Ice Cream Mkt India

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19/12 .business-standard.com/india/printpage.php?autono=468154&tp=

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For a bigger biteTo stoke growth, most ice cream brands are tring to get consume rs to pa

more for their froen treats

Saantani Kar / Mumbai March 19, 2012, 0:35 IST

Teenagers, young couples and tiny tots along with their parents flock to an icecream parlour in a leafy Mumbai neighbourhood late into the evening.

Nothing remarkable about the event but for one sm all thing. Down the sam e

street is another parlour selling ice creams. But apart from the bored s tore

attendants, there is just one soli tary customer in s ight, vehemently scrolling

down his s martphone while dipping into his bowl of vanilla ice cream from

time to time.

While the near-empty parlour, belonging to national ice cream brand, sells

the usual flavours, the one drawing in the crowds is a local unit which has an

array of flavours s uch as watermelon and s itaphal with nuggets of the

seas onal fruits embedded in its ice cream tubs. This brand Natural ice

creams, to cut to the chase sans preservatives and s tabilisers , sells at a

premium over the ones available at the next parlour.

The knack for such organic fare has caught the national brands attention too.

Going organic and, by corollary, premium is one of the ways ice cream

brands are looking to differentiate their offerings this sum mer, a seas on that

sees 90 per cent of their yearly sales .

The Rs 1,500-crore branded ice cream market (60 per cent of the Rs 2,500

crore market) has been evolving beyond the impuls e purchases of stick, cups

and cones. Excitement has come in the form of ice cream parlours on the

one hand, and take-home packs of exotic flavours, on the other. But the per

capita consumption of ice cream in Indian still lags many other countries,

including its neighbours. On an average India consumes 0.3 litre per

individual per annum compared to 0.6 litres in Pakistan and 26 li tres in theUS. The most promising markets for growth, analysts say, are in emerging

economies such as China and Brazil, where annual sales are soaring above

8 per cent. In contrast, the demand in India remains seas onal, the supply

chain patchy and the purchases largely impulse-driven.

Compare this to the market for coffee chains, which stands at Rs 1,000 crore

currently, or the chocolates and confectionery market that is valued at Rs

4,500-crore and the carbonated soft drinks market in India is estimated at Rs

13,000 crore. While economists say discretionary spending is typically a

good measure of where the economy is headed, the fact remains even

before the economy softened, ice creams were no easy business to play in.

While companies put the blame at the doors of the product itself it has a

short shelf life and demands an expensive cold chain-to this day ice creams

are seen as pure indulgence and with little product differentiation theres a

huge question mark over brand loyalty.


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Cold comfort

But the recent moves by ice

cream companies suggest they

see a sweeter future. For one,

segm enting their offerings

could be one way for these

brands to develop a better

margin model. Amul, which has

the largest share of the market

among national players (25 per

cent of Rs 1,500 crore in 2011-12, according to industry

analysts), is trying on new

formats this season. It has

readied a frozen yoghurt

product which will ride its ice

cream network to retail at Rs 90

for 500 ml. RS Sodhi,

managing director, Gujarat

Cooperative Milk Marketing

Federation (GCMMF), which

owns the Amul brand, says, It is a probiotic desert with fruit nuggets and wi ll

be pos itioned as a healthier option because of its low fat content.

Amul is also going exotic offering variants such as tubs of Morroccan Dry

Fruit. It will have a cone with a chocolate top with sauces down its middle,

much like Hindustan Unilevers (HUL) Kwality Walls Cornetto. Mother Dairy

and Vadilal too have lined up their natural products. Vadilal which is neck and

neck with HUL in some markets had launched a premium ice-cream stick,

investing in a technology that made for a smoother and creamier texture of

the product. Its Gourmet tubs are its high-end offering with flavours such as

Belgian Chocolate and JavaChips , reminiscent of the Hagen-Dazs tubs that

dot modern retail shops these days.

To stoke growth, mos t companies are trying to get consumers to pay more for

their frozen treats. Subhashis Basu, head of dairy and frozen products at

Mother Dairy, says, Apart from linear growth, the exotic flavours help to retain

existing cus tomers and move them up the value chain. We have seen a

predilection for natural juices over carbonated drinks. We will have ice

creams made out of natural fruit pulp to tap into this trend, skipping

emulsi fiers altogether. A case in point our Strawberry Crush. Its Classics

range of ice creams incorporates wes tern, Indian and fruity flavours not

commonly found. Mother Dairy also underlines that it is the only brand whose

entire range is made of ice cream from m ilk fat, which is costlier than

vegetable fat used by some others, and makes for a richer flavour. Its Paan

and Rose kulfis weave in Indian flavours.

