The classic chant “I scream, you scream, we all scream for ice cream” may no longer be a totally accurate observation.
What happened: The Magnum Ice Cream Company made its market debut yesterday on Amsterdam’s Euronext index, completing a spinoff from Unilever and becoming the world’s biggest ice cream company. However, the new home of Ben & Jerry’s and Cornetto saw shares open lower than expected, before slowly rising to close a modest 1.33% in the black.
Why it matters: While continued tension with Ben & Jerry’s surely didn’t help, the main factor for Magnum’s muted debut is likely broader uncertainty facing the ice cream biz. While it’s currently a moneymaker, some investors predict a rocky road ahead.
Amid health kicks and growing global usage of GLP-1 weight-loss drugs, ice cream has been identified as one of the snacks most at risk of seeing a serious sales drop.
Plus: There’s the matter of a hotter climate. While rising thermometers are typically a boon for ice cream sales, extreme temps might make more consumers reach for a refreshing cold drink rather than lugging around a belly full of cream on a sweltering summer afternoon.
Our take: It’s not like the consumer desire for sweets has disappeared (just look at the endless array of teeth-rotting lattes at your local coffee shop). And ice cream is still beloved, not just as a food product, but as a concept and familial ritual. Its future growth will depend on innovation to create flavours and serving sizes that better appeal to shifting tastes.—QH