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INDUSTRY ANALYSIS REPORT WITHREFERECE TO ICECREAMIDUSTRY

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Ice Cream Industry

Content
SNo 1
2 3 4 5 6

Title Industry Analysis Overview Ice Cream Industry Profile Ice Cream Industry Growth Top Ice Cream Companies list
Short Profile of Ice Cream Companies SWOT Analysis of Ice Cream Industry Market Share of Ice Cream Industry Conclusion

Page No 3-7 8 10 11 12-15 16 17 18 19

7
8 9

Reference

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Industry Analysis Overview:
The main objective of industrial analysis is to assess the prospects of various industrial groupings. At any stage in the economy there are some industries which are growing while others are
declining, the performance of companies will depend among other things upon the state of the

industry as a whole and the economy. If the industry prosperous, the companies within the company
may also be prosperous although a few may be in bad shape. The share price of the company is

empirically found to depend up to 50% on the performance of the industry and economy. To analysis the industrial performance one should follow three steps. Industry life cycle analysis Study of the structure& characteristics of an industry SWOT analysis

1. Industry life cycle analysis:(Product life cycle theory)

Many industrial economists believe that the development of almost every industry may be analyzed in terms of life cycle with four well defined stages.

Pioneering stage :( Introduction stage)

The stage is characterized by introducing of a new product and uptrend in business cycle which encourages new product introductions. Demand keeps on growing at an increasing rate competition is generated by the entry of new firms to grab the market opportunities weaker firms face premature death while stronger over survive to grow and survive. This stage is mainly suitable for a speculator.

Rapid growth stage: (Expansion stage)

Firms which enter in pioneering stage will concentrate on expansion of their sales & profits in this stage. It is suggest to the investor respond quickly & invest more in this stage. The market continues to grow but slowly offering steady and slow growth to sales of industry. It is a phase of consolidation wherein companies establish durable policies relating to dividends and investments.

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Maturity stage:
This stage show sign of slow progress and also prospects of decay. After enjoying an above
average rate of growth during the rapid growth, the industry enters the maturity stage. In this

stage the growth of the industry is more or less developed, it is growth rate is comparable to that of

the economy of a country it is suggested to hold the investment in this period.

Declining stage:
The stage is existed due to the changes in the consumer performance competition from new product etc,. In this stage the industry may grow slightly during prosperous periods, stagnate during normal periods and during recessionary periods.

2. Study of the structure and characteristics of an industry:

Since each industry is unique; a systematic study of its specific features and characteristics must
be an internal part of the investments decision process. Industry analysis should focus on the

following:

Structure of industry & nature of competition:

(a) The no. of firms in industry & market share of top few firms in the industry. (b) Licensing policy of the government. (c) Entry barriers, if any (d) Pricing policy of the firm. (e) Degree of homogeneity or differentiation among products. (f) Competition from foreign firms. (g) Comparison of the products of the industry with substitutes in terms of quality, price, appeal& functional performance.

Nature & prospects of demand:

(a) Major customers and their requirements. (b) Key determinants of demand. (c) Degree of cyclicality in demand. (d) Expected rate of growth in the foreseeable future.
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Cost, efficiency, and profitability:
(a) Proportions of the key cost elements namely raw material, labor, utilities, and fuel. (b) Productivity of labor. (c) Turnover of inventory, receivables, and fixed assets. (d) Control over prices of outputs & inputs. (e) Behavior of prices of inputs & outputs in response to inflationary pressures. (f) Gross profit, operating profit, and net profit margins. (g) Return on assets, earning power, and return on equity.

Technology & research:

(a) Degree of technological stability. (b) Important technological changes on the horizon & their implications. (c) Research & Development outlays as a percentage of industry sales. (d) Proportion of sales growth attributable to new products.

3. SWOT analysis:

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SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey,
who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500

companies.
A SWOT analysis must first start with defining a desired end state or objective. A SWOT

analysis may be incorporated into the strategic planning model. An example of a strategic planning technique that incorporates an objective-driven SWOT analysis is Strategic Creative Analysis (SCAN). Strategic Planning, including SWOT and SCAN analysis, has been the subject of much research. Strengths: attributes of the person or company that, are helpful to achieving the objective. Weaknesses: attributes of the person or company that, are harmful to achieving the objective. Opportunities: external conditions that, are helpful to achieving the objective. Threats: external conditions which could do damage to the objective. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development.

Evidence on the Use of SWOT

SWOT analysis may limit the strategies considered in the evaluation. "In addition, people who use SWOT might conclude that they have done an adequate job of planning and ignore such

sensible things as defining the firm's objectives or calculating ROI for alternate strategies." Findings
from Menon et al. (1999) and Hill and Westbrook (1997) have shown that SWOT may harm

performance. As an alternative to SWOT, J. Scott Armstrong describes a 5-step approach alternative that leads to better corporate performance.

