The ice cream business is becoming less seasonal, more lucrative

India’s ice cream sector may attract more investments in the coming years as rising demand and easier access through quick commerce platforms have made dessert consumption less seasonal, experts and investors told and Grameen Kulfi, and Kedaara Capital’s $150 million infusion into Dairy Classic Ice Creams Pvt Ltd (Dairy Day).

“It is a growing industry and is becoming more rounded with a full year of consumption. With newer types of retail formats and distribution channels emerging, there is immense opportunity for this sector to keep growing,” said Ankur Bisen, head of retail at India’s Technopak Advisors.

The industry has been buzzing with investments even as Hindustan Unilever Ltd (HUL) said last week it is evaluating options for its India ice cream business following parent Unilever’s decision to demerge its €7.9 billion ice cream unit by the end of 2025. While industry experts have noted that this is a company-specific issue (aimed at controlling costs), they believe the overall sector looks promising.

At a macro level, with disposable incomes on the rise, there is more potential for ice cream businesses to grow, as seen in the performance of some publicly listed companies, said Manu Chandra, founder of Sauce.vc, an early-stage, consumer-focused venture capital firm.

In the past year, legacy ice cream companies such as Vadilal Industries and Hatsun Agro Product Ltd. have seen their stock rise by 102% and 25% to ₹4,350 and ₹1,033, respectively. Founded in 1907, Vadilal specialises in ice cream and frozen goods while Hatsun, founded in 1970, owns brands such as Arun, