market research india - ice cream market in india 2009

7/31/2019 Market Research India - Ice Cream Market in India 2009

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‐

December 2008

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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

2ICE CREAM MARKET – INDIA.PPT



•Market Overview

•

•Trends

•Key Developments




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%


South



•Market Overview

•

•Trends

•Key Developments




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




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




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




•Market Overview

•

•Trends

•Key Developments




Key Trends

Large scale

advertising Product

diversification

to

target

specific segments

Trends

Benefits derived from falling

costs

Franchises and strategic

partnerships to enhance

distribution




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




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


, .



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




•Market

Overview•

•Trends

•Key Developments


h k l d h f



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%


larger

players



•Market

Overview•

•Trends

•Key Developments




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.




Thank you for your timeFor an updated report or any customized research requirements, please contact:

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ICE CREAM MARKET – INDIA PPT

market research india - ice cream market in india 2009

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