Mövenpick sees India among its top 10 markets in five years
It plans to have 50 outlets across the country in the next three years, serving Swiss-made ice-cream, said Tarun Sikka, managing director, Star Foods Speciality, Mövenpick’s distributor in India.
So far, Mövenpick has been slow in expanding its retail presence. Since 2013, the Swiss gourmet ice cream brand has opened just three outlets—in Chennai, Bengaluru and Delhi. “We will be opening the fourth outlet at Juhu in Mumbai on Thursday,” Sikka said.
While Mövenpick—the ice cream brand started by Swiss hotelier Ueli Prager in 1948—entered India in 2000, it had a troubled journey until 2004, when it exited owing to distributor trouble. It then changed its distributor, and re-entered the market in 2013.
Over the next three years, Sikka said Mövenpick will be present in all the metros and even smaller markets with good spending capacity, such as Chandigarh and Hyderabad. It will adopt a mix of franchisee- and company-owned stores to expand.
Most of the new stores will be Mövenpick Cafes—a relatively new but successful model developed by Mövenpick’s Australian entity, and now taken to 23 of the 40 markets where the ice cream has a presence.
Unlike most ice cream kiosks and boutiques, Mövenpick Cafes offer coffee and dessert along with ice cream.
“In the past three years, ice cream has moved from being just impulse category. And the cafe model has definitely helped Mövenpick increase ticked sizes by at least 40%,” said Dennis Koorey, country business head, Australia, Mövenpick. Koorey is in India to oversee implementation of the cafe model by Sikka’s team.
For Mövenpick, said Koorey, India is an important market. “Over the next five years, we believe India will be among the top 10 markets for Mövenpick in terms of size. China and India are seen as the two largest markets for Mövenpick in the near future,” he added. At present, Mövenpick’s top five markets are Switzerland, Russia, England, France and Australia.
Considering India’s low per capita consumption of ice cream and large population, Koorey said the scope for growth is enormous. The annual per capita consumption of ice cream in India is about 300ml, while it is 22,000ml in the US and about 3,000ml in China, according to a study by retail consulting firm Technopak Advisors.
Sikka said his firm will spend about $5 million to expand Mövenpick’s retail presence and cold-chain infrastructure.
Just like the cafe model developed by the Australian entity, Sikka is in the process of developing the home delivery model here, which will be the first in Mövenpick’s global history. “We will start home delivery in the next couple of months. At present, we are developing the team and logistics for this. We won’t outsource delivery,” Sikka said.
Depending on the success of the home delivery model, Mövenpick may look at taking the model to other countries.
At present, Mövenpick’s ticket size in India is around Rs.370, relatively lower than most global markets. A single scoop is sold at Rs.200, almost the same as Häagen-Dazs’ prices in India. American brand Häagen-Dazs entered India in 2009 and maintains a limited presence.
A major part of the business for both Mövenpick and Häagen-Dazs comes from sales to five-star hotels.
According to an April study by Euromonitor International, the ice cream market in India is estimated to grow to Rs.6,198 crore in 2019 from Rs.4,160 crore in 2014. It did not quantify the size of the premium and super-premium categories.
“Premiumization was one of the key trends in 2014...driven by ice cream brands such as Magnum, Häagen-Dazs and London Dairy among others. These brands were extremely niche, and available only in metropolitan cities. Due to increased annual disposable incomes, consumers were more than willing to pay the premium,” the study noted.
The overall ice cream market in India is dominated by Amul, a brand owned by the Gujarat Cooperative Milk Marketing Federation, with a 32% share, according to the study.