Having fought each other in Mumbai and Chennai, the two ice cream majors Hindustan Lever Ltd (HLL) and Gujarat Cooperative Milk and Marketing Federation (GCMMF), are gearing up to take the pricing war to Delhi this week. HLL plans to launch softy kiosks under the Kwality Walls brand with softies at Rs 5, GCMMF, which owns Amul, plans to launch its softies under the subbrand ‘Snowcap’ at the same price in Delhi next month. GCMMF plans to open 10 outlets, which will be taken to 100 in six month’s time.
The low-priced machine-made ice cream popularly known as softy, has of late caught the fancy of big players. So much so that even Ahmedabad-based Dairy Den, which till recently was entrenched as a local brand also made an entry into Delhi two months ago with its ‘Yums’ softy. With 50 flavours, it is expected to go national soon.
At McDonald’s, too, which was one of the first few organised players to launch softies at their restaurants a few years ago, softy—priced at Rs 7—is one of its highest selling items.
What makes the segment attractive is the fact that it does not require much capital investment, and breaking even is easy. An approx cost of a softy dispensing machine is about Rs 2.5 lakhs and at a price of Rs 5, a retailer, still has a 100 per cent margin.
Affordability and the hygiene factor, make softies a hit with customers. To create differentiation, companies are stressing on the hygiene factor.
HLL is tom-tomming its patented tamper proof wet mix system (TPWMS) that ensures that there is no human contact with the ice-cream right from the factory till the consumer gets the softy in his hands, Amul too claims that it uses a readymade softy mix in tetrapaks.
The Indian organised ice-cream market is about Rs 500 crores, the organised softy market is estimated to be just Rs 50 crores currently, growing at an annual rate of 25 per cent.