For ice-cream lovers, soaring milk prices may leave a sour taste

Consumers can expect to pay more for their summer treats as many ice cream makers plan to pass on to customers the rising costs of milk, a key ingredient. Several ice cream makers have, in fact, already effected price hikes in January and February, citing unusually high commodity inflation.

- Suneera Tandon

Hindustan Unilever Ltd, which sells ice creams under the Kwality Wall's brand, has taken selective price hikes. "Commodity inflation continues to be a significant challenge for the industry. In the current inflationary scenario, our priority is to provide value to consumers, invest in our brands and protect our financial business model. Given the recent-all round increase in material prices, including dairy, which is a key raw material for ice cream, we have increased prices to consumers selectively in our portfolio, while maintaining key price points for value-seeking consumers," a company spokesperson said.

Komal Anand, managing director of Havmor Ice Cream said: "The cost is killing us. We are in a business where we cannot pass on all costs to consumers. We cannot afford to sell at low margins as well." The hike in prices may have an adverse impact on demand. Havmor took a "small" round of price hikes in January. Future price hikes will depend on how dairy prices pan out in the second quarter of the current year.

Milk prices have been steadily increasing since last year, driven by a combination of factors such as farmers reducing their herd during the early months of the pandemic, a spike in prices of cattle feed, and a surge in demand for milk and dairy products following the reopening of hotels and restaurants.