Ice Cream Industry

INDUSTRY ANALYSIS REPORT

WITH REFERENCE
TO
ICE CREAM INDUSTRY

Submitted by:
 Ice Cream Industry

Content

SNo Title Page No

1 Industry Analysis Overview 3-7

2 Ice Cream Industry Profile 8

3 Ice Cream Industry Growth 10

4 Top Ice Cream Companies list 11

5 Short Profile of Ice Cream Companies 12-15

6 SWOT Analysis of Ice Cream Industry 16

7 Market Share of Ice Cream Industry 17

8 Conclusion 18

9 Reference 19
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Industry Analysis Overview:

The main objective of industrial analysis is to assess the prospects of

various industrial groupings. At any stage in the economy there are some
industries which are growing while others are declining, the performance
of companies will depend among other things upon the state of the
industry as a whole and the economy. If the industry prosperous, the
companies within the company may also be prosperous although a few
may be in bad shape. The share price of the company is empirically found
to depend up to 50% on the performance of the industry and economy.

To analysis the industrial performance one should follow three steps.

 Industry life cycle analysis

 Study of the structure& characteristics of an industry
 SWOT analysis

1. Industry life cycle analysis:(Product life cycle theory)

Many industrial economists believe that the development of almost

every industry may be analyzed in terms of life cycle with four well defined
stages.

Pioneering stage :( Introduction stage)

The stage is characterized by introducing of a new product and

uptrend in business cycle which encourages new product introductions.
Demand keeps on growing at an increasing rate competition is generated
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by the entry of new firms to grab the market opportunities weaker firms
face premature death while stronger over survive to grow and survive.
This stage is mainly suitable for a speculator.

Rapid growth stage: (Expansion stage)

Firms which enter in pioneering stage will concentrate on

expansion of their sales & profits in this stage. It is suggest to the investor
respond quickly & invest more in this stage. The market continues to grow
but slowly offering steady and slow growth to sales of industry. It is a
phase of consolidation wherein companies establish durable policies
relating to dividends and investments.

Maturity stage:

This stage show sign of slow progress and also prospects of decay.
After enjoying an above average rate of growth during the rapid growth,
the industry enters the maturity stage. In this stage the growth of the
industry is more or less developed, it is growth rate is comparable to that
of the economy of a country it is suggested to hold the investment in this
period.

Declining stage:

The stage is existed due to the changes in the consumer

performance competition from new product etc,. In this stage the industry
may grow slightly during prosperous periods, stagnate during normal
periods and during recessionary periods.
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2. Study of the structure and characteristics of an industry:

Since each industry is unique; a systematic study of its specific features

and characteristics must be an internal part of the investments decision
process. Industry analysis should focus on the following:

Structure of industry & nature of competition:

(a) The no. of firms in industry & market share of top few firms in the
industry.
(b) Licensing policy of the government.
(c) Entry barriers, if any
(d) Pricing policy of the firm.
(e) Degree of homogeneity or differentiation among products.
(f) Competition from foreign firms.
(g) Comparison of the products of the industry with substitutes in
terms of quality, price, appeal& functional performance.

Nature & prospects of demand:

(a) Major customers and their requirements.

(b) Key determinants of demand.
(c) Degree of cyclicality in demand.
(d) Expected rate of growth in the foreseeable future.

Cost, efficiency, and profitability:

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(a) Proportions of the key cost elements namely raw material, labor,
utilities, and fuel.
(b) Productivity of labor.
(c) Turnover of inventory, receivables, and fixed assets.
(d) Control over prices of outputs & inputs.
(e) Behavior of prices of inputs & outputs in response to inflationary
pressures.
(f) Gross profit, operating profit, and net profit margins.
(g) Return on assets, earning power, and return on equity.

Technology & research:

(a) Degree of technological stability.

(b) Important technological changes on the horizon & their implications.
(c) Research & Development outlays as a percentage of industry sales.
(d) Proportion of sales growth attributable to new products.
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SWOT analysis:

SWOT Analysis is a strategic planning method used to evaluate the

Strengths, Weaknesses, Opportunities, and Threats involved in a project or
in a business venture. It involves specifying the objective of the business
venture or project and identifying the internal and external factors that are
favorable and unfavorable to achieving that objective. The technique is
credited to Albert Humphrey, who led a convention at Stanford University
in the 1960s and 1970s using data from Fortune 500 companies.

