June 24, 2020
Who knew that the lethal Coronavirus would cause chaos in several countries of the world, including India? Every sector is facing the brunt, but the ice cream industry has taken the biggest blow. After the PM declared a lockdown on 24th March as a preventive measure against the pandemic, the hopes of a successful summer sales were crushed. For ice-cream manufacturers, the month of March, April, May, and June is the peak season for their products. They get maximum sales during this time of the year but unfortunately, COVID-19 and lockdown played spoilsport. What seems more worrisome is that it is unpredictable as to when things will return to normalcy and the industry looks to a bleak summer sale.
The ice cream industry was all set for the sunny days to set in with the purchase of stocks and inventory. But with the lockdown announcement, there were hardly any vendors or consumers for the existing stocks. The love for ice cream has grown ever since the days when parents treated their children over good results, or dessert and sometimes, after dinner walk where kids demand having the cool treat. Along with children, adults get chance to pamper themselves too because of this amazing chiller full of flavours and variants with season availability.
With keen observation of the present scenario and the suffering of ice cream industry, Ice Cream Times approached manufacturersto enquire about their perception of this lockdown and its severe impact on the industry. Ice Cream times spoke to a few of the industry stalwarts fromall over India and recorded their views on COVID-19 falserumoursabout the consumption of ice cream during the pandemic, lockdown effect on the season and lot more. Have an insight to understand how the pandemic has disrupted the ice cream industry and ruined the hopes of a prosperous summer run.
Rumour about COVID-19 and ice cream
Just when Coronavirus was spreading worldwide, false rumours were doing the rounds on social media linking ice cream and other frozen products help to spread this disease. The rumour of consuming ice cream causes Coronavirus or ice cream is a carrier of the virus and so on is being circulated. The misinformation that is being transmitted to the people has badly impacted the industry. The false information creates apprehension about the safety of the product. Though the UNICEF and IICMA clarified the false information circulated but the rumours damaged the reputation of ice creams that affected the consumption ratio and caused slump in the sales margin.
UNICEF Deputy Executive Director of Partnerships, Charlotte Petri Gornitzka clarified the false rumours because any false information amidst the pandemic situation will only fuel severe chaos and anxiety for all. She quoted “However, while many people are sharing information about the virus and how to protect against it, only some of that information is useful or reliable. Misinformation during times of a health crisis can spread paranoia, fear, and stigmatization. It can also result in people being left unprotected or more vulnerable to the virus. For example, a recent erroneous online message circulating in several languages around the world and purporting to be a UNICEF communication appears to indicate, among other things, that avoiding ice cream and other cold foods can help prevent the onset of the disease. This is, of course, wholly untrue.”
Even the Indian Ice Cream Manufacturer’s Association (IICMA) press release stated that ice creams and other frozen foods are not the carriers of the said virus. IICMA would like to reassure and inform everyone that ice-creams do not carry or spread Coronavirus as the virus cannot survive the temperature below minus. To avoid the spread of coronavirus and to stay safe, we all need to keep maximum hygiene, frequently wash our hands, avoid touching the face.
So drawing your attention back to our industry players who amidst the dark times still spoke to our correspondent, show that they still have the flame of hope burning and shall overcome this tough period. Abhishek Narsaria, MD of N. B. Ice creams who is based in Ranchi and dealer of
Rollick ice cream brand said that the deadly coronavirus hampered his business. “Not only has the sales dipped but the entire frozen industry has come to a standstill. People are scared to consume ice cream this season.”
Gujarat based, Bhupat Bhai Bhuva from Amreli, MD of Sheetal Cool Products Ltd quoted,“Some people are barely literate and tend to believe such rumours. But I can say that approximately 10 percent of sales were affected at that time.”
Hemadri P. K. who is the Proprietor of Venus Enterprises located in Mysore selling Natural ice-creams stated that the false rumours about Coronavirus did cause a dip in sales. “Today social media has become a significant aspect of human life and can be used in both good and bad manner. But in this case, social media was used negatively by some miscreants to spread rumours. I raised my voice over this issue on 28/01/2020 and requested the government to take severe action against people who spread rumours under the IT Act no 21 of 2000.”
