Ice-cream companies gear up for a bumper season as sales rise in March

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The early onset of summer has brought cheer to ice-cream companies that are reporting higher sales in March than seen in the pre-pandemic era as life returns to normalcy and COVID-19-related restrictions are removed. Bigger players in the market, companies like Amul and Mother Dairy, have reported sales 30-35 percent higher in March so far compared to the same period in 2019.

“The summers have come early and this is helping the category. We have witnessed a surge in demand in March and while it is much higher than the last two years, we are 30-35 percent ahead of the same period in 2019 too,” R.S. Sodhi, managing director, Gujarat Cooperative Milk Marketing Federation, which owns the Amul brand, told Moneycontrol.

Other companies are reporting even higher sales. Popular Mumbai-based ice cream retailer Naturals Ice Cream, for instance, has seen a 150 percent growth in sales over the pre-Covid period, according to director Siddhant Kamath.

“We are very positive that April, May, June will be a bumper season for us,” he said.

Summers are the peak season for ice cream brands and most companies draw about 40-60 percent of their entire sales and 80 percent of profits during the period. The sales of these companies suffered drastically during the last two seasons as multiple waves of the pandemic struck the country and mobility restrictions were imposed.

Ice cream production in the country, which is also an indicator of consumption given the short shelf life of the product, dropped around 42 percent in FY21, according to data from Care Ratings. It had been on a continuous climb from FY15 till FY20.

Amul, for instance, was able to generate only 50 percent of its ice cream sales in FY21 and was expecting a similar dip in FY22 also. With the return in demand, the year ahead, however, looks brighter. Amul is the largest operator in the ice cream segment and claims to command about 40 percent of the market.

Anticipating a surge in demand, companies are sprucing up their distribution and supply chains. “The focus is to ensure a steady availability of the products throughout our channels,” said Sodhi.

National Dairy Development Board-owned Mother Dairy, too, is launching new products and adding new locations. “We intend to introduce around 10 new products to keep our consumers excited and foray into additional about 100 new towns across the country. We will also be coming up with a mass media campaign to drive brand salience during the key consumption period,” said Sanjay Sharma, business head, dairy products.

Mother Dairy expects the category to more than double its sales compared with the summer of 2021.

While a large share of ice cream sales comes from offline channels, companies have during the last two seasons tried to tap delivery too. As a result, companies such as Naturals Ice Cream now see 35-40 percent of their sales from deliveries versus 20 percent in the pre-Covid period. Companies are expecting a surge in takeaways and deliveries this season too.

As it gears up for the summer, Naturals Ice Cream has introduced sugar-free flavours which are preferred by consumers who opt for deliveries, and is also planning its inventory with a focus on bestseller flavours such as mango, lychee and kala jamun during the season.

“We are expecting our sales this season to be two times higher than the pre-pandemic period,” said Kamath of Naturals Ice Cream.