Summary of Key Points
This summer, traditional cold drink shops have faced an awkward situation where the peak season did not bring the expected boom: customer traffic has plummeted, revenues have declined, and many shop owners are considering changing careers. The reasons behind this include abnormal weather (excessive rainfall), shifts in consumer habits (ice drinks like milk tea competing for customers), a decline in demand for premium ice cream (consumers no longer willing to pay extra for luxury products), and changes in distribution channels (brand manufacturers bypassing traditional wholesalers to directly target retailers or use vending machines). Ice drink companies are adjusting their strategies, shifting from creating nationwide hits to customizing products for different channels in an attempt to break through the current challenges.
1. Traditional Cold Drink Shops: No Business During the Peak Season, Struggling to Afford Rent and Utilities
The owner of a cold drink wholesale store in Fengtai, Beijing, said that with universities on vacation and a 30% decrease in community foot traffic, daily rent and utility costs amount to over 500 yuan. The business is barely surviving off cigarette sales. The situation in Zhoukou, Henan, is even worse: daily turnover is only a few hundred yuan, not enough to cover salaries, so the owner has to rely on help from elderly family members and plans to clear inventory before changing careers.
Why is it so difficult? In addition to reduced customer traffic, the weather has also been a major factor—there has been heavy rainfall along the Yangtze River, causing distributors to be hesitant to stock up in case they can't sell the products. Data supports this trend, with forecasts indicating that ice cream sales and shipments will continue to decline from 2024 to 2026, making the weak peak season a common phenomenon.
2. Ice Cream Price Segmentation
The ice cream market has divided into two distinct segments:
- Budget-friendly prices (0-3 yuan): This segment's share has increased from 30.8% to 33.35%, relying on bulk purchases by families for sales. For example, Qiaolezi ice cream costs 3.6 yuan, which is cheaper than in convenience stores, and buying five units comes with a free stick of old-style ice cream. Although the profit margin per unit is low, it helps to maintain overall sales.
- Premium prices (over 6 yuan): These products have faced a sharp decline in demand. For instance, a Maideri ice cream costs 9 yuan, but the production date is January 2026 (indicating excess inventory). Retailers are also reducing stockpiling of premium products because consumers no longer value packaging and marketing efforts; they prefer cheaper alternatives.
Products priced between 3-6 yuan account for nearly 50% of the market and complement the budget-friendly segment, but overall growth is sluggish.
3. Milk Tea Competing with Ice Cream?
Summer consumer preferences have changed:
- Ready-made ice drinks: In hot weather, people prefer to drink cold milk tea or coffee over ice cream.
- Rise of fresh ice cream shops: Companies like Yeren Shengshi have opened 1,372 stores in the past year, with an average transaction value of over 25 yuan, attracting ice cream enthusiasts.
- Popular consumption of frozen desserts: This trend suggests that people prefer to consume ice in liquid form rather than in solid blocks.
These new options have taken a significant share of ice cream sales.
4. Changes in Distribution Channels
In the past, brand manufacturers relied on wholesalers to deliver ice cream to consumers. Now, the situation has changed:
- Direct distribution to retailers: Companies like Yili are customizing mung bean ice cream for Sam's Club and collaborating with Dingdong Maicai to offer Qiaolezi products; Mengniu is creating matcha ice cream for Walmart, which has become a hit.
- Vending machines in offices: Mengniu has installed over 200 free vending machines in Beijing. As long as the office provides power, they use 10% of sales to cover the cost of the machines, delivering ice cream directly to employees.
Traditional wholesalers are both facing reduced customer traffic and being bypassed by brand manufacturers, leaving them with increasingly limited opportunities for survival.
5. Corporate Adaptations
Companies are changing their approaches:
- Moving from Creating National Hits to Customizing Products: They no longer focus on creating nationwide bestsellers but instead customize products for different channels (e.g., offering classic products for community supermarkets or special editions for membership stores).
- Closely aligning with consumer scenarios: For example, by placing vending machines in offices to meet the immediate needs of office workers.
This shift is necessary to adapt to the competitive market landscape. The market is limited, and companies must precisely target specific channels and consumer needs to retain existing customers.
In Conclusion
The “good times” for the ice cream industry are over. Now, businesses and shop owners must adapt to the challenges of divided consumer demand and changing distribution channels. Otherwise, they may not be able to survive in the long term.