Description
Gives the brief overview of Ice cream market in India. It gives the size, growth and characteristics of ice cream industry. It also includes key trends in advertising in ice cream industry.
ICE-CREAM MARKET INDIA
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 & Challenges
– –
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-developed cold chain facilities
Trends
– – – –
Large investments in advertising Diversification 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 The premium segment is dominated by Baskin Robbins
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
The industry is growing steadily with the northern and western regions accounting for the largest consumption
Overview
• Size and Growth – Worth USD 209 mn in 2008 – Growing at 12% p.a. in 2005-2008 – Forecast to increase by 15% to reach USD 240 mn in 2009 Characteristics – Northern and western regions together account for 70% of total market consumption – Profit margins range from 30% to 50% depending on the product segment – 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 together with strawberry and chocolate it accounts for 70% of the market
Size and Growth
USD mn
250 200 150 100 50 0
+12%
240 182 209
148
155
•
2005
2006
2007
2008 e
2009 f
Geographic Distribution
North 30%
West 40% 10% 20% East
South
Source: The Economic Times “Showers upset regional sales targets of marketers”, May 2007; IBEF “FMCG companies target consumers in summer”, March 2008; India Environment Portal “Is our ice cream natural or synthetic?, August 2007; The Financial Express “Fire & Ice”, June 2008; 51Rainbow company website
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
Key Trends
Large scale advertising
Product diversification to target specific segments
Trend s Franchises and strategic partnerships to enhance distribution
Benefits derived from falling costs
Large-scale advertising geared towards brand building and sales promotion
Advertising on Television: Jan-Apr 2008
• • • Grew by 15% rise in 2008 compared to 2007 Average number of ads per day increased by 45% The top 3 ice cream brands advertised – Kwality Walls Almond Praline – Kwality Walls Paddle Pop – Arun Ice Cream
Share of TV advertising
Kwality Walls 78% (HUL)
Hatsun Agro 9% 2% 4% Metro Daily Ltd Karnataka Milk 7% Federation Others
Advertising in Print: Jan-Apr 2008
• • • Grew by 58% rise since 2005 Gujarat accounted for 25% of the total advertising Maximum advertising in non-metros in the newspaper medium indicates organized sector’s targeting of rural areas and unorganized sector – Non-metros: 57% – Metros: 26% – Mini –metros: 16%
Share of Print advertising
GCMMF
14% Vadilal 52% Havmor 9% 3% Dinshaws 22% Others
Advertising is the primary method to increase consumption and penetration levels
Source: exchange4media.com “Snapshot of advertising by Ice Cream category in Print during Jan-Apr’ 08”; Indiatelevision.com “Snapshot of advertising by Ice Cream category in January-April 2008”, June 2008
Product diversification to target specific segments • Producers have launched flavoured “kulfi” – the traditional Indian dessert – ice cream which is the favoured dessert in the nonmetros
• Naturally flavoured ice cream i.e. without any artificial or synthetic flavour has been introduced for the premium segment
• Players are capitalizing on the market which has become extremely health conscious
Company Hindustan Unilever (HUL) Product Moo Probiotic range – Amul Prolife Diet
Capitalizing on demand from a niche markets
Health Benefits High calcium content, low calorie and fat Increases immunity, help in digestion, prevents diarrhoea and growth of colon cancer Low sugar and fat content
GCMMF Mother Dairy
Source:
Financial Express “Ice cream war begins as HUL, Amul oil plans”, February 2008
Enhancing network through franchises and strategic partnerships
Strengthens marketing, sales and distribution. Company HUL Franchising GCMMF Hatsun Agro Milkway Express Baskin Robbins Company Partnerships HUL GCMMF Baskin Robbins Milkway Express Movenpick Kiosks - Swirls Increase 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 Premium ice cream outlet – Arun Ice Cream Unlimited 1000 outlets in southern and central India by 2009, counters at corporate campuses Outlets in malls and multiplexes Affiliation Indian Oil Corporation (IOC) Oxicash Bharat Petroleum Corporation Ltd (BPCL) Lifestyle, Coca-Cola, ICICI credit cards and Cox & Kings Spencer Retail Ltd and Foodworld Rhapsody Foods & Beverages Purpose Retail stores at petrol stations Marketing via scratch and win contests Mobile kiosks at petrol stations Exclusive retailing Targeting the southern market Re-launch brand in Mumbai, Delhi, Bangalore, Hyderabad, Kolkata and Chennai Projects
