Search Business Opportunities
Business Categories
Jun, 01 2007

The FranchICED Scoop

ICE creams have always been a favourite treat for Indian population. Onset of summer, introduction of new flavours by different brands, new ice cream parlours mushrooming with the upcoming malls and multiplexes have all created an utopian situation for th

ICE creams have always been a favourite treat for Indian population. Onset of summer, introduction of new flavours by different brands, new ice cream parlours mushrooming with the upcoming malls and multiplexes have all created an utopian situation for the growth of ice cream industry in India. With people shelling out a large amount of money on ice creams, Markets for several ice cream brands are soaring higher and higher with every passing day. Ice creams came over to the Indian crowd through vendors who targeted mainly the school kids. These vendors were also found on the streets and playgrounds. Since then, the industry has come a long way to arrive at today's position. With the introduction of various major ice cream brands, the industry has become much more organised. Though local vendors (either outside school gate or on local streets) are still there; the crowd has moved towards different ice cream parlours that offer an array of various flavours with a new toothsome topping everyday. Today, there is a number of choices - from softy cones to sundaes and from sugar free to egg less ice cream. What you have is a rich plethora of delicious ice cream treats. 'Just name it and they have it.'

Growth

Industry sources report that the ice cream market got a boost after de-reservation of the sector in 1997. Total size of ice cream sector being Rs 15 to 16 billion, 30 to 32 per cent belong to the organised sector valued approximately at Rs 4.9 billion, rest is with the unorganised sector. Among the major players, the Kwality Walls brand has a market share of around 50 per cent. Amul, with an estimated market share of 35 per cent, is rapidly gaining growth. Finally, Vadilal is the player in the national market with eight to nine per cent of market share.

Most of the key players have considered expansion of their business through franchise. Increasing demand and coming of established brands have made franchised ice cream parlours to pull enthusiastic ice cream lovers. This has eventually fueled rapid growth. Mohit Dhanjal, Business Manager Retail and OOH, Kwality Walls, says, "Franchising helps the brand to rollout parlours more aggressively as franchisees are able to provide local knowledge of their markets and suitable locations to carry out the business."

Key players

Kwality Walls

Established in 1956, Kwality entered into a strategic alliance agreement with Hindustan Lever in 1995. The next turning point for the company was its joint venture with the global brand leader, Walls to form the umbrella brand that rules the Indian market as Kwality Walls. Today, Kwality Walls is synonymous with summers for its continuous service to the ever-increasing demands of Indian ice cream consumers (six to sixty years of age) with an array of ultra-indulgent, lip-smacking treats like cornetto, feast, sundaes, vienetta, max and moo. Kwality ice cream has been in the parlour business since late 1950s. Later, it acquired a large number of company owned company operated (COCO) parlours, which were renamed in late 1990s as Kwality Wall's Lop Stop. Over the years, the company has moved to a completely franchised model. In 2006, this model was further refined whereby franchisees are provided with a low investment model so as to accelerate the rollout of the parlour format. In the past one year, this number got doubled to over 320 parlours in the country. Dhanjal observes, "The high initial investment barrier was reduced suitably changing the business model, wherein the spirit of partnering in one's business was established and the initial investment of the franchisee was reduced." Speaking about future prospects, Dhanjal says, "It wants to expand its presence in the top 20 cities in the country and is looking at partnering with enterprising franchisees in cities like Amritsar, Ludhiana, Jalandhar, Patiala, NCR, Lukhnow, Kanpur, Agra, Jaipur, Kolkata, Hyderabad, Vijaywada, Vizag, Chennai, Coimbatore, Bangalore, Cochin, Mumbai, Pune, Goa." At present, the company has 200 franchisees and is looking for more ambitious and dedicated franchisees with a passion for ice cream.

Baskin Robbins

More-than-six-decades old company, Baskin Robbins is the biggest ice cream chain in the world and operates over 5,600 stores in 40 countries. Presently, ice cream market size in India is estimated at Rs 850 to 900 crore and Baskin Robbins share is around five per cent. One of the very few successful QSR and franchised models, it entered India in 1993 via JV with Ghai Enterprises. They opened company owned stores. Later, they went for BOT (build, operate and transfer) model, which worked really well and attracted franchisees. Commenting on the growth of franchisees, Sanjay Coutinho, COO, Baskin Robins, says, "Our idea was and always is to maximise franchisee returns, ensure that we develop a robust, stable and highly profitable business model. To further expand, our backend (logistics, production etc.) had to be really strong. Once we ensured this and had a team of passionate and professional team working with us, it was never an issue." As regard formats, Coutinho observes, "High streets make a better option in comparison to malls for they have stability and self-sustenance potential unlike outlets in malls, which are purely dependent on footfalls generated by the mall." Baskin Robbins, known for their '31 flavour' slogan, entered India with 21 flavours and the iconic pink spoon which allowed customers to sample each flavour to find out their choice. The company has mapped out 350 store openings in the next three years and 40 of these are scheduled to come up soon. At present, the company has 171 franchisees and expects to have 200 more in next three years. The company provides full support as regards site assessment, project implementation, training, local area promotion, POS and other operational activities.