Hailing from Patna, the Director of Golden Dairy Products Pvt Ltd, Neeraj Tahalani said, “Initial ly, a lot of rumours were spread about not having cold products which also included ice-cream and due to which minor sales must have been affected” and the same point was reiterated by Kiran Hegde, Manager – Operations of Kool Marketing India Pvt Ltd, Pune.
Another dealer of Rollick brand from Kolkata, MD of Prestige Ice Creams Pvt Ltd, Gaurav Khemani felt that the rumours did not affect sales as compared to the lockdown. The rumour went around for a few days but then most ice cream companies reacted and clarified the information which did not impact sales. Sameem Ansari Erukulangara, MD of E. K. Foods Pvt Ltd based in south India also shared the same view.
Harinder Kumar, MD of Kamal Milk Foods located in Chandigarh that sells Lotus Ice Cream faced a serious dent to sales because of the rumours much before the lockdown was implemented.
Karim Kabiruddin, Exec. Director at Health Food Product Pvt Ltd from Odisha,are associated with the Fun India Dairy Ice cream expressed that “once the market opens up after the lockdown, we’ll assess how badly the sales margin has dropped. Now since people got to know about the coronavirus pandemic, they began to panic and some started false rumours about it linking the virus with ice-cream and cold beverages.” Hashim Basheer, Director – Operations at Lazza Ice creams another popular brand in south India echoed that sales were impacted due to the false rumours but things will improve eventually.
Lockdown dampened the summer plans
The Indian ice cream industry is worried over two major issues, the lacklustre demand for ice cream this season and the financial setback they are bound to face post lockdown. With negligible sales and inventories in the cold storages, the companies still have to pay their taxes, salaries, loans and other fixed expenses. The industry was experiencing the heat of rising prices of skimmed milk powder (SMP) but now with this pandemic and lockdown, it has been affected badly. The ice cream industry’s plans for the summer season have become futile as several companies have already purchased raw materials, packaging products, ingredient supplies as a nature of circulation of ingredients for future use.
Tahalani has never seen such a situation in India where everything has completely halted. COVID-19 has spared no strata of society, rich or poor and all are experiencing anxiety in this environment. Hemadri added that though the entire country is in a locked down position, ice cream industry has been affected due to the seasonal business in summers. “And COVID-19 began in the peak season wherein we have lots of inventory of raw materials and packing materials as well as finished goods (ice creams). So payment for suppliers and maintaining finished goods is a tough task for us. And the government has directed to pay full salaries even in lockdown which is again a big financial burden”.
Narsaria said that the lockdown resulted in a psychological setback and financial loss. “The sale is nil whereas the pressure to keep the cost of funds low has impacted us at every level. It is very difficult to even meet basic costs this season”.Ansari, Hegde, and Bhuva claimed just like every other company in this industry, the business has been affected by the lockdown. Everyone is facing a tough time to manage the business and money. Even Basheer agreed to this point that the lockdown has severely impacted the sales. All have to gear up for the post-lockdown phase that shall be even more stressful.
Khemani said that with the lockdown starting in the summer season, “and with 10% of our annual sales coming from the first month of summer, we are feeling the heat. It has affected the profit figures for the entire year.” Kumar also expressed something on similar lines, his business activity has come down to a standstill with sector-specific overheads and fixed expenses that is making the situation worse.
March, April, May, June are the months where ice -cream sales are its peak. Kabiruddin stressed that salaries have to be paid to the employees and then there is inventory cost. “But with no sales and profit, how will the person manage it all. There are other expenses as well as some people have got loans and EMIs to pay and even the government has just given three months moratorium to them. But then eventually one has to start paying those amounts and by then the monsoons will arrive and it will become a financial problem for them”.
Lockdown impact on the summertime
Various industry players had many plans this summer for their products, but the Coronavirus pandemic has put a brake on them. From a business point of view, the ice cream industry has been adversely impacted. The magnitude of this lockdown can only be ascertained when everything returns to normalcy. The lockdown began exactly when the sales of ice cream start picking. And no one has a clue when it will be over, when the summers are gone, the monsoons are arriving. If that’s the scenario, then the ice cream industry is in a huge crisis. The majority of the industry sales happen during these peak months and the annual profits largely depends on the summer season.