A SWOT analysis must first start with defining a desired end state or
objective. A SWOT analysis may be incorporated into the strategic planning
model. An example of a strategic planning technique that incorporates an
objective-driven SWOT analysis is Strategic Creative Analysis (SCAN).
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Strategic Planning, including SWOT and SCAN analysis, has been the
subject of much research.

 Strengths: attributes of the person or company that, are

helpful to achieving the objective.
 Weaknesses: attributes of the person or company that, are
harmful to achieving the objective.
 Opportunities: external conditions that, are helpful to
achieving the objective.
 Threats: external conditions which could do damage to the
objective.

Identification of SWOTs is essential because subsequent steps in the

process of planning for achievement of the selected objective may be
derived from the SWOTs.

First, the decision makers have to determine whether the objective is

attainable, given the SWOTs. If the objective is NOT attainable a different
objective must be selected and the process repeated.

The SWOT analysis is often used in academia to highlight and

identify strengths, weaknesses, opportunities and threats. It is particularly
helpful in identifying areas for development.

Evidence on the Use of SWOT

SWOT analysis may limit the strategies considered in the evaluation.

"In addition, people who use SWOT might conclude that they have done an
adequate job of planning and ignore such sensible things as defining the
firm's objectives or calculating ROI for alternate strategies." Findings from
Menon et al. (1999) and Hill and Westbrook (1997) have shown that SWOT
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may harm performance. As an alternative to SWOT, J. Scott Armstrong
describes a 5-step approach alternative that leads to better corporate
performance.

Use of SWOT Analysis:

The usefulness of SWOT analysis is not limited to profit-seeking
organizations. SWOT analysis may be used in any decision-making
situation when a desired end-state (objective) has been defined. Examples
include: non-profit organizations, governmental units, and individuals.
SWOT analysis may also be used in pre-crisis planning and preventive
crisis management. SWOT analysis may also be used in creating a
recommendation during a viability study.
SWOT-landscape also indicates which underlying strength/weakness
factors that have had or likely will have highest influence in the context of
value in use (for ex. capital value fluctuations).
Using SWOT to analyze the market position of a small management
consultancy with specialism in HRM.
Strengths Weaknesses Opportunities Threats
Reputation in Shortage of Well established Large
marketplace consultants at position with a consultancies
operating level well defined operating at a
rather than market niche. minor level
partner level
Expertise at Unable to deal Identified Other small
partner level in with multi- market for consultancies
HRM consultancy disciplinary consultancy in looking to invade
assignments areas other than the marketplace
because of size HRM
or lack of ability
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Ice Cream Industry Profile:

The ice cream industry in India is in many ways, reflective of the

overall population distribution. The country’s population is primarily rural
with approximately 65% of the population living in villages with a
population of less than 5,000; this means there are well over 150,000
villages with a combined population in excess of 650 million. This has
contributed to a highly fragmented industry that by many estimates has
over 70,000 ice cream entities. Many of these are single family operations
where the product is made either in the home or in very small factories and
sold on the streets. The 350 million remaining people are concentrated in
the cities where the industry is reasonably concentrated in the hands of a
few international and domestic firms. It is estimated that only 30% of the
entire market is “organized” and the industry meets the classic definition of
a fragmented industry, that is, one where there is an absence of market
leaders with the power to shape industry events.

Ice cream or ice-cream is a frozen dessert usually made from dairy

products, such as milk and cream, and often combined with fruits or other
ingredients and flavours. Most varieties contain sugar, although some are
made with other sweeteners. In some cases, artificial flavourings and
colorings are used in addition to (or in replacement of) the natural
ingredients. This mixture is stirred slowly while cooling to prevent large
ice crystals from forming; the result is a smoothly textured ice cream.

The meaning of the term ice cream varies from one country to
another. Terms like frozen custard, frozen yogurt, sorbet, gelato and others
are used to distinguish different varieties and styles. In some countries, like
the USA, the term ice cream applies only to a specific variety, and their
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governments regulate the commercial use of all these terms based on
quantities of ingredients.[2] In others, like Italy and Argentina, one word is
used for all the variants. Alternatives made from soy milk, rice milk, and
goat milk are available for those who are lactose intolerant or have an
allergy to dairy protein, or in the case of soy milk for those who want to
avoid animal products.

