“A cone costs RMB 50 (USD 7), and almost RMB 100 (USD 14) for something a little fancier. I couldn’t afford it as a kid, and now I still can’t.”
In China’s ice cream market, Haagen-Dazs has long been seen as the “Hermes of desserts.” But that once-coveted brand is now facing the risk of becoming a relic of the past.
Recent reports suggest General Mills, the parent company of Haagen-Dazs, may be considering selling its China-based store business, possibly for a nine-figure USD sum. According to Bloomberg, talks are still preliminary, and General Mills may ultimately opt to retain the business, continuing to distribute Haagen-Dazs in supermarkets and convenience stores across the country. The company declined to comment on what it called market rumors.
What isn’t a rumor, however, is that the brand is under growing pressure in China.
In its latest quarterly report ending February 23, General Mills reported net sales of USD 138 million from its premium ice cream business, down 3.2% from USD 142 million a year earlier. At a recent forum, General Mills chairman Jeff Harmening acknowledged that store traffic in China had fallen by double digits. During the company’s earnings call, he added that Haagen-Dazs stores operate with low profit margins while fixed costs remain high.
Over the past few years, General Mills has restructured its portfolio. In 2024 alone, it acquired three pet-related businesses and sold off its North American yogurt line. It had already exited Yoplait’s China operations in 2019, selling them to Tiantu Capital.
These developments have brought renewed scrutiny to Haagen-Dazs’s prospects in China. Once a dominant name in high-end frozen desserts, the brand now faces a critical question: how does it remain relevant amid slowing growth and an evolving market?
Store closures, market fragmentation, and the limits of a premium brand
In the US, Haagen-Dazs, managed by Nestle, follows a fast-moving consumer goods model and is widely available in supermarkets. When General Mills introduced the brand to China, however, it positioned Haagen-Dazs as a luxury offering.
The brand opened its first store in China in 1996 on Shanghai’s Nanjing Road. At the time, with average monthly income at just RMB 500 (USD 70), a single scoop served in a paper cup was priced at RMB 25 (USD 3.5). Haagen-Dazs quickly established itself as a premium treat, appealing to consumers not just with its products but also with upscale interiors and a romantic tagline: “If you love her, take her to Haagen-Dazs.”
Over the next decade, the brand expanded across China’s tier-one and emerging cities. It introduced signature items such as ice cream mooncakes and extended its presence into retail outlets, shopping malls, and hotel partnerships.
Many in the industry viewed Haagen-Dazs’s early success as part of a broader trend, akin to the trajectories of other Western brands like Starbucks. The brand benefitted from China’s rapid economic growth and the emergence of a middle class. Between 2006–2015, General Mills reported a compound annual growth rate (CAGR) of 33% for Haagen-Dazs sales in China.
But the frozen dessert market has since become more competitive. A proliferation of new-style tea drinks and local ice cream brands has reshaped consumer preferences. The sector now includes not only established foreign names like DQ and Unilever, but also a growing field of affordable domestic brands.
According to iiMedia Research, the gelato segment saw strong momentum in 2024, growing 10% year-on-year to exceed RMB 12 billion (USD 1.7 billion) in sales. Unlike American-style ice cream, gelato typically uses milk instead of cream and emphasizes lower sugar and fat content. Some brands promote their purity with claims such as “not a single drop of water added.”
Brands like Ye Gelato and Pobeice are also expanding aggressively. Du Bin, secretary-general of the Shanghai Council of Shopping Centers (SCSC), noted that malls have increasingly favored brands like Ye Gelato in recent years.
Haagen-Dazs, by contrast, has closed several locations, including older outlets such as the one in Nanjing’s Jiangning Wanda Plaza. Du said many closures followed the expiration of ten-year leases that were not renewed due to underperformance.
Industry outlet China Ice Cream reported that Haagen-Dazs operated 466 stores across China as of January 2024. By June 20, that number had declined to 385, according to Canyan Data, well below Ye Gelato’s 566 stores or DQ’s 1,695.
