HUL launches Magnum ice-cream in two more cities [Transfreez Mobile Refrigeration- India's Most effective cold plate Reefer Trucks]

This is a bid by the company to expand its ice-cream portfolio, which has products under the Kwality Walls range

The country's largest consumer goods company, Hindustan Unilever (HUL), has begun the national rollout of Magnum ice-cream, the world's largest-selling stick variety. It was launched here and in Hyderabad last week, after an introduction in Chennai last April.

This is a bid by the company to expand its ice-cream portfolio, which has products under the Kwality Walls range. Magnum is expected to be taken to other metro markets, including Pune and Bangalore. It is positioned as a premium product, priced at Rs 85 a stick. In Mumbai, the product, made of Belgian chocolate and available in three flavours, is being pushed across retail outlets, in both modern and traditional trade.

In his first public address last week, HUL's new managing director and chief executive officer, Sanjiv Mehta, had said he expected Magnum to do well in this city. "For urban places, a brand such as Magnum should do well. Our whole idea is to see how we get our business model in place, so that we can expand at a faster pace."

HUL has appointed noted film actress Kareena Kapoor as brand ambassador for Magnum; it has begun radio spots promoting the brand in Mumbai. In the south, actress Trisha Krishnan endorses Magnum, having launched the product in both Chennai and Hyderabad. This strategy of using multiple celebrities to endorse Magnum, which gives Unilever (HUL's foreign parent) two per cent of its overall revenue, is something the former has been doing across markets.

In the US, for instance, Hollywood actresses Eva Longoria, Liv Tyler and Eva Mendes endorse the product. The company also has names such as Elizabeth Hurley on its list of endorsers. Despite coming well above the Rs 5-50 price band in which regular cones, bars and sticks are available, Magnum is said to have done well in Chennai, a market HUL used largely as a test ground to gauge consumer response.

Analysts, however, say the road ahead might not be easy, given the presence of entrenched and competitive entities such as Amul, Mother Dairy and Vadilal in the segment.

Unilever is the world's largest ice-cream maker, with products such as Cornetto, Breyers and Ben & Jerry's retailing under its Heartbrand range. In India, HUL's Kwality Walls competes with Amul (the leader), Mother Dairy and Vadilal, in a roughly Rs 2,000-crore market.

Amul has 40-45 per cent of the organised ice-cream market in India. It has kept a lead over rivals with aggressive pricing, distribution and launches. Analysts say the roll out of Magnum across markets is expected to trigger a spate of launches by rivals at the premium end of the category.

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Viveat Susan Pinto  |  Mumbai  

February 25, 2014

Source: Food Navigator Asia

Ice Cream Market in India: Opportunities & Challenges [Transfreez Mobile Refrigeration-Name stands for Refrigerated Trucks of India]

The ice cream market in India is estimated to be around INR 2,000 crores, of which over 40% belongs to the organized sector growing at about 15% Y-o-Y. Amul leads the pack with about 36-38% market share (5% of its total revenues), followed by Kwality Walls & Vadilal with about 12-14% share each. These players not only have to fight the small local and cottage industry players, but also the fact that the Indian cuisine itself offers a large variety of desserts which are still preferred by most Indians. Due to this reason, the per capita consumption of ice creams in India is about 300ml per annum, 1.4% of that in US, and 13% of the world average, which can be seen as a huge opportunity in this sector in India attracting new regional and national entrants. However, an issue is the seasonal nature of this industry in India, especially true for the northern parts of the country. Bulk of the sales happen during the summer months of April-July, while the sales witness a significant dip during winter months of November-February. Additionally, the seasonality of events like marriages affects sales in a big way, although institutional sales provide some cushion. But what makes the situation worse is low supply of electricity, especially during the high demand summer months that affects the ice cream stocks. Once the ice cream melts, it is non-saleable, and drives retailers not to carry enough stocks – not an optimal situation given the not so favourable situation of cold chain in India. With the latest mandate for HUL to increase its foods revenue, they might also be focussing on out-of-home footprint through ice cream parlours, ice creams being a high growth category for HUL growing at about 31% last year. On one hand where Amul is trying to increase its reach by adding retail outlets to the tune of 15k to its base of 70k outlets, on the other hand HUL is focussing on new product launches and television campaigns for consumer activation. Half the market is driven by impulse purchase, and rest by family consumption at home and in-parlour sales. There are niche players in the parlour business, with Nirula’s being an established player in the north, and Naturals in the west; and then there are premium players like Baskin Robbins. Location is key here like in any retail business, to ensure enough footfalls and an optimal rental profile for sustained outlet level profitability. Brands are coming out with pro-biotic and low fat ice creams targeting the health conscious consumers, and also new manufacturing processes which reduce air content in ice creams giving more value for money to the consumers; but the acceptance for such products is still to be put to a proper test in the market. Overall, the ice cream market is heating up. What is to be seen is that for whom this heat helps in increasing revenues & profitability of players, or melts the aspirations in the sector. 

- Anurag Garg, TradeBriefs

[Transfreez Mobile Refrigeration-Name stands for Refrigerated Trucks of India]

Cold war [Transfreez Mobile Refrigeration-Name stands for Refrigerated Trucks]

The frosty world of ice-creams is seeing a rank outsider gunning for the top ranking

It was only launched a decade ago. But serial-entrepreneur Ravi Jaipuria owned Cream Bell has been growing at a blistering pace. Among the youngest pan-India players, it has already broken into the league of the country’s top five organised ice-cream brands.

