In India, screaming for Unilever's non-dairy frozen products, instead of ice cream

Staff Writer
Columbus CEO

(c) 2013, Bloomberg News.

MUMBAI — Ice cream without milk is like a wedding without dancing, or cricket without world- beating batsman Sachin Tendulkar, says Gujarat Co-operative Milk Marketing Federation in radio ads for its Amul brand.

Indian consumers have decided they're happy with frozen desserts using fats derived from cheaper sources such as palm oil. Now India's biggest dairy producer, losing ground to Unilever in India's booming frozen-treats market, is highlighting the lack of cream or any other dairy fat in most of its global rival's Indian products.

"Let the consumer decide and make an informed choice that 'Yes, I'm buying frozen dessert which has got vegetable oil,' " said R.S. Sodhi, managing director of Gujarat Co-operative, which has 3.2 million dairy farmers as members.

In the five years to 2012, Amul's share of the market for frozen treats fell to 31 percent from 35 percent while Unilever's rose to 21 percent from 17 percent, according to researcher Euromonitor.

"Unless there is greater awareness among consumers that frozen desserts don't contain milk, Unilever will continue to grow," said Swati Gupta, an analyst at AC Choksi Share Brokers in Mumbai.

Sales of the desserts more than doubled from 2007 to 2012 and will do so again in the five years to 2017, reaching 68.6 billion rupees ($1.1 billion), Euromonitor predicts. There's ample room for growth: the industry researcher says Indians eat an average of 200 milliliters of ice cream each year, versus 14 liters in the U.S. and 2.2 liters in China.

Milk fat is about five times as expensive as fats derived from palm oil and coconut oil. The wholesale price of milk rose 23 percent in the three years through August, while crude palm oil in Malaysia declined 6.5 percent, according to data compiled by Bloomberg.

Oil-based frozen desserts can be engineered to melt slower than dairy ice creams, according to Doug Goff, a food scientist at the University of Guelph in Ontario. That's important in a country as hot as India.

Since March, Gujarat Co-operative has been urging consumers to check labels for the words "ice cream" before they buy.

They won't find them on the Double Chocolate Cornetto sold in New Delhi by Unilever. Described on the wrapper as a medium-fat frozen dessert, it contains ingredients including water, sugar, edible vegetable oil, milk solids, liquid glucose, and vegetable protein — but no dairy fat.

Frozen desserts are similar to ice cream in their taste and sensory appeal, Hindustan Unilever, the multinational's local unit, said in an email.

"It is unfortunate that some competitors are trying to misguide consumers by sharing incomplete facts about frozen desserts," the company said.

The Food Safety and Standards Authority of India in 2011 specified minimum amounts of milk fat and milk protein for ice cream. Last year, Gujarat Co-operative lodged a complaint with the Advertising Standards Council of India over Unilever ads that claimed its frozen desserts were ice cream. The industry self-regulatory body ruled that the ads were misleading.

The ruling hasn't stopped Unilever and Ahmedabad-based Vadilal Industries from gaining market share with their non-dairy frozen desserts. Last year, Unilever introduced Fruttare "ice candy," and in May, Vadilal started selling Ice- trooper frozen treats targeted at children.

Gujarat Co-operative's advertising, focused on a few cities, hasn't had a significant impact, said Naveen Vyas, an analyst at brokerage Microsec Capital in Kolkata.

The ads "sound like lectures given by a schoolteacher: 'Eat this because it contains milk,' " Vyas said. "Young people are not going to be influenced by that sort of thing."

Consumers often don't realize the difference between ice cream and frozen desserts with little or no milk fat, according to Rajesh Gandhi, joint managing director at Vadilal, which gets up to 40 percent of its revenue from vegetable oil-based products. Using low-cost ingredients helps keep the goods affordable.

That's a view echoed by Tuntun Prasad, 27, a vendor who sells frozen treats from a hand cart near New Delhi's Connaught Place.

"People don't ask what's inside," Prasad said as he hawked his desserts on a hot September afternoon. "They just want the cheapest thing."

_ With assistance from Swansy Afonso in Mumbai.