ICE CREAM AND FROZEN DESSERTS IN THE PHILIPPINES - ANALYSIS

Country Report | Aug 2019

HEADLINES Market Sizes

Ice cream and frozen desserts grows by 6% in retail volume terms and 9% in current Sales of Ice Cream and Frozen Desserts
value terms in 2019 to reach 113 million litres and PHP21.7 billion Retail Value RSP - PHP million - Current - 2005-2024
Efforts to increase distribution to traditional grocery retailers boost sales
Take-home dairy ice cream is the most dynamic category in 2019 with current value
21,722 Forecast
35,000
growth of 10%
The average unit price of ice cream and frozen desserts rises by 3% in 2019 30,000

Unilever RFM Ice Cream Inc increases its dominance in 2019 with a value share of 25,000
62%
Ice cream and frozen desserts is projected to increase at an 8% current value CAGR 20,000
(5% 2019 constant value CAGR) over the forecast period to reach PHP32.3 billion in
2024 15,000

PROSPECTS 10,000

5,000
Unilever drives growth by expanding its distribution but school bans
threaten growth 0
2005 2019 2024
Sales of frozen desserts remained negligible in 2019, but ice cream continued to go
from strength to strength with it recording dynamic growth in retail volume and current
value terms. A key driver of this was Unilever RFM Ice Cream Inc, which dominates
sales of ice cream in the Philippines. The company has been looking to expand its Sales Performance of Ice Cream and Frozen Desserts
distribution into traditional grocery retailers in order to reach more consumers which % Y-O-Y Retail Value RSP Growth 2005-2024
has benefited both the company and the category as a whole. Other factors include
rising disposable incomes and an expanding middle class. 9.3% Forecast
Nevertheless, as with many types of snacks, growth is threatened by the introduction 10%
of ordinances within some communities which aim to ban unhealthy food and
beverages from schools and nearby shops. For example, the Quezon City Health
Department released a list of banned items in June 2018 which included ice cream, ice 8%
drops and ice candies (the latter two coming under single portion water ice cream in
Euromonitor’s data). With other localities including Pasig City, Cebu City, Davao City
and Muntinlupa City also taking this step it is probable that it may be extended 6%
nationwide. As such, ice cream and frozen desserts is projected to see slower growth in
current value and retail volume terms over the forecast period.
4%
Magnolia one of a host of companies to switch to carabao milk
With consumers showing a growing focus on what they and their families eat there was 2%
a trend towards the use of carabao (water buffalo) milk at the end of the review period
with a number of new product launches. Carabao milk is said to be lower in cholesterol
compared to cow’s milk as well as having a higher calcium content, while it also helps 0%
2005 2019 2024
to create a creamier taste. Magnolia Inc was one major producer to start using carabao
milk at the end of the review period with it starting to use it for its Magnolia Best of the
Philippines Ice Cream Collection (bulk dairy ice cream). The company signed an
agreement with local carabao farmers to purchase milk directly from them. Another Sales of Ice Cream and Frozen Desserts by Category
example was The Philippine Rice Research Institute which launched its Brown Rice Retail Value RSP - PHP million - Current - 2019 Growth Performance
Cracker-Ice Cream Sandwich (BRICS) at the end of 2018 which uses brown rice flour and
carabao milk. This range is aimed at addressing malnutrition in the country as well as Frozen Desserts
providing an additional income to rice-producing families. -
Ice Cream
Papa Diddi’s and Baskin Robbins introduce ice cream on subscription 21,721.8
0% 5% 10%
One new innovation to be seen at the end of the review period was the launch of
subscription service ice cream. Papa Diddi’s Handcrafted Ice Cream launched the first ICE CREAM AND FROZEN DESSERTS 21,721.8 CURRENT % CAGR % CAGR
YEAR % 2014-2019 2019-2024
pint subscription service in 2018. This was seen as the brand’s way to widen its GROWTH
distribution reach with subscribers getting two ice cream pints in flavours which are yet
to be released. Meanwhile, Baskin Robbins Philippines created a mobile application
and launched an ice cream subscription service in 2019. The subscription service is
initially serving customers in Bonifacio Global City, Taguig but will eventually expand to
cover other parts of Metro Manila. Although subscription services are expected to
remain a niche over the forecast period, they could attract mid- to high-income
consumers who are interested in novelty, with Millennials in particular interested in
new experiences and tastes.

