|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
“Flavours, pkg & mktg position ice cream as anytime treat”
|
|
Monday, 17 February, 2025, 08 : 00 AM [IST]
|
|
|
 Hocco (House of Chonas Collaborative) has now positioned itself in the premium ice cream segment, growing at 15-20% annually, which is becoming increasingly dynamic with changing consumer preferences towards artisanal and innovative offerings. Consumers are exploring exotic and gourmet flavours rather than sticking to conventional options, stated Ankit Chona, founder & MD, House of Chonas Collaborative, in an email interaction with Nandita Vijayasimha. Excerpts:
How would you describe the current scene for the ice cream industry in the county?
The ice cream industry in India is vibrant and growing. The market has witnessed substantial growth fueled by increasing disposable incomes, urbanisation, and consumer inclination towards indulgence. Several local and international brands are competing to increase their market share, offering diverse flavours and catering to various segments, from budget to premium. We are seeing significant demand uptick in small towns where there is uninterrupted power available for the first time.
What are the visible trends?
The key visible trends are artisanal and premium products, health-conscious options, regional flavours, online and retail sales. There's a rising demand for artisanal and premium ice creams, emphasising natural ingredients and unique flavours. Consumers are showing interest in low-fat, sugar-free, and vegan alternatives. Leveraging local ingredients and flavours has become popular, providing a fusion of traditional and modern tastes. The growth of e-commerce platforms has expanded the reach of ice cream brands, allowing for home delivery and enhancing convenience.
What are the challenges seen in the sector?
One is the distribution & cold chain infrastructure. This leads to logistic challenges due to inadequate cold chain infrastructure can lead to product spoilage. The second is seasonality. Demand can fluctuate with seasons, impacting sales and requiring effective inventory management. Third is intense competition: Stiff competition from established players and new entrants can squeeze profit margins. Fourth is regulatory compliance as meeting food safety and quality standards is crucial and can be challenging for smaller players.
How do you view the mergers and acquisitions happening in the sector in the wake of the Hindustan Unilever demerger of its ice cream business sale as a separate listed business entity?
Mergers and acquisitions can revitalise the sector by bringing in fresh capital, technology, and expertise. In the context of Hindustan Unilever’s (HUL) decision to treat its ice cream business as a separate entity, it could lead to targeted growth strategies and potential partnerships specific to the ice cream segment. This manoeuvre may prompt other firms to pursue similar restructuring to focus on core competencies.
Ice cream is more of a seasonal business. What are your thoughts on this?
While traditionally seen as a seasonal business, the industry is innovating with product diversification and promotional strategies to remain relevant year-round. Innovative flavours, packaging, and marketing campaigns have positioned ice cream as an anytime treat rather than a summer-only delight. Also with quick commerce, being a home delivery platform has helped push ice cream sales in colder months as well.
How do you view the changing consumer preferences in the ice cream category?
There are diverse flavour palates. Consumers are exploring exotic and gourmet flavours rather than sticking to conventional options. The focus is on health & wellness. There's a considerable shift towards health-focused products, with a preference for natural, organic, and low-calorie options.
There is considerable attention to sustainability and ethical sourcing. This is because an increasing awareness of environmental impact has driven demand for sustainably sourced ingredients and eco-friendly packaging. Overall, the ice cream industry in India is poised for continual growth and sophistication, addressing consumer needs and market challenges with creativity and innovation.
How are the Private Equity (PE) players and Venture Capitalists (VCs) looking at this business to fund startups?
There is a lot of interest from PEs & VCs in the ice cream space as the market is growing quite rapidly. Most startups in this field have managed to raise capital. Even the established players have seen significant PE interest. We have raised capital from VC fund Sauce and we are in talks with larger PE funds as well as we continue to scale-up.
With respect to your brand, what have been the efforts to move from a family legacy to a modern ice cream powerhouse?
We have transitioned from a legacy business by adoption innovative and significantly advanced production techniques, hiring a professional senior management team and embracing new ways of looking at brand management keeping the new-age consumer in mind.
What is the innovation strategy behind unique product categories?
Innovation is at the heart of everything we do. We invest heavily behind our R&D tech and team, we keep our ears to the ground to hear and implement feedback and we have built a solid system of ideation across the organisation. Being one of the few ice cream brands in the country to also have a full scale F&B service business with 110+ outlets also helps in bringing our ice creams direct to consumer to gauge and implement new ideas and feedback.
Some of the innovations that we have implemented are sponge-based ice cream sandwiches (Bix), differential packaging for ball top cones (oh! Cones) and new and innovative flavours like charcoal lychee and golden chocolate. These innovations have also helped us in being recognised as the most innovative ice cream company of 2024 by CII.
Which are your fast moving categories and the fastest growing markets?
Since we are only 15 months old in the market, all our categories are doing phenomenally well but we are seeing a rising trend in impulse-driven novelty categories like sandwiches, matka kulfis, cassata etc. - this category growth is also powered by the rise of quick commerce as a new and fast growing platform to fuel growth.
What is your expansion strategy and market penetration approach?
Since we launched with Gujarat first we have already achieved 70% distribution in the trade and we are looking to penetrate further into this market. We have recently launched Maharashtra, Rajasthan and NCR and the strategy there would be to expand distribution and availability for this season.
Would you be looking at international market opportunities?
International markets are an interesting opportunity for us. Exploring international markets would require understanding local tastes, compliance with regulations, and possibly partnerships with local distributors and we might eventually explore the possibility of exporting our brand beyond our shores.
How much technology is embedded into your operations?
Tech is deeply embedded into our culture. We have a very advanced tech enabled production facility where we have already tripled our capacity for this season. We also use data analytics to gather consumer insights from our F&B business to aid us in launching promotional campaigns targeting specific cohorts and we also use a tech stack to manage cross functional collaboration, document management, CRM, ORM, digital marketing and performance marketing.
What are the plans for FY25 and beyond?
We have already tripled our capacity in anticipation of FY26- specifically the summer of 2025. We are the fastest growing consumer ice cream brand in the country and we plan to grow by 50% in FY26. Launching newer markets, more penetration in existing ones and more innovative products coupled with manufacturing effectiveness will be the key levers for our growth.
|
|
|
|
|
|
|
|
|
|