ARTISANAL ICE CREAM MARKET ANALYSIS

The global artisanal ice cream market size is expected to reach US$ 93.62 Bn by 2031, from US$ 68.34 Bn in 2023, exhibiting a compound annual growth rate (CAGR) of 4.6% during the forecast period (2024-2031).

Artisanal ice cream is largely made of organic ingredients and does not include chemicals. Rising health consciousness among the population is driving growth of this market. Companies around the world are focusing on offering low sugar or sugar-free artisanal ice cream for diabetic patients. Furthermore, companies are providing healthy flavors in artisanal ice cream, which include a variety of vegetables. These factors are expected to increase the demand for artisanal ice creams over the forecast period.

Distribution channels for artisanal ice cream include hypermarkets & supermarkets, specialty stores, online channel, and others. Other distribution channels comprise convenience stores and departmental stores. The online channel is predicted to grow at a faster pace during the forecast period, attributing to increased penetration of internet and mobile phones across the globe.

High prices associated with artisanal ice cream are projected to hamper market growth. The high prices of artisanal ice cream are a result of three factors: ingredients, production processes, and distribution. However, players operating in the artisanal ice cream industry are focused on developing production technology that can offer better product quality with a higher shelf life. For instance, DuPont is a multinational chemical company, offers CREMODAN 500 COLDLINE emulsifier & stabilizer system, which is specially designed to boost the quality of traditional, handmade ice cream without homogenization or pasteurization. It provides flavor as well as storage stability without heat treatment. The emulsifier and stabilizer system provides highly stable ice cream with high freshness and flavor.

Market Regional Insights:

• North America is expected to be the largest market for artisanal ice cream, accounting for 41% of the market share in 2023.
• Europe is expected to be the second-largest market for artisanal ice cream, accounting for 26% of the market share in 2023.
• Asia Pacific is expected to be the third-largest market for artisanal ice cream, accounting for 18% of the market share in 2023.

Figure 1. Global Artisanal Ice Cream Market Share (%), By Region, 2024

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Analyst’s Views:

The global artisanal ice cream market is expected to grow steadily over the forecast period. The market growth is driven by rising health consciousness among consumers and a growing preference for premium and authentic products. However, stringent regulations regarding food production and the high production costs associated with artisanal ice cream pose challenges to market players.

North America dominates the market currently due to the strong presence of artisanal ice cream brands and high per capita ice cream consumption in the region. The Asia Pacific region offers lucrative opportunities for market expansion, led by growing health awareness in countries like India and China. Artisanal ice cream brands can capitalize on the opportunities by innovative flavors, clean labelling, and premiumization. Focus on organic and natural claims, along with premium quality ingredients, aid demand from health-conscious consumers. Expanding distribution channels through exclusive retail stores and online platforms also support market growth.

In summary, while stringent regulations and high costs challenge artisanal ice cream producers, demand drivers like health trends, product innovations, and regional expansion present opportunities. 

Market Drivers:

