The market for ice cream is currently valued at $3.4 billion and is projected to reach $5.4 billion by FY 25
- ByStartupStory | April 20, 2023
The Indian ice cream market is experiencing significant growth, with a 14% CAGR increase in FY22 compared to FY17 and an expected 17% increase by FY25. A recent report by Wazir Advisors highlights that the market, which includes both organized and unorganized forms, is currently valued at $3.4 billion and is projected to reach $5.4 billion by FY25. The report identifies several factors that are driving the growth of the Indian ice cream market, including:
Factors driving growth in the Indian ice cream market include the increasing presence of international brands such as Cold Stone, Baskin Robbins, and London Dairy, as well as the expansion of domestic brands like Amul, Cream Bell, and Vadilal. In addition, leading food chains like McDonald’s, Burger King, and KFC have been adding soft serve to their menus, resulting in increased sales. Furthermore, India has made significant improvements to its cold-chain storage infrastructure in recent years, which has contributed to the growth of the industry. According to a report by Wazir Advisors, the ice cream market in India is expected to reach $5.4 billion by FY 25, with a CAGR growth rate of almost 17 percent over the next three years.
Furthermore, the availability of a wide range of regional flavors from major national ice cream brands attracts customers from different backgrounds and age groups, resulting in higher wallet sharing among existing consumers. To achieve this, brands use two methods: first, by reducing prices and leveraging promotional strategies to increase consumption, and second, by targeting urban areas to increase per capita consumption while focusing on premiumization. Additionally, the trend of targeting semi-urban and rural consumers has emerged, leading to increased penetration by making products more accessible and affordable.
According to the report, the flavor preferences of the ice cream market are dominated by western flavors, including Vanilla, chocolate, strawberry, butterscotch, and mango. The report also indicates that in terms of value share for FY 22, impulse purchases account for 50 percent, take-home purchases for 39 percent, and artisanal purchases for the remaining 11 percent. In terms of form, bricks, sticks, and cones are the top three choices, with 29 percent, 25 percent, and 16 percent respectively.
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