Riding on a four-fold rise in per capita consumption of ice cream during the last decade, the ice cream manufacturing industry in India is not only clocking a healthy double-digit growth, but has caught the attention of investors and foreign counterparts, says Sudhir Shah, president of the Indian Ice-cream Manufacturer’s Association (IICMA), who was in Gujarat to attend a two-day exhibition of ice cream manufacturers where 300 players from 20 countries -- including from Italy, France, the US, China, Turkey, Australia, Iceland, the UK, Denmark, Poland and Austria -- participated.
What is the size of the ice cream market in India? Is it growing?
The ice cream industry in India is the fastest growing in the world. The per capita ice cream consumption, per annum, has increased in India. In 2011, it was 400 ml. Now, it is 1.6 litres per person. In States like Gujarat, the per capita consumption will be more than 3 litres. Even larger metro cities like Delhi, Mumbai, Bengaluru and Hyderabad have similar levels of consumption. Going forward, the demand for ice cream is expected to rise multi fold. Improved connectivity and cold-chain networks are helping take ice creams to every nook and corner in the country. The presence of quick commerce players like blinkit, Zomato, Swiggy etc have fastened this process.
What has been the highlight of this growth in the ice cream industry?
The biggest story in the ice cream industry is about city-based brands going national. For instance, there are ice-cream brands in Amreli district of Gujarat which are manufacturing ice cream here, but selling it in Srinagar. Today, places like Srinagar consume more ice cream than that in Amritsar. There is a sea-change in the dynamics of the ice cream industry.
Does it mean that the ice cream sector is attracting investors?
Investments in the ice cream industry are more attractive than that of other siblings in the dairy industry. Because of the high growth of the ice cream industry in India, there is a lot of interest among private investors. Even foreign ice cream brands are looking at India, as markets in Europe and the US are near saturation. A few years back,
South Korean-Lotte Confectionery purchased Gujarat-based Havmor brand. This year, South India’s
Dairy Classic Ice Creams saw a huge investment ( ₹1,200 crore) from a private equity player.
Mangalore-based Hangyo got a ₹200 crore investment. Mumbai-based startup ice cream brand Go Zero also attracted funds. The scenario is fast evolving. It is a win-win situation for mid-sized ice cream players who are looking to expand to other parts of the country and are looking for funds.
Where is the industry headed? What are the new trends?
India has the biggest kitty of ice cream flavours in the world. We not only have our own flavours, but we have also been importing flavours from countries like Italy, France, USs and Australia. We have got not less than 1,000 flavours in India. Now ice creams are expanding into territory controlled by traditional Indian sweets, with gulab jamun ice cream, rasgulla icecream, cake ice creams, modak ice creams etc.
How has the recent rise in coca prices affected the industry?
The rise in coca prices had heavily dented the margins of ice cream manufacturers. However, the impact has remained restricted to chocolate ice creams. Now, the price of coca is coming down and it is expected to stabilise. Despite the rise in coca prices, the ice cream prices were not increased.
Why has the industry been seeking a reduction in GST?
We are hopeful of getting a reduction in GST. The government is, at present, studying the data that we have submitted. Currently, ice creams are being treated as luxury products and they attract 18 per cent GST. The industry has proposed a 5 per cent GST as ice creams are no more a luxury product, but meant for the masses. If they reduce the GST, our growth is expected to cross 15 per cent.
