Market Dynamics
What are the Driving Factors for The Global Market?
The incidence of obesity-related disorders, such as diabetes, cardiovascular diseases, and others, has considerably increased in the last few years. According to the Organization for Economic Co-operation and Development (OECD), the prevalence rate of obesity in the U.S., Mexico, and England is estimated to reach 47%, 39%, and 35%, respectively, by 2030. Individuals in high-income geographical regions, such as North America and Western Europe, are more prone to diabetes, cancer, and other critical health issues owing to their unhealthy food habits and sedentary lifestyle. In addition, an increase in the incidence of such health disorders boosts health and fitness consciousness among consumers. Thus, the adoption of vegetarian foods is on a consistent increase across the world. According to recent studies, 30% of Americans are not only leaving meat off their plates but are also seeking out plant-based meat alternatives. Consumers are projected to become selective in their food habits to prevent severe health issues. Thus, an increase in the obese population shifts the preference toward vegan food products, which, in turn, fuels the growth of the global vegan ice cream market.
Consumers have been actively participating in various physical activities due to a rise in awareness about the benefits of indulging in such programs or activities. This has triggered the demand for various health-oriented products, regardless of the fact whether they are food & beverages, apparel, or footwear. Taking this trend into consideration, vegan ice cream manufacturers have been strategizing on introducing products that cater to the requirement of target customers. Thus, the rise in health and wellness trend among the target customers drives the global vegan ice cream market's growth in value sales.
An increase in disposable income in China is anticipated to drive the growth of the Asia-Pacific vegan ice cream market in the coming years. For instance, according to the National Bureau of Statistics of China, disposable income in China has increased at a significant pace. In 2018, the disposable income was noted as 28228 CNY. According to the Ministry of Statistics and Programme Implementation (MOSPI), the disposable income of India increased to 192,634,827 INR million in 2018-2019 from 173,190,080 INR million in 2017- 2018, which was the highest disposable income noted. The increased disposable income generates an opportunity for market players to expand their market presence in these countries.
What are the Restraints for The Global Market?
Plant-based milk such as soy, almond, cashew, and coconut milk is costly compared to dairy milk. Moreover, the extraction cost of this milk is higher than animal milk. Moreover, this milk is mostly consumed by fitness-conscious and vegan consumers. Thus, the high cost of plant-based milk is relatively raising the cost of vegan ice cream, due to which middle-class consumers may not be able to spend on vegan ice cream, which hampers the growth of the global market.
What are the Future Opportunities for The Global Market?
The market in Asia-Pacific offers lucrative growth opportunities for the operating players. This is attributed to an increase in the adoption of the Western lifestyle and a rise in the disposable income of consumers. In addition, players operating in this region focus on launching innovative plant-based milk products. Moreover, countries in Latin America, such as Brazil, unfold attractive business opportunities owing to the high prevalence of obesity in this region, which, in turn, shifts the preference of obese consumers toward vegan products, thereby accelerating global market growth.
Also, Non-dairy or plant-based beverages are primarily prepared from ingredients such as soy, almond, rice, oat, cashew, coconut, and peanut. Players have an opportunity to manufacture products such as refreshment drinks, energy drinks, and ice cream with enhanced taste and flavor. Organic flavors and exotic tastes can be added to plant-based ice cream, which is anticipated to attract a large consumer base, thereby driving the growth of the market.
Regional Analysis
The global market for vegan ice cream has been segmented based on geography into North America, Europe, Asia Pacific, and LAMEA.
The North American vegan ice cream market is analyzed across the U.S., Canada, and Mexico. The U.S. accounts for the highest share of the market, followed by Canada. A number of players have entered the North American market, and the number is expected to increase in the near future, owing to the rise in demand for organic and plant-based products. The North American market is expected to grow significantly, owing to the increase in obesity in countries such as U.S. and Canada. Obesity problems have motivated them to consume cholesterol-free, naturally prepared alternative dairy products, which fuels the growth of the vegan ice cream market. However, the production of conventional milk with decreased chemical levels and fat content is expected to restrain the growth of the vegan ice cream market in the region. On the contrary, an increase in demand for innovative flavors and new sources of vegan ice creams in this region may possess new opportunities for the market players. On the other hand, the North American vegan ice cream market is highly competitive. This is attributed to the increase in the number of players entering the market, addressing the upcoming demand for vegan products.
