Business

Bad News: Ice Cream Prices To Go Up This Summer, Find Out Why?

NEWS WORLD INDIA | 0
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| February 9 , 2018 , 18:51 IST

Ice cream majors, like Vadilal and Creambell, have the plan to increase costs by 5% for this mid-year season due to hike in the cost of dry fruits, overhead expenses and increment in fuel costs. In any case, in spite of the rise in costs, the Rs 8,000-crore organised Ice Cream industry anticipates that yearly sales to grow by 15%-20%.

Amul said that they will not increase the cost right now while Mother Dairy said that they are assessing the present circumstance.

"In the previous half year, diesel costs have increased by 23%, salary and wages by 10% and packaging material by 8-10%, these things guaranteeing a value climb 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.

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Some price points for ice creams have become sacred 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 costs by 2-5% mainly in cones and candies, but not lowered the quantity in the packet, 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 rise has happened," said Gandhi.