Daring flavours are als o being infused into the low ticket ice candy segm ent

that spurs impulse purchases . So while a Mother Dairy has a savoury gol

gappa candy stick, Amul is set to launch a cola-based s tick. Of course, none

of these players will give short shrift to the staple flavours for a more premium

play.

HOW THE PLAERS STAND

BRANDS TRADE VALUE*

Amul 380

Vadilal 275

Kwalit Walls 275

Mother Dair 170


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Laa 150

Baskin Robbins 75-80

Natural 40

Others 135

* In Rs c rore, ear: 2010-11Source: Market analsts

Besides playing around with flavours, most players are taking advantage of

falling commercial rents. To put it straight, they are expanding their network ofparlours aggress ively; some are venturing into the space for the first time.

In fact, HULs ice cream division is banking on its parlours to bring in the

premium crowd. Sapan Sharma, general manager, ice cream, Hindustan

Unilever Ltd, says, At Swirls, we get the consumers to experience our

different brands in different formats. They can see the brands they know such

as a Cornetto, Selection, Paddle-Pop coming alive. It adds a lot of value to the

brand. Rajesh Gandhi, managing director of Vadilal Industries, agrees, Our

parlours give a huge boos t to the parent brand. Apart from our Gourmet tubs,

the range at our Happiness parlours is different from that in the general trade.

The Happiness range of ice cream is milk cream-based and more premium.

Be it a shop in shop in hypermarkets, a kiosk in a mall or a high street outlet,HUL incorporates some l ive action to engage the consumers through a chill-

grille (an ice s lab to mix flavours), swirl m achine and myriad toppings. It is

adding to its count of 202 Swirl Outlets that logged Rs 7.2 million in

purchases last year almost every week. The number of happiness

parlours from Vadilal will go up to 300 by the end of this year from 200, while

Amul will add 500 scooping parlours to its existing 1,000 that offer a range of

products including sundaes and m ilkshakes besides the regular scoops.

Footprint matters

With 70 per cent of the market still hinging on impulse purchase, distribution

remains a deal clincher. The numbers speak for themselves. Mother Dairy is

stepping into Bangalore, while other players plan to add to their network.

Amul s pans 75,000 kirana stores and plans to add 15,000 more bySeptember. Vadilal has 55,000 retail outlets whi le Mother Dairy will take its

outlets from 3,500 to 6,000.

Kiosks in high footfall areas such as amusement parks are also being set up

by players such as Hindustan Unilever and Mother Dairy. Basu of Mother

Dairy says, With general trade, players can be at an arms reach away from

consumers.

Natural, which began sell ing hand churned ice cream made from milk, sugar

and seasonal fruits (calling it artisans ice cream) 25 years back is reaching

out beyond Maharashtra this season, besides beefing up its supply chain.

Our ice creams have to be consumed within 10 days of manufacturing and

the ones with fruits within a day. So, our supply chain and network aredifferent from the national players, says Srinivas Kamath, director, Kamaths

Ourtimes Ice Creams. Natural ice creams are transported in dry ice because

the number of parlours doesn t call for huge investment in a temperature-

controlled logistics system. Its new s tores in Kochi and Jaipur have to receive

the stocks manufactured and mailed in the evening, the next morning.

While indiscriminate expansion is not possible because manufacturing is

done out of a s ingle factory and the stores require trained staff to handle the

delicate churned ice creams, Natural is ensuring that it has the back-end in

order this summ er. It has entered into contracts with dry ice suppliers for

sm oother deliveries. It also controls the processing of even the fruits that go

into its ice creams ; it buys jackfruits from Kerala vendors, coconut from


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Coimbatore and strawberries from Mahabaleshwar and cuts these at its

factory in Mumbai. As a result, Kamath points out, Such a close grip over the

supply chain is difficult for national brands and even if they enter organic ice

creams, they would tend to s tick to mango and s trawberry rather than more

niche flavours like kala jamun.

Vadilals Gandhi agrees that such flexibility is poss ible for local layers whi le

national brands would have to gear up for launches at the start of the season

to build excitement.

Ice Cream Mkt India

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