborated with Zhongjie1946 Zhejiang Tea Group to launch Longjing tea-flavoured ice cream. The product's packaging highlights "zero water added," which underscores its exceptional quality. Chicecream also introduced its "pastry" ice cream range in 2021, which includes various seasonal flavours featuring Chinese speciality ingredients. One of its four flavours is lychee ice cream with chopped nuts and longans. In the same year, Meiji launched a high-quality cream series of ice cream, which featured vanilla and chocolate flavours, signalling its commitment to prioritising product quality for its premium product lines. Despite the relatively high price point of the above products, consumers have been drawn to their quality and uniqueness, as reflected in their sales performance.
Reduced sugar ice cream set to see a positive outlook
Used to be a relatively niche segment, ice cream with reduced or zero sugar is expected to attract more consumers. Over the forecast period, consumers in China are expected to pay more attention to their health and look for reduced or no sugar products, since many now believe that consuming too much sugar is not good for health. According to iResearch, nearly 80% of Chinese consumers indicated that they would purchase reduced sugar ice cream, with 40% stating that they are "very willing to buy". Attracted by this trend, some manufacturers have launched products in line with the reduced/zero sugar trend in ice cream in the Chinese market. Most notably, Camic has dedicated its entire ice cream product line to zero sugar. Instead, Camic uses sugar substitutes such as maltitol and erythritol to achieve sweetness for its products. Many more manufacturers and brands are expected to join this particular trend and launch similar products for those consumers who want to avoid sugar but crave ice cream.
Continued innovations in ice cream flavours
According to iResearch, chocolate, fruit, and milk are the most popular ice cream flavours among Chinese consumers, with over 50% of consumers expressing their preference for each. In addition to traditional flavours, the ice cream market has also seen a surge in unique and novel flavours. For example, Hengshun Vinegar Industry has introduced soy sauce and cheese, balsamic vinegar, and yellow wine flavours. Maotai, in May 2022, officially launched its three ice cream flavours: 53-degree vanilla milk, light milk sauce, and green plum wine, priced at 66/66/59 CNY respectively. Jointly launched by Maotai and Mengniu, the ice cream marks Maotai's entry into the market as a leading player in the traditional consumer industry. The launch was successful, with all 4,000 units sold out in just 51 minutes on the "iMaotai" app, generating over 2.5 million yuan. It reflects the growing demand for unique and high-quality ice cream products in China. It highlights the potential for companies to tap into this market through innovative flavours and partnerships.
The ice cream industry in China is thriving, with enormous growth potential. Chinese consumers are demanding more innovative flavours and formats, as well as premium quality and healthy options. If you are interested in gaining more insights into the Chinese market or require our assistance with anything, please do not hesitate to contact us today!