market research india - ice cream market in india 2009
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7/31/2019 Market Research India - Ice Cream Market in India 2009
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‐
December 2008
7/31/2019 Market Research India - Ice Cream Market in India 2009
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Executive Summary
Market
Estimated worth USD 209 mn in 2008, expected to grow to USD 240 mn in 2009
North and west account for 70% of total sales
High profit margins ranging between 30‐50%
Drivers: Opportunity to capitalize on low consumption levels; growing institutional sales
Challenges: Competition with the unorganised sector on price and quality, and lack of well‐Drivers &
developed cold chain facilities
Large investments in advertising
TrendsDiversification of product portfolio targeting specific consumer segments
Partnerships and franchises pursued to boost distribution
Falling costs of raw materials offsetting rising milk and sugar prices
Competition
GCMMF’s Amul brand is the market leader
Mother Diary and Hindustan Unilever’s Kwality brand are other strong players
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•Market Overview
•
•Trends
•Key Developments
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The industry is growing steadily with the northern and western
regions accounting for the largest consumption
•Size and Growth
Worth USD 209 mn in 2008
Overview Size and
Growth
240
USD mn+12%
Growing at 12% p.a. in 2005‐2008
Forecast
to
increase
by
15%
to
reach
USD
240
mn in 2009
•Characteristics
209182
155148
100
150
200
Northern and western regions together
account for 70% of total market consumption
Profit margins
range
from
30%
to
50%
depending on the product segment
0
2005 2006 2007 2008 e 2009 f
Geographic Distribution
60% of ice cream sales occur during the
summer months of April‐June
80% of sales is through street vendors
Vanilla
is
the
highest
selling
flavour
and
30%
North
together with strawberry and chocolate it
accounts for 70% of the market40%West
10%East
20%
4ICE CREAM MARKET – INDIA.PPT
South
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•Market Overview
•
•Trends
•Key Developments
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Drivers & Challenges
Challenges
Drivers
Low quality products and competitive
pricing from unorganized sector
Low consumption levels
ac o co c a n ac es
Developing institutional channel
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Low consumption levels and penetration, and a lucrative
institutional sales channel are key growth drivers
Low consumption
levels
•Per capita consumption levels are very low at 200‐250 ml while
penetration rate is estimated at 15% ml
Impact
• Significant scope for market growth by increasing either consumption
levels or market penetration, or both
• National players
are
focusing
on
increasing
per
capita
consumption
or
penetration to grow the market
’
250250
106100
200
300
,
Kwality Walls specifically targets metros to increase per capita consumption
Amul and Mother Dairy are increasing penetration by targeting rural markets,
making their product more widely available, and minimizing price
0
2000 2004 2008
• Catering and institutional customers are identified as a growing opportunity
• Players are
capitalizing
on
the
revenue
potential
of
impulse
sales,
which
is
an
established
trend
Developing institutional channel
in institutions such as malls and multiplexes
• Catering services and hotels are also a lucrative business opportunity for manufacturers
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Low quality products and price competition from unorganized
players and lack of cold chain facilities hampering industry
Low quality
products
and
competitive
pricing
in
the
unorganized
sector
•The market faces a threat from low‐quality products
Many regional players use synthetic substitutes and incorrectly label their products e.g. vanilla ice cream
Impact
ns ea o ar c a y avoure van a ce cream
Smaller players have started injecting a higher percentage of air into ice cream thus compromising on quality
• Price difference
between
large
and
small
players
Small players rely on a volume‐based, low price strategy, by taking advantage of strong distribution within a
regional market
Lack of cold chain facilities
• Large players are at a competitive disadvantage compared to the unorganized players due to
the low quality and pricing of the unorganized sector
•The lack of good cold chain facilities for transportation and storage is an impediment towards
increasing market access and penetration
• Cold chain also constitutes the most to the total cost
• Players have
been
taking
different
approaches
to
address
this
issue:
Baskin Robbins has outsourced its distribution and logistics
Amul, through self financing schemes, has made refrigerators available to shops in rural areas
• Developing cold chain infrastructure is extremely crucial to increase market penetration and
the challenge is shared by many other industries in the food & beverage sector
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•Market Overview
•
•Trends
•Key Developments
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Key Trends
Large scale
advertising Product
diversification
to
target
specific segments
Trends
Benefits derived from falling
costs
Franchises and strategic
partnerships to enhance
distribution
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New products such as traditional dessert, natural flavours and low‐
sugar ice cream is being used to target specific consumer segments
• Producers have launched flavoured “kulfi” – the traditional Indian dessert – ice cream which is
the favoured dessert in the non‐metros
Product diversification
to
target
specific
segments
Capitalizing on
Mother Dairy’s initiated their kulfi range with flavours such as Kesar, Pista, Badam and Mango
Amul is planning to introduce new brands such as Dates with Honey, “Koolfi cone”
• Naturally flavoured
ice
cream
i.e.
