Iced cream, better known as ice cream is a dairy product that is witnessing an evolution in the recent past. Growing urbanisation, rising disposable incomes, growing desire for indulgence treats, and changing customer preferences are the factors contributing to the rise in demand for ice creams and frozen desserts.
The global ice cream market is estimated to grow at a Compound Annual Growth Rate (CAGR) of 4.7 percent, reaching a staggering $73.2 billion by 2022.
India is the world’s largest producer of milk and accounts for more than one-fifth of the total milk production. In contrast, per capita consumption of ice cream remains low at 400 ml. However, led by the changing socio-economic dynamics of India, the ice cream sector is expected to register a growth of more than 50% from 2019 to 2022. The growth is driven by the availability of different varieties and flavours of ice creams such as hard ice cream, soft ice cream, low-fat ice cream, and others.
Ice cream manufacturers in India and around the world are stepping up the innovation game for meeting consumer’s demands for new and exotic flavours of ice creams. Along with traditional flavours like vanilla, mango, strawberry, etc., there is a demand for exotic flavours like blueberry, kiwi, pineapple, coconut, Indian pan, watermelon, and more.
With greater discretionary spending and increasing health awareness, consumers in India are open to trying newer variants that meet their expectations. Youth under 26 years of age, accounting for more than 53 percent of the total Indian population, is considered a key demographic for the ice cream and the frozen dessert sector.
A significant percentage of the customer base is inclined towards healthy and premium options. In India, the standard fat content in ice creams has been reduced to less than 5 percent. Diet-friendly ice creams that comprise fat-free, low sugar, pro-biotic, and sugar-free variants are introduced by leading ice cream brands as a part of the premium range. These incremental product innovations drive the growth of the local & global ice cream market.
The Indian market comprises a mix of Indian as well as international brands that are driving consumption in metros, mini-metros, and rural parts of India. Many unorganized players have set up ice cream businesses in rural areas which is potentially a bigger market than metro cities.
Maharashtra represents the largest market followed by Uttar Pradesh and Gujarat. International and regional players are providing impetus to the Indian ice cream market. Some of the prominent players in the market are Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), Kwality Walls, Vadilal, Mother Dairy, Hatsun, and Cream Bell.
Non-dairy ice cream products, including lactose-free ice creams, are also contributing to the non-dairy ice cream industry growth. There is a demand for frozen desserts and froyo (frozen yogurts) that is attractive to consumers and considered as sector competitors in the Indian market. Frozen dessert manufacturers are at loggerheads with the ice cream makers as they are insisting that frozen dessert products should be allowed to be labelled as ice cream.
The ice cream industry in India is projected to generate a revenue of approximately $3.4 billion by 2021. Employing more than 15 lakh people, the ice cream industry is one of the fastest-growing segments of the dairy or food processing industry. Ice-cream producers, including multinational companies in the cold chain, refrigerated transportation & packaging, etc. are all matters of concern for the ice cream industry. There is need to study topics such as emerging market trends, food safety, labelling, and regulations that affect the industry and brand strategy for expansion and market domination. CII aims to encourage such discussions to open up the market through its events for the sector.
The future of the Indian ice cream market entails innovative ways for product development, strengthening rural infrastructure for a wider value chain, and ensuring food producing standards. As Indian palate for a range of gourmet dishes grows, the ice cream industry has a promising future in the subcontinent.