Vadilal Industries has one of the largest ranges of ice creams and frozen desserts in the country with 150 plus flavours and sold in a variety of more than 250 packs and forms. The company has two production facilities - Pundhra in Gandhinagar district, Gujarat, and Bareilly in Uttar Pradesh. Rajesh Gandhi, MD, Vadilal Industries Ltd, in an email interaction with Anurag More, throws light on the organised frozen dessert and ice cream market. Excerpts:
How big is the Indian frozen dessert and ice cream market and what is your share in it?
The Indian frozen desserts market is estimated at Rs 1,500 crore while the ice cream market size is nearly Rs 2,000 crore. Vadilal has today emerged as India's second largest ice cream and frozen dessert player with turnover of Rs 350 crore.
How different is the Indian market compared to other key markets over the world?
The international ice cream market is very organised and structured. As against the per capita consumption of 23 litres in the US, 18 litres in Australia, and 14 litres in Sweden, ice cream consumption in India stood at a pathetic 100 ml in the mid-nineties. Currently the per capita consumption of ice cream in India is about 300 ml, which is a good indication of growth.
World market is in full swing of innovations and applications in terms of producing ice cream, frozen desserts, mellorine and gelatos. Slowly Indian consumers and players are also picking up the flavours that are available in the US, Australia and European countries.
Tell us about the growth in the market and what kind of growth are you envisaging by 2015.
The organised frozen desserts market is expected to grow every year at 20-25% over the next five years and branded ice creams at 15-20% every year. We are growing at about 25-30% every year and we are confident that this rate of growth will continue for coming five years.
There is talk about recession hitting the Indian economy. Has it affected the dairy sector?
It has definitely affected the prices of dairy products as well as ice cream products. We experienced inflation majorly in the form of increased milk prices. There has been a 5-10% rise in milk prices as compared to last year. Besides increase in prices of labour, raw materials and logistics amongst others that forces various players to increase their prices.
What are the new innovations and trends happening in the frozen desserts and ice cream market?
International brands have entered India and are influencing the consumer behaviour as well as preferences. With Baskin-Robbins, Haagen Dazs, Swensen's, The Cream & Fudge Factory, etc. in the market, consumers have become more demanding and constantly seek innovations in terms of products, flavours, etc. This year we introduced Praline N Creme, Golden Ribbon, Silk Chocolate, Kiwi Queen, Chocolate Peanut, Pina Lemon and Mango Marvel to give Indian consumers a feel of the international ice cream eating experience. We have also introduced the Ice Trooper brand with a special focus on the kids segment.
What are the challenges and opportunities for both the sectors?
Proper infrastructure, electricity issues, logistics, cold chain and high transportation costs are the major challenges for both the industries.
The markets are still in its nascent stage in India. The approximate per capita consumption of only 350 ml - is far lower from the global average of 2-3 litres. We see this as a great opportunity to capture more and more segments with even more exciting products to offer.
What are the different and innovative products offered by you?
Innovation has always been our focus. After introducing matka kulfi with ceramic matka in traditional style we recently launched Gourmet for the super premium ice creams packed in premium quality tubs.
We added international quality products into the Indian market by introducing Flingo, Badabite and Gourmet to target youth and premium segment of consumers.
Moreover, we are the only national company which is making all super premium ice cream, ice creams and frozen dessert. We offer a huge variety of cups, candies, cones and take home party packs, bulk packs in both.
How are they different from that of competitors?
These products are produced with latest extrusion technology that was installed last year at Vadilal's Pundhra, Gujarat plant. Vadilal was the first to install this technology amongst all Indian ice cream players. Vadilal's new products give best texture, thickness of the outer layer and better mouth-fill to the consumers.
Tell us about your manufacturing facilities.
We have two manufacturing units - Pundhra in Gujarat and Bareilly in Uttar Pradesh. In the last two years, we have doubled the production capacity of our ice cream plant at Bareilly to 1.75 lakh litre per day in the last two years.
Tell us about the R&D that goes into your products.
We introduce around 25 new products in a year. Our R&D team includes industry experts which conceptualises the products with pre-test with consumers and then puts into labs to meet the necessary food quality requirements. Then it comes into the final round of taste with extensive experience and strong fundamentals.
Give us some strong points about your products.
Better taste with better mouth-fill, fresh flavours, innovative presentation and affordability. And the huge range wherein we have more than 300 SKUs.
How are the government regulations for both sectors and what changes can be made for the benefit of the sectors?
There is very thin line of difference between frozen desserts and ice creams into legal structure. More specifications are required to promote both the segments separately.
The government has always encouraged power & infrastructure sector, which is the biggest motivation for the entire food & beverage industry. Apart from that it has been supportive with the subsidies on cold storage.