Why 35% of the Ice Cream Market Melted Away Despite the Heat?
It’s the height of summer, the sun is blazing, and it’s the perfect season for a cool bite of ice cream. Yet surprisingly, recent statistics reveal that the domestic ice cream market has declined by 35%. What’s behind this unexpected drop? In this post, we’ll explore the complex reasons why ice cream sales have plunged despite scorching heatwaves.
1. Sales Volume Falls, Revenue Barely Holds
According to the distribution industry, ice cream sales volume fell by as much as 35% in summer 2024 compared to summer 2023. However, total revenue remained relatively stable thanks to higher product prices. In essence, unit prices rose while purchase frequency dropped, showing a clear shift in consumer behavior.
2. Soaring Ingredient Costs, Especially Coconut Oil
One of the main culprits is the skyrocketing cost of raw materials. Key ingredients such as coconut oil, milk, and sugar have seen significant price increases in recent years. Since coconut oil is heavily imported, global market fluctuations have imposed additional strain on manufacturers.
3. The Hotter It Gets, the Less Ice Cream Sells?
Interestingly, extreme heat can actually reduce ice cream demand. Experts say that ice cream sales rise with moderate heat (around 30–32°C), but drop when temperatures exceed 35°C—as consumers shift to iced beverages instead. In short, ice cream appeals more during “pleasant warmth” than oppressive heat.
4. Cold Chain Limitations and Retail Disruptions
Another factor is cold chain logistics. During heatwaves, managing refrigerated trucks and freezers becomes challenging. Some retailers even avoid stocking ice cream due to storage concerns. These supply chain disruptions inevitably impact availability and sales.
5. Health Trends Driving Consumer Choice
Modern consumers are more health-conscious, favoring low-sugar or functional cold drinks over traditional ice cream. As a result, ice cream is no longer seen as a summer staple, but rather a selective indulgence.
6. Rising Prices Outpacing Income Growth
The average price of a single ice cream exceeds 2,000 KRW, with premium products priced between 3,000–5,000 KRW. Perceived cost pressure has risen significantly, making consumers hesitant to spend on what feels like a short-lived treat.
7. Time for Brands to Innovate
It’s clear the ice cream industry needs to revamp its product and distribution strategies. Potential innovations include functional frozen snacks, ice drink hybrids, and portable ice creams. Expanding beyond convenience stores to online platforms and subscription models could also unlock new revenue streams.
Conclusion: More Than Just the Heat
The ice cream sales slump cannot be blamed on temperature alone. Supply constraints, rising costs, changing trends, pricing sensitivity, and evolving consumer psychology all play a role. Without adapting to this complex landscape, ice cream may lose its summer crown.