After a completely washed-out summer in 2020 due to the pandemic-induced lockdown, ice-cream players were banking on a strong revival this year. The sector had foresighted that early onset of the season, projection of a harsher summer in the country this year and an uptick in the out-of-home consumption channel would upsurge season’s sales. But the battering second wave of covid is dribbling the hopes of ice cream manufacturers.
The organized ice-cream industry in India was projected to grow at a CAGR of 18-20 per cent during 2019-2025. But the pandemic has put brakes on the category’s growth last year. Industry players are hoping to get back to double-digit growth and expected the industry to achieve a growth of 12-13 per cent in 2021.
For the second year in a row, the lack of government intervention to boost the sector has led to a loss of market sentiment for ice creams and frozen desserts during lockdowns and curfews. With almost 12,000 small and large ice cream manufacturers in serious financial difficulties, the time has come for most of them to shut shop. Research has shown that people’s sweet tooth cravings happen more when a person is at home rather than at work. However, ice cream is one thing that gives smile, happiness, pleasure, and immunity to the people but is being avoided in myths and fear of catching a cold or cough – the premier signs for COVID-19.
Resurgence of Covid cases have made the players a bit cautious, the industry expects online sale and take-home packs to continue seeing strong demand on the back of rising in-home consumption.
With acceleration in adoption of digital platforms, ice-cream players are also increasingly focusing on reaching consumers through the e-commerce channel. Ice cream companies have joined aggregators such as Swiggy and Zomato to bring ice cream directly on doorsteps of customers.
The Western world had faced similar situations of lockdowns and slag in businesses, yet the ice cream demand never faltered. Why? Well because over there, online sales and E-commerce platforms have been ongoing platforms for some years and the ice cream market has been exploiting them. So even during the pandemic and staying back in the safe precinct of home, consumers enjoyed the coolness of ice cream in the heated situation of the corona.
In a comparative study, it was found that the Indian ice cream industry faced the flak of fake rumors, and relating the covid infection unnecessarily with ice cream did dampen its sale. But awareness is the toolkit here, and many big ice cream companies have taken on to slit anecdotes and spread its sale via online marketing.
The online ice cream sale in India vis-à-vis western market
When grappling with the uncertainty of the COVID-19 pandemic, many consumers in Europe and the USA turned to familiar and comforting indulgences like ice creams. As consumers’ associate ice cream with comfort – ice cream manufacturers in western countries forged bonds with consumers. With kids at home and not in school, mom stocked up on containers, which prior to the pandemic were anemic in sales at best.
In western countries coronavirus has led to significantly increased ice cream consumption and consumers are choosing to splurge on premium offerings as they seek out more opportunities to treat themselves to an extra-special dessert during such uncertain and emotionally exhausting times.
Unfortunately, it’s not the way you want to grow the category with this devastation, but it’s absolutely had a positive effect on sales online.
While in India Ice Cream market share has been increasing, but due to less availability of infrastructure growth rate it is still affected. “But the online sale of ice cream is increasing but limited to few top cities only just because of lack of infrastructure because ice cream cannot be sold without cold logistics”, stated Sudhir Shah, Managing Director, Scoops Ice cream, Hyderabad.
In India, the online sales of ice cream are still in the developing stage and this is what backfired on the manufacturers. Before covid, no one had thought that the need for online market was vital, as it included numerous surplus costs of packaging, then to shelf-life and to deliveries.
Perishables like fresh vegetables have been selling online for a while now, but the ice cream was too difficult to handle till it was packed in insulated bags that stop it from melting for 40 minutes. Big Basket and Grofers are selling ice cream online and other digital grocers are expected to follow, further supplemented Shah.
If the right marketing strategies are adopted Indian Ice cream industry also can perform very well. “But comparing it western world shows that we are still very far behind”, said Hashim Basheer, Director Sales & Operations, Teejan Foods Pvt. Ltd.
This because there are lots of restriction from the local self govt and executive authorities, as they have not categorized ice cream as essential products sot ice cream movement gets restricted during the lockdown.
Basheer said, “If the government is supporting us then we will definitely be making more sales and business as what the western world did in the last lockdown. Ice cream is a perishable dairy product and indirectly dairy industry gives livelihood to farmers. Hence, sugarcane farmers, dairy farmers get support from the ice cream industry. So the govt has to give us a priority to ice cream and not impose restriction on it.”
