The Real Reason We're All Experiencing Ice Creamflation 🍦
TLDR: we're not eating enough ice cream.
"Without ice cream, there would be darkness and chaos."- Don Kardong
Ice cream, that sweet, milky, GOAT of summertime treats is having a rough go lately. You'd think that the top-notch journalism from The Atlantic would be helping its case, shining a light on the mysterious health benefits of Ice Cream; but, the word doesn't seem to have gone around. Fewer people are buying the summer dairy treat and costs keep rising.
Two conflating factors have been working against it: changing consumer habits and frosty inflation. Let's dig into both.
We need to eat more 🍦
US residents are eating 6 pounds less of frozen dairy treats per year. That may seem like a lot, but breaking it down over warmer months, works out to only 15 grams less per day.
Not surprisingly, the consumption of low-fat and nonfat ice cream has stayed relatively consistent between 2000 and 2021. This is generally in line with the downtrend in consuming less caloric sweeteners.
This consumption pales in comparison to a handful of European nations, with Belgium, Portugal, Poland, Czech Republic, Ireland and Sweden all consuming more per year than their American counterparts.
The Price Surge: C.R.E.A.M.
"(Ice Cream) Rules Everything Around Me. C.R.E.A.M. get the money." - Wu Tang Clan
Adding insult to injury, Ice Cream has not been spared from the clutches of inflation. The rising prices have sparked widespread distress. Consider the reaction of one young British girl: "9 quid for 2 ice creams 😭," capturing the sentiment of many consumers facing sticker shock.
@karislambert Cost of living really taking its toll on marnie🤣 #foryou #fyp
♬ original sound - Karis Lambert
To comprehend the extent of this price hike, we can start by looking at some historical data. Thirty years ago, a McDonald's soft serve cone was less than $0.50. This isn’t just nostalgia; an old McDonald's Australia ad confirms that a $0.30 cone was a reality.
Fast forward to today, and the cost of ice cream has escalated significantly. This increase is driven by rising energy costs, global supply chain disruptions, and higher raw material prices. Below is a chart illustrating the average price per half-gallon of ice cream in the US from 1997 to today.
The cost of a half-gallon of ice cream remained more or less five dollars between 2015 and 2022. Then, starting in January 2022, prices spiked, climbing over a dollar by October 2023 and peaking in March 2024 at $6.20—a 24% increase from January 2022.
Unwrapping the Causes: Energy, Ingredients & Supply Chains
The causes of inflation in this instance are definitely not uncommon: an increase in energy and ingredient costs, plus unstable supply chains:
- Energy Costs: Energy expenses for the food manufacturing industry nearly doubled between mid-2021 and 2022, significantly impacting production costs. Dairy, in particular, is energy-intensive due to the required pasteurization process.
- Dairy Prices: The cost of dairy surged from $3.20/gallon in June 2020 to $4.22/gallon in November 2022, according to the U.S. Bureau of Labor Statistics. That's a 38% increase in cost over 17 months.
- Supply Chain Woes: COVID-19 and the war in Ukraine have wreaked havoc on global supply chains, driving inflationary pressures across the board and pushing up all food costs, including ice cream.
How to Save on Your Sweet Treat
You might think making your own ice cream is a surefire way to cut costs. However, whipping cream is pricey, so the actual savings might be minimal. Still, if you enjoy DIY projects, investing in an ice cream maker could be a fun and potentially cost-effective endeavour.
Alternatively, you can stick to budget-friendly options like Ikea and Costco, where the cost of an ice cream cone has remained relatively consistent over the last ten years at under two dollars. But beware: the savings on ice cream might be offset by impulse buys of items you didn’t really need!
You can also pencil into the calendar National Ice Cream Day, which falls on Sunday, July 21, 2024 this year. You can expect deals across national chains like Dairy Queen and Baskin Robins. And many local ice cream parlours also celebrate with deals.
Finally, perhaps the best strategy is to simply treat yourself occasionally at your local ice cream shop. This not only supports small businesses but also allows you to enjoy the newly appointed "health food" without too much financial guilt. We've certainly been doing our part:
