Latest round of turf war among sweet treat makers starts as hot season closer

Tourists hold their ice creams for photographs at a scenic spot in Tianjin in April. (TONG YU / CHINA NEWS SERVICE)

The month of May has arrived and, with the temperatures continuously rising, chowhounds in the nation start to browse products in the refrigerators of the supermarkets to find relief for their dry throats, triggering the competition among ice cream makers.

Top ice cream makers have doubled down on the sweet treat business to gain business from more consumers through innovation and expansion of production capacities.

Some makers have added the latest cultural icons in their product design, such as Chinese dairy giant Yili Group, which has launched a new ice cream-"Don't Feed the Cat"-a cone shaped to resemble a fish with vanilla and milk-flavored cream.

Shenyang Deshi Cold Drinks & Food Co Ltd in Liaoning province, a renowned ice cream maker focused more on the northern parts of China, has teamed up with the Shenyang Imperial Palace Museum and co-designed a series of ice creams in the shape of renowned historical icons, such as the Phoenix Tower at the museum, once the highest building in Shenyang during the Qing Dynasty (1644-1911), and the armors of ancient soldiers.

Available on domestic shelves already, these ice creams have also been shipped to overseas markets including Canada and Australia, according to the company.

In addition to more thoughts on product design, healthier recipes have gained more recognition from younger consumers from makers like the Shanghai-based Chicecream, which has recently launched the Youth Series in collaboration with the National Olympic Sports Center in Beijing. The jointly released ice cream is a low-sugar, low-fat and high-protein option.

The healthy ingredients of Chicecream are based on research and data collected from the training center to meet the demands of the younger generation of consumers, according to the company, which was founded in 2018.

"Leading companies have faced mounting competition from rising brands and niche brands," said Li Chen, a food and drink analyst from global market research firm Mintel. "Chicecream is catching up quickly with Wall's and Nestle."

A visitor displays a mythical monster-shaped ice cream at the Shenyang Imperial Palace Museum in Liaoning province. The frozen treat series is co-launched by Shenyang Deshi and the museum, and has been shipped to overseas markets such as Australia and Canada. (YU HAIYANG / CHINA NEWS SERVICE)

A quickly upgraded product portfolio plays a key role in leading the market positions for global players such as Nestle, which is expected to offer more than 20 kinds of ice cream, including its iconic ice cream brands, such as the Cantonese-featured ice cream, Yuexinyi. The product was invented last year in Guangzhou, Guangdong province, in an effort to connect younger consumers with the essence of traditional Cantonese culture.

Jiang Nini, head of the confectionery and ice cream unit at Nestle China, said the strengths of Nestle lie in its large portfolio of established household food brands. Therefore, Nestle can quickly form an alliance with such time-honored brands to create new products. For example, this year the firm is expected to work with Nestle Eagle brand-a sweetened condensed milk-using their ingredients to make innovative new ice creams.

This year, Jiang said Nestle's popular chocolate brand Cui Cui Sha, or crispy shark chocolate wafer, expects to be extended with an ice cream cone product in the Chinese market.

"The Chinese ice cream industry has entered a positive phase where ice cream is no longer a seasonal product and has become a mainstream retail product," said Zhu Danpeng, a food and beverage analyst based in Guangzhou. "Innovation, upgrades and differentiation have become keywords for the ice cream trend.

"Meanwhile, as more domestic consumers are confident in cultural heritage and homemade products, ice cream brands have become increasingly diversified to support the strong growth for the sector."

Consumer goods giant Unilever has rolled out a new Magnum product that has reduced the use of sugar in its iconic Belgium chocolate to please the health-conscious consumers in China. On the other hand, the brand has adopted imported cream to cultivate a creamier flavor that is often more preferred by domestic customers.

The themed ice cream that has endorsed cultural heritage has been the highlight of this year as the Shanghai-based Bright Dairy has decided to kick off new irregular-shaped ice cream productions. Efforts include renovating its facilities and optimizing its production capacities.

According to Mintel, China's ice cream sector revenue has reached 304.3 billion yuan ($46.4 billion) as the world's largest ice cream market in 2019.

In addition to rolling out new flavors and shapes, leading players have gradually upgraded their manufacturing facilities or expanded production lines, in preparation for the escalated fight for the sweet tooth.

Unilever's ice cream brand, Wall's, has unveiled its new "lighthouse factory" in Taicang, Jiangsu province.

The new factory has been equipped with 15 production lines. The intelligent factory, the world's first "lighthouse factory" in the ice cream industry, adopts smart manufacturing technology for ice cream products that can help reduce carbon emissions and energy and water consumption by 83 percent and 14 percent, according to the city's bureau of commerce.

The factory uses an artificial intelligence model that accurately predicts market demand. The artificial intelligence model can not only accurately predict product demand, but also perceive information such as large-scale market fluctuations and rapid growth channels, according to Unilever.

Through the layout of the artificial intelligence model, Unilever Taicang's food production base can quickly respond to market changes, accelerate technology and product innovation, and effectively improve production efficiency, said the company.

Consumer-oriented innovation accelerates product upgrading. Unilever Taicang's food production base focuses on consumer-oriented digital innovation achievements, collecting consumer needs in real-time and then simulating product development to accelerate new product upgrades.

During an online news conference held in March, Matt Close, business group president of ice cream of Unilever, told the media that the new factory is planning to manufacture 2 million ice cream products under the brands Wall's, Magnum and Cornetto.

"China is not only an important market but also an inspiration for us to seek innovation and breakthroughs," said Close.

"The factory is another milestone for our innovation, to bring more growth for our ice cream business."

The company has built another production base in Guangzhou, Guangdong province, with an investment of 1.6 billion yuan, which is aimed to produce personal hygiene products, household products and food.

During the six years between 2016 and 2021, if calculated by retail, Yili ranked No 1, taking up 17.8 percent of market share, followed by Unilever at 9.3 percent, Mengniu at 8.4 percent and Nestle at 5 percent, according to Euromonitor International, a consumer product research group.

Other leading enterprises in the ice cream market in China also include Sanyuan, Tianbing, Zhongjie and General Mills.