Market
Sri Lanka’s ice cream market is estimated at
around US$ 25-30 million and the per capita ice
cream consumption is approximately 1.1 litres,
compared to regional markets such as Thailand
and Malaysia, which record a per capita
consumption of 1.5 litres and 2.7 litres,
respectively. At the other end of the spectrum,
the per capita consumption of ice cream in
Europe is approximately 13 litres, whilst in the
US, it is 23 litres. These statistics all point
towards the significant growth potential of the
ice cream market in Sri Lanka.
Ceylon Cold Stores (CCS), or Elephant
House as it is popularly known, accounts for
almost two-thirds of the local ice cream market.
Clearly, this brand has won the hearts, to say
nothing of satisfying the tastes, of Sri Lankan
consumers.
The ice cream market could be segmented
into the take-home market, comprising in-home
consumers, and the impulse segment, targeting
out-of-home consumers. The ice cream market
worldwide consists of a comparatively larger
impulse segment in comparison to the take-
home market. In the local market, this ratio is
virtually reversed. Interestingly, the impulse
segment of the local market is presently
experiencing a double-digit growth trend in
comparison to the take-home market, which is
growing at a slightly slower pace.
Capitalising on this opportunity, Elephant
House Ice Cream has stepped into the gap with
a range of novelty products catering to the
potentially lucrative impulse market. The brand,
as always, has kept tabs on ever-changing
consumer needs.
The distribution of ice cream is dependent on
the availability of storage freezers and power
supply to sales outlets. Over the last few years,
the Elephant brand has been aggressively
expanding to stamp its presence at widespread
outlets. Its products have found space in the
island-wide network of outlets that have the
infrastructure to store ice cream.
Per capita GDP in Sri Lanka increased to US$
1,197 in 2005, compared to US$ 1,030 in 2004
(Source: Central Bank of Sri Lanka). Following
the concomitant growth in disposable income, a
larger share of wallet has been reserved for
food items. The phenomenal growth and
expansion of supermarkets across the country
have enhanced the availability of a range of
products. While this has spoiled consumers for
32 SUPERBRANDS
Chillies awards, the very same ice cream’s
marketing campaign was recognised for its
exceptional creativity vis-a-vis TV advertising in
the food category.
As a result of the recent tie-up between
Ceylon Cold Stores and SriLankan Airlines,
Elephant House Ice Cream is now served in
branded cups to passengers on board the
national carrier – a first in local aviation history.
History
Elephant House has a long and illustrious past,
dating back more than 100 years. The New
Colombo Ice Company Limited, the first
incarnation of what was to become Ceylon
Cold Stores, was floated in 1894 to purchase
the Colombo Ice Company, which manufactured
ice and mineral water. In 1935, Spencer &
Company of Madras offered Icefruite, a type of
iced lolly, to the New Colombo Ice Company at
a royalty of seven shillings and sixpence a
thousand. Sales were made throughout
Colombo using bicycles to distribute the novel
product. The year 1941 saw a historic change of
name, when the New Colombo Ice Company
choice, changing lifestyles coupled with exposure became Ceylon Cold Stores. This was not
to global trends have created a tempting merely a change in nomenclature, but described
opportunity to grow the ice cream market in Sri the company’s rapidly expanding operations.
Lanka. With the acquisition of the company in 1991
by one of Sri Lanka’s leading blue-chip
Achievements companies, John Keells Holdings, new strategies
The ever-popular Elephant House Ice Cream have been implemented to revolutionise the
was voted the Most local ice cream market while gaining market
Preferred Food share from competition. Elephant continues to
Category brand at focus on creative marketing
the very first strategies and innovative
National Icon product development to
Awards, organised stay ahead of the
by the Sri Lanka competition.
Institute of Characteristically, even
Marketing in this activity takes its
association with TNS cue from ever-
Lanka, held in 2005. changing consumer
The fact that the tastes.
consumers’ choice was
instrumental in Elephant Product
bagging this award is only a There is no denying that CCS
reflection of how much the markets a unique brand of ice cream. Its
brand’s diverse range of ice products are distinctive in terms of taste
creams continues to be in demand. and texture, while almost magically retaining
At the Sumathi Awards presented in April the flavour that is distinctively Elephant. The
2006, Elephant House’s Pani Cadju commercial company places special emphasis on the
was awarded a silver medal for its exceptionally production of the essences that go into
creative execution. And at the ground-breaking flavouring its ice creams. Its vanilla ice cream, for
example, is traditionally exquisite. Even a first-
time consumer could differentiate this
benchmark product from other brands in the
market, due to its superlative taste and quality.
The secret, of course, is in the vanilla essence
that has been customarily produced in-house.
