Ice Cream is enjoyed by all regardless of age, gender, income or education. The Ice Cream industry in India, estimated at INR 4,500 Crore in 2013 is likely to grow to INR 7,000 Crore by 2018. Increase in disposable income and change in tastes and preferences have transformed the nature of the ice cream industry in India. Ice cream is widely being accepted as a snacking option, shedding its ‘dessert only’ title. The per capita consumption of Ice Cream in India is relatively low at 400 ml, compared to the global average of 2.3 litres per annum. There is huge potential for organized players to expand the demand for ice cream amongst both, urban and rural population. An efficient Cold Chain infrastructure can play a key role to help meet this growing demand and increase market penetration of the Ice Cream industry.
With the growing demand, ice cream is also being accepted as a comfort food. This has resulted in increase in Ice Cream outlets, innovation in flavors, increase in consumption of frozen desserts and in-home consumption. The ice cream market in India is divided into the branded segment and the unbranded segment. The Unbranded segment consists of small local players and hence contributes a small fraction to the overall demand for the product. North and West India are the highest consumption centers, accounting for 70% of Ice Cream consumption. Conventionally perceived as an important part of post family dinner treat, ice cream consumption has now evolved as a snacking option for India’s growing middle-class population. The reasons for this change in trend are:
- Easy accessibility across various parts of India
- Rise in the disposable income
- Increasing presence of the International brands
- Availability of multiple options to consumers
- Growing trend of eating-out
- Increase in impulse purchases
Consumers today are spoilt for the choice – ranging from flavors like plain vanilla to caramel, strawberry, chocolate, raspberry and many more. The growing entry of international brands in India and increase in choices has made the Consumer more aware. These consumers are more willing to experiment with new flavors and formats of the frozen dessert. The ice cream industry is adopting innovative techniques to boost its reach, thereby achieving higher consumption across the country. Ice creams using sugar- free alternatives without compromising on the taste have also arrived for the health conscious consumers. This variety of ice cream/frozen dessert is growing fast with higher demand in metro cities of India. Efficient cold storage and transportation network is equipped to ensure deeper market penetration. Availability of variety of flavors and types makes consumers more aware, in turn creating higher demand for the product.
Another growing trend in the Indian ice cream industry is the introduction of premium flavors of ice creams and frozen desserts. The rise of premium ice cream is driven by a consumer who craves new experiences and is willing to make compromises elsewhere to pay for them. New concepts of frozen desserts and gelatos are also gaining popularity in the Indian market. Cold Chain is the reason why most cities in the country have access to International Ice Cream brands. The growth in the demand for ice cream has provided impetus to the regional players in the market.
Per capita consumption of Ice Cream is still low in India, approximately 400 ml compared to 22 litres in the US and 18 litres in Australia. The main factors that hamper the growth of this industry include the lack of cold chain infrastructure and inadequate supply of electricity. Another challenge that manufacturers face is that ice cream is categorized as a luxury food product by the Indian government and taxed accordingly, whereas many countries do not have a tax on ice cream and consider it as a normal food item. Moreover, threat of a cheaper substitute is very high for ice creams in Indian market due to its culture of traditional sweets and desserts. Since ice creams are highly temperature sensitive, the availability of the product is the major factor generating demand for the regional brands. The lack of reach of national and international brands generates the dependence on regional brands. This is slowly changing as industry players from the branded segment target consumers from Tier II and Tier III cities of India. Cold Chain India can play a major role in driving this growth.
Ice cream is a product that requires constant temperature control and proper handling. Developing an integrated cold chain infrastructure is extremely crucial to increase deeper market penetration. An efficient cold chain network and resilient temperature controlled storage facilities can make ice creams and frozen desserts accessible to a larger consumer base. Moreover, adequate storage facilities will help increase the shelf life of the product and keep it preserved for a longer period of time. Cold chain can further help reduce wastage and loss of quality of the product. An integrated cold chain infrastructure, combining state-of-the-art storage facilities at manufacturing centers and resilient temperature-controlled transportation network will help in wider and deeper distribution of Ice Cream.