“Yes, we can follow the steps and sale figures of western companies, but this can be done only if there is no break, no logistics issues, and no infrastructure issues. These are the reasons why ice cream sales have not been good during pandemic”, explained Girish Pai, Director, Natural Ice cream.
He revealed that last year many companies having dairy products were able to sell their ice creams behind the curtain. Schemes like if one purchases ghee or paneer then they had to purchase the company’s ice cream came out to be a very good idea of a sale.
As ice cream is not taken under essential commodity most companies have had restricted movement and not been able to transport it on time and the second reason is the existing infrastructure and cold chain logistics for general that is also not strong.
Ashish Nahar, Director, Fun India Dairy Ice Creams, substantiated that if online platforms are more efficiently used and tactical marketing is done thereby making an online sale of ice cream user friendly, we can also achieve great sales online.
Shilpa Seth Bhambri, Creative Food Consultant, Baskin Robbins India, said, “The Indian ice cream space has further entered into a fuzzy, comfortable eating zone, prodded by the change in consumer eating patterns brought on by the lockdown lifestyle.”
Last year during the pandemic, two factors played an important role in online sales of ice cream, firstly the safety and then the availability of a media (online delivery platform) to take one’s product to the consumer.
“Generally in India, there always have been hygiene issues when it comes to manufacturing of food products. And unhygienic manufacturing practices have particularly maligned the ice cream industry to such bigger extent than we think”, articulated Aniruddha Chitale, Chitale Ice cream.
He also added that because of people’s preference to eat Mithai rather than Ice cream which was made a villain thanks to the negative publicity.
As compared to last year’s pandemic, the western countries had advantages- that of good hygiene practices followed in general by all – in the Ice cream manufacturing – and hence people perception being that ice cream is a safe product to have (remember it was winter time last year in the western world during the onset of this pandemic). Also as the western ice cream companies had a better and stronger digital backbone, their online sales and delivery services were very much effective.
Chitale highlighted that the western world capitalized on this strong digital backbone to sell their safe and hygienic ice cream, whereas here in India, the ice cream industry struggled due to unwarranted rumours, and the attitude of perceiving ice cream to be unhygienic and disease-causing.
While the ice cream brands in India that were apparently healthy and hygienic didn’t make good sales due to lack of a proper digital channel to reach their consumers.
“We think Indian Ice cream industry can definitely perform well with safe and hygienic manufacturing practices along with a strong digital sales setup. This was the sole reason why Chitale Ice cream was able to serve their customers last year even in the adverse situation of the pandemic”, proudly stated Aniruddha Chitale.
Hashim Basheer clarified that sales in the Southern part of India weren’t much affected, in fact, Lazza did not have many hindrances in the sale and the company had opened all the access for selling ice creams.“There are many benefits to go online, ice cream companies need to intensely enter the e-platform market as it directly connects them to the customers and also discounts and other benefits can be given directly to end consumer”, highlighted Sudhir Shah.
Breaking the Ice – The online sale in India
Despite taking a major hit due to the pandemic, several ice cream manufacturers took the challenge as the silver lining for the industry. Why? Well, they moved a step ahead and ventured into online sales that gave a major boost in take-home consumption.
Traditionally, the impulse category accounted for 60% of ice cream business and 30% consisted of take-home. While this was reversed in 2020, this year, and the companies aim to keep it (take-home) stable. But the industry is facing headwinds due to rising input costs, such as freight and packaging material. It will, however, has to be absorbed by the industry.
“Pandemic has made the customer feel safer to get ice cream delivered at his doorsteps and hence online business is growing. It is also easier than before because so many third-party food delivery companies are active in India like Swiggy, Zomato, etc.”, said Sudhir Shah, who is also the President of IICMA.
“There has been a surge in the online sale as people prefer ordering food more than going out and attracting disease”, agreed on Aniruddha.
On the same line, Ashish Nahar established that there has been an increase in online sales but not as good as compared to western countries. “But if we have good source we can also achieve record sales in this segment,” he said.
Shilpa Seth Bhambri, reproached that the sales of ice cream sales are not in line with pre-covid times, but there has been an improvement in the online sales as compared to last year after the covid onslaught.
