Vadilal third largest brand of Ice cream in India

In 1907, a certain unassuming gentleman started a soda fountain outlet in Ahmedabad. He, later on, passed on the business to his son


Ranchod, who ran a one-man show, and, with a hand-cranked machine, started a small retail outlet in 1926. What was started in 1907 by Vadilal Gandhi has now turned out to be third-largest ice-cream brand in India, which boasts of 500 distributors and more than 40,000 retailers. With its 120-plus flavours, Vadilal has one of the largest range of ice-creams in the country.



Brand Vadilal firmly established itself in the early 1960s. With the entry of Vadilal’s grandsons, the Gandhi family decided to ramp up operations and incorporated the company in 1961. Before introducing automatic machines around 1960, Gandhi family used to manufacture ice cream in wooden drums called Kothis.



A name that dominates western Indian market, Vadilal, during seventies and eighties, had to contend with competition from local brands. Kwality ice-cream was the only sizeable player in the still nascent ice-cream market. But it faced first real challenge when dairy giant Amul forayed into ice-cream business in 1996. Backed by its strong butter brand, cooperative major made quick inroads into the 1,500-lakh litre ice-cream market in which it now enjoys 40% share. Amul marketed its ice-creams almost 30-40% cheaper than the existing brands, and that pushed the then market leader Vadilal to the second slot.



But Amul’s foray also indirectly helped Vadilal, as it helped in expansion of market in India. As against the per capita consumption of 23 litres in the US, 18 litres in Australia, 14 litres in Sweden, ice-cream consumption in India stood at a pathetic 100 ml in the mid-nineties. Post-Amul, the per capita consumption of ice-cream jumped to more than 300 ml. Vadilal has been using the growing ice-cream consumption culture to its advantage.



“Brand Vadilal has survived many challenges and it will live through generations,” says group managing director Rajesh Gandhi, the fourth generation of Vadilal. Today, turnover of Vadilal Group, which has presence in ice-cream, frozen food, chemicals, forex and real estate, stands at about Rs 350 crore.



With an investment outlay of Rs 50 crore, the group will expand the capacity by 60% to three-lakh litres per day. While two upcoming candy lines will produce 25,000 pieces per hour, new ice-cream plant will be ready before summer. Vadilal already has manufacturing facilities at Pundhra near Ahmedabad and Bareilly in Uttar Pradesh. “The ice-cream market is growing at an average of 12-15% a year and has now turned into a game of volumes. We are expecting the market to grow even better during coming summer since the country had a below average monsoon,” says a top Amul official.



With the leader sounding optimistic, Vadilal too, after long pause, has once against started airing its commercials on national television. It is spending about Rs 7-8 crore a year on promotions and planning to increase the budget in coming days. The group is focusing on the food business.



“We were in dilemma about leveraging our brand and the group is still assessing the possibilities to use the brand Vadilal in non-ice cream categories. We launched processed food business under the brand name ‘Quick Treat’ some five years back that accounts for Rs 50 crore in our total turnover and growing at almost 80% a year. While ice-cream remains the core of our activity, we also export ready-to-serve curries, range of Indian breads, frozen samosa etc to 45 countries,” says Gandhi.



The group recently launched ice-cream parlours under the banner of Happinezz. “We believe that ice-cream is a happy thing, so we named our chain of ice-cream boutiques Happinezz, which offers rich exotic flavours,” says Gandhi. Besides expanding manufacturing and distribution capacitites, we are also strengthening our milk procurement network from farm-to-factory to cater ice cream made from the fresh milk,” says Gandhi.



In last couple of years, Vadilal has won laurels at the Great Indian Ice Cream Contest organized by Indian Dairy Association and Danisco. This year too it won seven awards in various categories. The group is gearing up to achieve new scales with rapid expansion on cards. The fifth generation of Gandhi family is now ready to enter the business. The challenge remains—retaining the freshness of the century-old brand.





Source : Economictimes