North America Dairy Desserts Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Segment Analysis

By Type: Frozen Desserts Gain Share Through Innovation

In 2025, ice cream dominated the market with an 89.62% share, supported by strong brand loyalty and availability in 180,000 retail outlets across the U.S. However, frozen desserts, including novelties, sherbet, and gelato, are expected to grow at a 4.03% CAGR through 2031. This growth is driven by manufacturers introducing portion-controlled options and adding functional ingredients to meet wellness trends. In July 2025, Mars announced a USD 2 billion investment in U.S. manufacturing to increase its frozen novelty production. In rural areas, frozen formats are more popular as they can handle temperature changes during transit. Gelato, positioned as a premium product and priced at USD 8-12 per pint, appeals to urban millennials who value its European authenticity. However, its lower butterfat content (8-10% compared to ice cream's 14-16%) and slower production process make it difficult to scale for mass markets.

The frozen desserts market is growing due to strategic efforts by major players. For example, in January 2025, Unilever launched Breyers Carb Smart frozen bars, which contain 4 grams of net carbs and 5 grams of protein per serving. These bars cater to GLP-1 users with lower sugar tolerance while maintaining the convenience of hand-held treats that encourage impulse purchases at convenience stores. Sherbet, once considered a low-margin product, saw a revival in 2024-2025 as brands reformulated it with real fruit purees and probiotics, turning it into a premium-priced functional snack. Frozen yogurt bars and fruit-based popsicles are also gaining popularity among parents looking for portion-controlled treats for children. Children account for 28% of frozen dessert consumption but only 19% of ice cream pint sales. The FDA's 21 CFR Part 135 standards require ice cream to have at least 10% milkfat, but frozen desserts are not subject to this rule. This gives manufacturers the flexibility to reduce costs or increase protein content without regulatory restrictions.

Note: Segment shares of all individual segments available upon report purchase

By Category: Non-Dairy Alternatives Accelerate Despite Small Base

In 2025, dairy-based products dominated the market with a 94.24% share of the total volume. This was driven by consumer familiarity and the creamy texture provided by milkfat. However, non-dairy alternatives are expected to grow at a 3.58% CAGR through 2031 as options like oat, almond, and coconut milk expand from niche health-food stores to mainstream supermarkets. Van Leeuwen's oat milk ice cream, launched in 2024 with flavors like bourbon cherries jubilee, sold 2 million pints in its first year. Despite being priced at USD 6.99—30% higher than dairy-based ice cream—it demonstrated that good taste can offset the higher cost of plant-based products. Although 36% of Americans are lactose intolerant, according to NIH data, non-dairy bases accounted for only 5.76% of the 2025 market volume. This gap presents an opportunity for companies like Perfect Day, which use precision fermentation to create animal-free whey proteins that replicate the creamy texture of dairy. In February 2024, Unilever launched Breyers Lactose-Free Chocolate, made with Perfect Day's fermented whey. This product bridges the gap between dairy and plant-based options and targets the 40 million lactose-intolerant Americans who previously relied on coconut-based products, often criticized for their grainy texture.

Coconut milk dominates the non-dairy segment with a 60% market share, thanks to its high saturated fat content (13-14%), which mimics the richness of cream. However, oat milk is gaining popularity as brands like Oatly license their barista blend to ice cream manufacturers. This appeals to consumers looking for clean-label products and options with a lower environmental impact. Almond-based products lag behind due to their thinner consistency and tendency to separate during freeze-thaw cycles, limiting their use to fruit-flavored sorbets where texture is less critical. Cashew-based products are creamier than almond but face cost challenges. In 2024, raw cashew prices increased by 22% due to supply disruptions in West Africa, squeezing margins for smaller producers. Dairy-based products still hold key advantages, including well-established supply chains, lower input costs (USD 18 per hundredweight for milk compared to USD 35 for oat milk), and the perception that "real" ice cream must contain dairy. However, with 40% of Gen Z identifying as flexitarian and millennials willing to pay 20-30% more for sustainable options, the 3.58% CAGR for non-dairy products could accelerate if taste improves and prices become more competitive with dairy options.