“Digital and online sale of ice cream this year is on rise and that is why we have created our own portal, which is on pilot run and we are upgrading it to the next level”, said Hashim. “We have listed ourselves to all the online channels like Swiggy Zomato Jiomart and all the local online delivery partnerships or agencies and getting reasonable good sales also, on the online arena” he added.
Girish Pai elucidated that initially the sales was normal, but from Feb it has shoot up to 20% to 40%. At present the sales have not come down the sales are steady not too high nor too low.
He said “But if we talk about current sale it has been increased by more than 50%, because sitting in lockdown position everyone would like to have ice cream and chill. And Ramzan has been a big booster for the sale of ice creams because in the Muslim community they want something which is chilled and that too made up of milk”.
Kold Seal Quality Head, Parvesh Kaushik said that “We are working as cold chain logistics service providers for delivering ice cream online. Our delivery team takes input from the customers about the products being transported and accordingly analyzed the requirements of the containers.” Also, the temperature and other settings required for a particular product are considered for providing the solutions. There are certain facilities that are meant to ease the e-commerce process of customers, he added.
Upgradation of Online Portals– For Better Sales
One of the de-merit of online sales are that in the 2 tier and 3 tier cities there is an obvious absence of food delivery companies and it is of utmost importance for the ice cream companies to develop their own network for doorstep delivery of ice cream, added Sudhir Shah.
Baskin Robbins has categorically focused and explored online sales possibilities via its aggregator partners and various digital platforms. It has worked hard with dedicated research and development, repeated trials, and created a whole new range of ice cream-based desserts, flavours, and thick shakes for the home-bound customers. These are dispatched with cooling gel packs and sturdy/secure packaging to the online buyer.
Shilpa Seth Bhambri said that the particular need of the hour for the ice cream industry is the creation of a Blue (chilled) delivery zone, specifically for the frozen food/ice cream suppliers. The service portal would have the infrastructure to handle and dispatch the frozen or chilled goods, which is the growing need of the times. Handy thermal bags, cold cabinets, gel packaging cushions to be part of the delivery portals dispatch and transfer set up.
While Chitale is also in process of upgrading its digitized sales platform, Lazza sale is on rising as it has its own portal which is on the pilot run and upgrading it to the next level. “We have listed ourselves to all the online channels like Swiggy Zomato Jiomart and all the local online delivery partnerships or agencies and getting reasonable good sales also, on the online arena” evaluated Basheer.
Fun India Dairy Ice Creams have also tied up with other online platforms for ice cream sales but according to Nahar, there is very much scope for increasing online sales if we have more efficient source specialized for ice cream.
Packaging essentiality for Online delivery
Selling ice cream online is a tedious challenge. It is very important to have improved anti-melting ingredients to slow down the melting point of ice cream for easy delivery.
Praveen Kumar Akula, Pan India Head of Sales & Marketing, Halcyon Food & Beverages Pvt. Ltd. said, “One technology that has proven to be good for short distance delivery of ice cream is the blast freeze the ice-cream to attain -24 degrees before delivery. For long distances insulated bags with dry ice or cold pads. Overall adjust sugar % or use complex sugars like Dextrose, maltodextrin etc and adjust fat% accordingly.
Generally, from scooping parlour to home delivery it takes around 10 min to 45 min max, on an average it’s 15-20 mins. It depends on proximity to the delivery location and also on factors like transport with the insulated box on a bike stand, or by hand in open carry bags if it’s near to parlour and moreover traffic in cities like Mumbai and Delhi. During all this process ice cream should be carried in a cold chain but sometimes due to lack of resources, it’s not possible for each delivery.
Also, the cost of these resources is added to the manufacturing of the ice cream. Many times companies carry iceboxes or use dry ice while delivering ice creams to the customers, most deliveries happening rapidly after orders in ambient temperature. They try to deliver as soon as possible, or else it damages ice cream overrun, original shape, and structure.
According to Vikas Patil, Founder Director, Mirtillo International, “Melting is unavoidable; it can be postponed but not stopped”. He explained, “Melting of ice cream starts in 10 minutes to 25-30 min, so what best we can offer to the industry is Mirtillo Real Ice integrated stabilizer & emulsifier system for ice cream industry; which prevents meltdown properties while delivering from parlour to home”.
