The ice-cream market is set to sizzle this summer. At least 10 ice-cream makers armed with over 125 flavours will try to freeze the attention of the Indian consumer. The somewhat surprise winner of the cold war-Amul-is ready to launch over 20 new varieties this summer. Hindustan Lever Ltd's (HLL) Kwality Walls has already unveiled 10 new flavours.

SUCCESS RECIPE

CANDY FOR THE MASSES: Affordability is the USP. Kwality Walls' 1 litre vanilla costs Rs 75, Amul's just Rs 40. COOL PACKAGING: Santra Mantra in orange-shaped container, vanilla in plastic ball attract extra buyers. MAXIMUM FLAVOURS: Date with Honey, Alphanso, Cappachino, Anjir and other exotic flavours. AGGRESSIVE LAUNCHES: Over 20 varieties will be added to the existing 70 this summer. GOOD REACH: Available in 1,000 cities; Kwality Walls in six. 27% of organised marketshare is with Amul.

The company that has scooped a coup is Amul. In a market invaded by big companies and brands (HLL, Baskin Robbins, Movenpic) and swarming with regional and local players, Amul has emerged as the largest selling brand in the organised sector (see chart).

Amul's success is reflective of the fundamental changes taking place in the ice-cream market. Till 2000, the Rs 1,000-crore industry was dominated by small manufacturers, with organised players accounting for just one fourth of the total. Today, the market has grown to over Rs 1,500 crore to which organised players contribute 40 per cent.

But beneath this consolidation, the big plans of deep-pocketed MNCs like HLL and Baskin Robbins seem to have melted even as cooperatives like Amul and Mother Dairy have tightened their hold on the market. The going has been particularly rough for HLL. Forced on the backfoot by the low prices of the cooperative cousins, the company had skimmed its ambitions two years ago and decided to be content with being a niche player focusing on only the six metros. Says J.H. Mehta, executive director, ice creams, HLL: "A large chunk of the business was not commercially viable. So we decided to cut down our portfolio and focus on profitability."

Just as HLL was shrinking its presence to consolidate, Amul was charting out a national footprint. Today, its ice creams are available at 25,000 outlets in 1,000 cities across India and the cooperative has plans to add another 5,000 outlets. Luckily, many of its competitors were happy focussing on regional markets like Arun in the south, Mother Dairy in the north and Metro in the east. "By 2010, we will have a Rs 1,000-crore ice-cream business," says B.M. Vyas, managing director, Gujarat Cooperative Milk Marketing Federation, which markets the Amul brand. In 2003, its ice cream sales were Rs 160 crore, almost three times the Rs 55 crore sales in 1998.

Amul's impressive growth is rooted in its savvy marketing. The price warrior launched its ice creams in 1998 at prices 40-70 per cent lower and pried open a market that was till then considered elite. The wide options-over 70 flavours packaged in various sizes-added punch to its low-price strategy. The price-sensitive Indian consumer has lapped it all up. Amul ice candies and lollies, priced at Rs 3 upwards, have managed to lure new customers from the unorganised sector. This has been buttressed by innovative products, attractive packaging and unique flavours (see box).

One of the reasons why Amul can afford to be a price warrior is because it is a dairy cooperative. With no middle men at any stage, its costs are 8-10 per cent lower than that of an MNC. It is now taking the battle into the MNC camp by launching a premium range of ice creams. Clearly, the cold war in the ice-cream market is heating up.

— By Malini Goyal