Ice cream players line up exotic launches to grab the premium segment
The premium segment is the battlefield for ice cream makers this summer with almost all major players lining up new launches.
So if Vadilal Industries is launching ‘Flingo’, a fudge-filled cone, this Tuesday, Amul, the country’s largest ice cream maker, is coming up with new flavours like ‘Afghan Dry Fruit’ ice cream, ‘fresh guava’, ‘thandai’ among others. Kwality Walls, a Hindustan Unilever (HUL) brand, is offering “innovations” on its popular ‘Cornetto’.
Localised players are trying to go one up by launching exotic products. For example, Havmor, an Ahmedabad-based brand that launched whiskey and ‘paan’-flavoured ice creams last summer, is now offering ‘limited edition’ flavours like ‘nutty Belgian dark chocolate’, ‘Strawberry cheese cake’, ‘Cinamon White Chocolate’ and ‘Jamaican Walnut’ to beat the heat.
“With more international brands opening shop in the country, consumers now have more exposure to premium and super-premium varieties of ice cream, and hence the expectations are high. Our market research and depot-level feedback shows that our customers want more premium flavours from Amul,” says a senior official of Gujarat Co-operative Milk Marketing Federation (GCMMF), owner and marketer of the Amul brand of milk and milk products.
At present, premium ice cream contributes to around 20 per cent of Amul’s net sales. It has lined up new exclusive flavours this summer, like ‘fresh guava’, ‘cookies and cream’, ‘thandai’, ‘creamy almond’ in the premium range and ‘choco brownie’ and ‘roasted almond’ in its ‘Exotica’ range, priced in the range of Rs 150-170.
The premium segment also offers higher margins, says RS Sodhi, managing director, GCMMF, adding that the segment accounts for nearly 20-30 per cent of the organised ice cream market in the country, pegged at around
Rs 2,500 crore. It is clocking a growth rate of 15-20 per cent per annum.
“The margin in the premium segment is close to 18-20 per cent, as opposed to that in the ‘impulse’ or volume segment which is around 2-3 per cent.”, says Pradeep Chona, managing director of Havmor. His company is, therefore, coming up with the limited edition range this month that will be priced almost double the normal range. “We have already taken up a kiosk at the Mumbai airport arrivals section where we are now offering these exclusive flavours. We plan to make it available across our parlours,” Chona says.
With rising raw material costs, companies are now betting on higher margin products. Milk prices have gone up by 30-35 per cent on a year-on-year basis, so have the prices of other key ingredients like chocolate and nuts. Devanshu Gandhi, managing director of Vadilal Industries says, “rising raw material costs have indeed affected our bottomline. Hence, we are focusing on more premium range products like cones that start from Rs 25 onwards.” At present, the premium segment accounts for around 10 per cent of Vadilal’s net sales of around Rs 270 crore, while the impulse segment comprises around 65 per cent.
It has now decided to focus on the youth segment. “Our ‘Flingo’ brand will be targeted at the youth segment. This will be a range of cone ice creams with the centre filled with chocolate and caramel,” says Gandhi.
Players such as Kwality Walls is making a re-entry into the Gujarat market where Vadilal holds a 40 per cent market share. Walls is leveraging its Cornetto brand by launching two innovations — Choco Disc, Vanilla Disc.