Source: FnBnews “Coops, the mainstay of India's dairy model”, October 2008; Business Standard “Ice-cream makers add healthy flavours”, April 2008; FoodIndustryIndia “Gelato ice creams is a hit at AAHAR”, March 2008
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
Market
Major Players
• Fiercely competitive due to attractive economics with profit margins ranging between 30-50% 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 of targeting the rural market For most national players viz. GCMMF, HUL and Mother Diary, revenue from ice cream accounts for a small portion of their total revenues Premium segment: – Baskin Robbins is the single largest premium ice cream brand – New entrants include Amul, Movenpick, Haagen Dazs and Snowberry
Market share
•
55%
Unorganized
• •
45%
Organized
Vadilal GCMMF 37% 14% Mother Diary 13% 15%
•
16% Others
5%
HUL Baskin Robbins
A well established unorganized sector creates a fiercely competitive environment for the larger players
Source: Business Line “Bringing in the creamy layer”, August 2008; magindia.com “Amul to launch new ice cream range”, October 2008
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
Drivers & Challenges
Challenges Low quality products and competitive pricing from unorganized sector Lack of cold chain facilities
Drivers Low consumption levels Developing institutional channel
External Factors
ECONOMIC FACTOR - Low consumption levels
ml
•
Per capita consumption levels are very low at 200250 ml while penetration rate is estimated at 15%
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
300 200
250 106
250
•
100 0
2000
2004
2008
•
Source: Economic Times “Vanilla prices shoot up on short supply”, October 2008; Business Today “The Branded Ice-Cream Tango Begins”, July 2000; Rediff “The icecream war hots up”, March 2004; Vadilal Annual Reports; Hindu “The Ice-cream Punch”, June 2004
External Factors
SOCIETAL FACTOR - Low quality products and competitive pricing in the unorganized sector
• The market faces a threat from low-quality products • Price difference between large and small players • Large players are at a competitive disadvantage compared to the unorganized players due to the low quality and pricing of the unorganized sector
External Factors
TECHNOLOGICAL FACTOR - Lack of cold chain facilities
• 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
• 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
Internal Factors - SWOT
doc_820011255.pptx
Gives the brief overview of Ice cream market in India. It gives the size, growth and characteristics of ice cream industry. It also includes key trends in advertising in ice cream industry.
ICE-CREAM MARKET INDIA
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 & Challenges
– –
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-developed cold chain facilities
Trends
– – – –
Large investments in advertising Diversification 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 The premium segment is dominated by Baskin Robbins
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
The industry is growing steadily with the northern and western regions accounting for the largest consumption
Overview
• Size and Growth – Worth USD 209 mn in 2008 – Growing at 12% p.a. in 2005-2008 – Forecast to increase by 15% to reach USD 240 mn in 2009 Characteristics – Northern and western regions together account for 70% of total market consumption – Profit margins range from 30% to 50% depending on the product segment – 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 together with strawberry and chocolate it accounts for 70% of the market
Size and Growth
USD mn
250 200 150 100 50 0
+12%
240 182 209
148
155
•
2005
2006
2007
2008 e
2009 f
Geographic Distribution
North 30%
West 40% 10% 20% East
South
Source: The Economic Times “Showers upset regional sales targets of marketers”, May 2007; IBEF “FMCG companies target consumers in summer”, March 2008; India Environment Portal “Is our ice cream natural or synthetic?, August 2007; The Financial Express “Fire & Ice”, June 2008; 51Rainbow company website
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
Key Trends
Large scale advertising
Product diversification to target specific segments
Trend s Franchises and strategic partnerships to enhance distribution
Benefits derived from falling costs
Large-scale advertising geared towards brand building and sales promotion
Advertising on Television: Jan-Apr 2008
• • • Grew by 15% rise in 2008 compared to 2007 Average number of ads per day increased by 45% The top 3 ice cream brands advertised – Kwality Walls Almond Praline – Kwality Walls Paddle Pop – Arun Ice Cream
Share of TV advertising
Kwality Walls 78% (HUL)
Hatsun Agro 9% 2% 4% Metro Daily Ltd Karnataka Milk 7% Federation Others
Advertising in Print: Jan-Apr 2008
