Ice Cream Products 'Spark' Growth Amid COVID-19... Last Year's Market Size 1.8 Trillion Won, Up 5% YoY

Last Year's Ice Cream Market Size 1.8153 Trillion Won
Upward Trend Since 2020... 'Jipkok' Impact Cited
Future Decline Expected Due to Decreasing Child Population and Dessert Diversification
This Summer's Ice Cream Category Battle for No.1 Between 'Lotte vs Binggrae'

[Asia Economy Reporter Song Seung-yoon] The domestic ice cream market, which had been on a decline for some time, turned to growth during the COVID-19 pandemic. This is because 'stay-at-home' consumption increased and dessert culture became more active, leading to more people eating frozen desserts at home even outside of summer.

According to the Food Industry Statistics Information System of the Korea Agro-Fisheries & Food Trade Corporation on the 22nd, the size of the domestic ice cream market last year was 1.8153 trillion KRW, a 5% increase compared to the previous year (1.7269 trillion KRW). Before COVID-19, the ice cream market size was gradually shrinking. The ice cream market exceeded 2 trillion KRW in 2015 with 2.033 trillion KRW, but decreased by 12% to 1.7725 trillion KRW in 2017, two years later. It slightly decreased again to 1.7243 trillion KRW in 2018, and shrank by 8.9% to 1.6134 trillion KRW in 2019. However, when COVID-19 broke out in earnest in Korea in 2020, it grew again by 7%, and last year it increased by 5%, returning to an upward trend.

The industry analyzes that this upward trend is due to increased sales of premium ice cream and ice cream specialty stores along with stay-at-home consumption. As home cafes and dessert culture became a trend, snack consumption at home increased, and demand for various ice creams, including premium ice cream, rose.

In fact, based on retail POS data in 2020, the most common type of ice cream purchased was bar type at 30.0%, followed by home type (19.2%) and cone type (17.7%). While the market share of bar and cone type ice creams has been gradually declining, the market share of home type ice cream, which is eaten with a spoon, increased by 3.7% compared to the previous year.

However, the ice cream market size is expected to either maintain its current level or gradually shrink in the future. This is because social distancing measures due to COVID-19 have been lifted, and the child population, the main consumer group, is steadily decreasing due to the low birthrate trend. The diversification of desserts that can replace ice cream, such as iced coffee, cakes, and chocolates, also plays a role.

As the market size shrinks, competition is expected to intensify further. As of 2020, the market share by manufacturer was Lotte Confectionery 30.9%, Binggrae 27.0%, Lotte Foods 15.6%, and Haitai Confectionery 13.3%. At that time in 2020, Binggrae became the number one in the domestic ice cream market by acquiring Haitai Ice Cream. However, with the recent merger of Lotte Confectionery and Lotte Foods, Lotte Confectionery is expected to reclaim this position. In this case, the competition for market share in the domestic ice cream market is expected to become a fierce two-way battle rather than a free-for-all. This summer's peak season will be the first stage for the two companies after their merger.

An industry insider said, "Ice cream, which is convenient to eat at home, enjoyed a brief popularity boost due to COVID-19, but the reality is that the overall market will inevitably shrink," adding, "From this summer, marketing and sales wars among companies to solidify their market shares are expected to begin in earnest."

This content was produced with the assistance of AI translation services.