Lost Summer: Ice Cream business in India dip by 50%

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Lost Summer: Ice Cream business in India dip by 50%

  • Ice cream sales dip 50 per cent in India during the lockdown. 
  • While lockdown limitations hit trade, sales take a beating because of  ‘misconception’ that ice cream can make one vulnerable to COVID-19.
  • Stakeholders believe it is this notion that ice cream can give anyone a cold has led to no relief for the business this summer.
  • And with summer gone, the trade can only decrease leaving them frozen. 

R SAI VENKATESH | Chennai:  The lady at CKC Cool Corner, a fancy, air-conditioned ice cream shop in Chennai sits behind her desk, looking outside through the glass doors, awaiting customers. Unfortunately for her, they have been very less in numbers for the last four months.

The freezer by her side has a rack with half-filled small to medium-sized ice cream cups, costing Rs 10-20 per piece. There was another freezer adjacent to it that was filled with family packs, bars and relatively larger ones for milkshakes. These were the stocks which have not yet been sold to customers due to their reluctance in consuming ice creams as the pandemic circled the air.

The lady says that on any normal month, she had to place orders to renew stock at least thrice a week. While during the last month, when the shop was opened after relaxations, the refilled stock hardly witnessed any movement in the supply chain. This ice cream shop, which is in a school zone, is a hangout spot for kids and teenagers.  Situated by the side of a lane that leads to the beach, the shop attracted an average of 150 customers a day. However, in the past four months, the number has drastically come down to less than 15, bringing down the daily earnings to Rs 500 to 600 from a decent sum of Rs 4,000 a day.

No Summer relief

Annually, the ice cream business amounts to about Rs 4,500 crore. This business has been hit by the pandemic as it has expectedly dipped by almost 40 per cent. Trade experts believe it is very unlikely to recover anytime soon as the monsoon is here during which the demand for ice cream falls anyway.

Dairy products giant Amul’s ice cream sales are expected to fall by almost 50 per cent in the first quarter of the financial year 2020-21. According to Gujarat Co-operative Milk Marketing Federation (GCMMF) Managing Director Dr R S Sodhi, even other companies in the same business might fall by 70-80 per cent in the current financial year.

The National Dairy Development Board is not the one in-charge to keep a tab on the sales and production figures. The Market research firm Statistica, in its report, stated that in 2017-18 fiscal, 170 million litres of ice cream was produced in the country.

Another Indian research firm says that the Indian ice cream industry has emerged as one of the rapidly growing segments of the dairy or food processing industry.

In a 2018 report by Research and Markets, it said that the industry had generated a revenue of over $1.5 bn (around Rs 10,000 crore) alone in 2016 in India. It had also predicted that the industry would generate a revenue of $3.4 bn (around Rs 25,000 crore) by the year 2021.

Cold Fear

One major reason behind consumers refraining from buying ice creams is the newfound fear and aversion towards cold food items and beverages. Though, the WHO has denied any claims regarding ice creams spreading the COVID-19 virus, it has failed to pacify the common people.

Igloo Ice Creams, a local manufacturer and caterer to hotels, have stated that their frequent customers are now reluctant to buy ice creams from them, even when they are provided free of cost.

Another factor that cannot be overlooked is the lack of money in people’s pockets due to loss of livelihoods during the pandemic. A representative from another local brand, Amirtha Ice Creams, says, “With lay-offs and underemployment on the rise, people hardly have any money to spend on essentials. How can we expect them to spend on ice creams?”

An ‘Electric’ Shock

Though shops and factories were shut down and factories, the ice-cream sellers were left with no choice but to keep their machines running. Freezers and cold storage were also kept on, fearing repercussions and unnecessary repair costs that would have followed.

A representative from a local brand, Ganesh Ice Cream, said that they have received an inflated electricity bill of Rs. 6.5 lakhs for the past five months from March. “We are high on the stock. We manufactured most products just before the lockdown was announced. We also have to keep the kulfi machine running mandatorily for at least one hour a day. But, these bills seem to be quite inflated.”

Several companies shared their inflated electricity bills that they were handed out during the lockdown. All of them feel that some waive off and aid by the government would help them to remain in business.

No Scoops for anyone

Ice creams, despite being a commonly consumed dessert, are still a seasonal product. The summer months in the city (April – June) are when they have a soaring demand. Thus, suppliers and retailers feel that they will be at loss for this entire year.

The adverse effects of the unprecedented lockdown have also trickled down to employees and delivery men. Most of them had to be laid off and some of them have not been paid any wages.  However, some local suppliers have not deserted them in these testing times and continue to pay their employees despite having near to zero income.

Those manufacturers and suppliers who had employed migrant workers for loading, unloading and delivery are now short of labour. Thus, one or two orders that they get amid these testing times also are delayed due to inadequate labour. They feel that this greatly damages their name and reputation.

When questioned about transiting to other businesses, some feel that doing so would land them in an excruciating situation than the present. “I have been in this business for 15 years and have learnt quite a lot. Transiting to another business will do more harm than good as I will have to spend a great deal of time, money and effort to understand it from scratch,” said the owner of local ice-cream seller, Ganesh Ice Creams.

However, some, like CKC Cool Corner, says that they are ready to diversify into other businesses like bakeries and coffee shops, which have fared well relatively.

In the eventuality of schools and colleges remaining shut, marriages and hotels having limited gatherings for a foreseeable future, the suppliers feel that a pivotal portion of their customers has been locked away. Any rejuvenation and surge in business shortly is now a distant dream for those involved in it.

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