Sugar-Free Frozen Custard Market Size (2024 – 2030)

The global sugar-free frozen custard market was valued at USD 610 million and is projected to reach a market size of USD 858.33 million by the end of 2030. Over the forecast period of 2024–2030, the market is projected to grow at a CAGR of 5%.

Sugar-free frozen custard without added sugar that has been naturally sweetened with erythritol, maltitol, and xylitol is known as sugar-free frozen custard. These sweeteners are lower in calories than ordinary sugar and are derived from plants and berries. The ingredients of frozen custard include pasteurized egg yolk, milk, cream, and sugar; this gives it a creamier, denser texture than ice cream. Egg yolks, cream cheese, and sugar-free syrups or extracts are used in certain recipes for sugar-free frozen custard. Over the past decade, there has been a notable shift towards the consumption of fewer calories. However, there was limited growth in the market due to a lack of options. Presently, the market has seen a considerable boost owing to health awareness and product diversification. In the future, with a focus on distribution channel expansion and collaborations, immense development is anticipated.

Key Market Insights:

Demand for sugar-free products is fueled by growing health consciousness, which is fueled by diseases like diabetes. The market for sugar-free frozen custard is expanding as consumers look for goods with lower sugar and calorie content. The reason for the faster rise is that more people are discovering options in sugar-free frozen custard to suit their varied dietary choices, such as those who are gluten and lactose intolerant.

The market for sugar-free frozen custard has several difficulties, including related expenses, fierce competition, and preserving flavor and texture without added sugar. Manufacturers are working to innovate and enhance formulations to address these challenges.

The industry is full of opportunities for innovative products, such as adding unusual fruits, functional components like vitamins and probiotics, and sustainable packaging projects. Businesses may take advantage of these trends to draw customers and set themselves apart from the competition.

Sales of sugar-free frozen custard were originally impacted by the COVID-19 pandemic due to lockdowns, interruptions in the supply chain, and lower consumer spending. Nonetheless, a post-pandemic rebound has been noted, with consumers prioritizing healthier food alternatives and restrictions easing. This has resulted in a rise in sales of sugar-free foods. E-commerce sites have been instrumental in increasing sales both during and after the epidemic by making it easy for customers to order and receive sugar-free frozen custard goods online.

Due to its high level of awareness, stable economy, and the existence of well-known brands like Halo Top, Enlightened, Arctic Zero, and Rebel Creamery, North America now commands the majority of the worldwide market. Due to factors including urbanization, shifting lifestyles, and rising disposable incomes, Asia-Pacific is the market with the quickest rate of growth.

Sugar-Free Frozen Custard Market Drivers:

Growing health consciousness has been contributing to the success.

A study published in The Lancet in June 2023 states that the prevalence of diabetes is 6.1% globally, affecting over 500 million individuals. In the next 30 years, its population is expected to more than double to 1.3 billion, with a predicted rise of 16.8% by 2050. This has led to many health and wellness trends. People have started to follow a healthy lifestyle to prevent the prevalence of diabetes. Consumption of foods with fewer calories and sugar-free options aligns well with this ongoing trend. Sugar-free frozen custard is a guilt-free option for individuals looking to manage their sugar intake. Manufacturers are bringing out many options in the market to attract a health-conscious customer base.

Dietary restrictions and preferences have been accelerating the growth rate.

Due to changes in the standard of living and other environmental factors, there has been an increasing number of cases of people who are allergic to gluten and lactose. Consumption of foods with these compounds can cause bloating, digestive issues, migraines, headaches, etc. Sugar-free frozen custard has alternatives for sugar. This can include natural sweeteners. As such, people allergic to gluten can go for this option. Besides, there is a growing popularity of veganism. This involves the consumption of plant-based products. Alternatives to dairy products are being used in frozen custard. Coconut, almond, and cashew milk are a few of the examples. These beverages have a unique taste and are healthy as well. A few products are also specialized as per the needs of the individual. As such, people can accommodate their dietary requirements without compromising on taste or quality.

Sugar-Free Frozen Custard Market Restraints and Challenges:

Associated costs, intense competition, and lack of taste & texture are the main issues that the market is currently facing.

Naturally occurring sweeteners and substitutes for sugar, such as erythritol, stevia, or monk fruit, can cost more than regular sugar. This subsequently increases manufacturing and production costs. As a result, the products commercialized in the market can be expensive. This can lead customers to go for other options, causing losses to the industry. Secondly, there is a wide range of options that people can choose from. Products like frozen yogurt, gelato, sorbet, and other dairy-free options have gained prominence. Businesses need to stand out in the industry to attract customers. Thirdly, despite advancements, it can be a little challenging to maintain the taste and texture without the aid of sugar. Sugar is responsible for lowering the freezing point of water, which keeps the custard soft. Additionally, it is responsible for creating a smooth, creamy, and dense structure. Few food critics have mentioned a lack of creaminess and flavor in sugar-free frozen custards. As such, manufacturers must achieve the right formulation and composition.

