The Indian ice cream industry, one of the leading consumer businesses impacted badly by the Corona pandemic, is not hopeful of an early recovery considering the structural damages it has suffered since the beginning of this financial year, a senior industry officials said.
Ashish Nahar, Secretary, Indian Ice Cream Manufacturers Association (IICMA) and Director of Fun India Dairy, told indossiancommodities.com a complete recovery could take up to three years.
“Corona led crisis began just at the beginning of the peak summer season for ice cream sales. It would eventually wipe off over 70 percent of our sales in the current fiscal. And it would have long-term implications because of structural disruptions it has caused to the business,” Nahar said.
According to Nahar, growing over 10 percent annually in the recent years, the cumulative sales figure of the Indian ice cream business had crossed Rs 20,000 crore last year.
“Our growth journey was on a steady path, but after Corona our annual sales figure this year will be broadly in the range of Rs 6,000 crore,” Nahar said, adding that many large-scale players had significantly scaled down their production capacity.
The Indian ice cream business is dominated by organised players like Amul, Hindustan Unilever, Vadilal, etc. Some 60 percent of the business is under the control of organised players and the industry employed more 20 million people across the value chain before India shutdown on fears of the spread of the virus.
“But now organized and also regional players have slashed their production capacity at their plants and some players are even contemplating closing down their units. It is having a serious bearing in sustaining jobs in the business,” Nahar said.
According to Nahar, the industry is not hopeful of an early recovery due to structural damages inflicted by the shutdown.
“Timing has been extremely bad. Our peak sales cycle for the year was about to begin when the pandemic happened. The large players of the game had invested heavily in buying packaging and other raw materials in February while getting ready for the summer season. Those materials remain unused in their plants creating serious working capital issue. The entire ice cream industry is facing serious cash crunch at this stage,” Nahar pointed out.
There are other impediments to recovery too.
“We have also been unfortunately dragged into a perception battle. There is a myth that cold products like ice cream will affect your throat making you more vulnerable to Covid-19. Nobody has any clue how to negate this perception,” Nahar said.