Elephant House’s range of take-home
products varies in terms of volume and variety
from the 500 millilitre to four-litre ice cream
tubs of Vanilla, Strawberry, Chocolate, Fruit And
Nut and Ripple. A premium range of ice creams
includes the mouthwatering Karutha Kolumban,
Jugger-nut, Cookie Cream, Toffee Caramel and
Coffee Grand.
Catering to impulse buyers, the brand has a
range of 80 millilitre tubs,
with ice cream in the basic
flavours as well as Fruit And Nut
and Manga Batta. The Jumbo Jolly
range with Wonder Cone, Wonder Bar,
Trio, Jigsaw and Sweethearts, made especially
for Valentine’s Day, has added variety to this
range. These contemporary and exciting
products, which have nonetheless retained the
CCS attributes that define its brand value, have
kept Elephant increasingly in demand across the
consumer demographic.
Importantly, catering to local tastes, the brand
has not neglected to maintain the international
standards for which it has been long reputed.
Recent Developments
The Elephant House Ice Cream logo has been
modernised to look contemporary and
fashionable. The introduction of a creative
ribbon concept captures the brand’s energy. For
the first time in the country, an FMCG company
has adopted the innovative technique of the in-
mould printing of branded labels on its ice
cream containers, boosting brand identity as
well as augmenting consumer appeal.
Venturing beyond the local market, CCS
began its Maldivian operation in 2001 and
has captured over 70% of the ice
cream market in the archipelago,
outperforming leading
multinational rivals.
Elephant House Ice
Cream is freely available
in the Maldives and the
brand has enjoyed a
growing demand for its
on-premise category,
comprising cups and iced
lollies. Elephant is also favoured
by the many resorts and hotel
chains that dot the island group.
In the increasingly important
sphere of corporate social
responsibility, CCS has
worked to benefit the
rural economy,
generating
employment and improving the living while
standards of the farming community. The below-the-
company has invested significantly in line consumer
maintaining sustainable partnerships, whilst promotions and
strengthening its supply chain. sponsorship activities are also used effectively to
The purchase of raw materials directly from promote the brand.
the local communities in which it is present has
resulted in about 160 farmer families benefiting Brand Values
from the Treacle Project. Here, CCS procures Elephant House Ice Cream is perceived as tasty,
palmyrah honey directly for one of its most trustworthy and of the highest quality. The
innovative products, Pani Cadju ice cream. brand’s continuing quest is to maintain its values
The Cashew Outgrower Project has also and retain the trust of its consumers, won over
been a blessing to local cultivators. Previously, many decades. Innovation, continuous
the company imported 40% of its cashew responsiveness to consumer needs and strong
requirement from India. In 2005, CCS signed supply-chain management have been the triune
forward-sales agreements with local cashew pillars of its sustained success.
growers. This proactive patronage enabled the
company to purchase its total requirement www.keells.com
locally, ensuring that farmers obtained a fixed
price for their produce.
CCS is presently reaping the rewards of
another salient investment, its Vanilla Outgrower
Project. A key ingredient in Elephant House Ice
Cream, vanilla was previously imported from
Madagascar. But due to the
global demand for
this raw material
and correlated
issues impacting
on vanilla
cultivation, the
company decided to
enter into a mutually
beneficial agreement
with local farmers. Thus,
it undertook to purchase
Sri Lankan farmers’ vanilla
crops at a predetermined
price.
Promotion THINGS YOU DIDN’T KNOW ABOUT
The company’s success has been
attributed to the positioning of its key Elephant HOUSE ICE CREAM
brands. Leveraging on its primary brand Elephant House is the number-one choice
strengths, CCS has competed effectively in among consumers of ice cream in Sri Lanka,
marketing its products locally through the commanding a share of over two-thirds of the
development of a range of innovative local market.
ice cream products. Its hallmark
Karutha Kolumban, Pani Cadju, The brand’s ice creams have survived
Manga Batta & Wonder Bar sub- challenges to its success, posed by stiff
brands have enabled Elephant to competition from rival multinationals, by being
stand its ground amidst fierce responsive to consumer needs.
competition.
The CCS strategy of purchasing raw materials
The brand’s dominance in the local
from local farmers has been mutually
market can be attributed to better
beneficial and is an ongoing boost for the
understanding of the local consumers’
rural economy.
psyche, translating readily into its success in
marketing it products. Sri Lanka’s ice cream market is poised to
Elephant House’s preferred medium for grow, as the per capita ice cream
advertising its ice creams is TV. A substantial consumption is comparatively low when
chunk of the brand’s marketing budget is compared with the region, at 1.1 litres per
allocated to above-the-line communications, year.
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