Makers eagerly await launch of Omore ice cream

Ice cream manufacturers face competition from a host of sweet contenders. The bulk of revenue generated in the ice cream industry comes from impulse sales to consumers looking for an instant fix of sweetness. Makers of cones, sticks and cups of ice cream have to battle with other similarly priced food and beverage items that also offer an immediate sugar rush. In such, they are competing for a share in the amount of money people are willing to spend for fun - ‘fun money’.

It is estimated that this year Pakistanis will spend more than Rs200 billion as fun money. The market for impulse food and drink items such as carbonated beverages, confectionery items, packed snacks and chocolates is expected to grow by 10 per cent annually.

Producers of ice cream, however, have anticipated a much higher growth and assert that by next year the market for their products could grow by a whopping 25 per cent.

This does not mean that there are no hurdles to the predicted expansion of the ice cream industry. Ice cream sales have not been able to match the sales of traditional items on days when people typically consume high amounts of sugar.

For example, kulfi and mithai almost always trump ice cream sales on special occasions like Eid. Meanwhile, at the other end of the competition spectrum Pepsi and Coke spend many times more on advertising than even the largest ice cream brand in the country, Walls.

What then does Unilever, manufacturer of Walls ice cream, think about the launch of Engro Food’s brand of ice cream, Omore? “It is the biggest blessing for existing ice cream manufacturers!” claimed Khayyam Rajpoot, the Brand Director for Walls.

Comfortable at the top

Customers willing to part with fun money have a wide array of options to choose from. They constantly need to be convinced and reminded to buy ice cream. “So far Walls has been the only brand that spends a significant amount on advertisements on TV, in magazines and other mass media,” explained Khayyam. “When they (Omore) launch nationally, there will be more ads for ice creams and that would translate into more overall demand,” he concludes.

Khayyam’s optimism is not completely unfounded. Total sales of branded ice cream stand between 70 and 80 million litres and even according to competitor estimates more than 60 per cent of that volume is bagged by Walls. “Walls is synonymous with ice cream,” Khayyam said, citing that when an ice cream cart or ‘trike’ pulled into a neighbourhood and played the brand’s familiar jingle, everyone knew the ice cream man had arrived.

Clowning around

Preparing for the entry of a potentially threatening competitor is exactly what other companies in the market are busy doing. Fareed Tharani, Brand Manager for Igloo, said he was “doing homework” on the potential impact on sales from Omore’s national launch. He predicted that “there could be more competition on dealer side, if they come on trade, they may come with trikes initially.”

So far Igloo has not faced competition from the new brand as the company only operated in Sindh and Balochistan, while Omore had been launched only in Punjab. But the cost of inputs is increasing and more competition means that Igloo “would be unable to increase prices to accommodate cost pressures”, admitted Tharani.

Besides a rush for market intelligence, Igloo management has also introduced unique products hoping to boost sales. Recently, they launched Gumbo – an ice cream stick shaped like a clown’s face with a bubble gum for a nose.

Street talk

Omore will need a lot more than trikes and tricks to win over buyers in a market where competitors like Walls and Igloo are well entrenched. Walls has managed to develop a strong working relationship with retailers since it started operations in 1997.

Moin Khan, owner of a small shop in Gulshan - a middle-income neighbourhood of Karachi, clarified: “I only have enough space in my store for one freezer, so I got it from Walls. They sell way more than other brands.”

Still, Omore had already made big waves among potential consumers with their marketing campaign. Wali Khan, a superstore owner from Defence, shared that people were eagerly waiting for the launch of Omore in Karachi. “Their ads have great recall. People keep asking if the ice cream was available.”

Published in The Express Tribune, July 7^th, 2010.