Once a seasonal, out-of-home sweet treat, ice cream is now a year-round retail offering that consumers enjoy at home. Researchers note that the global ice cream market’s consistent growth outpaces the broader food and beverage market. From changing consumer sentiment to an array of exciting new flavors, suppliers and manufacturers alike are keeping their eye on the cone – or cup, if you prefer.
We run through a list of high-profile challenges and opportunities in the ice cream industry.
The Top Growth Trends in the Ice Cream Industry
Both actively and incidentally, ice cream’s hottest trends offset some of the industry’s biggest opportunities. These recent market developments offer both a degree of pricing protection and access to a global and increasingly mobile audience.
1. The Premiumization of Ice Cream
Increased demand provides opportunities to offer niche products at higher price points. This is known as premiumization, and it is supporting the rise of artisanal ice cream brands and specialty shops. Ice cream is increasingly paired with yogurt, sherbets, and other category offerings in unique ways. This extends to the “functional” ice cream products available on store shelves, such as those with high protein content, lower fat, reduced sugar, or those with added probiotics and prebiotics.
2. Flavor Innovation
The most popular ice cream flavors in America, and indeed, the world, are vanilla and chocolate, but that doesn’t mean the industry is standing still. Manufacturers are constantly working to offer unique flavor experiences that reflect regional preferences (matcha in Asia, rosewater in the Middle East) and new mix-ins, often pairing with other consumer brands. This cross-channel play often combines the brand power from multiple grocery aisles, such as marrying Hudsonville ice cream with Little Debbie or, infamously, Van Leeuwen with Hidden Valley Ranch.
3. Private Label Ice Cream
North American consumers’ belated shift toward private label brands presents an exciting opportunity for in-house manufacturers, as this is the largest market for ice cream in the region. Private label ice cream sales growth outpaced national brands 3% to 1% in 2024. Across the broader refrigerated food category, private label sales increased 7.5%. With renewed forecasts of sustained pricing pressures, private label ice cream offers an affordable option that appeals to a broader range of consumers across various income levels.
The Big Chill: Challenges in the Ice Cream Industry
Taking cues from the world’s biggest ice cream manufacturers, including Unilever and Nestle S.A, the industry’s consistent growth looks secure. The past few years have presented a few hurdles; however, many of these challenges also offer opportunities to improve both the formulation process and the final product.
1. Ingredient Price Volatility
While ice cream’s increasing premiumization has yielded improvement in product margins and a degree of insulation, ingredient pricing remains unpredictable. Core ice cream ingredients such as dairy, sugar, vanilla, and cocoa, have always been subject to significant volatility; recently, prices have remained elevated. The cost of sugar per pound (in US dollars) increased by 67.1% between 2018 and 2025; it only decreased once during that period, from 2024 to 2025, yet remained well above historical averages.
Cocoa prices increased from $2,000 in 2022 to $12,000 per metric ton in early 2025, while vanilla, dairy, and other commodity inputs have experienced spikes and troughs over the past several years. The volatility has been caused by several factors, including crop yield fluctuations resulting from storms and droughts. Certain supplier trends, such as market saturation by Madagascan vanilla growers, have recently contributed to significant devaluations of the commodity. Changes to import and export policies also continually pose a material risk of price increases for ice cream ingredient suppliers.
Opportunity: Manufacturers are looking for new ways to replace or reduce these ingredients with alternative flavors. Reformulation protects both manufacturers and consumers from price hikes while presenting new opportunities to explore fun and exciting new flavors.
2. Manufacturing and Supply Chain Costs
Beyond commodity prices, manufacturing and transportation costs are on the rise. Ice cream manufacturers incur substantial energy costs to maintain safe refrigeration levels, both during on-site production and throughout the supply chain. In European markets, energy embargoes have increased natural gas prices, while globally shifting oil and renewable energy policies have contributed to broad energy price rises.
These energy price increases have had a larger impact on small manufacturers, particularly in the US, where consolidation through mergers and acquisitions has accelerated.
Opportunity: Ingredients like carrageen and other hydrocolloids stabilize ice cream and prevent ice crystal formation, slowing the melting rate. Other changes, such as higher fat content, allow manufacturers to create and deliver a world-class product globally at slightly higher temperatures, keeping costs in check.
3. Evolving Consumer Preferences
Consumer demand for reduced-sugar, plant-based, and dairy-free ice cream alternatives has led to the development of intriguing new products that blur the definition of ice cream.
While sometimes challenging to formulate, non-dairy ice cream is a small but rapidly growing segment of the global ice cream market. With the rise of GLP-1 adoption and a growing demand for functional food products like high-protein ice cream, innovation in this segment is a top priority for leading ice cream manufacturers like Unilever, General Mills, Nestle S.A., and others.
Opportunity: There is unlimited potential for crossover offerings to pair ice cream with yogurt, sherbets, and dairy alternatives, delighting customers who seek a satisfying comfort food or a novel new flavor. Learn how Tilley can support your formulation process.
Improve Ice Cream Formulation and Results with Tilley Distribution
Our full-service distribution capabilities make Tilley Distribution an ideal partner for ice cream manufacturers. With an expansive catalog of specialty ingredients and ready access to leading suppliers, we bring supply chain solutions to an industry that relies on agility and solutions-focused thinking. Speak with a Tilley representative to learn more about our exciting capabilities.
