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Covid-hit Kerala’s ice cream industry eyes tourism revival to mop up sales

V.Sajeev Kumar Kochi | Updated on October 29, 2020 Published on October 29, 2020

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The Covid-hit Kerala’s ₹600 crore ice cream industry is pinning hopes on the opening of tourism centres to boost demand.

The industry has already witnessed a 30 to 40 per cent sales drop in the lockdown but has started climbing up with the easing of Covid restrictions. The revival of tourism activities is expected to give a fillip to it, primarily through gate sales in tourist destinations, beaches and institutions, sources in the sector said.

The targeted segment for ice cream consumption is the age group of 13-35 years, and there are about ten brands in Kerala in the organised segment. Besides, there are vendors in the unorganised sector who target schools, parks, beaches, and festival venues. This market too, has taken a hit in the lockdown.

Since a significant turnover for organised ice cream sales comes from the catering business, cancellation of weddings and functions has impacted consumption in a big way. The industry runs mostly on credit lines, and the inability of shopkeepers to pay their outstanding has affected business badly, John Francis, Director, Lazza Ice Cream, said.

However, a new segment emerging in ice cream consumption in the pandemic times is the carry home segment, “This is a trend in Kerala, and we are bringing out new flavours in half-litre and one-litre packs to cater to the demand of this segment”, he told BusinessLine.

With a turnover of ₹220 crore, Lazza Ice Cream is also focusing on merchandise sales in a big way as there is a surge in local buying with the opening of eateries and bakeries. Impulse buying ice creams are on the rise, which requires enhanced visibility of brands to perk up sales. “We are also looking at business through supermarkets and online platforms so as to bring products at consumers' doorstep”, Francis said.

Milma, which is also a major player in the ice cream market, has also been hit by Covid with a reported drop of around 70 per cent. K.M.Vijayakumaran, Managing Director, Milma Malabar region, attributed the decline to subdued demand for cold beverages mainly due to the closing down of educational institutions, the absence in tourist arrivals and cancellation of functions.

However, he pointed out that the unlock phase has facilitated youngsters to venture out, and this would reflect in ice cream consumption as well. This market would expect to improve further once educational institutions start functioning. With a 15 per cent share in the organised segment, Milma is looking at a 20 per cent growth after Covid restrictions are entirely over.

The company is also betting big on its 'immunity booster' Golden Milk and Golden Milk Mix spiced with ginger, turmeric and cinnamon. The development of this new product with Indian Institute of Spices Research, Kozhikode, would provide a win-win situation for dairy and spice farmers under increased use of spices in value-added form, avoiding wastage of surplus milk, and additional income to milk farmers, he added.

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Published on October 29, 2020
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