Ancient civilizations have served ice for cold foods for thousands of
years. The BBC reports that a frozen mixture of milk and rice was invented
in China around 200 BC, and in 618-97 AD, King Tang of Shang had 94 men
who made a frozen dish of buffalo milk, flour, and camphor. The Roman
Emperor Nero (37–68) had ice brought from the mountains and combined
with fruit toppings. These were some early chilled delicacies.In 400 BC,
Persians invented a special chilled pudding-like dish, made of rose water
and vermicelli which was served to royalty during summers. The ice was
mixed with saffron, fruits, and various other flavours. The treat, widely
made in Iran today, is called "faloodeh", and is made from starch (usually
wheat), spun in a sieve-like machine which produces threads or drops of
the batter, which are boiled in water. The mix is then frozen, and mixed
with rose water and lemons, before serving.

Industry Competition:

As the industry evaluation would indicate the competition is

significant. The 70,000 some participants is a large number but the more
serious challenge comes from the top six national firms; Amul, Kwality
Walls, Mother Dairy, Vadilal, Dinshaw, and Arun. These top six firms
dominate the market and essentially control the organized market. Detail
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statistics are not available to indicate market share but Ben & Jerry's
estimates that these six firms control 40% to 50% of the urban market.

Historically MNC’s have not achieved much success in penetrating the

Indian market. There are a number of possible explanations for this; the
relative embryonic and disorganized nature of the market, excessive
government regulation that included excessive tariffs and the restriction
that imported ice cream could only be sold in hotels, and a highly
fragmented and ineffective media. Most of these market inefficiencies have
been or are in the process of being corrected and Ben & Jerry's believes
that conditions have ripened to the extent where MNC’s can now effectively
enter the market and compete with the domestic firms.
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Industry Growth:

The three factors of growth, population, per capital consumption,

and price are all projected to increase over the next six years. Population is
projected to grow at 1.8%, per capital consumption is projected to grow at
5%, and prices are projected to increase at just over 1% per year. (Overall
the long-term projection for consumer prices is expected to rise at 3.5%,
however, given the intense level of competition Ben & Jerry's does not
think it likely that ice cream prices will rise that fast.) Overall the market
will grow from $245 million to $360 million, a compound growth rate of
8%. Of the $115 million in growth, 60% will come from increased per
capita consumption, 24% from increased population, and 16% from
increase in price.
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Top Ice Cream Industries List:

 Vadilal Ice Cream India

 Amul Ice Cream
 Kwality Walls
 Mother Diary
 Ben & Jerry
 MTR
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Short Profile of Ice Cream Companies:

Vadilal Ice Cream Ltd:

Vadilal ice cream division has always been a hot favorite with the
people both inside and outside the organization. In India, the name Vadilal
is synonymous with Ice Cream. The Ice Cream industry in India today has a
turnover of Rs. 15 billion [US$ 330 million]. A quarter of this comes from
the house of Vadilal alone. But that’s no surprise, considering that we have
the largest range of Ice Creams in the country – 120 – plus flavors, in a
variety of more than 250 packs and forms. The range includes cones,
candies, bars, ice-lollies, small cups, big cups, family packs, and economy
packs. Something for all tastes, preferences and budgets.
To make it convenient for our consumers to relish our complete
range under one roof, we have set up a chain of Happiness Parlors – ‘Ice
Cream boutiques’ so to say. Hordes of people flock to these parlors daily
because they know that our products contain the purest and creamiest
milk, and the freshest and tastiest fruits and nuts.
Among our products are OneUp Chocobar and King Cone – all-time
favorites which have today attained the generic status. Another hit is our
Kulfi – traditional Indian milk sweet. Some of our products are a
combination with confectioneries.
Since our products are highly perishable, quick transport and proper
storage are of paramount importance. Hence our refrigeration equipment
and deep freezes are imported from companies, which are world leaders in
their respective fields. To ensure sufficient, timely and constant ice cream
supply, we have a Cold Chain Network comprising three manufacturing
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plants [totaling a production capacity of 1.25 lakh litre per day], about 23
C&FA, more than 500 Distributors and over 40,000 Retailers.

