The ice cream industry in India has been struggling since the pandemic. Restrictions, lockdowns, myths, taxes, etc. pushed this industry towards a loss. But 2022 brings new hope for it, as the ice cream industry is tilting towards sustainable change and innovation to keep up with what it relinquished. Apart from taste and texture, it focuses on health and wellness. As consumers become more educated about ingredients and the health benefits of a plant-based diet, there is a massive shift in buying behaviour. In both the dairy and non-dairy sets, there is a continued preference for clean-label, low-sugar, and less processed ingredients. The ice cream industry knows now it’s time to innovate and focus on consumers’ needs to regain what it lost during the pandemic.
Overview For two consecutive years in a row, the ice cream industry in India has incurred huge losses with sales plummeting to a record low due to a significant dip in demand and curbs imposed to rein in COVID-19 infections. Being a Rs 15,000-20,000 crore industry, the ice cream sector registers around 70 per cent of its sales in the summer months – from March to September. This year, with the third wave towards the end, the ice cream industry is optimistic.
Due to the pandemic, the industry has not seen even half of its normal sales volumes in the period. With lockdown sales tumbling, almost 12,000 small and large ice cream manufacturers are in serious financial difficulties, and many are shutting shop.
The ice cream industry in India was projected to generate revenues of around $3.4 billion by 2021. But these targets look impossible in a post-COVID world. Industry players say it has been two consecutive dry years for them and they are struggling for recovery this year. Ice cream consumption has fallen by 60–80% in the country.Brands that are largely dependent on ice cream parlours to reach customers are the most hit.
And now, another blow to the industry is that ice cream sold by a parlour or any similar outlet would attract GST at the rate of 18%. This levy on ice-cream supplies with retro effect from July 2017 has led to a near meltdown for thousands of ice-cream parlours, most of which are small businesses.
Furthermore, ice cream consumed at home cannot compensate for the lost market because 60-65% of ice cream consumed in the country is consumed outside of the home. The silver lining for the ice cream industry has been the opening up of the e-commerce channel and home delivery of ice cream.
Apart from the lockdown, the fears of ice cream causing COVID infection have hurt the industry the most. Industry players admitted that they could not win consumer confidence back. Consumer confidence in the product is fragile and the industry would have to come together to dispel the COVID myths.
Optimistic 2022 for the ice cream industryIn the years 2020 and 2021, the business of ice cream was affected by two waves of COVID-19.
However, 2022 presents hope as the third wave is weaving off, so the summer season can be a comeback for the industry. Ice cream makers are really hoping to cover up the losses this time.
Pradeep Chona, director of Havmor Restaurant Pvt Ltd, said, “If the last two years have taught us anything, it is that the only certain thing around us is uncertainty. So my plans for this year are to continue surprising and treating the taste buds of customers with lip-smacking food, festivals, and delicious innovative ice-creams, even if that requires working with shoestring budgets considering the curfew timings and COVID, which is speeding like wild fire”.
Our latest introduction at Huber & Holly is ice cream tacos, which we are introducing this month in 3 unique flavours – chocolate, saffron, and paan.
Gurnish Chhabra, Director of Fab Flavours, wishes for a good summer free of COVID so that the industry can function normally and ice cream consumption patterns increase across the country.
Fab Flavours has developed a lot of new flavours for ice cream and other industries and is going the extra mile to promote new concepts and ideas to the customers.
Going along with this, Manjith Shaju, Founder of Bolmay Cocoa, stated that with the start of a new year, Bolmay has introduced fresh and natural ice cream coating dips. The variety gives flavours, and in the case of ice cream, one can’t even stop counting. Let the dips be in the flavours of strawberry, mango, or white/milk. They will delight everyone. Expanding the plan, Bolmay has also brought sugar-free chocolate coatings for diabetic people, taking the health concern in mind.
While Vikas Agarwal, MD, of DUKES INDIA considers that increased awareness about COVID vaccination and its acceptance amongst people has put the economy back on track. “We have experienced the change and its conversion in our business volume in the last 2 quarters. We believe that sharp economic recovery will result in an upward trend in the ice cream and bakery industries for the year 2022. “
This summer we are expecting growth in the market as the COVID restrictions are less as compared to the last 2 years. The increase in disposable income will also play a crucial role in the growth of the ice cream and frozen dessert industries, elucidated V. Srinivasan, Head of Specialty Fats, Adani Wilmar.
