OrganICE retail potential

The origin of ice cream can be traced back to the 4th century B.C. Early mentions include the Roman emperor Nero who ordered ice to be brought from the mountains and mixed with fruit toppings. To entitle a produce ‘ice cream’, two basic prerequisites must be met: the delicacy must be at least 10 per cent milk fat and should have used sugar as sweetener. This fusion is stirred unhurriedly while cooling so as to avoid big ice crystals from forming and result in a smoothly textured ice cream. Ice cream recipes first appeared in 18th century in England and America. The icy delights are, by and large, packaged and sold in three ways: cups, bars, sticks, cones and family packs or bricks.

 

Ice creams worldwide

Indian ice cream market started with just a few flavours of ice creams. But now, there is an extraordinary variety to pick from. A number of flavours like vanilla, strawberry, chocolate, mango and butterscotch are available in addition to various fruit flavours and dry fruit flavours. Mr Wilson Abraham, VP, Marketing & Franchising, Mini Melts, informs, “The market is totally dominated by chocolate, vanilla and strawberry flavoured ice creams.  Together, they account for more than 70 per cent of the market followed by butterscotch and other fruit flavours.” For most of the companies Vanilla dominates the show. But on the other hand, “Our top selling flavour is chocolate fudge brownie, followed by strawberry cheesecake, yoghurt wild berry.” says Mr Sunil Kapur, Managing Director - Blue Foods Pvt. Ltd. There are other brands also where vanilla is not the dominating flavour in sales. Mr Sanjay Couthino, COO, Baskin Robbins, says, “Gold medal ribbon is the dominant as it’s one of the flavours synonymous with the brand.”  Informing about good response from consumers, Mr Paul Thachil, CEO, Mother Dairy, says, “Mother Dairy has also seen great response for our premium take-home categories such as choco fudge cake under dessert de la soul, shahi meva malai and Jamaican almond fudge of sundae magic and fruit classic range with 100 per cent natural flavour.” Amul has launched India’s first pro-biotic wellness ice cream and sugar free delight for diabetics. Buying an ice cream for taking it home, especially in summers, can be a very tricky task as it may melt on the way becoming unsuitable for consumption. Well, this problem will not be any more for Amul has come up with ‘ice cream insulated carry bag'. This is an innovative way to keep your ice creams frozen and intact, even while you are shopping or traveling. These bags maintain the required temperature up to 45 minutes and preserve Amul ice cream. These are lightweight, re-usable and washable bags and can be used to carry other frozen or refrigerated products as well. Other varieties of ice creams offered are:

Gelato is an Italian frozen dessert having a lower milk fat content than ice cream. Mr Kapur informs, “Gelato is an Italian frozen dessert made from fresh 3.5 per cent low fat milk with fresh fruits and other 100 per cent natural ingredients, with flavours and toppings called ‘variegato’. This makes Gelato low in fat and calories, being 94 per cent fat free.”

The scientists at CIFT, Kochi, have developed the ice cream under the name Mari cream. Fish is the main ingredient of this product, along with water sugar, butter, egg white, flavouring substances, stabilisers and emulsifiers. Mari cream is free of fish flavour. Precautionary measures are taken at all steps of processing to ensure that it is bacteria-free. As the fish protein provides all essential amino acids, it is a highly nutritious dessert.

Promotional strategies

Promotional activities help a lot in the sales of a brand. Companies figure out different ways to promote their brands. A few brands come up with new flavours or offer on festivals and occasions. Special flavours are introduced for attracting the younger generation, which is the opinion maker nowdays.

Pizza Hut has introduced ice creams in its home delivery menu. Now, when you order your favourite pizza, you can also have Baskin Robbin’s chocolate or honey nut crunch ice cream delivered right to your doorstep. Both flavours will be available in 250 ml tubs. All you have to do is to order a medium pizza and, for just Rs 10 extra, get a 250 ml tub of Baskins Robbins ice cream along with it. The ice creams can be delivered along with your order of pizzas from any of the Pizza Hut outlets in central India.