The vegan ice cream market for Europe region is studied across emerging markets such as Finland, Sweden, Denmark, Italy, and the U.K. Europe has emerged as the world's largest vegan ice cream market. The leading European vegan ice cream player has focused on market extension while strengthening its production capacity to consolidate its foothold in the market. According to the WHO, 30-70% of people in European Union countries are overweight. Because of the highest prevalence of obesity, the United Kingdom has emerged as the region's largest market for vegan ice cream. Furthermore, due to increased health awareness and vegetarianism adoption, other Western European countries such as Finland and Denmark have emerged as major markets for vegan ice cream. Thus, rising demand for vegan ice cream is expected to propel Europe's vegan ice cream market forward.
The vegan ice cream market for the Asia-Pacific region is studied across developing economies such as China, India, Japan, New Zealand, and Australia. The competition in the soy milk market in the Asia-Pacific region has witnessed a consistent increase over the past few years. Among the dairy alternatives, rice milk is anticipated to gain maximum demand in the region, compared to other markets, due to its low price and high calcium content. An increase in health & fitness consciousness and innovative product launches by companies operating in the vegan ice cream market are the major factors that contribute toward the growth of the overall market growth.
The vegan ice cream market for the LAMEA region is analyzed for the Middle East, Latin America, and Africa. Brazil and Argentina are among the largest producers of soybeans. The penetration rate of soy-based meals, snacks, and other foods is high in countries such as Brazil and Argentina. The soy milk market in Brazil is relatively smaller than in other regions. However, it is growing at a substantial pace. Impossible Foods, a new entrant in the Brazilian soy milk market, raised funding of $108 million in October 2015 before starting its production. BRF is among the major companies in the Middle Eastern soy milk market. In the alternative dairy segment, a combination of soy milk and fruit juice is popular in Latin America, which has increased the sale of dairy alternatives, which, in turn, positively impacts the vegan ice cream industry. The introduction of new flavors in vegan products is anticipated to offer a remunerative opportunity for the industry in the coming years.
Segmental Analysis
The global vegan ice cream market is segmented based on Source, Flavor, Sales type, and Distribution channel.
By source, the market is categorized into coconut milk, soy milk, almond milk, and cashew milk.
Coconut milk is extracted from the flesh of mature brown coconuts. It has been used as a key ingredient in various desserts, soups, and sauces. It is a popular component of Indian, Thai, Hawaiian, and South American cuisines. Extracting coconut milk involves grating the fleshy part of the fruit and soaking it in hot water. The cream that forms on the surface of the liquid is collected to be used as coconut cream, while the remaining liquid is then sieved and separated from the pulp to obtain the coconut milk. Low-fat coconut milk consists of a neutral base taste that can impart the flavor of ice cream. The demand for this milk is rising due to its health benefits such as it helps in weight loss; is rich in vitamins C & E that are well known for their anti-oxidant properties; acts as a key source of potassium, magnesium, and phosphorous; helps to prevent cardiac diseases, and strengthens the immune system. Thus, vegan and fitness-conscious consumers prefer coconut milk ice cream, which significantly contributes to the growth of the market.
Soy milk is a plant-based beverage made by soaking and grinding soybeans, then boiling and filtering the resulting mixture. It is an emulsion of oil, water, and protein that is stable. Initially, it was a natural byproduct of tofu. The soy milk market is comprised of a wide variety of products containing plant-based and other organic ingredients. Tofu, Tempeh, textured vegetable protein, Quorn, Seitan, and other ingredients such as peas, lentils, and rice are used to create soy milk products. Such products have gained immense popularity among health-conscious consumers, as they are gluten-free; cholesterol-free; and serve as a key source of protein, iron, calcium, amino acids, and other micronutrients. A number of players operating in the developed markets, including North America and Europe, offer tofu and tofu-based soy milk ice cream, which significantly contribute toward the growth of the market.
Almond milk is made from ground almonds and filtered water. It may contain starches and thickeners to improve its consistency and shelf life. Almond milk is typically lower in calories than other milk as long as it is unsweetened. In addition, it is free of saturated fats and is naturally lactose-free. Almond milk is rich in fatty acids such as omega-3 and serves as a key source of vitamin E, which is crucial in keeping the skin hydrated and fed. It is the most popular milk source in vegan ice cream, which has been gaining increased traction among the target consumers.