Mini Melts

Mini Melts ice-cream was conceptualised and launched by Tom Mosey with his partner and college friend, Nick Angus in 1995.The company originated in UAE from where it started spreading through the middle east covering the entire Arabian peninsula. Gradually, it traversed its way throughout the world. Mini Melts currently has operations in over 20 countries all over the world including India. Abdul Samad Saya brought the company to India. Mini Melts India was launched on December 22, 2006, in Jalandhar. Mini Melts hit the Indian market through its unique formula of making delicious kernels of ice cream frozen at extremely cold temperatures. Mini Melts has patented innovative technology, and currently, holds a patent for a method of rapidly producing cryogenically frozen dessert particles. Wilson Abraham, Vice President, Mini Melts, says, "Being a completely different type of ice cream, we do not have any competition from traditional normal ice cream available locally in the market." Speaking about the preferred location of Mini Melts kiosks, Abraham says, "Ideal locations and markets for Mini Melts ice cream include recreation parks, amusement parks, department stores, shopping malls, coffee shops, ice cream parlours, and other speciality food shops." Mini Melts ice creams are currently available in many cities like Amritsar, Mumbai, Bangalore and Cochin.The Mini Melts family has over 2,000 members worldwide with 25 franchisees in India. They are planning to have a network of 150 franchisees in this financial year.

Nirula's

Nirula's has a large share in ice cream sector of the country. Started in 1978, the Nirula's ice cream parlours offer smooth, creamy, rich textured ice cream in 21 flavours. A new flavour every month is an addition to the variety. Predominantly, ruling the markets in Delhi and Chandigarh, Nirula's has more than fifty six outlets operating over five states for more than seventy years now. At present, the company has six franchise outlets and expects to have five to six master franchisees. They are looking for master as well as individual franchisees in Rajasthan, Madhya Pradesh and other states of North India.

Other domestic companies

Amul & Vadilal

Uniqueness of Amul ice cream lies in serving international quality products at half the price of Kwality Walls. Amul has recently entered into direct retailing through 'Amul Utterly Delicious' parlours created in major cities like Ahmedabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and Surat. Amul has plans to create a large chain of such outlets to be managed by franchisees throughout the country. Vadilal started as a one-man show with a hand cranked machine in 1926 in a small retail outlet. Today, the company produces one lakh litres a day at three ice cream plants, located at Ahmedabad, Pundhra and Bareilly respectively. Vadilal has one of the largest cold chain networks in India. It comprises of 12 agents, 250 distributors and 15,000 retailers. Vadilal has a eight to nine per cent of the Indian ice cream market as its share. The group offers over 200 SKUs comprising of cones, cups, candies, family and party bricks and bulk packs.

Future of the industry

Ice-cream industry in India has savoured success through franchising route. Speaking about the challenges Baskin Robbins faced in franchising their product in India, Coutinho says, "The biggest challenge happened to be recruitment and training as getting the franchisees to recruit the right people and retaining them seemed a major hurdle. Besides this, competition is the other name of this game." With the fast changing retail scenario of India, companies are always coming up with new and innovative ideas. For this, Kwality Wall's has introduced a more premium and exclusive Franchise Kwality Wall's Swirl's. Kwality Walls also has an array of other products that they launch during winters. These products include various options of hot tea and coffee from the stables of Lipton and Bru. Apart from these, local franchisee is also allowed to add small eats from a list of approved products. Moreover, product innovation such as 'warm' ice cream flavours during winter helps in increasing sales. Coutinho observes, " Competition keeps them on their toes and keeps them focussed on the product and customer service. Ice cream is a product that will never be out of market in a place like India. It is ruling the Indian market and is here to stay." Franchising has accelerated up the growth of this sector. These franchised outlets have carved out a distinctive niche for themselves and are now spreading their roots with quality product delivered through a customer friendly approach in no-fuss ambiences. This has also boosted the entrepreneurial spirit of the Indian Franchisee. This shows a tremendous scope for the industry in the fast growing Indian economy as well as opportunities for new business enthusiasts of the nation.

Comment
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
Trending
More Stories

Free Advice - Ask Our Experts