2 listed ice cream makers hope for recovery as sales pick up

The ice cream industry is gradually recovering from last year's coronavirus driven downturn, with two listed ice cream makers – Taufika Foods and Golden Harvest Agro – seeing a slight recovery now.

Ice cream consumption has increased in the ongoing pandemic, they say. They also hope for a full recovery, provided the present rebound continues and the pandemic subsides.

But to reach pre-pandemic levels, the industry will take more than a year, they said.

Industry sources say when Covid-19 broke out last year, a rumour that ice cream consumption might increase the risk of coronavirus infections made the rounds. Soon, the industry faced a big blow as sales decreased drastically.

Taufika Foods and Lovello Ice-cream PLC, popularly known as Lovello, posted a 19% negative growth in revenue and a 17.67% growth in profits in the first nine months of fiscal year 2020-21, compared to the same period in the previous fiscal.

Net profits jumped in this period as administrative and marketing expenses declined while other earnings increased.

Agro-based frozen food maker Golden Harvest's sales increased after almost coming to a halt last year due to the pandemic. The company is popularly known in the ice cream industry by its brand name, Bloop.

An official of the company said its agro, dairy, and ice cream product sales were increasing gradually after last year's lockdown.

Nirmal Chandra Sardar, company secretary of Golden Harvest, told The Business Standard that ice cream product sales had increased in the first nine months of FY21, compared to the same period last fiscal year.

"We started to recover in early 2021. The ice cream industry may return to normal next year," he added.

Lovello profit rebounds

According to the latest financials, in the first nine months of FY2020-21, Taufika Foods sales stood at Tk53.88 crore, which was Tk66.67 crore in the same period of the previous financial year.

At the end of this period, its net profit increased to Tk4.66 crore and earnings per share (EPS) stood at Tk0.76, which were Tk3.96 crore and Tk0.72 in the previous year respectively.

In the January-March period of FY2020-21, its revenues increased 0.62% to Tk17.91 crore from Tk17.8 crore compared to the same period in the previous fiscal year. In this period, its net profits increased 156% to Tk1.92 crore from Tk75.64 lakh.

Lovello was commercially launched in February 2016 and it was listed on both stock exchanges in 2021. It has a variety of mouth watering products, such as Hidden Heart, Heart Beats, Toffy Beats, Hazzle Beats, Sixty-Nine Double flavor Lolly, and many more.

Golden Harvest hopes for recovery

In the first nine months of FY2020-21, Golden Harvest's revenue fell 49% to Tk37.69 crore from Tk74.07 crore in the same period of the previous fiscal year.

As its revenues went down, it incurred a loss of Tk18.56 crore, while loss per share was Tk0.85.

According to its financials, its revenues come from two segments – frozen food, and ice creams and dairy products. The upper class of Bangladesh are the primary target customers of its frozen food products, while the ice cream segment serves mid level customers.

More than 90% of its revenues comes from 122 frozen food varieties.

Its subsidiary, Golden Harvest Ice Cream, is a new player in the ice cream industry with the brand Bloop, which offers 106 types of ice cream, including sticks, cups, calippo, sorbets, tubs, cakes, and many more.

Ice cream market

According to Golden Harvest Agro's annual report, the estimated size of the domestic ice cream market is around Tk1,400 crore.

Apart from the leading brands, there are numerous local ones with limited geographic presence and low to non-existent brand image.

Even though the market size of non-brand companies was large in the past, this has become smaller in the last five years in the face of aggressive expansion and distribution by big brands.

Igloo holds 43% of market share while Polar has 21%, Kwality 13%, Bloop 8%, Bellissimo and Za n Zee 7% each, Lovello 5%, and others 3%.