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Use of SWOT Analysis:
The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT
analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. Examples include: non-profit organizations, governmental units, and individuals. SWOT
analysis may also be used in pre-crisis planning and preventive crisis management. SWOT analysis

may also be used in creating a recommendation during a viability study.

SWOT-landscape also indicates which underlying strength/weakness factors that have had or likely

will have highest influence in the context of value in use (for ex. capital value fluctuations).
Using SWOT to analyze the market position of a small management consultancy with specialism in

HRM. Strengths Reputation in marketplace Weaknesses Shortage of consultants at operating level rather than partner level Expertise at partner level in HRM consultancy Unable to deal with multi-disciplinary assignments because of size or lack of ability Identified market for consultancy in areas other than HRM Other small consultancies looking to invade the marketplace Opportunities Well established position with a well defined market niche. Threats Large consultancies operating at a minor level

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Ice Cream Industry Profile:
The ice cream industry in India is in many ways, reflective of the overall population
distribution. The countrys population is primarily rural with approximately 65% of the population

living in villages with a population of less than 5,000; this means there are well over 150,000 villages
with a combined population in excess of 650 million. This has contributed to a highly fragmented

industry that by many estimates has over 70,000 ice cream entities. Many of these are single family operations where the product is made either in the home or in very small factories and sold on the streets. The 350 million remaining people are concentrated in the cities where the industry is

reasonably concentrated in the hands of a few international and domestic firms. It is estimated that
only 30% of the entire market is organized and the industry meets the classic definition of a fragmented industry, that is, one where there is an absence of market leaders with the power to

shape industry events.

Ice cream or ice-cream is a frozen dessert usually made from dairy products, such as milk and cream, and often combined with fruits or other ingredients and flavours. Most varieties contain
sugar, although some are made with other sweeteners. In some cases, artificial flavourings and

colorings are used in addition to (or in replacement of) the natural ingredients. This mixture is stirred slowly while cooling to prevent large ice crystals from forming; the result is a smoothly textured ice

cream.
The meaning of the term ice cream varies from one country to another. Terms like frozen

custard, frozen yogurt, sorbet, gelato and others are used to distinguish different varieties and styles.
In some countries, like the USA, the term ice cream applies only to a specific variety, and their

governments regulate the commercial use of all these terms based on quantities of ingredients. In
[2]

others, like Italy and Argentina, one word is used for all the variants. Alternatives made from soy

milk, rice milk, and goat milk are available for those who are lactose intolerant or have an allergy to

dairy protein, or in the case of soy milk for those who want to avoid animal products.
Ancient civilizations have served ice for cold foods for thousands of years. The BBC reports

that a frozen mixture of milk and rice was invented in China around 200 BC, and in 618-97 AD, King Tang of Shang had 94 men who made a frozen dish of buffalo milk, flour, and camphor. The Roman Emperor Nero (3768) had ice brought from the mountains and combined with fruit toppings. These
were some early chilled delicacies.In 400 BC, Persians invented a special chilled pudding-like dish,

made of rose water and vermicelli which was served to royalty during summers. The ice was mixed
with saffron, fruits, and various other flavours. The treat, widely made in Iran today, is called "faloodeh", and is made from starch (usually wheat), spun in a sieve-like machine which produces

threads or drops of the batter, which are boiled in water. The mix is then frozen, and mixed with rose

water and lemons, before serving.

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Industry Competition:
As the industry evaluation would indicate the competition is significant. The 70,000 some

participants is a large number but the more serious challenge comes from the top six national firms;
Amul, Kwality Walls, Mother Dairy, Vadilal, Dinshaw, and Arun. market and essentially control the organized market. These top six firms dominate the

Detail statistics are not available to indicate

market share but Ben & Jerry's estimates that these six firms control 40% to 50% of the urban

market.

Historically MNCs have not achieved much success in penetrating the Indian market. There are a number of possible explanations for this; the relative embryonic and disorganized nature of the market, excessive government regulation that included excessive tariffs and the restriction that
imported ice cream could only be sold in hotels, and a highly fragmented and ineffective media. Most of these market inefficiencies have been or are in the process of being corrected and Ben &

Jerry's believes that conditions have ripened to the extent where MNCs can now effectively enter the

market and compete with the domestic firms.