without
any
artificial
or
synthetic
flavour
has
been
introduced
for the premium segment
demand from a
niche markets
Natural Vanilla flavours – Choco Fudge Cake and 100 percent Natural Vanilla
Gelato, an ice cream produced only using natural ingredients, introduced for the premium segment. The
primary difference being that the ratio of ice cream and air is 70:30 in Gelato vs.30:70 in other ice cream
• Players are capitalizing on the market which has become extremely health conscious
Company Product Health Benefits
Hindustan Unilever (HUL)Moo High calcium content, low calorie and fat
GCMMFProbiotic range –
Amul Prolife
Increases immunity, help in digestion,
prevents diarrhoea and growth of colon
cancer
Mother DairyDiet Low su ar and fat content
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Companies are setting up franchises or entering into partnership
to develop their distributional network
Enhancing network
through
franchises
and
strategic
partnerships
Company Projects
‐
GCMMFIncrease Amul Parlours from 1,800 to 3,000 in 2008 and 10,000 by 2009, Cyber stores in 100 cities, Cyber clubs
in 125
cities
Hatsun Agro Premium ice cream outlet – Arun Ice Cream Unlimited
F r a n c h i s i n
,
Baskin Robbins Outlets in malls and multiplexes
Company Affiliation PurposeIndian Oil Cor oration IOC Retail stores at etrol stations
HULOxicash Marketing via scratch and win contests
GCMMF Bharat Petroleum Corporation Ltd (BPCL) Mobile kiosks at petrol stations
Baskin Robbins Lifestyle, Coca‐Cola, ICICI credit cards and Cox & Kings Exclusive retailing
a
r t n e r s h i p s
Milkway Express Spencer Retail Ltd and Foodworld Targeting the southern market
Movenpick Rhapsody Foods & BeveragesRe‐launch brand in Mumbai, Delhi, Bangalore,
Hyderabad, Kolkata and Chennai
P
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Falling prices of raw materials reducing production costs assisted
by government policy has benefited the players
• Vanilla prices have fallen drastically to INR 100 per kg from INR 3500 per kg in 2003
Vanilla being the most preferred flavour in the market allows players to maximise profits
Falling input
costs
offsetting
milk
and
sugar
price
rises
Cost incentives
• In February 2006, the government removed the 16% excise duty on ice cream, which offset the
rise in milk and sugar prices in 2006 and 2007
investments
attractive
Milk Prices
25
30
35
40
r
L i t r
e
Prices of Sugar Medium grade: Delhi
15002000
2500
u i n t a
l
0
5
10
15
c t ‐ 0
0
c t ‐ 0
1
c t ‐ 0
2
c t ‐ 0
3
c t ‐ 0
4
c t ‐ 0
5
c t ‐ 0
6
c t ‐ 0
7
c t ‐ 0
8
I N R p
0
500
1000
S e p ‐ 0 4
M
a r ‐ 0 5
S e p ‐ 0 5
M
a r ‐ 0 6
S e p ‐ 0 6
M
a r ‐ 0 7
S e p ‐ 0 7
M
a r ‐ 0 8
S e p ‐ 0 8
I N R /
MRP of GCMMF's Amul Gold Mi lk MRP of GCMMF's Amul Taaza Mi lkPric es of Sugar Medium grade: Delhi
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•Market
Overview•
•Trends
•Key Developments
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GCMMF is the market leader with strong competition from HUL,
Vadilal and Mother Dairy
• Fiercely competitive due to attractive economics
with profit margins ranging between 30‐50%
Major Players Market
share
55%
• Organized sector comprises GCMMF’s Amul,
HUL’s Kwality Walls, Mother Diary, Baskin
Robbins and
a number
of
regional
brands
• Amul is the market leader and is at the forefront
o arge ng e rura mar e
•For most national players viz. GCMMF, HUL and
Mother Diary, revenue from ice cream accounts
for a small
portion
of
their
total
revenues GCMMF
Vadilal
15%
45%Organize
Baskin Robbins is the single largest premium ice
cream brand
New entrants include Amul, Movenpick, Haagen Dazs
and Snowberry
37%
Mother Diary 14%
A well established unorganized sector creates a fiercely competitive environment for the
HUL
Baskin Robbins
5%Others
16%
16ICE CREAM MARKET – INDIA.PPT
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players
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•Market
Overview•
•Trends
•Key Developments
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Key Developments
Date Development
15‐Dec ‐ 08 Snowberry USA, an American ice cream retailer, is planning to enter the Indian ice cream industry with an investment of USD 50 mn in 2010 through a franchise known as Snowberry India Private Limited.
‐ ‐ , , . million in 2007 today stands at around USD 95–106 million. Cream Bell has launched four new flavours in 2008 namely
Belgian Chocolate, Chocolate Coffee, Almond Fudge and Strawberry. RJ Corp has decided to set up a production facility in
Goa with
an
investment
of
USD
8.5
million.
The
plant
will
have
a capacity
of
6 million
litres.
This
will
allow
them
to
cater
to
the southern and western markets in the country. They have invested USD 21.3 million towards capacity creation this year.
24‐ une‐08 Dair Foods set u the first ever ice cream factor in the Kashmir Valle . The have invested USD 0.5 million on this ro ect.
13‐May ‐08 Movenpick, a Switzerland‐based company, through a distribution arrangement with Rhapsody Foods & Beverages, re‐
launched their brand in Mumbai, Delhi, Bangalore, Hyderabad, Kolkata and Chennai. They are planning to develop retail or kiosk outlets in other cities by 2009.
31‐ July
‐07 Dominoes
Pizza
is
also
planning
to
enter
the
ice
cream
segment
in
India.
The
company
will
introduce
ice
creams
in
vanilla,
strawberr and chocolate flavours. Their roduct will be made available in dinin and home deliver conce ts.
18 ‐ June‐07 New Zealand Natural, a global ice cream parlour chain, has tied up with Manju Enterprises to launch 100 outlets in the
country by 2009. Taking an aggressive strategy, New Zealand Natural is offering its franchisees a margin of 50 per cent.
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