Amul India Ltd:

AMUL means "priceless" in Sanskrit. The brand name "Amul," from
the Sanskrit "Amoolya," was suggested by a quality control expert in
Anand. Variants, all meaning "priceless", are found in several Indian
languages. Amul products have been in use in millions of homes since
1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul
Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul,
Amul Milk and Amulya have made Amul a leading food brand in India.
(Turnover: Rs. 67.11 billion in 2008-09). Today Amul is a symbol of many
things. Of high-quality products sold at reasonable prices. Of the genesis of
a vast co-operative network. Of the triumph of indigenous technology. Of
the marketing savvy of a farmers' organisation. And of a proven model for
dairy development.
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Kwality Walls Ltd:

Kwality Ice Cream is the pioneer in the Indian ice-cream

manufacturing industry and in 1956 became the first company in the
country to use imported technology for manufacturing ice-cream on a
commercial scale. As the ice-cream industry exploded in India, in 1995
Kwality Group joined hands with Hindustan Lever Limited and then there
was no looking back.

The Indian consumer market was introduced to “KWALITY WALLS” –

the result of a collaboration between global brand Walls and the leading
Indian ice-cream brand Kwality. Though the two giants eventually parted
ways, the collaboration made Kwality a household name and created deep
in roads for the brand in the consumer market. Today, Kwality is not just a
brand – it is the ice-cream associated with the Indian summer; it’s the first
choice in ice-cream for any child or adult during the scorching Indian
summers. Kwality ice-creams are trusted not only for their rich, creamy
flavours, but also for their trusted quality and nutritious food value.
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Mother Diary Ltd:

Mother Dairy Fruit and Vegetable Pvt. Ltd. offers the following
products: Mother Dairy markets dairy products like Liquid Milk, Ice
Creams, Flavoured Milk, Dahi, Lassi, Mishti Doi, Ghee, White Butter, Table
Butter, Cheese, UHT Milk, Dhara range of edible oils and the Safal range of
fresh Fruits & Vegetables, Frozen Vegetables and Fruit Juices at a national
level, through its sales and distribution networks, for marketing food items.
Mother Dairy milk (Bulk Vended Milk) is fortified with vitamin A @2000 IU
per litre of milk as a part of social accountability. This program was started
with the Mother Dairy, Delhi, since February 1980and there after Mother
Dairy is continuing this program on their own as a social responsibility
without having any financial assistance from the Government as well as
since it is felt that BVM is generally consumed by the middle / lower
middle / poor strata of the society. It is also found that the dietary practices
adopted by these classes are deficient in Vitamin A.

Mother Dairy sources significant part of its requirement of liquid

milk from dairy cooperatives. Mother Dairy sources fruits and vegetables
from farmers / growers associations. Mother Dairy also contributes to the
cause of oilseeds grower cooperatives that manufacture/ pack the Dhara
range of edible oils by undertaking to nationally market all Dhara
products.The company markets an array of fresh and frozen fruit and
vegetable products under the brand name SAFAL through a chain of 400+
own Fruit and Vegetable shops and more than 20,000 retail outlets in
various parts of the country. Fresh produce from the producers is handled
at the Company’s modern distribution facility in Delhi with an annual
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capacity of 200,000 MT. An IQF facility with capacity of around 75 MT per
day is also operational in Delhi. A state-of-the-art fruit processing plant of
fruit handling capacity of 120 MT per day, a 100 percent EOU, setup in
1996 at Mumbai supplies quality products in the international market.
With increasing demand another state-of-the-art fruit processing plant has
been set up at Bangalore with fruit handling capacity of around 250 MT per
day.

Ben & Jerry Ltd:

Since 2003, Ben & Jerry's have been working on a sustainable Caring
Dairy initiative, which helps level out needs of the farmers and their cows,
as well as the planet's needs. The company has, so far, reduced energy use
on their 11 farms by 2%, and converted all their farms to green energy.
Also, in 2002, Ben & Jerry's in the USA committed to reducing carbon
dioxide emissions by 10% by 2007, and by investing in a variety of
efficiency measures, this target was achieved with ease - the USA now
produce 32% less carbon dioxide emissions (per pint of ice cream) today
(in 2008) than in 2002. This initiative was brought to the exclusive
provider of milk for Ben & Jerry's European ice cream production,
Beemster Cheese, in 2007.