Sugar-Free Frozen Custard Market Opportunities:

Innovation of products provides the market with an ample number of possibilities. Companies can experiment with unique formulations and ingredients. Besides, healthy items can be incorporated into this product. Exotic fruits can be incorporated to impart a different taste. Additionally, functional ingredients like probiotics, prebiotics, vitamins, and other minerals can be added to enhance the nutritional value. Secondly, focusing on online channels is beneficial. Having a virtual presence helps in better revenue generation. Manufacturers may interact with consumers, promote product discovery, and enable easy online shopping by creating an online presence and utilizing digital marketing techniques. Thirdly, the introduction of seasonal and limited varieties helps with better profits. This creates a sense of excitement and curiosity, which drives a broader consumer base to buy these products. Apart from this, companies can expand in emerging economies. Opportunities for expansion in global markets can be achieved by customizing items to meet regional tastes and preferences while adhering to legal constraints.

SUGAR-FREE FROZEN CUSTARD MARKET REPORT COVERAGE:

Sugar-Free Frozen Custard Market Segmentation: By Distribution Channels

• Supermarkets & Hypermarkets

• Specialty Stores

• Online Retail

• Others

The largest growing distribution channels are supermarkets and hypermarkets. Customers may inspect the items to determine their visual quality, ask questions, and speak with the business owners. They can also change the price by haggling over the products. Demand is further increased by the preference of those who are uneasy or inexperienced with the Internet. Accessibility is further facilitated by the fact that these stores are present throughout the majority of the colonies. Besides, many options are usually available on the counters. Online retail is the industry distribution channel with the fastest rate of growth. This is mostly due to availability. Customers choose this option since it is so handy. Customers can order the dessert from their house, and the products are delivered to their doorstep. Additionally, they will have more access to a wider range of native and imported kinds. Online retailers may benefit their customers by offering free shipping and discounts. In addition, the sector has grown as a result of the expanding digitization trend.

Sugar-Free Frozen Custard Market Segmentation: Regional Analysis

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

North America is the largest growing market. This region has a share of around 34% of the market. The United States and Canada are at the forefront. The primary reason for the dominance is awareness and demand. Frozen custard is a popular dessert in North America. A lot of customers tend to go for this option as their dessert. As such, the revenue generated is higher. Secondly, due to a stable economy, companies can invest in innovative formulations and other R&D activities. Many companies try to bring out unique and different flavors for each season. Additionally, due to the funds, it is easier to access resources and other necessary infrastructure. Thirdly, many well-established companies are present in this area. They have a global presence. This leads to greater profits. Prominent players include Halo Top, Enlightened, Arctic Zero, and Rebel Creamery. Furthermore, as per the 2022 National Diabetes Statistics Report by the CDC, 11.3% of the US population, or 37.3 million individuals, are affected by diabetes. Of these, 8.6 million have diabetes without a diagnosis, and 28.7 million have a confirmed condition. This increasing prevalence of diabetes is enabling progress. Asia-Pacific is the fastest-growing market. This area has an approximate share of 26%. Countries like China, India, and Japan are at the top. Urbanization has led to an increase in disposable income and a change in the standard of living. People have become more aware of what they consume. A greater percentage of the population has many fitness goals. Many of them are looking for sugar-free and low-carb options. Besides, gluten allergies, veganism, and keto diets have been boosting the market. Companies are working towards releasing diverse flavors catering to the needs of individuals. Online retail has been a boon. People are preferring this due to its convenience. Companies and startups are coming up with marketing strategies to create better awareness. Governmental initiatives through funds for the food and beverage industry have been beneficial.

COVID-19 Impact Analysis on the Global Sugar-Free Frozen Custard Market:

The outbreak of the virus hurt the market. Lockdowns, mobility limitations, and social isolation were all part of the new normal. This influences supply chain management, logistics, and transportation. The primary focus was on remote work. Production and manufacturing activities were halted. Operating challenges were brought forth by safety restrictions. A decline in the economy was seen. Many people experienced job losses. Hotels, restaurants, and other dining establishments had to close. As a result, the food and beverage sector suffered losses. Projects relating to healthcare were intended to get the majority of the cash. Launches and partnerships were delayed as a result. Many people merely bought essentials. People began to search for more immune-boosting, healthful solutions. There was an elevation in home cooking activities. Post-pandemic, the market has started to pick up owing to the relaxation of rules and regulations. Sugar-free options have started gaining prominence due to the rising cases of diabetes. E-commerce has been helping with increasing sales.

Latest Trends/ Developments:

Companies in this industry are motivated to increase their market share by using a range of strategies, including acquisitions, joint ventures, and investments. Businesses are spending a lot of money to develop techniques to retain competitive pricing. Further growth has resulted from this. Innovations in packaging have been a recent market trend. Companies have started to take sustainable initiatives. This involves using recycled and biodegradable materials for packaging. This helps reduce landfills. Besides, organic materials like cornstarch, sugarcane, and wood are being used for biodegradable spoons to decompose spontaneously under composting conditions. Because they are biodegradable, dangerous residues cannot be left behind when they are broken down by microbes into non-toxic molecules. Investments are being made by business tycoons to fund these projects and move towards a circular economy.

Key Players:

1. Halo Top

2. Enlightened

3. Arctic Zero

4. Rebel Creamery

5. So Delicious Dairy Free

6. Swerve

7. Arctic Ice Cream

8. Eat Me Guilt Free

9. Wink Frozen Desserts

10. Killer Creamery