BIG FM Hyderabad came up with an innovative contest called the ‘BIG Ice cream Marathon’. It was held from April 29 to May 05, 2008. Through this innovative and fun-filled contest, listeners got to win 100 litres of ice cream every hour. They were invited to participate in the big cool brain challenge where the contestant who ate the maximum ice cream in three minutes took home 92.7 litres of ice cream. This event was organised in collaboration with Jumani Ice cream. According to Mr Ashwin Padmanabhan, Station Director, BIG FM Hyderabad, ‘With temperatures soaring high this summer, BIG 92.7 FM’s ‘BIG Ice cream Marathon’ will surely prove to be a big hit since the contest is not just about fun and games for the callers, but also a method to ensure means of finding solutions to beat the heat with us.”

Kwality Walls has come up with a summer campaign in association with Oxigen Services India Pvt. Ltd - the ‘Scratch & Win’ promotions. The promo entitles consumers to a ‘Scratch and Win’ offer on buying Kwality Wall’s cornetto. The scratch card, which actually is cornetto cone’s lid, enables each buyer to earn reward points starting from Rs 10 worth of OxiCash, a secured stored value wallet on the mobile and utilise the same to connect with their loved ones to winning a wide range of gifts and services. OxiCash, through this tie up, will deliver to the Kwality Wall’s consumer instant access to talk time and other VAS services on his mobile, by simply sending a sms to a dedicated code.

Baskin Robbins has come up with ‘Paanchvi Pass’ (chocolate fudge ice cream with chunks of brownie pieces and almonds) flavour launched in sync with the Paanchvi Pass programme hosted by Shah Rukh Khan on Star Plus. There’s an entire campaign built around it. Godrej Nature’s basket brings one of the world’s most premium ice creams - Haagen Dazs. Haagen Dazs is world's no. 1 ice cream known for the quality of its ingredients. The sumptuous American ice cream can be relished in various flavours, which will leave you in a state of bliss.

Mother Dairy’s launch of ‘fruit classic range’ is being supported by a comprehensive campaign across television, radio and outdoor including on-ground activities. To create awareness and trials of the new range, the company has also initiated an innovative retail promotion exercise across Delhi, Kolkata and Mumbai. Under its retail promotion programme, the company has tied up with leading modern retail format stores and high footfall areas to promote these flavours. 

Supply chain management

Supply chain plays a major role when it comes to ice creams because if they are not stored and carried accurately at the required temperatures, they tend to get spoilt and may end up in a mess. So, all the manufacturers need to develop a foolproof system of haulage and storage. Mr Abraham says,  “MiniMelts Ice Cream (India) Pvt. Ltd is headquartered in Mumbai and has adopted state-of-the-art technology from USA and India to ensure the best manufacturing facilities to produce ice cream in the most hygienic environment possible. We operate a two tier franchisee model in India. The City Franchisee operates like a super distributor for MiniMelts and ensures a robust supply chain to all the retail franchisee outlets. MiniMelts ice cream is shipped from the factory to the City Franchisee’s located at various parts of India with the help of dry ice. We have specially designed insulated containers to hold and maintain the temperature at below minus 40 degrees celsius with the help of dry ice until the ice cream reaches the distributor’s storage freezer.”

 

Retail formats

Ice creams are sold across various formats. Previously, we found ice cream hawkers selling homemade ice creams on streets, parks and playgrounds. Then, came mobile pushcarts, tricycles or three-wheelers from the ice cream companies along with the availability of their products at local retail and kiryana stores. The opening of ice cream parlours followed this. But those, which are the most common these days, are mobile vending units, counter across retail outlets, booths, carts and kiosks, besides the parlours.