In addition to helping farmers and their cows, in 2001 Ben & Jerry's
began sourcing vanilla, cocoa, and coffee, for their smooth ice creams, from
cooperatively run farmer associations - these community structures help
promote their members' quality of life, improve worker's benefits, and
sustain a commitment to their land and communities. In 2006, the world's
first ever vanilla ice cream made with Fairtrade ingredients was launched
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by Ben & Jerry's. 2007 saw the release of Vanilla Toffee Crunch, using
100% Fairtrade certified cocoa, sugar, and vanilla, and in 2008, Chunky
Monkey was guaranteed to be traded in accordance with international
Fairtrade standards as well.

MTR Pvt Ltd:

MTR Foods Private Limited is amongst the top five processed food
manufacturers in India. We manufacture, market and export a wide range
of packaged foods to global markets that include USA, UK, Australia, New
Zealand, Malaysia, Singapore, UAE, Japan and Oman.

Starting with the legendary MTR restaurant in Bangalore, India’s

silicon valley, we now offer ''complete meal solutions'. Our wide range of
products include ready-to-eat curries and rice, ready-to-cook gravies,
frozen foods, ice cream, instant snack and dessert mixes, spices and a
variety of accompaniments like pickles and papads.

Our deep understanding of culinary expectations and needs has

resulted in many new and innovative products. Our investments in
infrastructure and technology ensure that we can scale rapidly and bring
these to market. Today, consumers across the globe count on us to bring
them all-natural, wholesome and delicious food that is also convenient and
no-fuss.
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The key players in the India ice cream market are:

 Gujarat Co-operative Milk Marketing Federation Ltd

 Vadilal Industries Ltd

 Mother Dairy Fruit & Vegetable Pvt Ltd

 Hindustan Unilever Limited

 Devyani Food Industries Ltd

 Graviss Foods Pvt Ltd

 Dinshaws Dairy Foods Pvt. Ltd

 Havmor Ice Cream Pvt Ltd

 Ramani Icecream Company Limited

 Dairy Classic Ice Creams Pvt. Ltd.

 General Mills Inc.

 Others
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Market Segmentation

Ice cream refers to a frozen dessert made of milk, sugar, cream, eggs,
berries, and flavours. This also includes stabilizers, like gluten, to ensure a
smooth texture of the mixture. It is distinguished by a smooth, fluffy
texture that is accomplished by rapidly shaking the frozen mixture to
prevent the development of large ice crystals. Vanilla, chocolate, raspberry,
strawberry, and butterscotch are among the most popular flavourings used
in ice cream

The major types in the market include:

 Impulse Ice Cream

 Take-Home Ice Cream

 Artisanal Ice Cream

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Based on flavour, the India ice cream market is divided as follows:

 Chocolate

 Fruit

 Vanilla

 Others

The market, on the basis of packaging type, is segmented into:

 Cup

 Stick

 Cone

 Brick

 Others

On the basis of end use, the market is divided into:

 Retail

 Institutional and HoReCa

Based on distribution channel, the market is divided into:

 Supermarkets and Hypermarkets

 Ice Cream Parlours

 Convenience Stores

 Online

 Direct Selling
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The regional markets for ice cream in India are:

 North India

 East and Central India

 West India

 South India

Market Analysis
India is among the world's largest manufacturers of dairy products, which
is a major driver for the India ice cream market. In addition, rapid
urbanisation as well as growing per capita income rates, have opened up
growth opportunities for the country's premium ice cream variants.
Consumers are eager to experiment with new flavours and styles that have
led to the introduction of a wide range of products in the market, like
sundaes.
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In addition, regional and conventional flavour variants are rapidly gaining
popularity in the market. The availability of wide range of flavours
including exotic Indian flavours like Anjeer, Badam, Kesar, Pista, Nolen Gur,
and Rajbhog as well as several kulfi variants like Rabri, Faluda And Matka
Kulfi, is driving the market further. In addition, the expansion of online
retail channels, offering easy shopping, a wide range of flavours, and a
reasonable price point, along with improvements in the infrastructure of
the cold chain, also contributes significantly to the development of the
industry. Other factors, including the emergence of intense competition
between leading domestic and international market players and the launch
of gluten-free and vegan variants, are also propelling the growth of the
India ice cream market.

