Ice-cream sales surge in off-season

The ice-cream businesses of both Hindustan Unilever and Amul have reported an overall growth in ice-cream sales year-on-year even during the so-called "off-season".

The main reason cited by the companies is something that environmentalists fear - climate change.

"An elongated summer has actually helped companies record higher ice-cream sales. Previously, we would witness high sales during the first seven months of the year. But, now this period has extended to the first nine months," said R S Sodhi, general manager - marketing, Amul.

HUL registered a growth of 9.67 per cent in ice-cream sales for the quarter ended September 30, 2007 to Rs 33.80 crore from Rs 37.07 crore for same period last year. The companies also saw a growth in cold-chain infrastructure and a shift in their marketing strategy has worked to their advantage.

According to HUL's spokesperson, "Our ice-cream brand Kwality Wall's aims to increase the overall size of the market. We believe the best way of doing this is to increase the frequency of consumption."

Kwality Wall's focuses on key consumer markets (the top-20 cities) and has a three-pronged strategy in terms of availability, affordability and acceptability."

HUL's market share in the Rs 1,200 crore ice-cream market is 9 per cent compared with 37 per cent for Amul. While HUL has focussed on cities and impulse products such as Feast and Cornetto, Amul has employed a bigger portfolio and has penetrated the rural market aggressively.

"Ice-cream sales are purely determined by the availability of refrigerators. We have helped shops in rural areas to procure refrigerators through self-financing schemes. Such benefits motivate them to keep our products," said Amul's Sodhi.

An overall improvement in the cold chain has also enabled higher ice-cream sales every year. This is further boosted by the growth in the number of outlets.

According to HUL, since most ice-cream consumption is out-of-home, an increase in the number of outlets would play a key role in the sales.

To cater to the growing incidence of malls, the company aims to provide high-end value-added products to its customers. Its current ice-cream portfolio consists of Cornetto, Feast, Viennetta, Sunshine Zing Cones.

In order to drive volume by overcoming the price barrier, HUL has employed internal cost engineering and process innovations for Kwality Walt's to create products such as Cornetto Choco Fudge sold at Rs 15, also products specifically targeted at kids such as Bikimax and Choco Vanilla sold at Rs 5. They Also have their Home range priced at Rs 99.

On the other hand, Amul's portfolio sprawls around Royal Treat, Sugar Free to Probiotic ice-creams in the range of Rs 18 to Rs 120.

It is not just the sales in the off-season but overall sales in the year that has gone up. Amul registered a growth of 17 per cent year-on-year for ice-cream sales and HUL 18.7 per cent, faster than the present market growth rate of 12 per cent.