Nepali Times
Business
Ice cream is hot


ALOK TUMBAHANGPHEY


The ice-cream business is now hot. Consider this: within two years two international brand names have entered the Nepali market. Clearly, the days of drooling over pictures are over. Quality slurp days are here, and well in time for the summer.

Old timers still remember the first ice cream business in Nepal. It was called Rum Doodle and was started in 1976-1977. It was cheap and good, but it soon shut down. There is no account of small businesses that manufacture ice sticks sold by street vendors in colourful little carts, but the big names are all too familiar: Kwality, Neerala's (formerly Nirula's), Baskin31Robbins (B&R), Nepal Dairy (ND's), and more recently, the world-famous M?venpick. It's up to you to decide how deep you want to reach into your pocket to give yourself a treat.

The street vendors outside school gates and parks sell what is not really ice cream in the truest sense but rather ice sticks or ice-lollypops-iced sugar water with a touch of added colour and flavour. There are more than 200 manufacturers in Kathmandu who churn out these iced sticks of sugar water and they sell well. A street vendor sells an average of Rs 300 worth of sticks a day and each company has 10-15 carts. Easy math, and you get quite a decent sum for an industry that doesn't cost much to set up. Street carts with names like Anand, Himali, and New Everest painted on them are a familiar sight. "I sell an average of Rs 400 worth of ice cream and ice lollies a day. For me the profits come from ice cream but the company makes a lot of money from the ice lollies," says Ram Thapa, who sells Anand.

The bigger players offer you a range as varied one could ever want. Whether you want low-fat or an ice cream dangerously high in calories, you get it all. M?venpick is the new rage. This Swiss premium ice cream is Europe's hottest selling brand, now set to capture South Asia as well-they have already set foot in nine countries. The guys behind Movenpick say they are not here to take over the entire market. "We are targeting the upper ten percent niche market," says Ananta Amatya, Marketing Manager of Movenpick South Asia. The 300 varieties that Movenpick has to offer are expensive, but the brand is already making its presence felt here, which is exactly what they want. "We are here to make our presence felt because Movenpick is not what ice cream is, it is what ice cream is not," adds Amatya. Movenpick's distributor in Nepal Himmat Shrestha of Ratna Organisation is optimistic. "On the first day we put a street car and sold a few flavours in front of the boutique. We sold Rs 20,000 worth," he claims. Movenpick ice creams are brought all the way from Switzerland and knowing Nepali connoisseurs fondness for spending it certainly looks like the brand is here to stay.

If what Himmat Shrestha claims did actually happen, others in the business are in for a tough time. While it is true that international brand names easily attract initial attention they are harder to sell in the long run because they are expensive. Baskin31Robbins, the famous American brand, is on the verge of shutting down after just a year in the Nepali market. Industry sources say it's likely to happen within a few months. B&R has already been replaced by another brand, Walls, in the first outlet that it opened at Wimpy's on Darbar Marg. It still sells in other popular joints but its target consumers in Nepal never got used to paying the price it demanded.

That may be why Nepal Dairy's brand ND's is popular. Khasa Bazaar in Maha Bouddha is an unlikely place to find ice creams one would think, but surprisingly ND does and well. "ND's is a home product, cheap and good," says Mukunda Bhattarai, an ice cream lover. Any flavour and one has only to pay Rs 30 compared to the Rs 100-350 per flavour for foreign brands.

Another name that was a big hit a few years back was Nirula's in Darbar Marg. Crowds thronged the fast food joint cum ice cream parlour that served popular flavours like 21 Love, Manhattan Mania and Strawberry. It did well and was hugely popular but internal management problems eventually shut it down. "The problem was that it was managed by people from Delhi who didn't know the environment here. That caused problems even though the outlet was doing good," says VR Satyan manager of Food Court Pvt Ltd, the company that is now trying to cash in on Nirula's goodwill. Food Court produces 'Neerala' and has an outlet in the same place where Nirula's previously sold theirs. It has an average annual turnover of over Rs 10 million and outlets in three other places outside Kathmandu.

An average manufacturer sells around 500 litres of ice cream a day. Most of the big firms have expensive machinery but returns make investment worthwhile. "The total market worth could be anywhere between Rs70-80 million," says Bhupendra Shakya who has been in the industry for a long time. Shakya helped Kwality get on its feet and today runs his own Himalayan Ice Cream factory that sells the brand Ice Cream King.

Most of the ice cream business use local raw material well and the industry employs thousands. With summer fast approaching, the business is all geared up for another bout of tough competition. This, here, has meant greater choice. Summers will never be the same again.


LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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