Amul will be doubling its distributor base for ice creams from the existing 200 to 400 by the end of this year.
R S Sodhi, chief general manager, Gujarat Co-operative Milk Marketing Federation, said that the expansion of distributor base was a step towards the company making Amul Ice-creams a Rs 1,000 crore (Rs 10 billion) brand by 2010. Its ice cream sales for 2006-07 are projected to be around Rs 300 crore (Rs 3 billion).
Amul, a relatively new entrant in the Rs 2,000 crore (Rs 20 billion) ice cream market is at present the market leader with a share of 34 per cent. The branded market for ice cream is about Rs 700 crore (Rs 7 billion) growing at about 20 per cent annually.
Elaborating on how the company intended to reach the Rs 1,000 crore (Rs 10 billion)-mark, Sodhi said that this would be done through a combination of two factors.
"One would be to increase the penetration by increasing the number of outlets, and the other by growing the market by continuously introducing new flavours and products," he said.
Pointing out that the per capita consumption of ice cream in the country is still very low at just over 200 ml per person per annum compared with the global average of 2 litre per person per annum, Sodhi said that there was still tremendous scope to increase consumption here.
According to Sodhi, ice cream sales have still not taken off in smaller towns primarily because of the non-availability of products as well as electricity problems as demand is rising there.
By moving into these towns, the company would be looking at increasing the consumption of branded ice cream giving local players a tough competition.
In contrast to this strategy, Hindustan Lever, with an 8 per cent market share, has positioned Kwality Walls as a more urban brand with the focus remaining on the larger cities.
Amul has over the last few months been bringing in new products, both to counter offerings brought by competition as well as innovative products such as spanish saffron and cream balls ice cream.