It retains the original shape of ice cream, with no overrun loss in transit. Even if some melting happens it retains its original taste and texture after the customer stores it in the deep freezer or refrigerator as it does not form any ice crystals, added on Patil.
One technology that has proven to be good for short-distance delivery of ice cream is the blast freeze, the ice cream to attain -24 degrees before delivery. For long distances insulated bags with dry ice or cold pads are useful. “Our company assists in many ways by providing inside surface of box in corrugation so box temperature maintained equilibrium conditions in containers, fast cooling containers. Customer can check the temperatures of the box in their mobile during running conditions of the vehicle”, Parvesh Kaushik explained.
“For Online sales, packaging must be very nice with an ‘Anti-theft” lock system for customer to ensure the product delivered is safe to consume”, said Sudhir Shah. He explained that the provision of dry ice facilities to all areas for ice cream delivery is also a huge challenge.
“Insulated bags and freeze-pads are also extremely effective and beneficial for transportation and distribution of ice cream and allied products from distributor to retailer and last-mile deliveries”, reflected Deven Deshpande, Managing Partner, Carry Cool Enterprise.
“Our 30 mm insulated bags are specially designed for that last-mile deliveries and used by all leading brands… These heavy insulated bags when used with ice pads give an optimum performance by maintaining the desired temperature. The bags can be customized as per size, company’s logo, and branding, Deshpande elucidated.
ICT insight
With reduced footfall at ice cream parlours and kirana stores, ice cream companies have had to pivot to online sales, like several other businesses. Many big companies have partnered with Swiggy, Dunzo, and Zomato; companies like Mother Dairy activated e-commerce and also their own distributors to home deliver ice creams; while Kwality Wall’s tied up Swiggy, Big Basket and Zomato.
According to Mintel research conducted in July 2020, 23 per cent of Indian consumers said that they would expect to spend more on takeaway and home delivery of food during the pandemic. Brands are, therefore, betting big on the take-home segment this year. The most apparent challenge for the home delivery of ice creams is the temperature-controlled supply chain.
More so, because summer is the peak season for this category, Food aggregators and grocery e-tailers already have ways to insulate the product while it’s on the way to the consumer. However, it is important that the capacity to handle products that need to be stored in a temperature-controlled environment increases.
Other than the challenge with capacity, the integrity of the value chain gets compromised at multiple levels, and the product suffers as a result. In a category like ice cream, “supply can create demand”. For instance, there is now a need for thermocol boxes for deliveries that keep the ice cream from melting.
The sad thing is that ice cream companies with food aggregators Swiggy and Zomato means they have to pay a commission to these aggregators.
Therefore, it is now essential for ice cream companies to build their own e-commerce site and persuade a network of distributors to join the platform. Investing in new packaging and better logistics while ensuring the price of the product doesn’t deter consumers could be a tightrope walk for these companies.
The rising cost of raw materials such as milk, oil & fats, as well as packaging and transportation, has put pressure on the bottom line for manufacturers. Typically, the prices of ice creams increase by 8-10% every year to account for an increase in production costs and inflation.
Mintel expects consumers to be “more price-sensitive” due to the economic situation, implying that an ice cream may not be as much of an impulse purchase product as it was before the pandemic.
Ice Cream Times newspaper conducted a random Google survey on sales of ice cream during pandemic
The Covid-19 pandemic has witnessed the increasing sales of ice cream via online distribution channels that have wiped some tears of the ice cream market. In spite of the critical situation, food delivery operators were busy delivering orders of ice creams but relying on these e-commerce platforms is not good for the industry. Despite the dire situation, food delivery operators were busy delivering ice cream orders, but relying on these e-commerce platforms is bad for the industry.
The ongoing pandemic has had an impact on several market sectors. Some major players have seen their graphs rise, while others have seen them fall. However, the ice cream market has seen an increase in online ordering due to the fact that many manufacturers do not have their own operating portals, which is a major disadvantage.
Disclaimer: The data presented above is based on our general evaluation of ice cream manufacturers and Google searches. The graphical presentation in the Ice Cream Times newspaper is intended to provide a general overview of the online platforms used for ice cream sales and is not intended to be used as commercial data.