The report gives a detailed analysis of the key players in the India ice
cream market, covering their competitive landscape, capacity, and latest
developments like mergers, acquisitions, and investments, expansions of
capacity, and plant turnarounds. The comprehensive EMR report provides
an in-depth assessment of the market based on the Porter's five forces
model along with giving a SWOT analysis.
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SWOT Analysis of Ice Cream Industry:

Strengths:

1) They are available in reasonable prices.

2) Known for product quality.
3) Strong presence of parent company in India.
4) The Brands almost generic to their product category
5) Wide variety of unique ice cream flavors.

Weakness:

1) The durability of ice-creams is not really good

2) it melts very soon
3) The industry has a complex supply chain management and the main
issue is traceability
4) Domestic business as well as many international markets are
thriving

Opportunities:

1) They can come up with new flavors

2) They should focus more on their advertising and marketing
strategies
3) They should come up with offers for purchase of ice-cream in whole
market
4) Efforts to exploit export potential are already on
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Threats:

1) Currently, the threat of new viable competitors

2) Foreign players entering the market
3) Consumer buying power also represents a key threat in the industry
4) Consumers can easily switch to other substitutes with little cost or
consequence
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Market Share of Ice Cream Industry:

Market Share of
Ice Cream Industry

Others 19% Kwality Walls

Arun 6% 37%

Ben and
Jerry
6%
Amul
Vadilal 8%
13%
MTR
11%
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CHALLENGES FOR MEDIUM-SIZED ICE CREAM

Reduced raw material costs, easy and reliable operation, flexibility for
different products and low cost of ownership top the wish list of medium-
sized ice cream producers with filler capacities of up to 18,000 units/hour.
What should they be looking for in their production equipment in order to
achieve this? And which are the main challenges they face?

A general trend in ice cream production is towards reducing raw material

costs in order to increase earnings for a given product. But cheaper raw
materials also risk tolerance increase, e.g., in distances between cones in a
stack, and deviation of material consistency between batches. This could
result in the purchasing department reaching its goal of achieving low cost
supply, but the technical department being blamed by the production
department for equipment not performing up to standard. The solution is
to invest in robust and proven processing equipment that can cope with
deviations and flaws in raw materials and deliver ice cream products of
consistent quality.

Easy to operate

Since labour costs can be a substantial part of total production cost, it is

essential that production equipment can be run and operated with little
specific know-how and training. Typical for medium-sized producers is
that production planning often changes rapidly to meet new demands in
sales channels. To accommodate this, it is crucial that equipment operation
is easy enough to allow more or less any operator to make quick
changeovers, start up equipment and handle optimization of sub-processes
such as chocolate spraying on the fly.
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Easy to change product type

Many producers in this segment have the need and ambition to offer many
different products to the market without over-spending on the production
equipment. And in cases where there is simply not space for a second line,
one machine needs to be able to produce a range of different products. This
requires a machine that can be easily re-configured for new products –
whether a minor size change (such as from one cone size to another) and
options such as products with or without toppings, or a totally different
product type such as a changeover from cones to cups with snap-on lids.

Reliable operation with a low investment cost

To cope with all of these demands, and to deliver on quality and the bottom
line, ice cream fillers must combine a high level of flexibility with easy
operation and robustness – all at a reasonable investment cost. A
complicated and expensive machine would most probably deliver reliable
operation, but might lack flexibility and put high demands on qualified
operators to run, serve and maintain it. A simpler machine, on the other
hand, might offer a lower investment cost, but at the expense of both
flexibility and robustness. The problems would probably begin with the
cone dispenser being unable to cope with deviations in the raw materials.
The result? All the trouble and waste could potentially turn that cheap
investment into a nightmare.

