Now that summer is here, people start to think more and more about ice cream. Though many people eat it year-round, there’s something about eating ice cream on a hot summer’s day. Certainly there is the nostalgia of eating it as a kid while on summer vacation but it seems popular as ever now. How much do people spend on it? Who eats it?
Ice Cream Spending
The average American household spends approximately $75.46 per year on ice cream. Many zip codes with really hot weather have averages much higher than this but some have much lower. The biggest spenders on ice cream are on the eastern seaboard and in California. The zip code with the highest average spend per household is 07078 in Short Hills, NJ. They spend $213.40 per year, on average.
What do we know about the households that spend so much on ice cream? One method to classify consumers is through tapestry segmentation. Esri, a geographic information systems company which also does data analysis, developed a tapestry segmentation that classifies US residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics.
The tapestry segments that spend the most on ice cream are Top Rung, Connoisseurs, Suburban Splendor, and Wealthy Seaboard Suburbs. More than 90% of the neighborhoods where these are dominant the average household spending on ice cream is $100 per year or more. Top Rung households are actually the biggest spenders. 93% of the neighborhoods where that segment is dominant have an average of $150 or more spent on ice cream per year. That’s a lot of ice cream! Hopefully they will invite me over to have some sundaes!
There are some groups that spend very little on ice cream. 90% or more of the City Commons, Modest Income Homes, and Southwestern Families spend, on average, $50 or less per household per year on ice cream. Each of these segments have very low median incomes ranging from $16,830 to $28,307. Most likely they are spending their money on things much more needed items.
People buy ice cream at lots of different locations including grocery stores, ice shops, warehouse stores, and convenience stores. A little less than 8% of the population buys at least some of their ice cream convenience stores. Who are they? Where do they live?
Consumers that live in the southern part of the US, in general, are more likely to purchase ice cream at convenience stores. This could be because they are simply more likely to purchase ice cream in general (since it’s warmer throughout out the year) or that it is cultural.
The tapestry segments that are most likely to purchase ice cream at convenience stores are City Commons, City Dimensions, Inner City Tenants, Industrious Urban Fringe, International Marketplace, and Rural Bypass. Each of these neighborhoods have an index of 150 or higher. This means that residents of these neighborhoods are 1.5 times more likely to purchase ice cream at a convenience store. In City Commons neighborhoods, the index is 200 or higher. City Commons neighborhoods are in large metropolitan areas, mainly in the South and Midwest and are comprised of single-parent families or singles who live alone. They have a median age of 26.7 years and a median household income is $16,339.
One method of looking at populations is through LifeMode and Urbanization groups. Each tapestry segment consists of one of these. LifeMode summary groups are based on lifestyle and lifestage. Urbanization summary groups are based on geographic and physical features along with income. While there is no trend for ice cream and convenience stores among the Urbanization groups, there is one a LifeMode group. 62% of the Global Roots neighborhoods have an index of 150 or higher for purchasing ice cream at convenience stores. Global Roots’ residents are very diverse and are young, earn modest incomes, and tend to rent in multiunit buildings.
Why Does this Matter?
Knowing how much people spend and where people purchase a particular item can help companies figure out their distribution and marketing strategies. This information can show locations of opportunity. There may be neighborhoods where consumers are likely to buy but don’t because the products simply isn’t available there. Companies wanting to distribute complimentary items can use this information to find out where best to distribute – they can understand where their customers are already going.