“In terms of flavor, Haagen-Dazs doesn’t really offer anything different from cheaper ice creams anymore,” said Zhu Danpeng, an analyst in the food and beverage industry, in an interview with 36Kr. He added that the brand’s lack of innovation in both product design and store experience has made it less appealing to younger consumers.
Meanwhile, the rise of tea shops and independent cafes has introduced more accessible and varied leisure options, further fragmenting the customer base that Haagen-Dazs once served.
The numbers reflect this shift. Haagen-Dazs’s revenue in China fell from USD 800 million in fiscal year 2019 to USD 730 million in 2024.
How can legacy brands survive in a value-conscious era?
Haagen-Dazs isn’t alone in feeling the squeeze.
In March, Unilever spun off its ice cream division into a new entity, The Magnum Ice Cream Company (TMICC), citing structural misalignment with the rest of its portfolio in terms of distribution and profitability. The move is intended to allow for more focused and efficient growth.
In 2023, Unilever’s ice cream revenue fell by 6%, followed by another 1% decline in 2024. The company pointed to softness in global markets, including China, as a key factor. The decision to spin off TMICC may offer insight into the path General Mills could take with Haagen-Dazs.
Broader market dynamics are also at play. Younger consumers are becoming more price-conscious and less inclined to spend on premium frozen desserts they perceive as offering more image than value.
According to iiMedia’s latest survey, just 6.94% of Chinese consumers in 2025 said they were willing to pay more than RMB 20 (USD 2.8) for ice cream. In contrast, 77.39% preferred to spend less than RMB 10 (USD 1.4), a sharp increase from 49.67% in 2023.
Haagen-Dazs has begun adjusting its approach. At the end of 2024, Su Qiang, head of General Mills’ China operations, told Top Digital that the brand would expand its retail footprint and emphasize handheld products. Plans are also underway to increase sales points and upgrade in-store displays to improve visibility.
These changes are aimed at enhancing reach and competitiveness. At the same time, the brand is experimenting with promotional pricing. In April, a pop-up shop at a Sam’s Club in Shanghai offered ten-scoop bundles for RMB 189.9 (USD 26.6). In some cities, takeaway coffee was priced at RMB 9.9 (USD 1.4) as part of localized campaigns.
The brand’s messaging has also evolved. Its former romantic slogan has been replaced with a more introspective one: “Everyday Made Extraordinary.” Su noted that as demographics shift, more consumers are looking for small personal pleasures. Haagen-Dazs hopes to position itself as a suitable option for gifting and everyday indulgence.
Still, challenges remain. In 2024, major Chinese dairy players like Mengniu and Firmus revised their frozen product strategies. Meanwhile, new entrants such as Adopt A Cow and Feihe ramped up their ice cream development.
With industry-wide margins under pressure, pricing promotions may help stimulate demand but also raise concerns about long-term brand dilution.
Harmening acknowledged the complexity of the situation, emphasizing that pricing is just one element of a broader strategy. He said the company plans to increase marketing investment. “Although Haagen-Dazs’s store sales in China continue to decline, our retail performance is on the rise,” he said.
This may explain why General Mills is exploring a sale of its store operations while expanding its retail line.
According to Zhang Yi, chief analyst at iiMedia Research, Chinese consumers today expect more from premium food brands: it needs to be healthy, culturally resonant, and socially relevant. Haagen-Dazs’s current store format falls short.
Some foreign brands have responded to similar pressures with localization strategies. After CITIC Capital became the majority owner of McDonald’s China, the chain embraced a more localized identity. Starbucks has also reportedly explored selling its China operations, though it has denied those reports.
“If Haagen-Dazs were operated by a Chinese firm, it could be more down-to-earth and better adapted to local market conditions,” analyst Zhu said. He believes the brand should offer a tiered product line with high-end, midrange, and mass market options.
SCSC’s Du added that while Haagen-Dazs still holds brand equity, it must evolve. Potential changes include adding grab-and-go windows to existing stores or launching smaller, DQ-style formats to better suit the current market environment.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Chen Sizhu for 36Kr.