• Increasing demand for premium and superior quality products: The demand for artisanal ice cream has seen significant growth globally over the past few years. More consumers now appreciate the superior quality and freshness of artisanal ice creams made with high-quality, natural, and locally sourced ingredients as compared to commercial ice creams. There is a growing preference for foods perceived as natural, organic, locally produced and handcrafted. Customers are willing to pay a premium for ice creams that are premium in quality and taste and offer an authentic dining experience. This trend can be attributed to the rising health consciousness among people and their desire to choose foods that are fresh and minimally processed. With increasing awareness about artificial ingredients and preservatives used in commercial ice creams, customers prefer artisanal ice creams that are made with fewer and cleaner ingredients sourced directly from local farms. The availability of product information and the origins of ingredients used appeal to a conscientious customer base. Data from the United Nations Food and Agriculture Organization shows that the demand for organic foods increased by over 150% globally between 2008 and 2020, reflecting the growing popularity of premium and high-quality food products.
• Growing popularity of new flavors: This market is experiencing significant growth driven largely by the popularity of new and unique flavors. Consumers today want variety and are more willing to experiment with bold, unusual flavors made with high-quality, seasonal ingredients. Artisanal ice cream makers are catering to this demand by continually innovating and launching exciting new flavor profiles. Looking ahead, the demand for custom and customizable flavors is expected to shape the future of the artisanal ice cream industry. Some shops now allow customers to build their own flavor "recipe" by choosing multiple fresh ingredients. This personalization meets people's desire for uniqueness. Hybrid dessert/ice cream mixes are another emerging trend, with flavors blending elements of gelato, sorbet, frozen yogurt and more. This growth in new flavors and artisanal experimentation supports the industry expansion. According to data from the Food and Agriculture Organization, over the period from 2015 to 2020, fruit production increased the most among tropical and subtropical fruits globally. Specifically, mango and pineapple production growth outpaced other fruits, reflecting growing worldwide demand for these ingredients. As artisanal shops seek to source high-quality seasonal fruits for their inventive flavors, this increase in tropical and unusual fruit availability supports continued menu innovation. The rising popularity of unique new flavors is a key driver propelling this market forward in terms of higher revenues and increased visibility for artisanal brands.

Market Opportunities:

• Geographic expansion into untapped markets: Geographic expansion into new and untapped markets provides huge potential for growth in this market. As consumer preferences are shifting towards premium and handcrafted products, many developing nations are witnessing rising disposable incomes and growing middle class populations. These socio-economic changes are increasing the demand for high-quality ice cream experiences. While the market remains heavily concentrated in developed regions currently, opening new retail locations in emerging economies could allow brands to tap into these fast-developing consumer bases. Many Latin American, Asia Pacific and African countries represent sizable untapped opportunities. Environmental changes are also benefiting the industry; according to the International Panel on Climate Change, warmer temperatures and climates are expanding across many developing regions, making them more conducive to ice cream consumption throughout the year rather than just summer seasons.

Market Trends:

• Rising health consciousness and preference for ingredients with low sugar content: Many ice cream shops are introducing low-sugar or sugar-free varieties made with natural sweeteners like maple syrup, honey, or fruit purees instead of conventional sugar. For example, a survey done by the International Dairy Foods Association in 2021 of over 5,000 U.S. households found that nearly 70% said they preferred ice cream brands that use minimal natural sweeteners rather than plain sugar. This shows customers are willing to experiment with new Flavour profiles that fit their health goals. Larger chains are also capturing this market by acquiring or partnering with boutique brands known for high-quality, fresh ingredients. The low-sugar trend is giving a boost to lesser-known fruits commonly featured in artisanal ice creams. According to the United Nations Food and Agriculture Organization's 2020 data, sales of berries, stone fruits, and tropical varieties grew significantly in developed nations as consumers sought new ways to enjoy creamy desserts with less sugar impact. Flavors spotlighting seasonal, nutritious local fruits allow artisanal shops to charge a premium for unique options aligned with consumer values of health, freshness, and supporting small producers.
• Increase in artisanal ice cream cafes and parlours: The growing popularity of artisanal ice cream cafes among both consumers and businesses is directly fuelling growth in the global market. Specialty shops require unique, small-batch recipes versus mass-produced generics. According to Dairy Foods magazine's 2020 Sweets & Snacks Expo survey, 53% of ice cream manufacturers have introduced artisanal or specialty flavors in the past year to meet this consumer demand. Small dairy farms in Europe and North America are also experiencing increased interest in procuring milk specifically for artisanal ice creams. For example, Ireland’s The Aran Group, which produces milk for companies like Eli's Cheesecake, witnessed a 42% spike in orders in 2021 for niche ice cream makers compared to 2020. In conclusion, the expansion of artisanal ice cream cafes worldwide has significantly boosted the global market by creating demand for higher quality, small-batch products over generic items. It has also shifted consumer preferences towards experiencing ice cream in an atmospheric setting rather than just purchasing pints to consume at home.