Cashew milk is obtained from raw cashews. Recently, it has been commercialized to be used in different food products. Cashew milk is a popular non-dairy beverage made from whole cashews and water. It has a creamy and rich consistency and acts as a rich source of vitamins, minerals, healthy fats, and other beneficial plant compounds. It is usually available in unsweetened and sweetened varieties. Cashew milk boosts immunity and improves heart, eye, and skin health. These benefits, combined with the flavor of ice cream, make cashew milk making vegan ice creams a new trend in the ice cream segment.
By flavor, the market is categorized into chocolate flavor, caramel flavor, coconut flavor, vanilla flavor, coffee flavor, and fruit flavor.
Chocolate-flavored ice cream is an ice cream with natural or artificial chocolate flavoring. Chocolate was considered one of the first ice cream flavors, created even before the popular flavor vanilla. The chocolate flavor is popular among consumers globally. Market players involved in the vegan ice cream market focus on increasing chocolate flavor production, considering the consumers' demand. This flavor is preferred by consumers of all age groups, and hence its demand is considerably high. While people are shifting the trend from dairy to non-dairy ice creams, the chocolate flavor is one of the first flavors consumers want to try. Millennials all around the world are further driving the demand for chocolate-flavored vegan ice cream.
Caramel is a confectionery made by heating various sugars. It is primarily used to flavor puddings and desserts, as a filling in bonbons, and as a topping for ice cream and custard. Caramel is used to make a variety of candies, desserts, toppings, and confections. Caramel is one of the most versatile and widely used confectionery products. Caramel is now witnessing increased popularity in nutrition products. According to Flavors of Asia, since 2006, approximately 31,000 new food & beverage products have been launched in the U.S. Of these, more than 1,045 (around 3.3%) are flavored with caramel. The vast majority of these are confectionery products, while others are hot drinks, bakery & cereals, ice cream, and savory snacks. The different taste of caramel makes it a popular flavor for vegan ice creams as well as for other bakery products. Developing a variety of caramel flavors in vegan ice creams to attract more consumers is anticipated to offer remunerative opportunities for the expansion of the global market.
Coconut is a popular fruit flavor in the vegan ice cream category. The flavor is obtained by adding coconut essence to the ice creams that are made from non-dairy products. Coconut ice cream exhibits the coconut fruit's ability to stay fresh for longer. Moreover, the coconut flavor has been popular since ancient times and is used in various cuisines worldwide. In addition, coconut is considered a healthy fruit, and consumers seeking a non-dairy alternative for ice creams choose healthier flavors. This trend is driving the growth of the coconut flavor market for vegan ice creams.
Vanilla is produced from vanilla beans and possesses a perfumed, sweet aroma with a smoky or woody flavor. It is one of the most commonly used flavors in food & beverage applications. Due to the locality of natural vanilla flavorings to meet the global demand, synthetically produced vanilla flavor is most widely used for flavoring dairy and other food & beverage products. Vanilla is an ideal choice for blending, as it makes the mixture smooth and rich in flavor, which complements other flavors. Being a relatively cheaper flavor, vanilla is widely consumed in the Asia-Pacific region, and vegan ice cream consumption is likely to grow rapidly across the globe.
Coffee flavor is obtained by blending the coffee essence with the ice cream mixture. Different types of coffee flavors are available in the market based on local coffee types. Europe is one of the largest markets for coffee. Although still a niche market, the demand for high-quality and single-origin coffees has been witnessed to grow significantly for vegan ice creams. Moreover, changes in lifestyle and the adaption of the new food culture of the middle and upper classes in local and regional markets offer lucrative opportunities for coffee flavor markers and suppliers in emerging markets, such as Brazil, China, India, Russia, and South Korea.
Fruit-flavored vegan ice creams are made using a variety of fruits. The fruit essences are used in various applications such as juices, sorbets, dairy blends, bakeries, and confectionery. Considering the demand by consumers, fruit flavors such as strawberry, blueberry, mango, watermelon, and cherry are reintroduced in the market by the manufacturers by mixing other flavors with them. As the trend of maintaining a healthy lifestyle is increasing, individuals are shifting their preference toward the use of natural and organic ingredients in their diet. Hence, fruit essence is readily used in functional drinks; ice creams; and sports drinks as a natural source of nutrients, vitamins, and minerals. Globally, various fruits are available in different regions for the production of essences. Moreover, there are no known hazards of consumption of fruit essence, as they are manufactured from natural fruits. Furthermore, fruit essence gives a natural, authentic taste to food & beverages, which fuels the market for fruit flavors in vegan ice creams, thereby augmenting the growth of the global market.
