Creative ideas to capture the cravings of younger consumers for ice cream this summer are heating up.

This year, ChatGPT-inspired artificial intelligence technology and science fiction intellectual property have become the hottest buzzwords in ice cream marketing circles.

Chicecream, or Zhongxuegao, has developed Sa'Saa, a series of AI-related ice cream and popsicle products, priced at 3.5 yuan ($0.5) and featuring four flavors — red bean, green bean, milk and cocoa.

The company said AI technology has been adopted in naming, selecting flavors and designing the new product series.

For example, unlike its previous milky taste and textured appeal, the new product is more of a flavored ice, offering younger consumers the experience of a cool and fun summer. The new lower-priced product is designed to penetrate more markets including the fifth-tier cities, said the company.

In addition, Chicecream has launched an egg-shaped high-end ice cream, priced between 15 yuan and 20 yuan, with more milk and eggs used to maximize the creaminess.

"We've seen ice cream visibility in top restaurants, cafes and bars," said Lin Sheng, founder of Chicecream. "An increasing number of consumers have brought ice cream back home as snacks."

The company has continued to expand its offline distribution channels like convenience stores and small-sized retailers from its online "home court", mostly available for multiple users and family consumption. Offline retail revenue surpassed online revenue in 2022, said Lin. Chicecream has increased its production capacity and now churns out more than 200 million ice cream servings annually at its factory in Shucheng county, Anhui province.

Qixuan ice cream, a high-end brand under the country's leading dairy producer Yili Group, has collaborated with the popular science-fiction novel The Three-Body Problem, aiming at the book's sci-fi fan group. The marketing campaign centered around the novel has advertised on social media networks and livestreamed its IP package to promote the products.

"The ice cream sector is going to see explosive growth, creating even more fierce competition in a diversified market," said Zhu Danpeng, a food and drink analyst in Guangzhou, Guangdong province. "Ice cream has become a year-round snack, rather than simply a summer treat for the younger generation."

Meanwhile, ice cream has also become a popular category for entry of adjacent food and drink brands. Mars China has invested about 500 million yuan in building its first local ice cream factory in Guangzhou, the company's third such factory worldwide, to accelerate its business development in China. The factory produced its first batch of products at the end of last year.

"The localized production of Mars' ice cream business in China is a key milestone for us to inspire and boost China's ice cream industry and we are committed to providing Chinese consumers with high-quality, locally relevant and diversified products," said Tom Leemans, president of Mars Global Ice Cream Business.

The massive consumer market, premium trends and rapid progress of cold chains have boosted the confidence of Mars Wrigley in expanding its ice cream business in China, said Leemans.

Mars' ice cream business owns seven brands in more than 40 markets globally. In 2020, Mars Wrigley started to launch ice cream products with Dove and Snickers for the first time. Today, 15 high-end ice cream products under Dove and M&M's have been produced locally, which are expected to cover more than 170,000 retail stores in 67 cities in the country by 2026.

The strengths of local production will enable the company to react more quickly and flexibly, Leemans said, adding that the new factory allows ice cream products to strengthen the signature image of silky smoothness and classic indulgence.

"We will continue with our consumer-centric endeavors to better reach and understand our consumers, including new communication channels and methods, digitalization and data tools," said Leemans.

The retail ice cream market has seen sustained growth momentum in recent years. According to global market intelligence agency Mintel Group's estimates, the retail sales value of packaged ice cream products in China stood at 46.1 billion yuan in 2021, up 8.3 percent year-on-year, while retail sales volume grew 5.3 percent.

Mintel said the average price per 100 grams of new ice cream launches in China increased by 12 percent between 2019 and 2021, driving further growth in retail value in 2021.

Yili, Unilever and Mengniu still held the leading positions in China's ice cream market, with shares rising further in 2021, said the Mintel report. Yili and Mengniu have not only optimized their product lines, but also actively developed online and new retail channels. Meanwhile, Unilever has increased its investment in China, unveiling its largest ice cream factory worldwide in Taicang, Jiangsu province, in March.

New retail brand Hema has also jointly launched ice cream products with coffee house Tim Hortons and plant-based drink brand Oatly. The entry of new players will further intensify competition within the category, said Mintel.

The market research house added that new ice cream product launches in the Chinese market have been on the rise since 2019, demonstrating the growing popularity of the category in China in recent years.

Dairy-based ice cream is still the most popular category, accounting for 95 percent of new product launches in China in 2021. Fruit and vegetable and traditional sweet flavors remained the top two flavor component subgroups for new ice cream launches in the country from 2017 to 2021.

Flavor components and extracts like flowers, coffee, tea and citrus have experienced the fastest growth rates among new ice cream products over the past five years. Considering consumers' interest in exploring novel flavors, it's important for brands to have a diversified flavor profile, said Roolee Lu, a senior research analyst at Mintel Group.

"Although taste is the most important factor when choosing ice cream, it's also important for ice cream brands to tap into the healthy evolution trend, which has already taken place in other food and drink categories under the growing priority of healthy eating. Brands can upgrade their products with healthier and natural ingredients, such as herbals and grains, to strengthen the healthy image of ice cream and further encourage consumption," Lu said.

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