FNB News - Ice cream sales remain lukewarm as input costs make prices soar by 7-8%

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DAIRY PRODUCTS

Ice cream sales remain lukewarm as input costs make prices soar by 7-8%

Monday, 04 May, 2015, 08 : 00 AM [IST]

Sampa Haldar, Mumbai

May, the hottest month of the season, is here but ice cream sales in the country remain lukewarm as increasing prices of raw materials and fluctuating weather conditions have sent the frozen food’s prices soaring by 7 to 8 per cent.

While the season, which roughly lasts from March to June, seem to have taken a big hit, companies are trying to minimise the impact. Rajesh Gandhi, CMD, Vadilal Industries Ltd, explains, “Raw materials affect the pricing of ice cream, but companies try their best to minimise the impact.”

According to Gandhi, increasing input costs are ramping up transaction costs for traditional ice cream players which are in turn pushing up prices at the consumer-end. The hike in pricing is sparked by increasing cost of ingredients such as milk, milk powder, sugar, dry fruits and flavours like vanilla and chocolate.

Nitin Arora, CEO, Devyani Food Industries Ltd, which is known for its popular brand Creambell, agrees with Gandhi. He states, “Price of any product is directly proportional to the raw material cost. The percentage cost of ingredients in our ice creams, for instance, prices are high since we use only high quality, certified and natural food products.”

He adds, “Ice creams have become marginally dearer owing mostly to cost of ingredients and input. The eclectic new qualities and flavours of ice creams are being developed that customers find worth the price and quality.”

Meanwhile, Samir Hafizi, MD, Pastonji Ice Cream, offers sudden change of weather as his reason for price rise. Hafizi informs, “Ice cream companies are prone to different seasons, every season is special for conducting any activity, consuming and our lifestyle preferences. Sudden changes in the weather definitely affect sales of ice cream. Also the production is getting affected as the raw material supplied is affected.”

However, Sudhir Shah, director, Sri Srinivasa Dairy Products Pvt. Ltd, Hyderabad, offers a dollop of hope, “Currently ice cream industry is worth Rs 3,000 crore in India. The ice cream market, in 2015, is witnessing growth of 15% per annum in India, proportionately the manufacturing of products by companies is also increasing.”

New Flavours
Speaking about the flavour of the season, Shah of Sri Srinivasa said, “Usually its is mango and pineapple that is much in demand but this year, there is a new flavour of jamun (Indian blackberry) that is wining the taste buds of the consumer.”
A spokesperson of Amul, points out in an email, “Summers are the peak time for ice cream consumption because the weather favours it. Epic, is the flavour of the season. Epic has the richest and creamiest ice cream bars and Epic Choco Almond is coated with a thick layer of yummy delicious Belgian chocolate ice cream and studded with almonds.”

The spokesperson adds, “Since summer is the ice cream season, all other flavours like fresh fruit flavours - strawberry, fresh litchi, fresh pineapple, alphonso mango; along with cones, sundaes, Frostik, Froot Lickz are an instant hit with the consumers,”

When asked about the best flavour of Summer 2015, Gandhi of Vadilal states, “Most people around the world still opt for flavours like vanilla, butterscotch, with an array of flavours to choose from chocolate and various other flavours combined with chocolates are preferred worldwide. Apart from chocolate, American nuts, chowpatty kulfi, cookies’n’cream are also very popular and look the most promising flavours in 2015.”

Creambell has on offer juicy fruits, crispy nuts and creamy infusions as new flavours for 2015. Speaking about the best flavour of the season, Arora of Creambell states, “We are launching a high quality range of ice creams in innovative flavours like caramel salted, candy floss and green tea under a new category. Our vanilla swiss almond is a concept ice cream that has been developed in New Zealand for the India market.”

He adds, “At the same time, our Fruit-o-Mania and Nut-o-Mania range will be a perfect foil to the summer. A tantalising combination of raspberry mango will also hit the shelves this summer. However, traditional Indian flavours are always popular too.”