• • • Grew by 58% rise since 2005 Gujarat accounted for 25% of the total advertising Maximum advertising in non-metros in the newspaper medium indicates organized sector’s targeting of rural areas and unorganized sector – Non-metros: 57% – Metros: 26% – Mini –metros: 16%
Share of Print advertising
GCMMF
14% Vadilal 52% Havmor 9% 3% Dinshaws 22% Others
Advertising is the primary method to increase consumption and penetration levels
Source: exchange4media.com “Snapshot of advertising by Ice Cream category in Print during Jan-Apr’ 08”; Indiatelevision.com “Snapshot of advertising by Ice Cream category in January-April 2008”, June 2008
Product diversification to target specific segments • Producers have launched flavoured “kulfi” – the traditional Indian dessert – ice cream which is the favoured dessert in the nonmetros
• Naturally flavoured ice cream i.e. without any artificial or synthetic flavour has been introduced for the premium segment
• Players are capitalizing on the market which has become extremely health conscious
Company Hindustan Unilever (HUL) Product Moo Probiotic range – Amul Prolife Diet
Capitalizing on demand from a niche markets
Health Benefits High calcium content, low calorie and fat Increases immunity, help in digestion, prevents diarrhoea and growth of colon cancer Low sugar and fat content
GCMMF Mother Dairy
Source:
Financial Express “Ice cream war begins as HUL, Amul oil plans”, February 2008
Enhancing network through franchises and strategic partnerships
Strengthens marketing, sales and distribution. Company HUL Franchising GCMMF Hatsun Agro Milkway Express Baskin Robbins Company Partnerships HUL GCMMF Baskin Robbins Milkway Express Movenpick Kiosks - Swirls Increase 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 Premium ice cream outlet – Arun Ice Cream Unlimited 1000 outlets in southern and central India by 2009, counters at corporate campuses Outlets in malls and multiplexes Affiliation Indian Oil Corporation (IOC) Oxicash Bharat Petroleum Corporation Ltd (BPCL) Lifestyle, Coca-Cola, ICICI credit cards and Cox & Kings Spencer Retail Ltd and Foodworld Rhapsody Foods & Beverages Purpose Retail stores at petrol stations Marketing via scratch and win contests Mobile kiosks at petrol stations Exclusive retailing Targeting the southern market Re-launch brand in Mumbai, Delhi, Bangalore, Hyderabad, Kolkata and Chennai Projects
Source: FnBnews “Coops, the mainstay of India's dairy model”, October 2008; Business Standard “Ice-cream makers add healthy flavours”, April 2008; FoodIndustryIndia “Gelato ice creams is a hit at AAHAR”, March 2008
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
Market
Major Players
• Fiercely competitive due to attractive economics with profit margins ranging between 30-50% 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 of targeting the rural market For most national players viz. GCMMF, HUL and Mother Diary, revenue from ice cream accounts for a small portion of their total revenues Premium segment: – Baskin Robbins is the single largest premium ice cream brand – New entrants include Amul, Movenpick, Haagen Dazs and Snowberry
Market share
•
55%
Unorganized
• •
45%
Organized
Vadilal GCMMF 37% 14% Mother Diary 13% 15%
•
16% Others
5%
HUL Baskin Robbins
A well established unorganized sector creates a fiercely competitive environment for the larger players
Source: Business Line “Bringing in the creamy layer”, August 2008; magindia.com “Amul to launch new ice cream range”, October 2008
• • • • •
Market Overview Advertising Trends Competition Factors – External & Internal Key Developments
Drivers & Challenges
Challenges Low quality products and competitive pricing from unorganized sector Lack of cold chain facilities
Drivers Low consumption levels Developing institutional channel
External Factors
ECONOMIC FACTOR - Low consumption levels
ml
•
Per capita consumption levels are very low at 200250 ml while penetration rate is estimated at 15%
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
300 200
250 106
250
•
100 0
2000
2004
2008
•
Source: Economic Times “Vanilla prices shoot up on short supply”, October 2008; Business Today “The Branded Ice-Cream Tango Begins”, July 2000; Rediff “The icecream war hots up”, March 2004; Vadilal Annual Reports; Hindu “The Ice-cream Punch”, June 2004
External Factors
SOCIETAL FACTOR - Low quality products and competitive pricing in the unorganized sector
• The market faces a threat from low-quality products • Price difference between large and small players • Large players are at a competitive disadvantage compared to the unorganized players due to the low quality and pricing of the unorganized sector
External Factors
TECHNOLOGICAL FACTOR - Lack of cold chain facilities
• 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
• 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
Internal Factors - SWOT
doc_820011255.pptx