Mirtillo International’s VikasPatil, MD, stated that in this new year, the company will be releasing new ingredient solutions for plant-based ice creams, delicious low-sugar and no-added-sugar ice creams, as well as natural and clean-label emulsifiers and stabiliser systems. “Doing innovation from time to time keeps you alive and sustainable growth, and wishing the ice cream industry all the best in this new year, we expect good sales this year to bring prosperity back,” he added.
Well, this year my whole concentration will be to empower small and medium-scale ice-cream manufacturers to upgrade the quality of their end product by installing ICYTIN’S ICYPHA machine and to help them come at par with the bigger players, informed Nitin Singh, director at ICYTINS Solution (OPC) Pvt. Ltd.
Sunil Pamnani, CEO of Gemni International, stated that this year will see the introduction of rolled sugar cone machines in addition to their existing moulded sugar cone machines, which are among the largest in the world.
Print Express’s Vijay Siyaram Sharma states that as pandemic situations begin to diminish, social conditions are improving. “We, as a packaging supplier, are completely focused on the supply chain to deliver the product on time and at the best quality possible. The rise in the raw materials is a challenge for the whole market, and we are bringing in the best options that could fulfil the purposes of our clients.”
According to Gajendra Bhardwaj, Sampark Infoways of Teetar Design, this year is all about picking up what was left behind and creating something even grander than before.
Businesses are gearing up again after tough times, and this time there are new challenges as well as old ones to address. This year, Teetar is more upfront in welcoming people from different parts of the world to work with us. We are aiming for more reachability and levelling up our skill-set and strategies to cater to a more global clientele. “
Omar Mohammed, MD, Alfah Cashews, derived that Alfah Cashews is supplying 80–85% of the ice cream manufacturers in Kerala and is trying to reach other states’ ice cream manufacturers as well. “We are now focused on establishing storage facilities in major cities so the buyer can get the materials quickly,” he added.
Tectonic changes in the ice cream industry Although the world almost came to a halt during the first and second waves of COVID-19, indulgence did not stop. Instead, it shifted as consumers sought reassurance from the familiar and sought out the delicious as comfort in their homes. The industry saw a move away from single-serve impulse buys, which were replaced by a trend towards multipacks of premium ice cream instead.
Though taste and texture are at the top of the ice cream industry, now, more than ever before, we are seeing consumers looking at indulgence through the lens of health and wellness.
As consumers become more educated about ingredients and the health benefits of a plant-based diet, there is a massive shift in buying behaviour. Plant-based and non-dairy alternatives are popping up quickly to meet this new demand. Also, in both the dairy and non-dairy sets, there is a continued preference for clean-label, low-sugar, and less processed ingredients. The ice cream industry in India needs to innovate and focus on consumers’ needs to regain what it lost during the pandemic.
“However, we did witness a lot of changes in customer behaviour. For instance, more and more people, instead of licking ice creams while lazing around in the park, are now ordering in ice creams at home to boost their moods and enjoy them with the family while sitting on their comfortable sofas and watching their favourite shows on TV,” versed Pradeep Chona.
One of the major concerns is that the news of the 18% GST on ice cream parlours has added to the ice cream industry’s concerns further.
“However, no matter what, ice creams have been and will continue to remain a global favourite delicacy and dessert, and I strongly believe the players who will survive these times will be the ones who will be successful, hygiene-conscious, and continue to innovate to surprise customers with a “Just do it” attitude,” stressed Chona.
India’s ice cream and frozen dessert industry faced an abstruse situation in the last two seasons, which tends to make a strong comeback.
Consumer preference has taken a major turnaround because of COVID, and to cater to this market effectively, innovation with ingredients, health, transparent labelling, and flexible packaging are expected to play a significant role in the Indian ice cream and frozen dessert industry, said V. Srinivasan.
Consumer preferences have shifted dramatically as a result of COVID, and in order to effectively cater to this market, ingredient innovation, health, transparent labelling, and flexible packaging are expected to play a significant role in the Indian ice cream and frozen dessert industry.