© Euromonitor Interna onal 2020 Page 1 of 2

COMPETITIVE LANDSCAPE Competitive Landscape

Unilever increases production, expands distribution and continues Company Shares of Ice Cream and Frozen Desserts
innovation % Share (NBO) - Retail Value RSP - 2019
Unilever RFM increased its dominance in ice cream and frozen desserts in 2019 with its Unilever RFM Ice Cream I... 62.4%
value share rising by two percentage points. The company invested PHP1.1 billion in
2018 to increase its production capacity in order to support the growing demand for ice Nestlé Philippines Inc 26.4%
cream. It also deployed more freezers in sari-sari stores (traditional grocery retailers) Magnolia Inc 6.0%
and independent small grocers in order to make its products more widely accessible.
Added to this, the company also launched several new products in 2018/2019. These Arcefoods Corp 1.7%
included Ube Salted Egg Con Quezo in bulk dairy ice cream, which was one of three
BTIC Inc 1.2%
limited edition flavours launched in the run up to Christmas 2018, the other two being
Choco Hazelnut Crinkles and Buco Pandan Espesyal. Ube Salted Egg Con Quezo is an ube Food People Inc, The 1.1%
(purple yam) ice cream with cheese bits and salted egg swirls. Salted egg yolk is a
Others 1.2%
flavour which has gained popularity in potato chips as well as being used in other food
applications especially in foodservice. Another example is Selecta Cornetto Disc
Matcha Cookie which uses a green wafer cone made from matcha. Matcha is made from
finely ground green tea leaves and it has become popular in cafés as well as an
ingredient in ice cream and other snacks.
Brand Shares of Ice Cream and Frozen Desserts
% Share (LBN) - Retail Value RSP - 2019
Interesting new flavours such as matcha, dark chocolate and coffee
add interest Selecta 38.1%

Flavour innovation remains a key strategy used by companies to generate consumer Cornetto 19.9%
interest in their brands. Interesting flavour innovations in 2018/2019 included Nestlé 14.2%
Drumstick Black ice cream which created a buzz on social media with consumers curious
as to what the flavour actually is. This limited edition flavour reportedly ran out of Magnolia 5.9%
stocks as consumers were purchasing it out of curiosity. The Food People Inc launched a Drumstick 4.0%
range of new flavours for its Fruits in Ice Cream brand, which included collaborations
Magnum 2.5%
with other brands. For example, it collaborated with bean-to-bar chocolate
confectionery brand Auro to create new flavours including Milk Chocolate Fudge, Single Arce 1.7%
Origin Dark Chocolate and Roasted White Chocolate with Cashew. It also collaborated
BTIC 1.2%
with the 10-in-1 local coffee brand Kaffea for the creation of a Kaffea ice cream which is
sweetened with coconut sugar and contains collagen and L-Carnitine. Fruits in Ice Cream 1.1%
Nestlé Twin Pops 0.8%
Mondelez introduces Oreo and Toblerone brands into ice cream
Nestlé Kimy 0.7%
Following on from its success in sweet biscuits, the Oreo brand made an entrance into Magnolia Popsies 0.1%
ice cream in the Philippines at the end of 2018 with the launch of three different
formats. Oreo Ice Cream Stick is a vanilla ice cream with crushed Oreo cookies, coated Others 9.9%
in a chocolate shell; Oreo Ice Cream Cone is a chocolate-wafer cone filled with vanilla
ice cream and Oreo cookie pieces; finally, Oreo Ice Cream Sandwich is a vanilla ice Increasing share Decreasing share No change
cream with Oreo cookie pieces sandwiched between two giant Oreo cookies. With an
established following in sweet biscuits this new range is expected to perform well with
it receiving nationwide distribution. Another of Mondelez’s brands to make a foray into
ice cream at the end of the review period was its Toblerone brand of chocolate
confectionery. The new Toblerone Ice Cream is a chocolate ice cream on a stick with
nougat and almond chunks.

© Euromonitor Interna onal 2020 Page 2 of 2