Ice cream was amongst the fastest-growing product categories in packaged foods in 2012. As a result, several regional players started expanding in 2012. Mother Dairy Fruit and Vegetable, which until now ruled Delhi’s market, was planning to enter the markets in Mumbai, Bangalore and Chennai in 2012.
Vadilal Industries – a leading player in Gujarat and Rajasthan – was expanding its operations in the northern part of the country. Hatsun Agro – a leading player in South India – was also planning to expand in western regions. A large part of this expansion is going to happen through consumer foodservice outlets. National and regional players alike have ice cream parlours. For instance, Vadilal Industries’ parlours are called Happinezz. Hatsun Agro’s ice cream parlours are called Ibaco.
Regional manufacturers were aiming to expand into other markets by opening more of such outlets in 2012.
COMPETITIVE LANDSCAPE: Gujarat Co-operative Milk Marketing Federation is expected to lead value sales in ice cream with a share of 31% in 2012. This is because its products were economically priced and were widely available. Availability of raw material was not a concern due to its close relationships with milk farmers.
Moreover, the company already has a cold chain network, which is crucial for this business. Many regional players were unable to expand their operations beyond a particular area because investment in cold storage is huge and its management requires expertise.
Hindustan Unilever through its brand Kwality Wall’s was the second largest player with an expected value share of 20% in 2012. The company’s brand has enjoyed considerable brand equity in metros for the past two decades.
PROSPECTS: A number of regional manufacturers are aiming at gaining national footprint over the forecast period. Most of them are looking at expanding in metro cities like Delhi, Mumbai, Bangalore, Chennai, Hyderabad and Kolkata. This shows that major urban centres still have high scope for growth. On the other hand, this also shows that competition in these areas is going to intensify. The share of consumer foodservice outlets in the total distribution is poised to grow.
Ice cream is mostly an impulse-based product in India. Its consumption is growing despite sharp rises in prices. This means that Indian consumers are willing to pay extra for indulgence and shows the potential for launches of premium ice cream brands going forward.
Source: Euromonitor
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