Ice Cream and Frozen Desserts in India

PROSPECTS

Tropical climate and rising temperatures spur growth in sales of ice cream

As most of India lies within the tropics and with the country experiencing increasingly hot summers, the consumption of ice cream has been seen to rise during the hot season for the past several years. The average daily temperature across India is 31° Celsius and is constantly rising.

New launches help the leading brands to remain on top

2019 saw an increase in the level of new product development in ice cream and frozen desserts as new flavours and new products with premium positioning and added value. This is part of general attempts by manufacturers in the category to woo increasingly sophisticated consumers with products that respond to specific emerging demand factors.

Plant-based ice cream is launched to appeal to vegans, becomes instantly popular

New product concepts continued to surprise and delight in ice cream in 2019 and these included the arrival of numerous plant-based ice cream brands. With demand for vegan-friendly, plant-based ice-cream projected to continue rising across the country, companies are clamouring to establish a strong position in this strongly emerging niche.

COMPETITIVE LANDSCAPE

Amul remains in the leading position due to innovation and marketing

Gujarat Co-operative Milk Marketing Federation Ltd remained the leading player in ice cream in 2019 as its popular brand Amul continued to perform well, registering double-digit growth despite losing marginal value share. Amul has undertaken numerous initiatives to counter increasing competition in the highly fragmented category and achieve higher penetration, with new distribution strategies at the core of these efforts.

Local players with regional presence account for a considerable amount of sales

Sales of ice cream remain highly fragmented and this is not least due to the presence of numerous local ice cream manufacturers in cities all over the country. These small and medium-sized enterprises tend to be owned or otherwise controlled by India’s regional dairy cooperatives, giving them a strong regional presence, although few of them have managed to expand beyond their home region and none of them has yet achieved national distribution.

Rising costs to continue putting pressure on all ice cream manufacturers

The forecast period is expected to further increases in raw material costs for all of India’s ice cream manufacturers. Among inputs that are expected to be subject to price increases over the forecast period are dried fruit, sugar, fuel and dairy and this is likely to have a major impact on the ability of competitors in the category to generate satisfactory profits.

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