Euro monitor International identifies Bangladesh as one of the 20 Markets of the Future that will offer the most opportunities for consumer goods companies globally. The country is one of the fastest growing and most promising economies in Asia-Pacific; however, market intelligence is extremely limited in this part of the world and the business environment is complicated. However Bangladesh’s economy is very fast growing. With the fast growing RMG, Pharmaceuticals and steel industries, there are some new industries too which can be considered industries of the future. Among them, Ice Cream industry is most important.The first branded ice cream, Igloo, was introduced in 1964 in the national region, which waslater nationalized right after the liberation of Bangladesh.Later during the early 80’s it was acquired by Abdul Monem Ltd.This is when Polar entered themarket creating the first rivalry.After 10 years since privatization, Igloo got to be the market leader after conducting heavy promotional campaigns. Since then it has retained its position among all major domestic andforeign brands in the market.
New players are making a foray into the growing market for ice cream, industry operators said.
Poultry sector giant Kazi Farms already launched its ice cream early this year and Golden Harvest now plans to enter the business, encouraged by the growing buying power of people.
Cold Stone Creamery, a concern of US-based Kahala, is set to open its first store this year with Olive Tree Foods as its local franchisee, an official of Olive Tree said.”The market for ice cream is huge. A rise in people’s income propels the demand. We want to tap that growth,” said MohiusSamad Choudhury, chief operating officer of Golden Harvest Agro Industries Ltd.Golden Harvest Ago, which presently markets ready-to-eat foods, will make ice cream through one of its subsidiaries: Golden Harvest Ice Cream Ltd. The company eyes to launch the ice cream by the yearend, Choudhury said.”A huge consumer base has developed in Bangladesh. We want to bank on that,” he said.Branded ice cream occupies nearly 85 percent of the country’s annual market of Tk 650 crore, of which 85% constitutes the branded ice cream makers and the rest of the 15% are the non-branded producers according to the annual report of Golden Harvest Ago Industries for 2012.
Ice creams of three brands-Abdul Monem’s Igloo, Dhaka Ice Cream’s Polar and Kwality Food’s Kwality -account for nearly 70 percent of the branded market. Igloo is the market leader followed by Polar, according to industry insiders.Regional and seasonal brands control the rest of the market.
Products and services
All these manufacturers either sell ice creams in ice cream parlors or takeawaysingle or family packs through traditional distribution channels.
There are two main consumer segments.Middle and upper middle class craving for branded and premium branded ice creams.Working class who are satisfied with the lower priced non-brand ice creams.
Major Challenges and Future Outlook
One of the challenges is coping with the bargaining power of the suppliers. Since most of the ingredients of ice cream are imported from abroad it has a strong impact in pricing the end product.The biggest challenge in the industry is the “Entry Barriers” in the branded segment. It requires huge investment for machinery and technologies necessary for the complex process of ice cream manufacturing.Moreover the infrastructure is also not strong enough in the distribution channel. The ice cream industry is still at growing stage. Only with proper investment and strategy the industry can be quite attractive for a business. If government takes proper initiative, we can export ice cream in a big volume. So ice cream industry can compete with other emerging industries and it has possibility to contribute in country economy.