Selling super premium ice-creams in a price sensitive market has never been easy. Steep import duties at nearly 27 per cent also add to the woes of players such as Haagen Dazs, Movenpick and London Dairy when it comes to deriving healthy margins.
They are now seeking lower price points and SKUs (stock keeping units) to garner volume growth by penetrating the market further through retail stores and cafes.
Affordable packs
For instance, Nestle-owned Movenpick, which has a new distributor for the past three years (Nectar Hospitality), is now bringing in 500 ml packs as 1-litre packs at ?950 were a bit too costly for the Indian market.
Tarun Sikka, Managing Director, Nectar Hospitality, said: “The price points of our 1-litre packs were considered prohibitive and affected the perception of the brand.
“We are now getting seven-eight flavours at the retail level in the 500 ml packs to specifically cater to the Asian market as the per capita consumption of ice-cream is still low in India compared to Europe.”
India continues to be a challenging market for Movenpick, which had exited the country in the past.
“We have had FSSAI issues in the past since there has been lack of clarity, but we have to work in this scenario.
“India is a challenging market but we have plans to expand our retail presence along with our cafes and sell about 1 lakh litres of ice-cream in a year,” added Sikka.
After catering primarily to institutional trade, Movenpick is now taking up its retail presence from 74 to 100 outlets along with nine cafes this year.
Volumes have also been sluggish for the Dubai-based London Dairy for the past two years as it was also facing FSSAI issues over the labelling of some of its flavours.
But this summer London Dairy is hoping to make up for it by introducing its mini ice-cream sticks at ?75 for 60 ml, its lowest SKU, in addition to enhancing its retail presence to 3,000 outlets from 2,000.
Compliance issues
After being present in India for the five years, London Dairy is now seeking to grow at 36 per cent. “Trying to get FSSAI compliance has led to erratic supplies for the past two years. But now we have to fight back by focussing on growth through the mini sticks since we believe in staying invested in India. The super premium segment is growing at 18-20 per cent,” said Shweta Shrivastava, Head - Marketing, London Dairy.
General Mills’ plans
General Mills-owned Haagen Dazs, which is imported directly from Arras in France, is seeking ways to garner additional volumes with more India-specific innovations to help it grow faster in the segment. It already has 19 cafes and reaches out to more than 100 retail outlets.
Salil Murthy, Marketing Director, General Mills, said: “We are seeking volumes for which we are working on product innovations specific to India. Since we started the super premium segment in 2009, we have been experimenting with Indian offerings such as mithai and faluda based ice-creams.”
According to market estimates, about 6 per cent of the ?3,300-crore ice-cream segment is pegged as super premium, which makes it a ?150-crore category.
Source :.thehindubusinessline.com
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