Brand war heats up in ice cream market


New players are making a foray into the growing market for ice cream, industry operators said.
Poultry sector giant Kazi Farms already launched its ice cream early this year and Golden Harvest now plans to enter the business, encouraged by the growing buying power of people.
Cold Stone Creamery, a concern of US-based Kahala, is set to open its first store this year with Olive Tree Foods as its local franchisee, an official of Olive Tree said.
“The market for ice cream is huge. A rise in people’s income propels the demand. We want to tap that growth,” said Mohius Samad Choudhury, chief operating officer of Golden Harvest Agro Industries Ltd.
Golden Harvest Ago, which presently markets ready-to-eat foods, will make ice cream through one of its subsidiaries: Golden Harvest Ice Cream Ltd. The company eyes to launch the ice cream by the yearend, Choudhury said.
“A huge consumer base has developed in Bangladesh. We want to bank on that,” he said.
Branded ice cream occupies nearly 85 percent of the country’s annual market of Tk 650 crore, according to the annual report of Golden Harvest Ago Industries for 2012.
Ice creams of three brands — Abdul Monem’s Igloo, Dhaka Ice Cream’s Polar and Kwality Food’s Kwality — account for nearly 70 percent of the branded market. Igloo is the market leader followed by Polar, according to industry insiders.
Regional and seasonal brands control the rest of the market, said Choudhury.
Imported ice creams of foreign brands such as Mövenpick, Baskin-Robbins, Anderson’s and Häagen-Dazs are carving a niche here.
He said Golden Harvest will need an investment of nearly Tk 170 crore to set up the factory and develop a distribution channel.
“We are at an advantageous position as we have already reached our retail stores with frozen ready-to-eat foods,” he said, adding that the company has refrigerators at 18,000 outlets.
Md Sajjadur Rahman, deputy manager (brand) of Kazi Food Industries Ltd, said the company is gradually expanding distribution of its ice cream brand, Bellissimo.
“We want to cater to the upper middle class,” he said, “There is a demand in the premium segment of the market.”
Premium ice creams account for nearly 15-20 percent of the Tk 550 crore market of branded ones, he said.
“Quality matters in the ice cream industry, not price. The firms who will deliver quality products will sustain in the competition in the long run,” Rahman said.
Olive Tree inked a ten-year franchise agreement with Kahala, the parent company of Cold Stone Creamery, to open store in Bangladesh, said Salman Shahab, general manager of Olive Tree Foods Ltd.
“We want to open our first store this year. It will be at a high-end and posh area as we see good prospects of it among middle and upper middle class,” he said.
Including the first one this year, Olive Tree aims to open four Cold Stone Creamery stores within the next four years.
“Once we have enough stores, we will go for putting our ice cream at retails,” Shahab said.
Cold Stone stores are operating in more than 420 international locations and in 20 countries, including China, Singapore, South Korea, Canada, Nigeria, Egypt and the United Arab Emirates.

Source: The Daily Star


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