Frozen Yogurt Growth Freezing Out Ice Cream

Although ice cream maintains its leadership in the frozen novelty market with 54 percent of sales in 2013, frozen yogurt is picking up steam, according to new research from Mintel.

Due largely to new product releases spurred by consumer interest in health and the popularity of yogurt offerings in the foodservice arena, frozen yogurt sales saw a 74 percent increase between 2011-2013 -- a monumental increase compared to the 3.9 percent increase of ice cream.

Overall, sales of ice cream and frozen novelties grew 9 percent from 2008-2013 to $11.2 billion, equating to a loss of 1 percent when adjusted for inflation. While ice cream is the most popular segment by far in the sector -- consumed in 89 percent of U.S. households -- the segment posted minimal sales growth, going from $5.7 billion in 2011 to $5.9 billion in 2013. In contrast, the frozen yogurt sector grew from $279 million in 2011 to reach $486 million in 2013.

“While ice cream remains the largest segment of the ice cream and frozen novelties market, sales dipped following the economic downturn,” said Beth Bloom, food and drink analyst at Mintel. “The expanding array of snack options, as well as a lack of product innovation, contributed to this performance.

“In contrast, the frozen yogurt segment has benefitted from a perfect storm of factors,” Bloom continued, “including the growing popularity of yogurt among US consumers, the growing acceptance of frozen yogurt as a snack, and a perception of a higher health profile that coincides with increased attention placed on better-for-you products.”

The majority of consumers (73 percent) believe that ice cream and frozen novelties can fit into a healthy lifestyle, and nearly half (47 percent) agree that low sugar/fat ice cream and frozen treats are as satisfying as regular varieties. However, some 53 percent of consumers say they try to limit the amount of ice cream or frozen treats they keep around the house to avoid excessive consumption, and 21 percent believe eating these items even once a week is too often.

Added Bloom, “Ice cream and frozen novelty products positioned as having an added value through the offer of functional benefits, as well as reduced guilt through their contribution to wellbeing, can stand apart from the competition on store shelves and garner more attention from consumers.”