Rahil Gandhi, Director, Vadilal Dairy International Limited, speaks of his companies new marketing campaigns, withstanding the foreign competition and the growth of ice cream industry in India.
The ice cream industry in India appears to be going through a phase of churn with foreign brands giving a serious look-in to home-grown brands. What explains this sudden foreign interest in the Indian Ice cream industry and why are local brands looking to exit a business they have been associated with so long?
I don’t think there is any sudden interest of foreign brands in India. As you may be aware, Hindustan Unilever Limited (HUL) had acquired the Kwality brand ice cream way back in 1995. Also, Cadbury had brought the Dollop ice cream brand in 1990. There has always been an interest in ice cream or the dairy sector by foreign brands. Ice cream, overall, is always in demand and liked by many and there has never been a sudden foreign interest in the industry. Of course, there are always some local brands that are on the lookout for interesting buyout opportunities to come their way. By and large, local ice cream still continues to be patronized and liked by many people.
Why is it that many of the regional players, despite their years in the business, have not really been able to scale up as desired? Why is it that regional players have not been able to become national brands?
Regional players, despite being in the field for long, have not been able to scale up at the desired size because ice cream is a very tough business to be in. We need to have effective distribution, high-end logistic support and be able to match the taste and preferences of consumers. But regional players have been able to scale up in their own territories. They could not grow further in other territories due to the higher transportation and infrastructure costs. Setting up depots is very expensive and not very profitable if they are farther away from your production base. Selling ice cream products in other far way territories poses formidable logistics challenges.
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