He also mentioned that a new trend is boosting the industry: the growing popularity of dairy-free ice cream, which could be attributed to rising health concerns, food allergies, or concerns about animal welfare and sustainability.
Ice cream consumers are one kind of loyalist. They are no longer frightened by the virus, and the suppression caused by the pandemic has pushed the consumers’ inner strength to the limit. No one can predict the outcome of the flow of the market, but as of now, the situation seems to be moving on the brighter side”, adopted by Vijay Siyaram Sharma.
Vikas Patil said, “Understanding the latest consumer post-COVID is very important for the industry to bring it to its pinnacle.” You can observe D2C brands (Direct to Consumers) are doing very well and growing profitably, whether it’s an online platform through their own website, Flipkart, Amazon, or home delivery and parlour sales. “
So, as time passes, it is important to recognise that consumers nowadays expect convenience, and as a result, the ice cream industry should be more focused on catering to this expectation in addition to traditional business and distribution.Also, consumers nowadays prefer healthy options without compromising on taste, so the industry needs to get equipped to offer healthy ice creams.
“Consumers nowadays go for proteins, fibres, low carb, natural fruits, and they also understand the sources of ingredients. This is the future and you will see many new startups and regular brands grow now depending on understanding consumers who still have great purchasing power even in a slowdown. Think about what will happen after 3-5 years. Industry should prepare for these futuristic customers.”
Vikas Agarwal defined the last 2 years as very difficult for ice cream players. He added that the pandemic affected crucial season times, i.e., summer in 2020 and 2021, but that this year the ice cream industry will grow exponentially.
With a changed consumer mind set, social media reach and experimentation have led to new formats, new flavours and innovating new categories like vegan, dairy free, keto ice creams etc. Overall, we believe it’s an exciting time for the industry.
Agarwal said, “We are also keeping a close eye on changing consumer behaviour and addressing those changes swiftly through our customised solutions, sourcing and building an entire value chain. This will help us to remain ahead of the competition and relevant to the industry, “ he added.
Gurnish Chhabra is sure that this year COVID will be accepted as a part of our lives. “Everyone now wants to get on with life and start being normal. The UK has also announced the withdrawal of restrictions. I think this should be a good year for the industry as more and more people are moving out, travel is increasing, and restaurants and markets are getting fuller. In my opinion, the industry should do well this year.”
The ice cream industry has expanded over the years. For a business to grow and reach its potential, changes are necessary.
“Obviously, the basis should be the same, but by bringing variety, by introducing a new range of products, we can lead the business from various points of view. In the case of Bolmay, it will always bring different ranges of products. This can be said as a growth plan too, “said Manjith Shaju.
Ice cream is an ever-loved product for people worldwide. Even though the market was filled with big industry giants, people still accepted and loved new brands that brought taste and uniqueness to their appeal.
“We see that people are opening up to different options when it comes to the category of ice-cream. They are more attracted to natural products and are open to more vegan or organic options too. People are becoming more health-conscious and environmentally-aware. So, there are a lot of ways to experiment in today’s ice-cream business”, explained Gajendra Bhardwaj.
Innovation that can enhance the ice cream industry The ice cream industry, just like other industries, has its own set of challenges. The only way to survive here is by being agile and thinking outside the box.
Pradeep Chona said it is important to keep the innovation game on – be it products, presentations, or packaging. We need to be on our toes to think ahead of time and give customers what they probably don’t even know they need right now—an experience!
He revealed that the ice cream industry needs to cash in on home comforts. With home delivery gaining so much pace, it is very important to develop products that can be enjoyed in the comfort of one’s own home.
Also, the focus on Gen Z is vital as, in this digital age, we can’t ignore the 18–21 age group, which loves to try new things and is always eager to share their experiences on Instagram. It is important in these times to be relevant to the changing trends and be a leader.
Vikas Agarwal illuminated that they are driven by their business philosophy, which is to “help clients to succeed and the rest will follow.” Dukes has innovative products pipelined for the next few years that will cater to industrial clients and their consumers and deliver a great ice cream experience.