By Distribution Channel: On-Trade Recovery Outpaces Retail

In 2025, off-trade channels accounted for 94.08% of sales, with supermarkets leading at 60%. They used 12-16 feet of freezer space per store to display both mainstream and artisanal products. In 2024, U.S. online grocery sales reached USD 95.8 billion, with frozen foods making up 11%, supported by improved dry-ice packaging and cold-chain logistics. Convenience stores held 18% of off-trade volume, benefiting from impulse purchases during commutes or late nights. Single-serve novelties, priced at USD 1.99-2.49, delivered 40% gross margins, higher than the 28% from pints, prompting retailers to expand freezer options. Walmart secured summer delivery slots, offering 12-pint cases at 20% discounts, appealing to bulk buyers like large families and party planners.

The on-trade market is projected to grow at a 4.92% CAGR through 2031, outpacing off-trade's 3.1%, as foodservice recovers from the pandemic. Quick-service restaurants are adding frozen desserts to value meals to increase check sizes. For example, McDonald's reported a 12% rise in transaction values during 2024-2025 McFlurry promotions, with desserts costing USD 0.40 to make but selling for USD 2.99. Full-service restaurants introduced liquid-nitrogen ice cream stations, creating a theatrical experience that justified USD 15 prices and 70% gross margins, compared to 35% for pre-portioned pints. Sysco's 2025 catalog added 40 new frozen dessert options, including portion-controlled and gluten-free items, reflecting confidence in foodservice demand. Independent ice cream parlors and brands like Cold Stone Creamery thrived as consumers prioritized unique dining experiences over convenience, paying 3-4 times retail prices for customized treats.

Geography Analysis

In 2025, the U.S. led the regional market with 82.93% of the volume, supported by 180,000 retail outlets and a high per-capita consumption of 20 pounds annually—double Canada’s 10 pounds and triple Mexico’s 6 pounds. Mars’ USD 2 billion investment in U.S. manufacturing, announced in July 2025, highlights efforts to maintain market share by focusing on protein-fortified novelties for GLP-1 users with reduced sugar tolerance. Canada’s bilingual labeling rules under CFIA add USD 0.05-0.10 per unit in compliance costs for U.S. exporters, benefiting local producers like Chapman's and Agropur. The South and Midwest regions of the U.S. account for 55% of national volume due to preferences for indulgent desserts and higher obesity rates, while the West Coast, with 25% of the population, drives 40% of non-dairy sales due to health-conscious consumers.

In Mexico, growth is focused in Monterrey, Guadalajara, and Mexico City, where Walmart de México and Soriana operate 3,500 stores with reliable cold chains. However, most sales still come from independent tiendas without refrigeration, limiting chilled desserts to modern trade and leaving rural areas to shelf-stable products. Canada’s per-capita consumption stayed at 10 pounds annually from 2020 to 2025, influenced by health campaigns targeting sugar reduction. Premium products like Häagen-Dazs’ "exträaz," launched in 2024 with layered textures and European ingredients, grew 8% annually by attracting frequent buyers willing to pay CAD 8.99 per pint. The rest of North America, including the Caribbean and Central America, contributes less than 2% of regional volume but shows potential as tourism boosts demand for branded ice cream in resorts, which spills into local retail. The U.S. FDA’s 21 CFR Part 135 standards for frozen desserts are mirrored by Canada’s CFIA and Mexico’s COFEPRIS, simplifying cross-border compliance for global manufacturers but creating challenges for regional startups.

Quebec, which accounts for 23% of Canada’s volume, prefers unique flavors like maple walnut and tourtière-inspired swirls, often overlooked by Anglo brands, creating opportunities for local players like Coaticook. In 2024, Mexico introduced NOM-051-SCFI/SSA1-2010, requiring front-of-package warning labels for high-sugar products. These black octagons cover up to 20% of the label, discouraging health-conscious buyers. However, premium brands like Häagen-Dazs saw little impact, as their customers prioritize indulgence. In the U.S., market maturity is driving growth through premiumization and new channels. Unilever’s March 2024 spin-off of its EUR 7.9 billion ice cream division reflects a shift from commoditized segments to higher-margin categories, creating opportunities for regional specialists and private-label brands.