The Ice Cream Track Becomes“Not Cold”But More“Hot”

By Lynn Yu

Recently， there were several viral videos posed by netizens s h o w i n g t h a t“Chicecream ice cream will not melt， even when exposed to temperatures of 31 degrees Celsius for 1 hour”， which caused a heated discussion. Chicecreams official Weibo was forced to respond， stating that there is no ice cream that doesnt melt. The company stated that the product just contains a high solid content and little water. They claimed that after it completely melts， it will naturally be sticky， but it wont completely spread out and become a pool of liquid. However， the solids cant become liquid after melting.

Although this matter has caused much controversy， as temperatures rise， the sales of ice cream and cold drinks such as Chicecream are also rising. Driven by factors such as consumer demand and intensified brand competition， the price of ice cream has also risen， and the market price ranges from RMB 3 and RMB 5 to RMB 10 and RMB 20. The price of ice cream also quickly hit the hot search list in Weibo， causing further heated discussion among netizens.

Local brands and international brands share the market equally

Chinas ice cream market keeps growing， reaching RMB 147 billion in 2020. Driven by e-commerce and live streaming ecommerce， the proportion of online sales of ice cream has quadrupled in the past two years， from 5% before 2020 to 20% in 2021. In the middle of last year， the Qianyan Industry Research Institute predicted that their data showed that from 2015 to 2021， the market size of the ice cream industry increased from less than RMB 90 billion to RMB 160 billion， with a cumulative increase of over 90% in six years. The estimate given by AskCI Consulting is RMB 164.3 billion. Overall， Chinas ice cream market still ranks first in the world.

According to the Industry Trend Report on Ice Cream in China （2022）， the top five ice cream brands in 2021 are Yili （16.0%）， Magnum （4.3%）， Cornetto（4.3%）， Mengniu （3.7%） and Wufeng（2.4%）； in terms of offline market shares， dairy giants Yili and Mengniu， as well as foreign brands such as Unilevers Walls and Nestle， still occupy a leading position in the domestic offline ice cream market.

Nowadays， Chinas ice cream market has shown that local brands and international brands share the market equally， which provides a favorable environment for new brands both at home and abroad. The emergence of domestic high-end ice cream brands is also promoting consumers recognition and support for domestic ice cream.

According to survey data found by iiMedia Research， in 2021， Yili ranked first among the ice cream brands eaten by Chinese netizens， accounting for 75.5%； this was followed by Mengniu， accounting for 71.3%； while Chocliz accounts for 53.9% and Nestle accounts for 46.1%， ranking third and fourth in the list. Many brands have established a certain level of brand loyalty among customers， and consumers have a high level of trust in the brands they often consume.

With the rise of domestic ice cream brands， many local high-end brands are gradually seizing the market share of foreign brands. According to the analysis of the Qianyan Industry Research Institute， among the top five most popular ice cream brands in China in 2020， three were local brands： Chicecream， Zhongjie 1946 and Modern.

As a representative brand of Chinese ice cream made as a new domestic products， Chicecreams revenue exceeded RMB 100 million in the first 16 months since its establishment， and its sales volume exceeded 15 million in the 18 months since its establishment， ranking first in the repurchase rate among similar sales. On the online channel， Chicecream has also made remarkable achievements. In the first year of its establishment， it won the highest sales volume of Tmall double 11 ice products. Since 2020， it has also won the first place in the category of Tmall double 11 and 618 ice promotion products year after year.

Price rises

According to the survey data from iiMedia Research， the price acceptance of a single ice cream by netizens in 2022 is mostly between RMB 3 to RMB 5， accounting for 37%. The second is between RMB 5 to RMB 10， accounting for 33.9%. In addition， some netizens accept lower prices of between RMB 1 and RMB 3， accounting for 11. However， the price acceptance is consistently less than RMB 10.

Although people accept the price of ice cream differently， it is difficult to see prices of 50 cents or RMB 1 in the ice cream market today， and this has been replaced by products above RMB 3， while the prices of some ice cream products with online celebrity attributes are mostly more than RMB 10， and some are even more expensive than that.

On e-commerce platforms， highpriced ice cream also abounds. A series of ice cream brands， such as Nestle， Magnum， Baxy， Meiji， H？agen-Dazs， Modern and Hongbaolai， are all in the high-priced area. A notable recent addition is the ice cream launched by the tea brand Heytea， which is priced around RMB 20. There are also many co-branded ice cream bars， which are also not cheap. The price of an ice cream bought from Yellow Crane Tower， West Lake Wu Yu， Shenyang Imperial Palace and other scenic spots is around RMB 20.

