Amul introduces premium 'Ice Lounges', to double ice-cream capacity

The Gujarat Cooperative Milk Marketing Federation, which operates the dairy and FMCG brand Amul is investing heavily in the ice-cream segment, from expanding capacity to opening new retail formats focused entirely on premium ice-creams.

Amul is investing Rs 800-1,000 crore to set up 12-14 new ice-cream manufacturing units and double capacity by the end of next year. Speaking to CNBC-TV18, Jayen Mehta, MD of GCMMF (Amul) says this is a mix of both greenfield projects and expansion of existing projects.

“We'll be commissioning a new plant in Ujjain next month, there is one coming up in Taloja, along with expansion in Surat. So about 12 -14 plants of ice cream, either as new projects or expansion of existing projects are already underway,” Mehta added.

In addition to this, Amul is also setting up premium lounges that will sell premium ice-creams. These are called ‘Ice Lounges’. Amul has already opened four: Two in Ahmedabad, one in Pune and one in Jaipur. Amul will open one in Mumbai by the end of the month and another one in Delhi. Mehta says 8-10 more are in the pipeline, including one in Dubai.

“We want to set up 100 such premium ice lounges in India and 100 abroad. The idea is to give the best flavour of every country to consumers in a very premium experience. All the products are made in-house and we have been getting a very good response. Started as company-owned & operated entities, the model is soon being extended to franchisees also. We will create premium experiences at all premium malls, premium locations, and airports of the country, and expand globally,” he added.

For the fiscal gone by, GCMMF reported a turnover of Rs 72,000 crore, up 18.5 percent over the previous year. This, Mehta says, was led by growth in volumes across product categories.

Amul milk-based beverages grew by 34 percent, Ice-cream by 40 percent, Butter grew by 19 percent while Amul Ghee consumer packs grew by over 9 percent.

“We achieved 20% growth in Amul long life milk, 40% growth in Amul Dahi, 16% growth in fresh Buttermilk and an impressive 20% growth in our largest product category, Amul fresh milk,” Mehta added.

The company says it now has a target of achieving Rs 1 lakh crore in turnover in the next couple of years.

A large part of this growth will come from the company’s plans to massively expand its presence across categories.

Amul is now aggressively expanding its manufacturing capacities to aid its ambitions. Amul currently has 98 plants making milk & milk products, and it plans to add 15 more while adding 70 lakh litres to its daily capacity, taking it up to 550 lakh litres a day.

“These plants are all at various stages of execution. Every year we set aside Rs 2,500 to Rs 3,000 crore investment to expand capacity, and we expect the same momentum to continue this year. For instance, we’re investing Rs 385-400 crore in Chittoor for a plant, similar ones in Hyderabad, Kolkata, etc. So we have a lot of new greenfield projects coming up along with expansion of existing capacities,” Mehta added.

A part of this expansion also includes its organic range of foods and pulses. The company has so far launched 8-10 products including the likes of flour, which have been largely sold in Gujarat, but are now being rolled out nationwide. It is now readying more products including organic tea, spices, besan, dal, etc. Mehta says the full portfolio of 18-20 products will be rolled out across the country by Diwali. “We have also set up a lab for the testing of these products and 10-12 plants are also being readied for the organic range. The response to these products has been very encouraging so far,” Mehta adds.

Apart from the launch of new products, another area that Amul is now eyeing is food offerings, with the proposition of them being made with Amul products. This is still a work in progress, Mehta says, as the company is working on the right format for the same.

“Working on a model in which you can have, say, the taste Amul Pav bhaaji, Amul Pizza etc. It can be in the form of a restaurant like the ones we've started in Anand or Ahmedabad, or it could be in the form of dark kitchens where we work with aggregators. This is still a work in progress and will take some time before we announce this,” he added.