Financial Daily from THE HINDU group of publications
Thursday, Aug 08, 2002
Dairy & Dairy Products
Marketing - Strategy
Ice-cream freebies rain in Gujarat
AHMEDABAD, Aug. 7
CUSTOMARILY, Gujarat and monsoons do not go hand-in-hand though the State is still chary of admitting that it is faced with a drought-like situation. But, the scant rains have not stopped the ice-cream majors from declaring the arrival of monsoon here, in the process signalling a price war of unparalleled intensity, much to the delight of the customers.
The Rs 525-crore Indian ice-cream market with a sale of 80.8 million litre per annum in the organised sector has reasons to put the turf war in Gujarat under the microscope. Amul, with a 24.75 per cent share of the all-India market at 20 million litres and Vadilal, with 13.61 per cent market share at 11 million litres, may not be an even match elsewhere.
However, competition between the two could not have got any closer in Gujarat. Here, it is 22 per cent of Amul's volumes that is pitted against 40 per cent of Vadilal's both fetching up at 4.4 million litres each. With HLL's Kwality Walls (22.8 million litres sales and 28.22 per cent market share) having virtually opted out of Gujarat, it is no wonder that Vadilal and Amul are engaged in a slugfest in the State.
Naturally, neither of the brands has actually reduced prices, but the freebies have been coming thick and fast. Taking a leaf out of the goodies on offer from the branded apparel sector and footwear to name a few items, most of the flavours are now available in `twos'. One would now get two units of quite a few flavours for the price of one, in effect cutting the price by half.
Thus, Vadilal has offered `one plus one' in the litre versions of mango, butterscotch and kaju draksh (nuts 'n grapes), while offering 50 per cent extra on pineapple, chocochips, butterscotch and fruit bonanza. According to Mr S. Keraleeyan, Product Manager, Vadilal Icecream, the freebies have ensured that the monsoon months will not be bad after all.
"Normally, there is a major dip in ice-cream sales during July and August. The schemes on offer this year have ensured that we reverse the slide by over 50 per cent. Vadilal has targeted a turnover of Rs 96 crore for this fiscal as against Rs 77 crore in 2000-01. Gujarat is our single largest market, accounting for 40 per cent of total sales," Mr Keraleeyan said.
Amul, already competitively priced at Rs 60 per litre for vanilla, has now brought it down to Rs 45 for the monsoon season. The other goodies on offer include a `combo-pack' of vanilla (1 litre) and kaju draksh (1 litre) at Rs 100, Rs 5 off on cones, Rs 3 each off on chocobars and 100 ml cups. The main pitch by Amul, of course, is that its ice-cream has a milk fat base as against vegetable fat used in the `frozen dessert' by its competitor, which is one-third cheaper.
Clearly, the price war seems to have rejuvenated the Gujarat market, not known for brisk ice-cream sales in the wet season.
Ahmedabad, the ice-cream capital of India and the other major cities of Vadodara, Surat and Rajkot - remember, here you do not step out for a drink in a pub or bar, instead you console yourself by having one more ice-cream, be it day or night - is sitting up in anticipation of a long `monsoon season' ahead.
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