by Lu Yibei
Once a symbol of indulgence, Haagen-Dazs is seeing its luxury image fade in China. With store traffic plunging by double digits and dozens of locations shutting down, the brand is losing ground to trendier competitors and a rapidly evolving dessert market.
General Mills, the parent company of Haagen-Dazs, recently reported its second-quarter results for fiscal year 2025. CEO Jeff Harmening acknowledged that offline store traffic for Haagen-Dazs in China has continued to decline significantly due to economic pressures and evolving consumer preferences. In response, the company is expanding Haagen-Dazs’ presence in retail, catering, and e-commerce channels to adapt to changing market dynamics.
Despite the decline in foot traffic, General Mills CFO Kofi Bruce noted that Haagen-Dazs’ market share improved quarter-on-quarter in Q2 of fiscal 2025. However, the brand’s struggles in China have persisted for over a year, with earlier reports showing declining net sales in fiscal 2024 due to a weaker consumption environment.
Haagen-Dazs is quietly reducing its store footprint across China. According to industry reports, the number of stores fell from 466 in January 2024 to 403 as of December 2024. Store closures, including high-profile locations in Beijing, Nanjing, and Nanchang, have sparked discussions on social media, with many consumers lamenting the brand’s fading appeal.
General Mills attributed the closures to low profit margins and high fixed costs. Harmening acknowledged the financial challenges, highlighting the difficulties of maintaining profitability amid rising operational expenses.
Haagen-Dazs’ challenges extend beyond economic pressures. Once positioned as a premium lifestyle brand offering luxurious experiences like ice cream fondue and afternoon teas, the company has struggled to keep pace with evolving tastes. Its iconic red branding and limited product innovation have failed to resonate in a competitive market crowded with dynamic domestic players.
Emerging brands have gained traction with bold flavors, creative packaging, and affordable premium offerings in convenience stores, capturing the attention of younger consumers. Meanwhile, other categories of desserts, such as milk tea brands like Heytea, continue to draw spending away from traditional ice cream with their novel concepts and marketing appeal.
Zhu Xi, former president of General Mills Greater China, highlighted this shift in a 2015 survey, noting that Haagen-Dazs’ core demographic had already changed from couples and friends to families, signaling a decline in its aspirational appeal. While the company has attempted to embrace "fast fashion" innovation, recent efforts—such as hiring actress Yang Mi as a brand ambassador—have failed to make a significant impact in a dynamic market.
While offline stores face challenges, Haagen-Dazs remains strong in retail and e-commerce. During the Double 11 shopping festival, it topped Tmall's ice cream sales rankings. General Mills China’s president, Su Qiang, emphasized the importance of an omni-channel strategy, covering physical stores, catering, retail, and e-commerce platforms.
Key growth drivers include Haagen-Dazs’ cup and handheld ice cream series, both achieving double-digit growth. To attract more cost-conscious consumers, General Mills plans to promote smaller, competitively priced products. “We aim to dispel consumers’ hesitations and make Haagen-Dazs an easy choice,” Su Qiang said.