Despite early rains, ice cream brands take a big bite this summer

“There are a few trends visible in the marketplace,” says Chaitanya Rele, vice-president, marketing, Havmor Ice Cream. “One is the shift the industry is seeing from unbranded to branded. This has been led by an improvement in supply-chain, distribution and availability of electricity,” he says.

A Mother Dairy spokesperson says, “The start of the ice cream season this year witnessed unseasonal rainfall in North India, affecting ice cream consumption. With temperatures soaring, the growth trajectory of ice creams has improved.”

At nearly Rs 120 billion, India’s overall ice cream market is amongst the most dynamic, according to a recent Mintel study, with the organised side pegged at around Rs 60-70 billion. While the overall market, Mintel says, is growing at 13 per cent per annum, the organised side has been growing at double the pace, at 26-27 per cent per annum.

This year has seen organised market growth rates surge ahead of the industry average, led in part by competitive intensity. Ice cream remains crowded in India, with regional and national players vying for consumer attention.

While Amul, Hindustan Unilever and Mother Dairy are national brands, Havmor, Vadilal, Arun Ice Creams (from Hatsun Agro) and Verka Ice Creams (from Punjab State Cooperative Milk Producers’ Federation) are considered regional delights. There are strong city-centric brands too such as Natural Ice Cream in Mumbai, Creambell in Delhi-NCR (it also has a presence in other states) and Pabrai’s Ice Cream in Kolkata.

Though regional brands such as Havmor say they are available in 14 states, experts argue growing reach will be critical for all players if they wish to expand rapidly.

Most ice cream brands have launched more variants, innovations and flavours this year, in the region of 15-25, higher than the average 10 different flavours that brands launched last year.

Companies are also straddling the price pyramid aggressively, ensuring there is something for all. “Typically, ice cream could be priced for as low as Rs 5 per unit (for a cup or stick ice cream) going right up to Rs 300-400 (per kg for family packs),” says R S Sodhi, MD, Gujarat Co-operative Milk Marketing Federation (GCMMF), the maker of the Amul brand of ice creams.

Working out various permutations and combinations in terms of flavours and stock keeping units at lower price points — such as Rs 10, Rs 15, Rs 20 and Rs 25 — have been key this year, say experts, resulting in the spurt in industry growth levels. Sodhi says that this effort by ice cream makers — to offer more for less — will grow as more consumers enter the organised market.

Mother Dairy says that innovations such as ice cream sandwiches, stickless ice cream bars, new kulfi and fruit flavours, regional delights (such as Rajbhog) have driven consumer interest this year, with companies investing heavily in research and development to raise the bar when it comes to product offerings.

Mintel says that India’s ice cream volume sales is expected to overtake more established markets such as the UK, with domestic ice cream sales likely to touch 657 million litres by 2021 from nearly 382 million litres currently.

As things stand now, China remains the world’s biggest ice cream market with an estimated sale of around 4.5 billion litres per annum, followed by the US at around 2.7-2.8 billion litres per annum and Japan at number three with a sale of around 760 million litres per annum, says Mintel.

The market researcher adds that much of the action is shifting to the Asia-Pacific region as ice cream consumption grows rapidly and players push the peddle on investment. Besides India, Indonesia, Vietnam and Malaysia are leading the charge. The heat is clearly on.

Havmor’s cows have been mooing more often this summer. Despite the early onset of the south-west monsoon in Kerala, March -May 2018 will go down as the best period for organised ice cream makers. Growth rates, according to key industry players, has been nearly 30 per cent over the year-ago period, coming when the weather has remained largely unpredictable throughout.

Summer this year saw many parts of India struggle with dust storms, hail storms, floods and even snow. While the west and south of India did see the heat set in early — Mumbai experienced hot weather from the end of February — ice cream makers say climatic conditions have not stopped consumers from digging into their favourite brands in any way.