• by Karlene Lukovitz  @KLmarketdaily, September 10, 2012

After two tough years, ice cream and frozen novelties saw sales grow by 4.1% last year, to $10.7 billion, according to Mintel. 

Moreover, the research firm projects that the category will see 4% growth again this year.

One reason that the category has struggled is that, next to flavor, price is the single most important factor in consumers’ buying decision, making it difficult for ice cream/novelty makers to break out of price promotion strategies, notes Mintel food and drink analyst John N. Frank.

Fully 94% of consumers surveyed by Mintel say they base their decision on flavor, 83% look at price, and 72% look for a sale or promotion.

However, new product development, including better-for-you products, new flavor profiles and new packaging concepts, are rejuvenating the category, Frank points out.

Case in point: The huge popularity of Greek yogurt is spilling over into the ice cream/frozen novelty market.  Total U.S. retail sales of frozen yogurt are up 9.7% in 2012, the highest growth among the category’s four product segments.

The dominant product claims consumers are now seeking in frozen treats are reduced fat (38%), reduced sugar (38%) and reduced calorie (36%).

Gluten-free and dairy-free products are also growing in popularity, with 14% and 15% of respondents, respectively, saying that these are “very or somewhat important” to them.

The container or serving size is important to 69% of all frozen treats buyers, and 74% of those 18 to 24. That young-adult segment is most likely to eat ice cream away from home directly after purchasing it from a grocery or convenience store. Not surprisingly, portion control containers fare well with those concerned with ‘low-in’ claims.

In volume terms, the U.S. leads the world in ice cream consumption, with 17 liters per person, compared to 10.3 in Australia, its nearest competitor. However, in dollar terms, Norway leads the world at £33 per person, closely followed by Australia (£30 per person).