As Narsaria explains that this season saw an increase in SMP and palm oil in the beginning due to which, the entire industry had to hoard the raw materials and a lot of funds were blocked in this. Nevertheless, lockdown followed soon leading to blockage of heavy funds and no inflows to equalize it. The interest in the cost of funds has started. The start has not been good, plus there seems to be no respite from coronavirus in the near future.
Bhuva shared that the lockdown has affected the nation’s economy as a whole. And on whole, the ice cream industry has been severely hit with barely any sales. “I am sure the seasonal sales have touched a low point margin.”Khemani hopes that sales will bounce back soon once things reopen but overall sales have been hit. Whereas Hashim anticipates the ripples of this lockdown will bring slow-down in the entire season.
Kabiruddin feels that there are 20 percent chances of ice – cream sale this summer but 80 percent loss has already occurred. Ansari and Hegde have a similar point as one-third of the sales turnover of FY 20-21 have been affected because of the lockdown. Since the summer sales used to take care of the entire expenses for the remaining 8 months, the situation is quite grim and bleak.
Kumar dreads the worst could happen, “amidst the lockdown with the cases increasing daily, it’s difficult to predict when we could expect business activity to resume. So, we can’t entirely dismiss the possibility of the whole season wash out.” Tahalani said no one knows when the lockdown period will get over but surely it has affected the ice cream business in a big way. “Nothing is better for ice-cream sales during the summer months of March, April, May, and June in our region.”
Likewise, even Hemadri shared the same feeling that ice-cream peak season has been affected by the Coronavirus outbreak and lockdown. “People stopped consuming ice creams from March itself, and the government announced lockdown from March-end and it is likely to continue for some more time. Due to sudden lockdown, this season business is gone and we need to wait till next year for big sales as our company is a MSME industry. A tough task lies ahead of us in terms of payment of suppliers’ bills, EMI’s, salaries, and other expenses. Financial crisis may occur in the country, so not sure if people will show enough interest to consume ice creams or not.”
Plan of Action by Players
If the ice cream industry does not function well this year, it will impact the lives of lakhs of people connected to this industry. Not just will it affect them and their families; it is a direct blow to the industry growth pattern, momentum, and economy.Everyone does follow a plan of action and even in such turbulence, our ice cream manufacturers have decided to gear up for the post-lockdown phase (certainly with change in plans, of course!).The past cannot be changed but the future can be created. With hardwork and determination, every challenge can be accomplished.
Narsaria asserts to make the most of this lockdown. His company plans to emphasize getting in touch with all their stakeholders, namely the dealers, wholesalers, raw material, and packing material providers as well as all employees. “Also, this is the time when companies can strategize in consultation with our stakeholders and come to a win-win situation for all.”
Khemani’s focuses are on penetrating the markets further and widen the distribution reach. “We are also increasing the strength of our sales team to help us adopt a more aggressive approach in the market right from day one of re-opening.” Tahalani’s aim is on sales, “the sales of our ice cream products are a must. We plan to offer the best from our end to promote and state that we are back in the market just like in the past.” As of now, Basheer is concentrating on more online and door delivery tie-ups.
Every entrepreneur will agree to the point that Hemadri makes. He said as living in a nation where crores of rupees are spent for building statues and huge amount of taxes are levied on consumables but there is no scheme for the business class during financial crisis. “The government of India should come up with an economic package for taxpayers(business class) so that we can face post lockdown issues. But as an entrepreneur, I need to manage my business post lockdown efficiently but would appreciate the government aid in terms of monetary considerations.”
To tackle the economic woes, Ansari may reduce the operating expenses such as salary, advertisements and promotion expenses, and other expenditures. The motive is to recover the losses and then bounce back. Kabiruddin indicates that due to rumours and lockdown, sales have dropped. “But once the market is open, it will become very important for us to educate our customers that there is no harm in eating ice – cream. We’ll have to wait and see the market scenario and plan accordingly.” For Bhuva, awareness is essential and so their focus is to create awareness among the people. “We are following all the norms directed by the government. All our plants are sanitized at regular intervals and we plan to maintain post lockdown as well.”
