COVID-19 impact | Ice cream industry suffers a meltdown; sales dip 50%

Ice creams have always figured on the favourite desserts list for most people, be it as a cooler during scorching summer afternoons or just a mood lifter on those dull days.

But the ice cream industry has been in a meltdown due to COVID-19. 

The month of May, which is the peak sales period for ice creams has been a disappointment.

Industry experts believe apart from lockdown restrictions, ice cream sales were affected by fear or misconception that ice cream makes one susceptible to COVID because one can catch a cold.

“Ice cream industry has suffered due to two reasons—COVID and lockdown. Supply chain disruptions impacted the ice cream sales and a lot of people are avoiding ice cream as they feel it can contract cold and get infected by the deadly Coronavirus,” Dilip Rath, Chairman of the National Dairy Development Board (NDDB) told Moneycontrol.

Rath said ice cream sales have dropped by almost 50 percent in the lockdown period from March 24.

He pointed out that ice cream parlours, restaurants are completely shut in the lockdown and also ice cream pushcarts were not allowed adding to the woes of the ice cream industry.

“The drop in consumption is largely due to adherence to prescribed norms of movement restriction, which has led to the closure of retail channels, vending carts, etc. and hence the drop in consumption,” Mother Dairy Spokesperson told Moneycontrol.

For Mother Dairy, ice Cream contributes around 3.5 percent of the overall company’s turnover.

Ice cream is not considered an essential commodity. So, during the lockdown, there was neither manufacturing nor transportation of ice cream.

“Usually ice cream sales peak up in summers but this time around COVID outbreak has ruined the total industry,” Rath said.

The ice cream industry in India is largely consolidated and competitive, with the top six companies accounting for 70 percent market share.

Gujarat Co-operative Milk Marketing Federation India’s largest ice cream maker that sells products under the brand Amul and enjoys 25 percent market share in the ice cream industry, followed by Hindustan Unilever’s Kwality Walls, Mother Dairy, Havmor, Vadilal and Cream Bell.

The remaining 30 percent of the market is extremely fragmented in small and local companies. 

According to experts the ice cream industry which was pegged at around Rs 17,639 crore in 2019 by Euromonitor, has lost a significant chunk of its sales due to the COVID-19 pandemic.

To make up for the lost ground, ice cream players have tied up with e-commerce websites such as Big basket, Dunzo and also food delivery companies such as Zomato and Swiggy.

HUL’s Kwality Walls has tied up with good and grocery delivery services platforms such as Swiggy, Bigbasket and Dunzo. 

According to Research and Markets, Indian ice cream industry is one of the fastest-growing segments of the dairy or food processing industry.

In its report issued in 2018, the firm stated that the ice cream industry in India generated revenue of more than $1.5 billion in 2016 and is projected to generate revenue of approximately $3.4 billion by 2021. 

Ice cream makers are hopeful of covering up the losses.

“With the trends that we experienced from our booth network, we are preparing ourselves and are hopeful that we will be able to secure at least 80 percent of our annual business post the lockdown period. Though the situation is now inching towards improvement with an increasing point of sales, brands like Mother dairy offering doorstep delivery, we are confident of regaining the consumer confidence in a very short span of time,” Mother Dairy spokesperson said.

Also Read: Life of a pilot in COVID-19 times: Little flying, diminishing salary and high EMIs