Overcoming the main challenges facing ice cream producers in the small
and medium segments really boils down to a few key things.
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 Make sure the machine you choose is robust, reliable and easily
configured for different products – and can be run by operators with
minimal training.
 Go for a machine with uncomplicated and reliable features – cone
dispenser, chocolate sprayer and lid dispenser, etc. – and ensure that
these can be perfectly adapted to the raw materials you are using
and cope with actual deviations.
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Emerging Ice Cream Technology Trends

Upon speaking with Anders from Gram Equipment, he told us about

the four key trends in ice cream and the subsequent ice cream technology
that is becoming more prevalent in the industry today which, according to
Anders, will continue to increase in importance over the next five years.
1. Ice Cream Becomes Bite Sized
Ice cream consumption overall is growing but Gram Equipment have seen
a noticeable increase in the amount of requests for snack-sized and portion
control formats in new innovations. These bite-sized novelties can be
challenging from an equipment perspective because they are often created
outside the traditional ice cream machine formats, so the technology used
by brands may often have to be adapted or changed in order to maintain
efficient production levels.
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This is why it is important to plan ahead in the product development

phase. Considering what your format needs may be in the future can help
you avoid or minimise technology or equipment adjustments. As an
example, Gram Equipment makes sure your extrusion line is flexible
enough to produce sticks, but with minimal change-over, you could also
manufacture bites or other extruded stickless formats.

2. Traceability from Farm to Spoon

Traceability is becoming hugely important across the entire mainstream
food industry and has now also moved into ice cream and frozen desserts.
Consumers are more appreciative of a brand’s transparency and ability to
keep track of their raw materials and ingredients all the way from farm to
spoon.
Technology-wise, Gram Equipment is now offering the option of printing
digital QR codes which, thanks to full integration opportunities with the
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client’s MRP system, will allow the final consumer to find all relevant
information regarding the traceability of their ice cream.

“We make a stronger link between the customer and the traceability of a
brand’s individual product. We are expecting to see much more of this in the
near future as consumers become more careful about what they are actually
consuming.”

This traceability system works due to each individual product, as well as its
external packaging, having its own QR code, with customised information
about the origin of the key ingredients (which is as transparent and
detailed as the client’s information system can provide). For ice cream, this
might look like showing which farm the cows that made the milk came
from, or which country the chocolate inclusion / coating was imported
from. This is not just a concept on paper, the equipment is already readily
available!

3. Consume Less for a Better Planet

Another trend that has been growing across the food industry and
becoming fundamental in ice cream as well is the sustainability piece
which Gram Equipment expects to grow immensely over the next 12
months.

“Technology has a big role to play in the sustainability of the ice cream
industry. In the last couple of years, we have made various achievements in
actually reducing the energy. At a high level, there are basically three
different ways of manufacturing ice cream; extrusion, moulding, and filling.
 Ice Cream Industry
On extrusion, we have managed to achieve more than 10% energy reduction,
and in moulding, we have achieved more than 12% reduction in energy.”

Reducing waste is another profitable sustainability goal that businesses

can work towards. Helping brands achieve this reduction in waste can be
carried out by ensuring that the equipment they use is designed to be less
dependent on operators and more capable of self-monitoring. For example,
a machine designed to reduce spillage or overflow will require fewer
ingredients to create the same end-product.

“No ‘good food’ waste is a concept that many of our customers are moving
towards, meaning that if the food is good, it should not be wasted”.

4. From Plastic to Paper-based

In order to better align with the movement to create less plastic pollution,
ice cream brands are looking for ways to minimise or avoid plastic in their
products. This change in the industry is another challenge for ice cream
equipment manufacturers who have to adjust to the new outputs required.
Luckily, for brands moving away from plastic and towards paper-based
packaging, the investment and changes required are, in most cases, very
minimal and can be easily adapted to suit existing technology needs.

3 Key Ice Cream Trends and their Impact on Technology

 Ice Cream Industry
1. Non-Dairy Desserts Disrupt
Non-dairy frozen desserts are on the rise globally and the equipment
required to handle the needs of a non-dairy frozen dessert brand is
disruptive because non-dairy ice cream freezes differently due to the fat
content. However, consumers still want their non-dairy ice cream to have a
similar texture to dairy ice cream, so manufacturers need to consider the
use of new equipment in order to satisfy this consumer need.
While this is usually not a concern for companies that exclusively produce
plant-based or non-dairy frozen desserts, traditional ice cream brands
looking to expand their portfolio to include non-dairy products may be
wondering how they can do so in the most seamless and affordable way
possible.

Gram Equipment is working on this and currently work with a piece of

equipment that can be easily installed to existing assets like traditional
freezers so that brands can switch from dairy to non-dairy production
processes almost instantaneously, thanks to the kit’s ability to be installed
and uninstalled within a matter of hours.

