NEW DELHI: Ice cream majors such as Vadilal and Creambell have or plan to increase prices by 5% for this summer season because of rise in price of dry fruits, overhead costs and increase in fuel prices.

But despite the rise in prices, the Rs 8,000-crore organised ice cream industry expects annual sales to grow by 15%-20%.

However, Amul said that they will not be increasing the price as of now while Mother Dairy said that they were evaluating the current situation. Kwality Walls declined to comment.

“In the past six months, diesel prices have increased by 23%, salary and wages by 10% and packaging material by 8-10%, thereby ensuring a price hike in ice creams,” said Nitin Arora, CEO, Creambell. “At this juncture the endeavour is to keep price hike under 5% in 2018, which we will do ahead of the summer season,” he added.


Some price points for ice creams have become sacrosanct over the last few years like paying Rs 5 for an orange bar, Rs 10 for a cup and Rs 20 for a cone, feels the industry. “We can’t raise the price from Rs 20 to Rs 22, so if it has to be rounded up it will be ?25. Now that raise will be too much, so we try to absorb it most of the time and pass it over the years,” added Arora.

Gujarat-based Vadilal group has raised prices by 2-5% largely in cones and candies, but not lowered the quantity in their packs, said the company’s managing director Rajesh Gandhi. “Dry fruit prices have seen a hike apart from the increase in fuel and other overhead costs. Also, last year we didn’t pass on the higher price of dairy products such as milk powder and butter, as it happened after we made the revision in February, so this year the raise has happened,” said Gandhi.

But despite the rise in prices, the industry expects annual sales to grow by 15%-20%, with good growth coming from towns and cities with less than five lakh people.
Source by:- economictimes