Experts believe that there are many reasons for the growing price of ice creams， and the cost of raw materials is one of them. From 2008 to 2020， the cost of raw materials such as milk and whipped cream increased by about 80%. Based on consumption upgrading， consumers have higher requirements for the quality of ice cream and are willing to pay for high-end products， which is the basis for ice cream brands to create this high-end positioning.

Secondly， factors such as the intensification of “internal involution”among brands and the seasonal attributes of ice cream determine the low-frequency consumption characteristics of ice cream， and the traditional road of small profits but a quick turnover is becoming more and more difficult to achieve. If ice cream brands want to survive， they must bring forth new ideas， and the layout of highend products seems to be the road to change for many brands.

From product design， packaging and the use of raw materials， to noveltyseeking tastes and co-branding， ice cream manufacturers are becoming ever more ingenious. For example， in terms of the use of raw materials， major brands are choosing foreign materials to improve the quality of their ice cream. For example， it is now not unusual to see matcha from Japan， milk from Australia， or cocoa powder from Ghana featuring in their products. For the brand， the health and high-end qualities represented by the raw materials can bring a greater premium to the brand. In addition， from product design， packaging and the use of raw materials， to exotic tastes and cobranding， the prices faced by ice cream manufacturers have gone up.

Chicecream， for example， has jointly launched cross-border products with Three Squirrels （300783）， Luzhou Laojiao（000568）， Roewe Auto， Xiaoxiandun， Nayuki， Wahaha， Wu Fang Zhai and other brands. On May 29th， three Maotai ice creams jointly produced by Maotai and Mengniu went on sale in Guiyang， with prices of RMB 59/66/66 each. According to official data from Maotai， after the Maotai ice cream had been on sale at the flagship store in Guiyang for just 7 hours， sales exceeded RMB 200，000 and the sales odd number exceeded 900.

Delicious and healthy is the new development trend for the ice cream industry in the future

According to the survey data from iiMedia Research， among the whitecollar consumers and generation Z consumers interviewed in China in 2022， the preferred packaging style for ice cream is a simple style and a Chinese style， accounting for more than 50%. Among generation Z consumers， the proportion of people who like simple packaging is 64.3%. In addition， there are also many consumers who like the cute style， beautiful style and two-dimensional（cartoon） style.

Although ice cream is beautifully packaged， some consumers are reluctant to pay the bill for this. Experts pointed out that ice cream manufacturers should stick to the essence of ice cream， and retain consumers hearts through their materials and taste， which is the best way to “keep the brand popular”.

With the improvement in consumersdemands on the nutritional value of products， in recent years， healthy snacks have gradually become a new trend in the market. According to the data from iiMedia Research， in an ice cream consumer survey in 2022， nearly 80% of the consumers surveyed expressed their willingness to buy or habit of buying sugarfree ice cream， which is clearly favored by consumers. In addition， low-sugar and low-fat ice cream， ice cream with added protein and functional raw materials have become new players， and delicious and healthy ice cream has become the new favorite choice for consumers.

Therefore， ice cream manufacturers should pay more attention to the green and healthy quality of ice cream， in order to meet the new consumer demand of the public and reduce consumers purchasing concerns. In the future， the combination of deliciousness and health will become a new trend in the development of the ice cream industry.

Chen Mengshan， a member of the National Committee of the Chinese Peoples Political Consultative Conference and director of the State Food and Nutrition Consultant Committee， explained： “Ice cream has become a new hot spot of consumption at present， and it is changing from a traditional snack to a snack food that pursues fashion and pays attention to nutrition. Enterprises should make the most of this trend， seize strategic opportunities， and funnel this into the direction for product design， R&D and manufacturing， and use it as the basis for marketing and brand building， in order to comprehensively promote the transformation， upgrading and healthy development of Chinas ice cream industry.”

In addition， the production process and upstream and downstream supporting industries of ice cream need to see upgrading direction from the aspects of the production process， packaging technology， additives and other links， so as to ensure the product quality and push ice cream innovation go further.

Recently， the worlds first ice cream “lighthouse factory” （Unilevers Walls production base） was unveiled in Taicang， Jiangsu Province. According to relevant reports， the “lighthouse factory”will widely use digital and intelligent technologies to help the factory improve its quality， efficiency and reduce its impact on the environment.

Liu Rui， Secretary-General of Green Agriculture and Food Nutrition Committee of the China Green Food Association， believes that technological innovations of related enterprises should aim at high productivity， unmanned， low emission or even zero emission， and manufacturing competitive ice cream products. Automated production lines also need to be upgraded to be more efficient， digital and low emission.