Whether you work in the gelato industry or you are planning on starting a related business, you should be fully aware of the latest data and the main characteristics of the market.
Here at MODALiTA we strive to help gelato related businesses to achieve commercial success. And we do that by consulting them and providing them with the best tools, advice and services needed for that purpose.
The gelato industry in the US might be a very profitable opportunity for well prepared entrepreneurs and investors. But it’s not an easy job. If you truly want to achieve the success you deserve, you should be well prepared for the journey. Too many promising shops fail and shut down everyday, just because many entrepreneurs don’t put enough effort into planning.
Some of them choose the wrong location, audience, inefficient equipment or an unattractive shop design. Some others undervalue the importance of understanding the numbers and the market data. As a consequence, they end up miscalculating their margins or ignoring their competitors, and therefore, positioning.
For this reason, with this article we want to report the most important market data available to help you understand the industry and make the right decisions.
The following are the key data you need to know in order to best fulfill your goals.
How big is the retail gelato market in the US?
The first basic question to ask is: how big is the ice cream and gelato market in the US?
The last 5 years saw the market face some unexpected volatility, due to the pandemic. From 2015 to 2019 the market steadily grew year after year, moving up to 14 billion dollars in revenues. America is, right after New Zealand, the country with the biggest ice cream consumption all over the world.
In 2020, the outbreak of the pandemic temporarily stopped the growth. Many shops were forced to close down because they couldn’t bear the costs of labour and rents during the lockdown. Many others closed down afterwards, due to the declining demand for gelato caused by the fear of the people of catching a cold going around and consuming frozen desserts.
The number of ice cream shops in the States has followed the same trend. It peaked in 2019, when the open shops rose up to 11.000, and it dropped during the pandemic, when several hundreds of shops had to shut down.
During 2022 the trend started to rise again, moving back to over 11 thousands active shops and showing the intentions to grow again at a steady pace. The states with the highest number of gelato shops are California, Texas, New York and Florida.
This surely is a positive and promising data. Nevertheless, if you’re running a gelato business or if you plan on opening a new one, please always keep in mind that a rising market means also rising competition.
So you will need to plan every detail in advance, with strategy and a precise positioning idea in mind.
What kind of ice cream is the most profitable?
According to the data, the ice cream’s most demanded flavors in the US are always chocolate and vanilla cream. Various fruits and coffee follow at a distance.
But the most important thing here is not about ice cream flavors. Rather than that, the very one distinction that really matters is the difference between ice cream and artisanal gelato.
Here at MODALiTA we support local businesses to spread only the highest quality Italian artisanal gelato. We do that for good reasons! Gelato stands for overall higher quality than common ice cream, with better taste, healthier ingredients, superior texture, and on top of that, higher profitability.
Real gelato is still a niche inside the ice cream industry: in 2015 according to Forbes only the 5% of the ice cream shops were actually serving gelato, with a number of proper gelato shops that has arisen over 1000 in the following years.
Gelato and ice cream aren’t the same thing
Artisanal gelato has multiple pros and strengths compared to its low profile cousin ice cream. And it does both for business and for customers. Whereas for customers as we said the tasting experience is way better, from a business side gelato is indeed superior as well.
Although the competition is quickly rising, it’s still early and less bloody than the ice cream one. Besides, a single scoop of gelato might cost on average around 5-6 dollars in California or New York, granting to the business higher net margins and therefore profits.
Last but not least, artisanal gelato doesn’t need to offer the same, boring flavors everywhere. You can surely offer the americans’ beloved chocolate and vanilla, but at the same time you can differentiate your product from any other by testing more complex, mouthwatering and surprising flavors.
This way you can find your own style and attract specific kinds of customers who are eager to try new top notch flavors. They will also be more willing to pay more for those they can’t find anywhere else.
If you want to know more about the technical differences between ice cream and gelato, stay tuned and keep checking our blog! We’re going back to this topic very soon with a specific blog post.
What do the gelato industry market data warn you about and what shall you do?
As we cleared in the previous paragraphs, the market data is of uttermost importance for understanding the industry trends. And therefore, for getting what you need to be careful about to achieve success with your gelato shop.
We can sum it up by the 3 main conclusions we came across.
- First, excluding the pandemic exception, the gelato industry is steadily growing. In the next few years more and more competitive gelato shops will pop up.
- Secondly, you should be careful about competition. You’ll need to focus your strategy upon defining a clear and effective positioning able to distinguish you from all the other shops around.
- Last, keep in mind how artisanal gelato is superior to regular ice cream both in taste and market profitability.
If you want to give a boost to your running or future shop, do yourself a favor. Contact us immediately!
MODALiTA will guide you through the best decisions you might make, by providing you with the best in class equipment and machines, and / or designing your shop from scratch to make it the place you always dreamed and will be proud of.