- Last week, US ice cream maker Baskin Robbins unveiled its new brand identity. While keeping the brand’s guarantee of 31 flavours intact, the brand has played around with the logo design “to highlight its playful nature and to foster an inviting atmosphere”.
- Mother Dairy has launched 15 new flavours and is expanding its dairy beverage range and dairy-based desserts too.
- Lotte Confectionery’s Havmor has jumped onto the IPL bandwagon and has become the ice cream partner for last season’s champions, Gujarat Titans, while also naming Hardik Pandya as its brand ambassador.
With new products, new communication and even new looks and feel, ice cream makers are all set to slug it out this summer. The good news is the early onset of summer this year. That makes most brands upbeat about a good season. The category, which is estimated to be Rs 25,000 crore (including frozen desserts), hopes to see a 20% growth in sales this summer, as per KPMG. The prediction of a hotter-than-usual quarter is like music to their ears.
It might not be smooth sailing though. Despite the promise of a scorching summer, ice cream players are faced with challenges such as high input costs and unseasonal rainfall. Nikhil Sethi, partner at KPMG in India, says, “Major ice cream brands have increased their pricing in January this year by 5-10% largely due to rising milk prices from Rs 57 a litre in April 2022 to Rs 69 a litre this year. That said, to counter volatile pricing, firms have historically increased inventories of key raw materials such as milk and sugar.” He also points out that the unseasonal March rains in some regions along with a sudden spike rise in Covid cases can also put a spanner in the works.
As Sethi pointed out, some brands have already undertaken a price hike to counter rising costs. Hindustan Unilever Ltd, which retails the Kwality Wall’s brand, has taken “selective price hikes”, as per reports, though the firm didn’t participate in this story citing “closed period”.
Havmor made a “small”price hike at the beginning of 2023, but doesn’t expect that to affect sales much.
Naturals, which has been aggressively increasing its footprint across the country in recent years, decided to pass on part of the cost increase to customers and absorb the rest. It undertook a 10% price hike in January, but expects to see a good 30% growth this quarter. “Though northern and western regions saw sporadic rain, we are seeing good growth in the south, especially in markets like Bangalore, and expect sales to pick up during this month. We expect the momentum to continue till June this year. Typically, our observation is that extended summers in the north help to balance early rainfall in the southern regions,” says Siddhant Kamath, director at Naturals Ice Cream.
Mohit Khattar, CEO of Graviss Foods, which operates Baskin Robbins in India, says the brand has taken a conscious call to maintain its pricing even with high input cost. “We don’t believe in short-changing the consumer so our pack sizes remain the same as they were last couple of years. We would rather earn profits for the company through higher sales rather than by giving the customer less,” he states.
Manish Bandlish, managing director at Mother Dairy, says that though the industry is grappling with the stress of high milk pricing, Mother Dairy is trying to minimise the impact by offering greater variety to consumers and fair remuneration for farmers.
Ready for a slugfest
Hobbled by increasing input costs, ice-cream makers are depending on new formats and larger footprint to woo consumers.
The period of April to September every year contributes about 60% of the annual sales for the industry, says Baskin Robbins’ Khattar. The brand has grown its presence in the last couple of years to now have roughly 850 ice cream parlours in about 230 locations in the country. Khattar says, “In 2022-23, we grew roughly 30% over the previous year. In FY24, we expect demand for ice cream to be fairly robust and the industry is expected to grow around 15-17% over the previous year.”
Considering that ice creams are a highly infrastructure-led business, Manish Bandlish, managing director at Mother Dairy says that the brand has ramped up its production and cold-chain infrastructure, and invested in asset deployment at consumer touch points to ensure shelf strength. “For a mass category like dairy, offline presence across markets is imperative for deeper penetration, but availability across D2C platforms is equally important,” he observes.
He says the brand’s omnichannel strategy will ensure that its products are available to consumers wherever they are. The company has set a target of 20% growth over last year for its ice cream business.