4 Key Dessert Industry Trends to Watch

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The COVID-19 pandemic had a huge impact on the dessert industry in 2020. While isolated at home, anxious consumers sought out comfort and indulgence—which increased sales of chocolate candy, home-baking ingredients, and cartons of ice cream and frozen desserts.

Looking ahead, the demand for many desserts is predicted to decelerate but still remain elevated compared to pre-pandemic levels. Here’s a look at recent U.S. dessert market data and key industry trends that will influence product development.

1. Chocolate Soared as a Pandemic Comfort Food and Snack

Given the increased levels of stress and uncertainty during the pandemic, it’s not surprising that many consumers helped themselves to extra handfuls of chocolate as a snack and an indulgent treat.

As a result, 2020 was a standout year for the U.S. chocolate market, with sales growth of 12% driving chocolate sales to $27 billion, according to Chocolate Candy: U.S. Market Trends and Opportunities by the market research firm Packaged Facts.

Sales of chocolate candy are expected to decline somewhat as the pandemic recedes, but many consumers will continue working from home on at least a part-time basis, which will lead to higher levels of snacking than before the pandemic.

2. Home Baking Gained New Momentum

Chocolate was not only a popular snack during the pandemic, but it was also a key ingredient in home-baking projects for brownies, chocolate chip cookies, or other popular desserts. While stuck at home, many people took up activities like baking for personal enjoyment or to entertain their kids.

Previously, from 2016 to 2019, growth in baking product sales was modest, but the market achieved double-digit growth in 2020 due to the impact of the pandemic. In a recent report, Packaged Facts estimates that sales of baking products soared 24% to reach $26.5 billion in 2020.

Even though sales of home baking products are expected to level off in the future, sales of baking products will still be higher in 2025 than in 2019, due to permanent shifts in consumer behavior and the ongoing popularity of home baking.

3. Demand for Ice Cream and Frozen Desserts Rose

Another U.S. market that benefited from the collective anxiety of consumers—and their sugar cravings while secluded at home—was take-home ice cream and frozen desserts. Consumers stocked up on comforting sweet treats during the pandemic, causing an uptick in the demand for bulk dairy ice cream and frozen desserts available in grocery stores and supermarkets.

However, the pandemic decreased impulse purchases and occasions for buying a cup or cone of ice cream while out and about, which limited sales of unpackaged ice cream. Retail channels that rely on impulse purchases, such as convenience stores, also suffered during the pandemic, according to research from Euromonitor International.

4. Healthy Living Trends to Influence Product Development

Consumers increasingly want it all, and they want their decadent desserts to be healthier too. Over the last five years, industry players have reformulated many frozen cakes and pastry products with more nutritious, higher-quality ingredients to appeal to health-conscious consumers. More natural and organic products also appeared in the baking aisle, including baking mixes and jarred frosting made without artificial flavors or preservatives.

This “better-for-you” dessert trend isn’t expected to lose steam anytime soon. In the future, the dessert category will include more ingredients that are associated with healthy living with clean label, organic, free-from (gluten-free, dairy-free, sugar-free), and vegan or plant-based options. As consumers seek to regulate their calorie intake, snackable desserts and mono-portion desserts will also be a big trend for cakes, pies, and cheesecakes.