Nitin Arora, CEO of Cream Bell, says, “In early 2013, we made it to the No. 5 position in India as we completed ten years of inception.” In the quarter ending September 2013, Cream Bell’s share was around 14-15 per cent in the branded ice-cream market.

But it is craving for more. “Our vision is to be among the top three ice-cream brands by the end of financial year 2017,” says Arora. “We aim to increase our market share to about 18-20 per cent,” he adds.  At 30 per cent, the company is growing at a faster rate than the industry’s 20-25 per cent. It hopes to end the current financial year with a turnover of ₹400 crore.

Ice-cream song

Started in 2003 under a technical partnership with French company Candia, Cream Bell gradually gained core competence to develop its own brand. Having perfected the strategy of collaborating with international brands in other segments, RJ Corp — the biggest PepsiCo bottlers, which runs brand Costa Coffee and Pizza Hut in collaboration — chose to develop its own brand for ice creams.                                   

The estimated ₹3,500-crore branded ice-cream market is fairly fragmented with big national players such as Amul and Hindustan Unilever and fairly strong regional players. Cream Bell believes it has several aces up its sleeve to grow its market share.

First it is looking to expand  production by 25 per cent. It has three plants at Baddi (Himachal Pradesh), Goa and one near Agra in Uttar Pradesh. “Our Goa plant caters to the West and the South. While our plants at Baddi and Kosi near Agra cater to the North. …we will look at a new production capacity to cater to the demand in the East,” he said. 

The product is available across most States. However, it has no presence in some markets such as Tamil Nadu and Kerala in the South and Gujarat in the West. Gujarat is a huge market for ice creams and Amul lords over it, while in Tamil Nadu Arun is still a dominant force.

Cream Bell executives say they will take the challenge to these markets at the right time. “For now we are looking to consolidate our position where we are present. But in the next 2-3 years, we are looking to enter these three States too,” says Arora.

Frosty relations

 Last year, the year-on-year growth of ice creams was lower owing to erratic weather trends and early monsoons. However, overall, ice-cream consumption in India lags global averages. According to industry estimates, each year Indians on average eat 200-300 ml of ice cream compared with 14 litres in the US and 2.2 litres in China. That’s one reason why most people vouch for the market’s potential. After nearly doubling in 2007-12, the market is expected to touch $1.1 billion by 2017, according to Euromonitor estimates in 2013.

 All the players believe that the summer of 2014 would shine brighter for them.  Subhashish Basu, Business Head — Dairy Products, Mother Dairy Fruit and Vegetable, said, “Our ice creams are present in the top 25 cities now, and this year we will be focusing on enhancing our market share.” The company is investing in cold-storage infrastructure and expanding in the 25 cities where it is present.

 Basu expects a higher CAGR this year compared to last. Euromonitor had noted that ice creams were the fastest growing category in packaged food in 2012, although it slowed in 2013 according to other industry estimates. But a lot depends on the warm summers, as ice creams are a seasonal product and an entirely impulse purchase, he added. Mother Dairy executives say they have an impressive line-up of innovative products for launch, but are understandably tight-lipped about the details.

 Similarly, HUL is reportedly planning to expand the presence of its premium ice-cream brand Magnum beyond Chennai. Other international brands such as London Dairy, Häagen-Dazs and Baskin Robbins are trying to make a dent in the ice-cream market.

Cream centre

 Ice-cream sales are largely driven by impulse buying, and a big chunk comes from out-of-home purchase.

 To tickle the imagination and taste buds of this set of consumers, Cream Bell executives are relying on new flavours, and innovative and premium products.

The company introduced more than 18 new products during the scorching 2013 summer. To appeal to the calorie-counting, health-conscious set, it introduced the Sach Much (means ‘genuine’ in Hindi) brand. On offer is fruit pulp, as opposed to flavoured ice, in an ice-cream candy format in mango, strawberry, litchi and raspberry variants.  Also on offer are ice-cream cakes and smoothies, besides a premium range sold under sub-brand Maxxum (not Magnum, sold by Hindustan Unilever).

 As the concept of frozen yoghurt is gaining ground, the company has launched pro-biotic products such as Zero Vanilla and Strawberry, which have no added sugar for the health-conscious. According to consultancy Technopak’s estimates, frozen yoghurts now constitute 10-12 per cent of frozen dessert sales, and this is expected to more than double in the next five years. 

 Cream Bell believes its products are in line with rapidly changing consumer preferences. It will invest about ₹275 crore during 2010-15. “We have already invested about ₹200 crore in capacity expansion and R&D,” says Arora, adding, “We believe having an in-house production facility as well as research and development gives us an edge and is our core competence.”

Beyond India, the company has international ambitions too. In Africa, it has a major interest in the dairy market and is using those credentials to introduce its ice cream in that continent. “We are gradually introducing brand Cream Bell in countries like Uganda, Kenya, Zambia and Tanzania,” he says.

Besides bigger packs and tubs in premium flavours, the company has set its sights on experimenting with the home delivery format in places like Gurgaon. “In Gurgaon, we have nearly 600 households which regularly order ice creams from us. We will focus on growing the model there before introducing it in other metros,” says Arora. 

From parlours to home deliveries, what will be the next step in selling ice creams? Cold calls? Pardon the pun.

-BusinessLine, 06 Feb 2014

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