Ice Cream and Frozen Desserts in Thailand

2021 DEVELOPMENTS

Improving demand likely for ice cream during 2021 as consumers start to spend greater time outside of the home as restrictions relax

Demand for ice cream, particularly through the foodservice channel, was significantly impacted during 2020 due to the national lockdown which restricted consumers’ movement outside of the home including meeting friends for an ice cream during the summer season in addition to limited tourism, with the latter resulting in double-digit volume decline for unpackaged ice cream. However, this benefited take-home dairy ice cream as consumers switched to home consumption, as the larger packaging served entire families confined to their homes, a trend also negatively impacting demand for single portion dairy ice cream.

Despite more positive outlook, foodservice channel will struggle to recover to pre-pandemic levels in 2021 due to severity of decline the previous year

Foodservice sales of ice cream and frozen desserts were the most significantly impacted by the emergence of the pandemic and the government’s efforts to control the spread of the virus through a national lockdown, which included the closure of public venues and restaurants for several months in 2020 in addition to prohibiting gatherings amongst friends, families, and other sections of society. This resulted in double-digit volume declines for unpackaged ice cream, which is dominated by foodservice, as consumers continued to avoid large, crowded spaces even when restrictions started to relax.

Players continue to explore innovative flavours and the cone format of impulse ice cream to attract consumers

While the largest category of ice cream is dominated by multinationals Unilever and Nestlé with their wide product portfolios which include respective brands such as Cornetto, Paddle Pop, Wall’s, Eskimo and Milo, players understand that many Thai consumers appreciate local flavours, and these have been a key area of development within ice cream towards the end of the review period, with more brands expanding their portfolios with these flavours. Both international and domestic brands have been following this trend; for instance, Wall’s has developed Ice Cream Sandwich Thai Tea and Asian Delight collection, whilst Nestlé has innovated with Extreme Thai Tea towards the end of the review period.

PROSPECTS AND OPPORTUNITIES

Full recovery for ice cream and frozen desserts predicted for 2022

Volume sales of ice cream and frozen desserts are set to further improve in 2022, with both foodservice and retail channels predicted to fully recover to pre-pandemic levels. There is likely to be a greater shift back towards the larger category of single portion ice cream as consumers start to spend increasing amounts of time outside of their homes, as restrictions relax.

Foodservice and unpackaged variants depend on consumer confidence and return of tourism

Unpackaged ice cream is predicted to recover to pre-pandemic levels by 2022 while recording the highest volume growth rate over the forecast period. Dominated by the foodservice channel, the category’s recovery will depend on greater confidence amongst consumers in terms of spending longer periods of time outside of the home; some consumers will remain wary of visiting establishments which specialise in offering buffet meals which often include unpackaged ice cream, particularly with health and safety concerns.

Players will continue to add value to category through innovation in terms of formats and flavours as well as products with healthier positioning

Players are likely to continue to attempt to add value to ice cream in particular, with demand through retail being outpaced by foodservice over the forecast period. Innovation in terms of formats, further exploration of local or more exciting flavour combinations or even healthier variants offer potential for development, particularly as consumers re-evaluate their health and wellbeing in light of the pandemic and home seclusion.