Good news for ice cream lovers in India. Ice cream is now cheaper than before, followed by the GST2.0 reduction (from 18% to 5%), and this is expected to rapidly narrow the gap between organized and unorganized players. According to industry experts, approximately half of India’s ₹30,000 crore ice cream market is organized, while the rest is unorganized.
GST 2.0 likely to drive 10-15% growth in the ice cream market
Analysts and companies believe that the GST2.0 is likely to drive at least 10-15% additional annual growth in the ice cream market. The organized ice cream market, already worth ₹15,000 crore, is growing at approximately 10-12% annually. Companies stated they must prepare for the future to meet the growing demand. Ice cream in India is primarily popular during the summer, but organized players are working on strategies to increase off-season sales through family and smaller pack sizes. Additionally, distribution through both offline and online channels has improved.
What are the Industry Plans and Expansions?
For instance, the Gujarat Cooperative Milk Marketing Federation (GCMMF), known for its Amul brand, may set up two to three additional ice cream plants in the next few years. The company plans to invest ₹10,000 crore in dairy and food processing. Now, this will help Amul’s ice cream reach more cities, especially tier-2 and tier-3 cities. GCMMF currently has 29 to 30 ice cream plants nationwide, and its retail reach reaches approximately one million outlets. There are approximately two million ice cream outlets in India. Amul leads the market with a 35% volume share, followed by Hindustan Unilever (HUL) at 15% and Vadilal at 12%. According to Jayen Mehta, Managing Director of GCMMF, “We have increased our capacity across all segments, including ice cream, over the last two years. Now we are preparing for the future.” Manish Bandlish, managing director of Mother Dairy, stated that with the increased reach of ice cream and other dairy products following the GST2.0 reduction, work on new products and formats will accelerate. He cited: “Our annual ice cream sales are ₹500-600 crore. Capacity has been growing by 10-15% year-on-year, and we are also working with third-party manufacturers.”