2. Increased Indulgence and Co-Branding Creations

Whether it comes from more indulgent ice cream (multi-textures, multi-
layers, larger inclusions) or from co-branding creations, ice cream
manufacturers are looking for more diverse ingredients than just milk,
cream, sugar and variegates. Challenges can arise from this sudden need
for manufacturers to handle those new products or ingredients, often from
other categories. For example, if an ice cream brand wants to include a Kit
Kat bar in their pint, the manufacturer needs to be able to adjust their
 Ice Cream Industry
equipment to cater for the new ingredient, which can lead to hefty
investments or time-consuming changes in the manufacturing process.
“From a technology point of view, this challenges us as we need to have the
right equipment to handle the addition of these new ingredients that we have
traditionally not handled before in the ice cream industry.”

The trend for ice cream indulgence innovation and open collaborations
means that this will likely be a more common challenge in the future and
there should be a solution to allow both small and large manufacturers the
option to cater to this growing need through the use of more adaptive
technology. Gram Equipment claims to stay ahead of the curve in this
aspect by keeping an eye on other industry and category solutions.

“We like to look to other industries, like bakery, to better understand how
they are handling this, and then think about how we can convert these
methods into solutions for the ice cream industry.”
3. Allergen-Free Equipment

The rise in brands making more inclusive and accessible ice cream
products has had a knock-on effect on the equipment required to cater to
these needs. The design of allergen-free equipment and technology needs
to be differentiated for safety purposes and the challenge lies in figuring
out how to switch between equipment for products with and without
allergens in a way that remains efficient and effective for brands (i.e.
minimal cleaning time, full assurance of allergen-free…).
 Ice Cream Industry

Exemple of a highly automated ice cream extrusion line

COVID has been an accelerator for digitalisation, including the

installation of new production lines.

Markets where out-of-home ice cream consumption encompasses a large

part of their sales, such as Asia and the Middle East, are the ones that have
suffered the most during the pandemic period due to business closures in
this space. On the other hand, European and North American markets saw
ice cream sales rise during Covid given their preference for at-home ice
cream consumption. Apart from this slowed consumption rate in some
 Ice Cream Industry
countries, which is now beginning to level out again, the ice cream industry
as a whole has remained relatively successful throughout the pandemic
period.
Thinking positively, companies like Gram Equipment have realised their
ability to achieve things they did not think possible pre-Covid. For example,
during the past year, they have been able to successfully install and
commission digital production lines in spaces outside of their HQ in
Denmark all thanks to the use of virtual reality (VR) glasses which allow
them to virtually manage and instruct foreign office teams on-site!
Impressive!
“From our HQ in Denmark, we were able to digitally commission a
production line through the use of virtual reality which has granted us an
immensely positive impact on our future flexibility in international markets.”
Ice cream has also become more prevalent in the eCommerce and online
delivery world since the pandemic began. Customers now have the option
of ordering ice cream online and having it delivered to their location
almost immediately. This is a trend we noticed Magnum in Europe
capitalising on in our July What’s New article, but it is a trend that all
brands should be taking into consideration as the global ice cream industry
scales towards even faster and more immediate innovation opportunities.
The future of ice cream tech may also involve more minimalist or
contained production spaces. Solutions like this could be helpful in coping
with the extremely fast growth rate of ice cream sales in certain countries,
like India, where consumption is rising in double digit figures but they also
experience a lack of cold chain distribution channels.
 Ice Cream Industry

Conclusion:

Following are the concluding points taken into consideration after

the conduct of the Industry Analysis:

 Advertisement acts as a very important role here. So if heavy

advertisements are carried out it will definitely increase purchase.

 Due to the changing in climate, life style and preferences, it was not
necessary that they will consume same product every time.

 The Ice Cream Industry had to further focus on:

 Strengthen communications
 Multi v/s sole dealer
 Training to dealers
 Ice Cream Industry

Reference:

Books:

1) Prasanna Chandra : Investment analysis & portfolio

management, 2nd Edition
Tata Mc Grill Hill, New Delhi.

Journal: The Brand Reporter

Web Sites:

1) www.moneycontrol.com
2) www.reportbuyer.com
3) www.indiatodaygroup.com
4) www.moneycontrol.com
5) www.indiainbusiness.nic.in
6) www.google.co.in