Mövenpick eyes a bigger scoop of the Indian market
The Swiss ice cream brand is beefing up its distribution network in the country and launching boutique stores to regain lost ground
Buoyed by the surging demand for premium frozen desserts among Indians, Mövenpick—the Swiss ice cream brand owned by Nestle—is looking to expand its footprint in the country.
In 2000, Mövenpick was one of the first premium international ice cream brands to enter India but couldn’t gain a foothold due to hitches with cold-chain logistics and distributors. It lost out to late entrants like US-based Häagen-Dazs, which set up shop in India in 2009.
The premium Swiss brand is now beefing up its distribution network to regain lost ground. “We believe India will be among the top ten markets for Mövenpick in the next five years,” says Dennis Koorey, country business head for Mövenpick in Australia and the head of its South Asian market.
India and China are Mövenpick’s fastest growing markets, exhibiting 50 percent year-on-year growth in sales, says Koorey, who was in Mumbai in July to launch a boutique store in the western suburb of Juhu.
As part of its new India strategy, the company has tied up with Star Foods Speciality, which holds the exclusive rights to assign Mövenpick franchises and distribute its products in India. Star Foods will also import the ice cream from Switzerland.
Tarun Sikka, managing director of Star Foods Speciality, says his company will invest $3-4 million over the next three years to strengthen its cold-chain logistics and also operate some Mövenpick stores on its own.
The Mumbai outlet is Mövenpick’s third boutique store in the country after Chennai and Bengaluru. The Chennai store, which was its first in India, was launched in 2000, but downed its shutters in 2004, a year after Nestle acquired the company from Mövenpick Holdings. It resumed operations in 2013 under a different distributor.
Besides its boutique stores, Mövenpick operates through a kiosk in Delhi’s Select Citywalk mall and two booths at PVR Cinemas in Mumbai’s Juhu and Lower Parel. These contribute to around 70 percent of Mövenpick’s business in the country. Institutional sales, to 44 hotels, add up to the rest. (The company does not disclose its country-wise revenues.)
Earlier, Mövenpick had an outlet in Mumbai’s high-end Palladium mall, but that shut shop in 2010 after two years of operations.
As a brand, Mövenpick caters to the elite segment—a single scoop costs a minimum of Rs 210. But Koorey believes that this is the right time to introduce such premium offerings in India, where disposable income is rising steadily.
Says Pooja Advani, director of Sun N Star Gourmet Foods, Mövenpick’s franchise owners in Mumbai, “Movenpick is a great brand to have in India. Since we are a nascent market, it’s always good to bring in a global brand. The current cold-chain logistics and infrastructure are so well organised that we don’t have to invest in a manufacturing set-up.”
Besides the metros, Mövenpick is also looking to expand into Tier I and Tier II cities like Chandigarh, Lucknow, Hyderabad and Kochi not only through boutique stores, but also cafes and kiosks.
Mövenpick is likely to face stiff competition from the likes of Häagen-Dazs, which has become popular among urban Indians as a premium frozen dessert brand. But Star Foods’s Sikka is unfazed as he believes the market for premium ice creams in India is large enough for the two to co-exist.
The Indian ice cream market is estimated to be worth Rs 4,000 crore and growing at a rate of 15 percent annually. According to a report by Euromonitor International in April, most of this growth is driven by international ice cream brands like Magnum, Häagen-Dazs and London Dairy. Mass market domestic brands like Amul and Vadilal have also launched their premium range of ice creams to compete in this segment.
(This story appears in the 21 August, 2015 issue of Forbes India. To visit our Archives, click here.)
