Market Information
Southeast Asia

Screaming for Ice Cream ⁽¹⁾

Rosalie B. Bernardino
Researcher
Center for Food and Agri Business
University of Asia and the Pacific

Ice cream, a flavored frozen food, is made up of milkfat or butterfat, milk solids, sweeteners, stabilizers and emulsifiers and water. Not many know that it is considered as a complete meal. It contains nutrients such as protein, carbohydrates, and calcium.

Ice cream is classified into two types: bulk and novelties. Bulk are those that come in one gallon, half gallon, and pint. Meanwhile, novelties or impulse products are those in sticks, cups, sandwiches and cones.

The product also comes in a variety of flavors mainly chocolate and chocolate variants, vanilla, cheese, mango, strawberry, ube, coconut, halo-halo, etc. There are also unusual flavors such as mashed potato and bacon, tuna fish, fried pork rind, chili con carne, garlic, sauerkraut, horseradish and beer, mustard, dill pickle, and ketchup.

History. There are many stories behind the creation of the ice cream but the exact origin is not really known. One story says that Marco Polo brought a product resembling sherbet from China. It was developed into soft and creamy product by the chef of King Charles I of England. It was called "creme ice" and was served only to the rich and nobles. In 1670, the masses were able to taste the "iced cream" and it eventually became famous in the 1700's. In 1846, Nancy Johnson invented the first hand-crank ice cream freezer.

Today, ice cream, with all its flavors and variations, has evolved into one of the world's most popular desserts.

Performance

Local. According to an industry source, bulk ice cream used to dominate the market with 70% share, while the rest are frozen novelties. Today, the share has been reversed to 30% and 70%, in favor of frozen novelties.

Based on the National Statistics Office - Family Income and Expenditure Survey (FIES), ice cream spending reached P2.3 billion in 1997. The National Capital Region (NCR) dominated spending with 41% share (P909 million), followed by Southern Tagalog, 13% (P285 million), and Central Luzon, 10% (P225 million). In terms of spending per family, NCR was the highest at P456, followed by Central Luzon and Northern Mindanao at P157 and P147, respectively.

By key cities, total expenditure was highest in Davao at P57 million, followed by Cebu, P53 million, and Cagayan de Oro, P42 million. Ice cream spending per family was led by Cagayan de Oro at P472 and Baguio at P461.

Figure 1. Family Expenditure on Ice Cream by Key Cities, 1997

Source: FIES-NSO, 1997

Figure 2. Family Expenditure on Ice Cream by Key Cities, 1997

Source: FIES-NSO, 1997

International. According to the International Ice Cream Association, Sunday is the day where most ice cream is sold. On the other hand, Le Mars, Iowa was named Ice Cream Capital of the World by the Iowa legislature. Le Mars is the place where Blue Bunny, a popular ice cream brand, is manufactured.

The world's leading producers of ice cream and related desserts are the United States and China at 61.3 million hecto liters (mhl) and 23.6 mhl, respectively (Table 1).

* lowfats, sherbets, frozen yogurt, etc.)
Source: Dairy Science and Technology, University of Guelph

Meanwhile, per capita consumption is highest in New Zealand at 26.3 liters, followed by United States, 22.5 liters; Canada and Australia, both at 17.8 liters; Switzerland, 5.5 liters; and Sweden at 14.2 liters. On the other hand, the Philippines has less than 1 liter per capita consumption for ice cream.

Key Players

The Philippine market is dominated by three companies, namely: Selecta-Wall's, Inc. (Selecta), Nestle Philippines, Inc. (Nestle Magnolia) and Universal Robina Corp. (Presto-Tivoli) (Table 2). Selecta and Nestle each claim market shares of 46%. The rest are accounted for by smaller players like URC and Arcefoods, Inc. (Arce Dairy Ice Cream).

There are also imported brands in the market such as Dairy Queen, Haagen Dazs, Dreyers Ice Cream, Dippin Dots and Baskin and Robbins.

Constraints and Prospects

Ice cream consists mainly of dairy. Since the country imports 99% of its dairy supply, the ice cream industry is vulnerable to foreign exchange fluctuations.

Another concern is the presence of adequate storage and handling facilities since ice cream easily melts. The product's shelf-life usually ranges from two weeks to one year depending on the conditions of its storage (Dairy Science and Technology, University of Guelph, Canada).

Consumption is largely influenced by quality, such as flavor, body and texture, appearance or color of the product, and packaging. Mishandling of the product from the sellers to the consumers leads to quality deterioration. Shelf-stability of the ice cream is a must.

As mentioned, there has been a substantial shift to frozen novelties from bulk ice cream, which is more expensive This may also have been influenced by weaker peso purchasing power and consumer demand for convenience. Increasing competition in the market has also led manufacturers to develop and launch new production techniques, flavors and products.

Overall, there is still a large market for ice cream. In the Philippines, where ice cream is considered as a traditional dessert, there is definitely room for increasing the low per capita consumption. The key is in providing quality products at competitive prices and putting more money into people's pockets.

As the industry gets better and better...people will definitely scream for more!

References

National Dairy Update, 2000. National Dairy Authority.
Dairy Science and Technology, University of Guelph, Canada
(http://www.foodsci.uoguelph.ca/dairyedu/icmanu.html)
Family Income and Expenditure Survey, 1997. National Statistics Office.
http://www.isodafountain.com
http://www.ice-cream.org
http://www.leewardlaw.com/scream.htm

1.^*This industry brief was published by the Manila-based University of Asia and the Pacific, Center for Food and Agribusiness in the June 2001 issue of the Food and Agribusiness Monitor, primarily for a Philippine audience. This industry brief is being made available to Canadian businesspeople in order to provide basic market information should there be export interest in this sector.