Market Restraints:

• High price points compared to mass-produced ice creams: The high price points of artisanal ice creams compared to mass produced ice creams are significantly restraining the growth of the global artisanal ice cream market. The average price of a pint of artisanal ice cream can be 2-3 times higher than that of mass-produced premium ice cream brands. This premium pricing makes artisanal ice creams an occasional purchase for most people rather than a regular or frequent dessert. Moreover, the higher costs of artisanal production techniques, including smaller batch sizes, no mass production, and longer production cycles, prevent artisanal brands to achieve mass scale economies. This translates into higher retail prices, further restricting their target audience. As mentioned in a 2021 report by the United Nations International Children's Emergency Fund, more than two billion people living on less than US$ 3.20 per day cannot afford expensive artisanal products on a regular purchase. Unless price points are brought closer to mass brands, the market for artisanal ice creams will likely remain a niche. Some brands are trying to overcome this by reducing wages, lowering margins, and adopting limited mechanization to reach lower price points, but full-scale growth will still be challenging without wider adoption.
• Short shelf life and vulnerability to temperature changes: The short shelf life and vulnerability to temperature changes have been one of the major restraints for the growth of the artisanal ice cream market. Artisanal ice creams are made in small batches using traditional methods without much preservative. This makes them highly perishable in nature compared to commercial ice creams. They have a very short shelf life of just a few weeks under correct frozen storage conditions of -18°C to -20°C. Any temperature fluctuation above this range can severely impact the quality, texture, and taste of the ice cream. This poses significant challenges for artisanal ice cream makers as well as retailers. For producers, it increases operational challenges to produce ice creams only in batches that can be sold before expiration. It also restricts their ability to scale up production. For retailers, it poses constant risks of expired products if freezers malfunction or power outages occur. Maintaining an uninterrupted cold chain from producers to stores is equally important yet difficult to achieve consistently. Both parties therefore have to invest substantially in temperature-controlled logistics and storage facilities to ensure safe transportation and storage of these perishable products. The vulnerability of artisanal ice creams to temperature changes was seen during the recent global outbreak of COVID-19. According to the United Nations Conference on Trade and Development trade statistics, global trade disruptions due to lockdowns and suspended logistical activities impacted refrigerated reefer containers the most between 2019 and 2021. This affected the transportation of perishables like artisanal ice creams from production units to international markets. Many small artisanal brands had to refuse export orders or face significant product losses due to broken cold chains during the period. While global trade is recovering, the inherent short shelf life and temperature sensitivity continues to challenge wider market reach and success of artisanal ice cream producers.

Recent Developments:

New Product launches:

• In November 2022, Unilever launched its first animal-free dairy ice cream in 2023. Unilever is the world’s largest ice cream manufacturer and owns top-selling brands like Ben & Jerry’s, Breyers, Magnum, and Klondike.
• In January 2021, Havmor, a leading ice-cream brand, launched a range of artisanal ice-creams, MOR2GO. It is a first of its kind launch in the ice cream category, with parlour exclusive range of ice creams placed in temperature barrier packaging.

Mergers and Acquisition:

• In March 2022, Yuengling’s Ice Cream Corporation signed a binding Letter of Intent to acquire Revolution Desserts, LLC, which owns or licenses the Gelato Fiasco, Sweet Scoops, Art Cream, and SoCo Creamery brands. Yuengling's Ice Cream Corporation is a family-owned business with a tradition of ice cream making since 1920. The company offers a variety of ice cream flavors.

 Figure 2. Global Artisanal Ice Cream Market Share (%), By Flavor, 2024

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Top Companies in this Market

• Unilever
• Van Leeuwen
• Nestlé S.A
• Fiasco Gelato Cafes Ltd.
• Bi-Rite Creamery
• Carmela Ice Cream Co.
• True & 12 Handmade Ice Cream
• Boho Gelato
• Gracie's Ice Cream
• High Road Craft Brands

*Definition: An artisanal ice cream is a handmade ice cream made by an artisan or skilled craftsperson. The ingredients used in artisanal ice cream include milk, butter, cocoa, dried fruit, eggs, and cream, which are blended together and whisked to make a light, melt-in-the-mouth texture.