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KMF set to maximise advantage of dairy business with its range of ice creams
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Tuesday, 04 August, 2009, 08 : 00 AM [IST]
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Nandita Vijay Bangalore
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Dairy major Karnataka Milk Federation (KMF) has an aggressive strategy in the ice cream segment as it seeks to gain a substantial market share. Its ice cream brand 'Magic' which registered 300 percent growth in fiscal 2008-09 will now see greater penetration across all 29 districts in the state besides having a strong foothold in the Andhra Pradesh and Goa.
As a part of its expansion-cum-brand building exercise, the Federation has invested Rs 75 crore. In addition, it has also installed a state-of-the-art stick making machine from Norway. This will see the KMF to offer both range and reach.
KMF which entered into the ice cream segment in 1999 has also been a contract manufacturer for the entire Amul range. The entire ice cream range comprising 85 stock keeping units (SKUs) in 12 flavours is produced at its Mother Dairy unit at Yelahanka which has a capacity of 10,000 litre per day.
As part of its growth strategy, KMF is increasing its distributors from the current 50 to 110 by March 2010. This will strengthen the marketing of the ice creams to all the 29 districts.
In addition, the company is also providing retail support through the franchise model to set up 130 dedicated outlets known as Nandini Ice Cream Scoops and regular parlour. It in is in dialogue with promising business ventures like hotels, clubs, bakeries and eateries in leading shopping areas, railway platforms and bus stops to start selling KMF ice cream range. By the end of this fiscal, in Bangalore alone KMF has set a target 1200 ice cream outlets which will include bakeries, small eating joints and shops.
In order to capture a sizeable share of sales from the franchisee concept, KMF has a tie -up with leading freezer companies like Voltas, Blue Star, Carrier and Rockwell to supply the freezers at a subsidised cost. The only condition by KMF is that the franchisee will only sell its range and generate Rs 2 lakh annually. Nandini Ice Cream Scoop outlets will not only provide the entire ice cream range but also its other value added products like flavoured milk and sweets, Sathish Kumar M S, joint director (marketing), Karnataka Co-Operative Milk Producer's Federation Ltd told F&B News.
All that a franchiser will need is space to keep the freezer at any public walk-ins like malls, theatres, bus stops and railway platforms. In the districts, KMF is hoping to have minimum two outlets in each district.
While it ramps up its infrastructure, KMF will also increase its offering to add 60 more varieties The pricing is affordable as it ranges between Rs 5 for a cup to Rs 110 for family packs.
According to Sathish Kumar, KMF will be able to make a dent in the market despite the presence of existing brands because of its dairy expertise, access to ingredients for ice cream manufacture and logistics. Not only that only KMF and Amul are the two dairies which adhere to the Prevention of Food Adulteration Act where it ensures a minimum fat content of 10 percent in ice creams. The other ice cream brands in the country are more Frozen Desserts.
Dairy market in India is estimated at Rs 1200 crore. The per capita consumption of ice cream is the lowest in India at 250 ml compared to 23 litre in the US, 18 litre in Australia, 14 litre in Sweden according to a report.
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