 

Growth till date

The ice cream industry has come a long way - from being an unorganised one to an organised one. The sector has witnessed finer growth in the recent years. But the market for organised sector is restricted only to the large metropolitan cities. Mr Abraham says, “Rs 2,000 crore is the estimated size of the Indian ice-cream market. Of this, the organised sector, which is growing at 20 per cent per annum, accounts for only around Rs 200 crore. The market potential is huge but despite India having the right climate for ice-cream consumption, the per capita consumption of ice cream in India is still a dismal 250 ml per annum compared with two to four litres in Singapore and an eye-popping 25 litres in the US. The average global consumption is around two litres and even countries like Sri Lanka and Pakistan consume much more than India.” Taking the point further, Mr R.S. Sodhi, Chief General Manager, Amul, says, “The ice cream market in India can be divided into a) branded market and b) grey market. Grey market consists of small local players and cottage industry players.  The total market is worth Rs 2,000 crore. Size of the branded market at present is 100 million litres per annum valued at Rs 800 crore. The branded market is expected to grow at 20 per cent annually. This very clearly indicates that there is a scope to grow six to seven times and match at least global average.” Explaining reasons behind growth, Mr Couthino says, “General good health of the Indian economy, higher disposable incomes, consumer focus on food, entertainment and leisure, increasing amount of working couples and mushrooming of BPO’s and tech parks are the reasons for the growth of the industry. Ice cream is now an integral part of the basic needs viz: roti, kapda aur makaan.” Since the adoption of Indian government’s liberalisation policy in matters of the ice cream industry, this sector has shown immense annual growth. Growth has also taken an upturn with the introduction of exciting flavours and opening of parlours around the country. Agreeing to this, Mr Surti says, “Vadilal's share in the market is 25 per cent. Major growth indicators are expanding consumer reach by opening up more new franchisee outlets, continuous launch of new and innovative flavours and huge promotions.”  However, Mr Jadag feels, “In recent past, lifestyles of people have changed. Now ice cream is not an item of summer. It has got its approval throughout the year. So, consumption has increased.” For Mother Dairy, Mr Thachil says, “Our ice cream business has been growing at a healthy rate of 25 per cent over last three years. The growth in ice cream industry has been primarily due to strengthening of distribution network and cold chain infrastructure. Channels such as mobile vending units have been adding year on year to reach out to larger set of consumers. Besides, consumers also have the choice of trying out varied product offerings from various brands. ” The preferred locations for opening of outlets for all brands are high street, malls and retails outlets, which have high footfalls.

Future

The future seems bright for the ice cream industry that is now seeing the entry of various international companies. It will also bring more innovations for health conscious people and diabetics. Mr Kapur, foreseeing the growth, says, “Gelato will be the dessert of the future. With exquisite flavours and naturalness of fresh fruit, Gelato appeals to all including even the health conscious.”  Mr Abraham says, “The future is very bright for the ice cream market in India with increase in number of malls. Consumer who often visit malls for entertainment prefer buying ice creams during different times of the day. Also, with increasing wallet size and innovative modern retail formats, it has definately given a filip to the ice cream industry in India. The perception of ice cream as a luxury indulgence is slowly changing over to an all-year consumption product.” Detailing this point further, Mr Surti says, “Current market scenario indicates steady and stable growth of ice cream industry in future. But, one of the main concerns is the increasing prices in raw material, due to which, there can a rise in the prices of ice cream also.” India's consumers expect diversity in their food preferences. Mr Jadag says, “The company is into a totally different kind of ice cream concept. The company has patented its technology for manufacturing of cryogenic ice cream in India. The company is in the process of going international by offering technology abroad. As ice cream is made of milk, we see a great future for ice cream.” Giving figures and talking about the growth prospects, Mr Couthino articulates, “The ice cream industry is growing at a rate of approximately seven to eight per cent per annum while we’ve been growing at around 35 per cent. We expect to grow at 45 to 50 per cent from now onwards. The growth rate is likely to improve, with companies innovating in terms of product offering and value additions to customers. We expect the market to adapt and cater to the demands of the ever-evolving customers.” Mr Thachil feels, “The per capita consumption of ice cream in India is still very low and there are big gaps to be filled in terms of strengthening the distribution network and, hence, reach out to larger set of consumers. The ice cream industry is set to see healthy growth rate in the years to come.” Therefore, for the ice cream industry to grow big, there is a need to cater to an all age groups including younger generation who desire to try new tastes. All the manufacturers ought to keep an eye on market modifications and alterations to reap big successes.

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