Growing health concerns among consumers have placed downward pressure on industry revenue growth
New York, NY (PRWEB) December 12, 2014
Limited disposable income following the recession caused many consumers to reduce spending on discretionary items such as ice cream. Many consumers either bought fewer industry products or purchased more affordable brands. In addition to reduced consumer spending, volatile input costs hindered the performance of industry operators. In particular, the prices of the industry's two primary inputs (milk and sugar) fluctuated drastically over the past five years. Many producers absorbed these higher costs at the expense of their earnings, lowering industry profitability through 2014. Meanwhile, other producers raised their product prices, causing sales to decline. Overall, industry revenue is estimated to have grown over the five years to 2014.
According to IBISWorld Industry Analyst Ibrahim Yucel, “Growing health concerns among consumers also placed downward pressure on industry revenue growth.” In response to new diet and health trends, producers introduced innovative products to appeal to health-conscious consumers. The leading industry producers launched low-calorie brands such as Nestle's Skinny Cow, while other new companies have emerged that specialize in reduced fat products. More companies also introduced smaller serving sizes to appeal to people who want to limit their consumption of sugary foods. Finally, as more Americans have returned to work in the years following the recession, consumers' need for convenience spurred demand for frozen novelties that can be consumed while on the go.
Over the five years to 2019, the industry is forecast to achieve consistent revenue growth as per capita disposable income levels rise, allowing consumers to purchase a greater volume of industry goods and trade up to premium brands of ice cream. “Additionally, the development of nutritious frozen treats and innovative flavors will drive demand for premium and super-premium ice cream brands in the domestic market and abroad,” says Yucel. Therefore, revenue is projected to rise in the five years to 2019. Ice cream producers will also benefit from lower input costs, which will help boost industry profitability.
For more information, visit IBISWorld’s Ice Cream Production in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry make ice cream, frozen yogurt, sherbet, frozen tofu and other frozen desserts, except frozen bakery foods, which are included in the Bread Production industry (IBISWorld report 31181). The majority of raw inputs are sourced from the Dairy Farms industry (IBISWorld report 11212).
Key External Drivers
Industry Life Cycle
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Products & Services
Globalization & Trade
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