One way to grow the ice cream industry is by giving quality ingredients, innovative products and by keeping competitive prices for our clients, resulting in lower costs for end consumers”, added Agarwal.
While Vikas Patil said, “The ice cream industry is an ocean of creativity where new flavours are introduced every month, every season, but only flavours will not work if we have to do something extraordinary.”
Now is the time for the ice cream industry to introduce new products like clean label, 100% natural, no added or low sugar, or sweetened naturally with things like honey, dates, organic jaggery, etc. Ice cream with high protein, gluten free, enriched with dietary fats, loaded with good fats like DHA, omega 3, 6, and 9, is also becoming necessary. Not to forget, lactose-free and plant-based ice creams like oats and almond milk have become popular.
“Let’s use our industry’s example of creativity to engage our consumers with enthusiasm and interest,” added Patil.
“We at Fab are always there to serve the industry with new innovative and trending flavours. We know vanilla is the mainstay of the ice cream industry, but with the changing tastes and incomes, people are trying newer flavours,” said Gurnish Chhabra.
He added, “People are aware of the new trending flavours all over the world, and we in India have a rich heritage of flavours and tastes.” Our teams of flavourists are constantly working on flavours with our ethnic tastes and also international ones.
“Variety in the product line gives options to the customers. Any time is best to introduce new products to the market. Their success is dependent on the reach and supply of the product. A specific product requires multiple hits and trials before it’s completely accepted by the consumer.
“As far as the current situation is concerned, this could be a very good time to diversify the market’s consumption into new products,” added Vijay Siyaram Sharma.
In the current scenario, not only the demand for ice cream but also the demand for any indulgence product has been rising in recent years. And it has been noted that ice cream is the most popular product among others. From Bolmay’s end, new varieties will always be brought into this sector. Along with the ice cream industry, Bolmay will always look after people too. What’s new or what exciting do they need, whether it’s about different flavours or different products “, elucidated Manjith Shaju.
While V. Srinivasan said, “We are about to extend our basket with a range of products which tend to cater to the problems evolving in the current market.” Consumers are shifting towards non-dairy products for many reasons, but they also desire the same rich and creamy outcomes, which gives us room for development.
“The raw material prices are at a whole-time high, which has pushed the industry on the back foot. So, we, as an organization, are working on products that can provide a solution to the problem”, he revealed.
“We are trying to understand changing patterns in consumers’ eating habits and preferences in general to devise better approaches to appeal to them. The ice cream industry is one such industry that we have been working in frequently, and we believe we are developing the right outlook towards this field to truly understand its changing needs”, explained Bhardwaj.
Omar Mohammed informed us that they are planning to launch caramelised nuts for the Indian ice cream industry. “We will be testing this with our existing customers, and we will launch it for the Indian ice cream sector.”
Company’s Mantra
Huber & Holly Ice cream: To develop the best products across its brands, this company’s single focus mantra is the customer and only customer!! For the welfare of the customers, they use the best ingredients and test them in their own labs, after which they are sent for trials first amongst employees and then piloted across a few stores. They launch new products at Huber and Holly and open them to the public after total satisfaction, because the customer is not king, but GOD.
Fab Flavours: The company works on a lot of fusion concepts, as it wants to offer customers unique and signature flavours for their products. They work very closely with the clients to understand their needs for the flavours and make products suited to them. Fab’s market research team keeps up with the latest trends in the market and helps develop flavours accordingly.
Dukes India: is a company that takes the strategy development process seriously. It all starts with an in-depth understanding of customers, consumers, and industry, followed by the relevance phase, i.e., what opportunities are relevant based on the company’s strengths, they pursue it and implement their strategy. Over time, the process has transformed the organisation into one that is more agile, customer-centric, and forward-thinking. That is why Dukes India has been able to add value to our clients in a way nobody can match.
Mirtillo International: For this company, consumer trends are the most important factor in developing your company. Flavour selection or flavour launch based on sensory feedback from experts and professional tasters always provides an accurate vision for reaching the right consumers. Mirtillo is already the best at this by introducing new flavours every month and season. The industry can, however, be successful by looking for repeat purchases or immediate growth in specific flavours.
Print Express: For this company, its products are as necessary as any given nutritional part of the product. Packaging is critical for the transportation of goods.The potential and unfulfilled demands in this industry are a motivator for our company, and we strive to move ahead with the same enthusiasm as before the pandemic arrived.
Bolmay Cocoa: Every brand has a story, and half of it is revealed in their products. And as Bolmay’s products reach the people, they unfold half of the story. There are many reasons behind Bolmay’s growth. But the huge credit goes to Bolmay’s team, the great team they have built.
And mainly due to that team’s different systems and methods, Bolmay has reached the end of people. It has been serving people with a rich taste of its products, and so Bolmay brings a little smile through just a few clicks.
Adani Wilmar: is an organisation that is constantly striving to improve itself and meet the needs of its customers. With the global pandemic increasing, so do the production costs for clients.
Hence, the company is working on a new formulation to strike a balance between the cost and quality of fats. During this pandemic, Adani has introduced a number of products to its ice cream fat portfolio and is continuously evolving according to customer needs in the future. It has a well-established R & D setup and always takes care of clients’ needs and develops products to best suit their requirements.
ICYTINS: Their products look out for client satisfaction, which you get from all the visitors from all over the country and abroad too, at the time the machine is in operation, giving out the end product, which clearly states the technology, development of the integrated system, and strategy.
Gemini International: The company’s goal is to be the most important partner in the success of our customers and to ensure that we grow together.
Teetar: The company Teetar handles the entire branding of businesses and keeps in mind that in everything that they create, it projects their business’s core values through designs. While doing so, consumer psychology and current trends have to be kept in mind. A detailed analysis of the product, what it is all about, is also necessary to bring out the right designs to represent it.
Alpha Cashews: The company’s decisions on ice cream are predominantly based on the ground level insights that they get from the ice-cream sellers. More than market studies or surveys, they bet on the ground reality and encourage ice-cream manufacturers to look at a cashew supplier who is in the market with a reputation for standards and not just look at the price alone.
ICT insights
This year, the ice cream industry is going to experience a period of great creativity and innovation. The impact of the coronavirus, the lockdowns and the restrictions on the hospitality industry have led many people to consume ice cream at home. In this regard, it has become of the utmost importance for manufacturers to build new bonds with these consumers.
During the last few years, ice cream trends have shifted toward greater flavour variety and complexity and the search for new textures that are fun, original, and daring in an attempt to dazzle consumers. Manufacturers have set off on a quest to find the “perfect ice cream”, a goal that requires combining new flavours (without forgoing the classics, such as vanilla and chocolate, which are still attractive to many consumers) and trying out new and surprising textures. And not only that – they have also had to adopt a transparent, healthy, and ethical approach when choosing the ingredients for their formulations. Low sugar formulations are also gaining importance, and artificial sweeteners have steadily lost ground. Erythritol, stevia, and monk fruit are now the top three choices in low sugar and sugar-free ice cream.
Holistic food exclusively composed of natural ingredients free from additives and artificial sweeteners is a macro trend that applies to most foods. For ice cream, consumers also tend to look for products manufactured with simple ingredients that offer functional benefits. This is why new vegetable product formulations, natural sugar substitutes, and nuts are becoming more popular. In this regard, for example, we are seeing that some ice cream manufacturers are launching their own certifications to strengthen concepts such as Gluten Free, while others are reinforcing their good for you claims with healthier preparations such as products free from preservatives, low in fat, or that include fresh, top-quality ingredients.
The ice cream industry is also following the high protein trends, with the percentage of ice creams with added proteins rising from 1% to 2% during the last 4 years, according to data by Mintel. With the goal of continuing this trend, ice cream manufacturers are looking into different healthy protein options, particularly vegetables, as alternatives to dairy proteins, and nuts such as peanuts and peanut-derived products play an important role.
As we have seen, dairy-free formulations, low sugar recipes, transparent labels, and ethical ingredients are some of the top trends in the ice cream industry. Nuts and nut-derived ingredients are fully aligned with many of these ice cream consumption and manufacturing trends. On onehand, they boost the nutritional value of formulations, and on the other hand, they perfectly mesh with many of the new drivers of innovation in the industry. Henceforth, amends and innovation are what will change the course of the ice cream industry in this pandemic-effected world.