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Industry Growth:

The three factors of growth, population, per capital consumption, and price are all
projected to increase over the next six years. Population is projected to grow at 1.8%, per capital consumption is projected to grow at 5%, and prices are projected to increase at just over 1% per year. (Overall the long-term projection for consumer prices is expected to rise at 3.5%, however, given the intense level of competition Ben & Jerry's does not think it likely that ice cream prices will rise that fast.) growth rate of 8%. Overall the market will grow from $245 million to $360 million, a compound Of the $115 million in growth, 60% will come from increased per capita

consumption, 24% from increased population, and 16% from increase in price.

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Top Ice Cream Industries List:

Vadilal Ice Cream India Amul Ice Cream Kwality Walls Mother Diary Ben & Jerry MTR

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Short Profile of Ice Cream Companies:

Vadilal Ice Cream Ltd:

Vadilal ice cream division has always been a hot favorite with the people both inside and outside the organization. In India, the name Vadilal is synonymous with Ice Cream. The Ice Cream
industry in India today has a turnover of Rs. 15 billion [US$ 330 million]. A quarter of this comes

from the house of Vadilal alone. But thats no surprise, considering that we have the largest range of Ice Creams in the country 120 plus flavors, in a variety of more than 250 packs and forms. The range includes cones, candies, bars, ice-lollies, small cups, big cups, family packs, and economy

packs. Something for all tastes, preferences and budgets.

To make it convenient for our consumers to relish our complete range under one roof, we have set up a chain of Happiness Parlors Ice Cream boutiques so to say. Hordes of people flock to these parlors daily because they know that our products contain the purest and creamiest milk, and

the freshest and tastiest fruits and nuts.

Among our products are OneUp Chocobar and King Cone all-time favorites which have

today attained the generic status. Another hit is our Kulfi traditional Indian milk sweet. Some of our

products are a combination with confectioneries.

Since our products are highly perishable, quick transport and proper storage are of paramount importance. Hence our refrigeration equipment and deep freezes are imported from companies, which are world leaders in their respective fields. To ensure sufficient, timely and
constant ice cream supply, we have a Cold Chain Network comprising three manufacturing plants

[totaling a production capacity of 1.25 lakh litre per day], about 23 C&FA, more than 500 Distributors

and over 40,000 Retailers.

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Amul India Ltd:
AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya,"
was suggested by a quality control expert in Anand. Variants, all meaning "priceless", are found in several Indian languages. Amul products have been in use in millions of homes since 1946. Amul

Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand,
Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India. (Turnover: Rs. 67.11 billion in 2008-09). Today Amul is a symbol of many things. Of high-quality

products sold at reasonable prices. Of the genesis of a vast co-operative network. Of the triumph of indigenous technology. Of the marketing savvy of a farmers' organisation. And of a proven model for

dairy development.

Kwality Walls Ltd:

Kwality Ice Cream is the pioneer in the Indian ice-cream manufacturing industry and in 1956 became the first company in the country to use imported technology for manufacturing ice-cream on a commercial scale. As the ice-cream industry exploded in India, in 1995 Kwality Group joined hands

with Hindustan Lever Limited and then there was no looking back.

The Indian consumer market was introduced to KWALITY WALLS the result of a
collaboration between global brand Walls and the leading Indian ice-cream brand Kwality. Though

the two giants eventually parted ways, the collaboration made Kwality a household name and created deep in roads for the brand in the consumer market. Today, Kwality is not just a brand it is the

ice-cream associated with the Indian summer; its the first choice in ice-cream for any child or adult during the scorching Indian summers. Kwality ice-creams are trusted not only for their rich, creamy

flavours, but also for their trusted quality and nutritious food value.

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Mother Diary Ltd:
Mother Dairy Fruit and Vegetable Pvt. Ltd. offers the following products: Mother Dairy markets dairy products like Liquid Milk, Ice Creams, Flavoured Milk, Dahi, Lassi, Mishti Doi, Ghee,
White Butter, Table Butter, Cheese, UHT Milk, Dhara range of edible oils and the Safal range of fresh
Fruits & Vegetables, Frozen Vegetables and Fruit Juices at a national level, through its sales and

distribution networks, for marketing food items. Mother Dairy milk (Bulk Vended Milk) is fortified with vitamin A @2000 IU per litre of milk as a part of social accountability. This program was started with the Mother Dairy, Delhi, since February 1980and there after Mother Dairy is continuing this program on their own as a social responsibility without having any financial assistance from the Government as well as since it is felt that BVM is generally consumed by the middle / lower middle / poor strata of
the society. It is also found that the dietary practices adopted by these classes are deficient in

Vitamin A.

