The peak season is not booming, and slow sales are putting enormous pressure on ice cream distributors.
During the height of summer, while the sun blazes, ice cream distributors find themselves in a chilling situation. Every year from April to September is the peak consumption season for ice cream. This summer, as the first peak season after the full reopening, the ice cream industry had high hopes. However, after half a year of anticipation and effort, they have hit a wall of 'peak season without prosperity.'
"My family has run a convenience store for over 20 years, and this year's ice cream sales are unprecedentedly bad, even worse than during the pandemic. People suddenly stopped buying (ice cream), and I don't know why," a store owner from an ice cream wholesale-retail shop in Zhengzhou recently complained to Toutiao Jun. This owner's experience is clearly not an isolated case. Distributors have the most direct sense of whether the market is hot or cold at the retail end.
Ice cream distributor Li Wen (pseudonym) reported that retail sell-through has been particularly slow this year, leaving him with first-quarter inventory still unsold while he had to make new payments in the second quarter at the manufacturer's request. "Now the warehouse is almost full." The sluggish retail sales have also directly impacted ice cream manufacturers. It is reported that a well-known local ice cream brand, which holds an absolute dominant market position, has seen its production capacity underutilized during this peak season—production halts every few days, which was unimaginable in previous years.
A veteran in the ice cream industry predicts that this year, except for a few brands and products, most ice cream sales will decline. Based on his personal experience, overall sales may drop by at least 10%.
'Assassins' Step Down, Affordable Products Return to Mainstream
In terms of retail sales, this summer seems quiet for ice cream, with no internet-famous ice cream products and much less buzz. The 'ice cream assassins' that drew attention and controversy last year have disappeared this year. According to media surveys, mainstream ice cream prices currently range from 3 to 5 yuan, with some high-end products still priced above 15 yuan. According to FoodTalks' list of top 50 best-selling ice cream products in North China in April 2023, only one of the top ten exceeded 5 yuan, with the rest priced between 3 and 5 yuan.
New ice cream products launched this year also lean more toward affordable pricing. According to incomplete statistics from CBNData, among 70 new products released by various brands in 2023, 46% were priced in the 3-10 yuan range per piece. In the Jinan market, media reported that a local community store sold 52 types of ice cream, with 19 products under 3 yuan, 33 products between 3-5 yuan, and none above 5 yuan. Another ice cream wholesale store sold 214 varieties, with 143 products under 5 yuan, 52 between 5-10 yuan, 15 between 10-20 yuan, and only 4 above 20 yuan.
Affordable products returning to the mainstream has become the most obvious trend in the cold drinks and ice cream market this year. Even some high-end brands have started launching affordable products this year. For example, Zhong Xue Gao launched a new ice cream product 'Sa'saa' priced at 3.5 yuan per piece this year. Compared to its previous products that often cost over ten yuan, the 3.5 yuan price seems inconsistent with Zhong Xue Gao's usual 'high-end' style, but it is a necessity driven by market demand. The downward price adjustment in the ice cream market this year reflects an adaptation to consumer demand and a rational return in ice cream consumption.
Peak Season Turns Cold: Why Is This Year's Ice Cream Market So Gloomy?
What exactly has caused the overall sales to be so dismal during this ice cream peak season? Toutiao Jun interviewed several ice cream distributors, and the most frequently cited reason was unfavorable weather.
Weather Stays Cool, Missing the Optimal Sales Window
After entering July, many parts of the country experienced widespread high temperatures. In general perception, this should be the best time for ice cream sales. However, for ice cream distributors, it is already a bit late. The main sales period for ice cream each year is from April to August, with April and May being the most critical sales months. Sales during these two months basically determine the annual baseline. This year, due to special climate conditions, temperatures did not rise in April-June, and the weather was not hot enough, directly leading to a dismal start to the ice cream peak season, with sales declining sharply and resulting in large inventory backlogs. In June and July, although temperatures were high during the dog days, the number of substitute products also surged, especially seasonal fruits like watermelon hitting the market in large quantities. As equally effective tools for cooling off and quenching thirst, they severely impacted the market for non-essential items like ice cream.
Inventory Backlogs Cause Bitter Suffering for Ice Cream Distributors
"Ice cream is a product that, even with good sales, once inventory piles up, means losses." A distributor with years of experience told Toutiao Jun that ice cream is highly seasonal, with only a short three-to-four-month sales period each year. If missed, it cannot be sold next year. This year, as the first peak season after the pandemic reopening, many ice cream manufacturers had high hopes for the market and set relatively high growth targets. Starting from December last year, they began shipping goods to distributors, but sales before June were far below expectations, putting significant inventory pressure on distributors. This added insult to injury for ice cream distributors already facing poor sales; the more inventory, the greater the sales pressure in the next two months. Therefore, since July, many ice cream manufacturers have been aggressively promoting to clear inventory as much as possible, but the current situation is not ideal. Ice cream is an industry racing against time. This year, after unfortunately missing the optimal sales window and compounded by the broader trend of consumption downgrading, a dismal ending seems inevitable.