The Global Heat Wave Is Not Helping Ice Cream Sales, Unilever Says When temperatures rise, consumers tend to prefer cold drinks over frozen desserts, according to company reps.
Key Takeaways
- Ice cream was Unilever's slowest growing segment in its latest earnings report.
- The consumption of dairy ice cream has been steadily declining since 1986, according to the USDA.
Opinions expressed by Entrepreneur contributors are their own.
Ruthless heat can make almost anything unbearable — including frozen desserts.
Unilever, the U.K.-based parent company of popular brands like Ben & Jerry's and Magnum, said on Tuesday that the heat wave scorching Europe may have an adverse effect on ice cream sales.
"There's a sweet spot for temperatures when I talk about the weather," Graeme Pitkethly, Unilever CFO, said after quarterly reports were reported on Tuesday, per Reuters. "If it gets to be too hot - and we can see incredible temperatures around Europe at the moment, there's some data showing people perhaps move away from an ice cream and buy a cold drink instead."
Despite the cooling nature of ice cream, the frozen dessert can actually make individuals more dehydrated due to its contents of sugar and milkfat.
This realization came after Unilever experienced a surge in out-of-home sales (restaurants and catering companies) in Europe in June when the weather was cooler. However, the recently high temperatures have broken records in some regions and raised health concerns — prompting individuals to stay hydrated and indoors whenever possible.
Separately, Unilever reported that sales of in-home ice cream brands like Breyers were quiet in the first half of the year globally, pointing to inflation that reduced consumers from non-essential spending.
Unilever's ice cream sales grew by 5.7% globally (the slowest-growing sector of Unilever's five industry categories) during the first half of 2023 when compared to the same period in the previous year. However, the growth was driven by significant price increases, even though the volumes slightly declined, according to the earnings report.
But weather and inflation aren't the only reasons ice cream sales are dropping. According to the U.S. Department of Agriculture, regular dairy ice cream consumption has been falling steadily since 1986, with the average American eating 12 pounds per person in 2021 compared to 18 pounds in 1986, per CNN.
CNN reported earlier this month that the decline primarily lies in the increasing consciousness of ice cream's impact on health and the environment. Also, the increased availability and variety of dessert options and the rise of premium ice cream brands with higher prices have further impacted ice cream sales.
"As people have more choice and more options, and as they become increasingly health conscious, ice cream has not won that battle," Lucas Fuess, senior dairy analyst at Rabobank, told the outlet.