By sales type, the market is categorized into impulse ice cream, take-home ice cream, and artisanal ice cream.
An impulse sale refers to a shopkeeper selling the buyers an item that is not originally on their predetermined shopping list. It is basically an unplanned sale for the seller and unplanned buying for a purchaser. A way consumers conduct an impulse purchase is by seeing a brand-new item for the first time. Supermarkets/hypermarkets or retailers keep the products in the viewing area of the consumers so that the products are easily visible to consumers for purchase. An impulse purchase refers to an unplanned decision to buy a product, even before the consumers have seen or heard of the product. When there is an urgency added to the offer, a sale is more likely to happen on a new item than without an offer. This sales channel helps the vegan ice cream market grow significantly, as this market is still in its initial stages.
Take-home sales type refers to selling goods to customers for home use and storage. An increase in the sale of vegan ice cream through supermarkets/hypermarkets, retail stores, or specialty stores significantly contributes toward the growth of the market. Consumers who want to store ice creams for longer periods of time or those who buy a large number of ice creams prefer taking ice creams home. Moreover, the arrival of various flavors in the vegan ice cream segment is attracting a large consumer base in supermarkets/hypermarkets, retail stores, and specialty stores. Thus increase in the footfall of consumers in such stores boost the take-home sale, which significantly contributes toward the growth of the market.
Artisanal sales type refers to the selling of vegan ice creams through specialty ice cream seller shops or cafes. These sellers can be private vehicles or small ice cream shops. Specialty ice cream stores are popular among all age groups, as they provide varieties of vegan ice cream flavors. Skilled workers at artisanal shops have adequate knowledge about each flavor and source of ice cream. Hence, consumers that are willing to try new flavors prefer going to these shops. The market for vegan ice creams through artisanal shops is expected to grow rapidly, owing to the increase in the number of specialty stores across the globe for vegan ice creams.
By distribution channel, the market is categorized into supermarkets/hypermarkets, convenience stores, and online stores. The online channel is expected to witness a significant growth rate in value sales due to a higher internet penetration rate.
The supermarket is a large shopping center where customers purchase their products, which are arranged systematically on the shelves. Similar products are arranged nearby, which helps buyers for easy comparison among similar products and decide which product to buy. On the other hand, a hypermarket is a large shopping store divided into a departmental store, which is usually larger than a supermarket. Consumers find it easy to view different flavors of vegan ice creams and compare their prices. A supermarket/hypermarket provides ease of purchase to customers. It offers different types of dairy-based as well as plant-based products of various brands with various flavors. An increase in retail sales channel penetration in developing markets has created new avenues for market growth. Moreover, an upsurge in deals and discounts being offered to customers by these distribution channels results in the dominance of supermarkets/hypermarkets in the global vegan ice cream market. Furthermore, supermarkets/hypermarkets are expected to remain the most preferred distribution channel during the forecast period, which significantly contributes toward the market's growth.
A convenience store is a small retail business that stocks a range of everyday items such as coffee, groceries, snack foods, confectionery, soft drinks, vegan ice creams, tobacco products, over-the-counter drugs, toiletries, newspapers, and magazines. Customers visiting this store are health-conscious and eager to buy products promoting an active and healthy lifestyle. Therefore, health food stores strategize on availing a wide range of product portfolio that caters to the requirements of target customers. Moreover, store operators carry out different promotional events to generate maximum sales through discount offers, seasonal pricing strategies, and customer loyalty programs. Hence, the vegan ice cream market sights immense opportunity to gain traction among its target customers during the forecast period.
Online distribution has emerged as a key sales channel for the food & beverage industry, as leading players in the industry are expanding in the e-commerce sector, owing to a rise in internet penetration and an increase in the number of netizens across the globe. Moreover, an online sales channel is widely accepted by consumers in the developed countries of North America and Europe due to the rise in the adoption of mobile phones. Vegan ice cream can be conveniently sold through online sales channels. Rigorous online marketing supplemented with huge options, availability of detailed information, discount & free home delivery offered by various e-commerce platforms has increased the popularity of this distribution channel in recent years. Furthermore, the industry is witnessing significant growth in developing economies, owing to an increase in internet penetration. Therefore, the online sales channel segment is expected to grow at the highest rate during the forecast period.
