Ben & Jerry’s may come to India


September 11, 2012

Vidhi Choudhary, MINT (A Wall Street Journal Partner)
New Delhi , September 11, 2012

Ben and Jerry’s Homemade Inc. signature ice cream flavours may soon be available in India. The unit of the Anglo-Dutch consumer goods maker Unilever Plc.—it took over the US company in 2000—is planning to enter the Indian market within six months, three food and beverage industry experts familiar with the company’s plan said.

If it happens, Ben & Jerry’s will join other food and beverage chains such as Starbucks Coffee Co. and Krispy Kreme Doughnuts that aim to expand in India, where an economy that’s growing, albeit slower than before, is putting more money in the hands of consumers keen on experimenting with new brands. Dunkin’ Donuts, which recently entered the country, has opened four stores under a licensing agreement with Jubilant Foodworks Ltd.

Ben & Jerry’s didn’t say whether it had plans for India.

“Because of the competition we face as a company, we are unable to release where we are heading next. Who doesn’t love a sweet surprise every now and again, though? We are always looking for new places to bring a little of Vermont’s finest,” said a public relations executive at Ben & Jerry’s in an emailed response to Mint’s queries.

Gaurav Marya, president of Franchise India Holdings Ltd, which works with international brands to find local franchisees for them, said the ice cream maker would be in India soon.

“Ben & Jerry’s is planning to enter the Indian market through the licensing route,” Marya said. “It has completed its due diligence. It’s likely to start its India operations in about three-six months.”

Amit Lohani, managing director at Max Foods Pvt. Ltd, said the US brand’s entry into India was “on the cards”, citing what he described as “reliable market sources”. Max Foods trades in international food and beverage brands including Doritos.
Ben & Jerry’s, headquartered in Vermont, operates in 30 countries including the UK, Australia, Germany and Singapore.

It’s not clear whether the brand will be distributed in India by Hindustan Unilever Ltd (HUL), the Indian subsidiary of Unilever.

“As a policy we do not comment on market speculation,” HUL said in an emailed response.

If it comes to India, the chain will compete with existing premium brands such as Baskin-Robbins, Häagen-Dazs and London Dairy, among others. The organized ice cream market in India is estimated at Rs.1,100 crore and is growing at more than 20% annually, according to Tecnova India Pvt. Ltd, a consultancy firm that helps multinationals build their entry strategy for the country.

“The ice cream segment caters to a large spectrum of consumers which extends from a share of your dining table to a popular dessert option at coffee shops,” said Marya. “The gourmet ice cream category is growing well and ice cream is replacing anything that needs to be cooked in the dessert space. It is a phenomenal market as the Indian consumer views it as leisure.”

A spurt of new retail formats has prompted growth in the organized ice cream category, said Gaurav Sharma, associate vice-president at Tecnova. “Now there are more opportunities for international brands to set up shop in the country through kiosks and stalls at high-footfall locations such as airports and shopping malls.”

Mohit Khattar, managing director at gourmet food retail chain Godrej Nature’s Basket, which sells Häagen Dazs and London Dairy in India, said that the two foreign brands were doing well in India.

“They are growing their distribution as consumer demand for both the brands is on the rise. Consumers have understood that these brands have a differentiated offering from traditional Indian brands,” he said.

Häagen Dazs was introduced in India in December 2009 by General Mills India Pvt. Ltd, which owns brands such as Pillsbury, Cheerios, Nature Valley and Betty Crocker, among others. It’s also sold through five restaurants in India. According to Marya, for Ben & Jerry’s to sustain itself in the competitive Indian environment, the key challenge will be its strategy to bring customers to stores rather than affordability.

“Ben & Jerry’s is an iconic brand, definitely on the target list of Indian companies looking for international partners. It is a desirable brand,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight, declining to comment on its potential India partner.

Baskin-Robbins entered the country 19 years ago and operates in India through franchisees with Graviss Foods, part of Graviss Group, a hospitality and foods business. The brand has more than 450 stores across 125 cities in India. Baskin-Robbins declined to comment.