Hegde has several ideas in the pipeline and will work with his teams in the company for implementation. “We are working on various ideas to deal with post lockdown.” Kumar described that they have new products in line for customers and are working on it. “We will have to use our marketing and product placement efforts to the maximum to fast track the recovery process. We are also in the planning stage to come up with new product offerings to generate interest among our customers.”
Message to the government and readers
Many players at the regional or state levels are in dire need of some incentive or financial help from the government. The government authorities should consider the needs of the ice cream industry which has been worst hit by the lockdown. It needs to provide some relief to the industry or else it will become difficult to sustain for many manufacturers and companies post lockdown.
The following paragraphsare a clear and genuine message to the government and the people, readers, and customers. To summarise everyone’s comments in a single statement, be optimistic in every situation, whether good or bad and there are possibilities to explore. Just don’t give up during rough days!!!!
Bhuva firstly praised Ice Cream Times for its initiatives for this industry. “This publication is doing the right thing by bringing about awareness and providing valuable information to the ice cream and allied industry. The ice cream industry has suffered a loss because of this lockdown but then now everyone has to come together for solutions that will alleviate the problem to a certain extent. The businesses have been impacted, unemployment ratios increasing due to no income and it is a very difficult scenario. If the government declares some incentives to the industry, then that would help everyone to recover the losses.”
Hemadri believes in the ‘work smart’ principle. He said, “Don’t give up work smart until you succeed. Ups and downs will come and go, and through collective efforts, all of us will emerge out of this crisis. And remember, amidst all this, we need to plan properly and take our companies towards success once again.”
Tahalani spreads positivity and believes that things will work out well. “Let’s be POSITIVE and hope for the best. Sooner it will be over soon and once again we all are back with a bang.” Hegde emphasizes everyone to stay calm in this chaos. “Keep your cool and think with a clear vision of how we can come out stronger out of this pandemic.”
Following on the same lines, Kabiruddin said, “We need to have patience and not panic. There is a lot of stress but if the government could consider the ice cream industry situation and give us some relief because summer is the period where we have a good number of sales”.
Ansari expressed that the government should be made aware of the need of the hour to protect the MSME sectors, particularly the ice cream industry across India. Khemani also echoed the message of being hopeful. “These are testing times for us, stay positive and we will all get through this together. Summer will be hotter and longer this year.” Basheer shared that keep the reserves and find-out new arena for selling directly to the customers.
Again Narsaria reiterated that consumption of ice cream does not lead to coronavirus. “We as corporates also understand our responsibility towards the society and have been doing every bit to support the government and people of our country in the best possible way. Also, we understand it is our responsibility to take care of all the labourers and employees associated with us in these hard times by compensating them as much we can. We unitedly can support each other and will get through the virus scare globally.”
Kumar requests to the people and consumers not to believe any false information regarding ice cream products. “These are unprecedented times for the whole industry which would require us to innovate on a whole new level to recover as soon as possible. And we would also like to appeal to our esteemed customers to not give importance to false and unverified rumours concerning the consumption of ice cream. You can continue enjoying ice cream and other cold consumables as always.”
Conclusion
They say that ‘After every storm, there is a rainbow’ and this Coronavirus pandemic is no less than a storm. So we all should hope for the best and work at making things right. The consumers’ mindset towards ice cream has to change so that they can consume it without hesitation. Experts of the ice cream and allied industry can share their opinions and talk to media about the false conceptions created around their products. A positive momentum needs to be created so that this industry can bounce back to its original magnificence.
As a media and publication company, we want to help the industry as much as we can. After lockdown, we do not want any ice cream company to shut down, the unemployment ratio stays low, and there is income in every household. We appeal to the government for some financial relief this year as a lot is at stake in the ice cream industry. Ice cream times thanks all the interviewees for their precious inputs so that the industry stands UNITED.