[The Street] Is Gelato the Next Fro-Yo Craze?

Amaretto pumpkin pie, cheesecake chocolate chip, limoncello and sweet potato organic maple syrup are just a few of the flavors you'll see on the gelato menu at Paciugo Gelato & Caffe.

Gelato represents just 1% of the frozen dessert market, according to the National Ice Cream Retailers Association, which makes the potential to expand essentially limitless. Given the popularity of frozen yogurt stores, especially with new-age giants such as Red Mango and Pinkberry dominating the scene, consumers have developed an appetite for food that is more natural and perceived as better for you, experts say.

Gelato is denser than ice cream, which lacks the air sometimes pumped into ice creams, and despite having less butterfat tends to have an equally (or, some would say, more) rich, creamy taste. Gelato is served at lower temperatures than ice cream, which -- along with the lower levels of butterfat -- means it melts in the mouth faster.

Howard Waxman, editor and publisher of the monthly newsletter Ice Cream Reporter, says he's predicting gelato will be the next big thing -- as he has been for the past five years.

"There has been definite growth over at least a half a decade in some key locations like New York and Florida," Waxman says. "Gelato is a great product if they can get some traction. The fro-yo [market] will beat itself up eventually" because there are too many names in the market.

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