Mother Dairy sources significant part of its requirement of liquid milk from dairy cooperatives.
Mother Dairy sources fruits and vegetables from farmers / growers associations. Mother Dairy also

contributes to the cause of oilseeds grower cooperatives that manufacture/ pack the Dhara range of edible oils by undertaking to nationally market all Dhara products.The company markets an array of fresh and frozen fruit and vegetable products under the brand name SAFAL through a chain of 400+ own Fruit and Vegetable shops and more than 20,000 retail outlets in various parts of the country.
Fresh produce from the producers is handled at the Companys modern distribution facility in Delhi

with an annual capacity of 200,000 MT. An IQF facility with capacity of around 75 MT per day is also operational in Delhi. A state-of-the-art fruit processing plant of fruit handling capacity of 120 MT per
day, a 100 percent EOU, setup in 1996 at Mumbai supplies quality products in the international market. With increasing demand another state-of-the-art fruit processing plant has been set up at

Bangalore with fruit handling capacity of around 250 MT per day.

Ben & Jerry Ltd:

Since 2003, Ben & Jerry's have been working on a sustainable Caring Dairy initiative, which helps level out needs of the farmers and their cows, as well as the planet's needs. The company has, so far, reduced energy use on their 11 farms by 2%, and converted all their farms to green energy. Also, in 2002, Ben & Jerry's in the USA committed to reducing carbon dioxide emissions by 10% by 2007, and by investing in a variety of efficiency measures, this target was achieved with ease - the USA now produce 32% less carbon dioxide emissions (per pint of ice cream) today (in 2008) than in
2002. This initiative was brought to the exclusive provider of milk for Ben & Jerry's European ice

cream production, Beemster Cheese, in 2007.

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In addition to helping farmers and their cows, in 2001 Ben & Jerry's began sourcing vanilla,
cocoa, and coffee, for their smooth ice creams, from cooperatively run farmer associations - these community structures help promote their members' quality of life, improve worker's benefits, and

sustain a commitment to their land and communities. In 2006, the world's first ever vanilla ice cream
made with Fairtrade ingredients was launched by Ben & Jerry's. 2007 saw the release of Vanilla

Toffee Crunch, using 100% Fairtrade certified cocoa, sugar, and vanilla, and in 2008, Chunky Monkey was guaranteed to be traded in accordance with international Fairtrade standards as well.

MTR Pvt Ltd:

MTR Foods Private Limited is amongst the top five processed food manufacturers in India.

We manufacture, market and export a wide range of packaged foods to global markets that include USA, UK, Australia, New Zealand, Malaysia, Singapore, UAE, Japan and Oman. Starting with the legendary MTR restaurant in Bangalore, Indias silicon valley, we now offer ''complete meal solutions'. Our wide range of products include ready-to-eat curries and rice, ready-tocook gravies, frozen foods, ice cream, instant snack and dessert mixes, spices and a variety of

accompaniments like pickles and papads.

Our deep understanding of culinary expectations and needs has resulted in many new and innovative products. Our investments in infrastructure and technology ensure that we can scale

rapidly and bring these to market. Today, consumers across the globe count on us to bring them allnatural, wholesome and delicious food that is also convenient and no-fuss.

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SWOT Analysis of Ice Cream Industry:

Strengths:
1) They are available in reasonable prices. 2) Known for product quality. 3) Strong presence of parent company in India.
4) The Brands almost generic to their product category

5) Wide variety of unique ice cream flavors.

Weakness:
1) The durability of ice-creams is not really good 2) it melts very soon 3) The industry has a complex supply chain management and the main issue is traceability 4) Domestic business as well as many international markets are thriving

Opportunities:
1) They can come up with new flavors 2) They should focus more on their advertising and marketing strategies 3) They should come up with offers for purchase of ice-cream in whole market 4) Efforts to exploit export potential are already on

Threats:
1) Currently, the threat of new viable competitors 2) Foreign players entering the market 3) Consumer buying power also represents a key threat in the industry 4) Consumers can easily switch to other substitutes with little cost or consequence

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Market Share of Ice Cream Industry:

Market Share of Ice Cream Industry

Others 19% Arun 6% Ben and Jerry 6% Amul Vadilal 8% MTR 11% 13%

Kwality Walls 37%

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Conclusion:

Following are the concluding points taken into consideration after the conduct of the Industry Analysis:

Advertisement acts as a very important role here. So if heavy advertisements are carried out

it will definitely increase purchase.

Due to the changing in climate, life style and preferences, it was not necessary that they will

consume same product every time.

The Ice Cream Industry had to further focus on: Strengthen communications Multi v/s sole dealer Training to dealers

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Reference:

Books:
1) Prasanna Chandra : Investment analysis & portfolio management, 2 Tata Mc Grill Hill, New Delhi.
nd

Edition

Journal:

The Brand Reporter

Web Sites:
1) www.moneycontrol.com 2) www.reportbuyer.com 3) www.indiatodaygroup.com 4) www.moneycontrol.com
5) www.indiainbusiness.nic.in

6) www.google.co.in

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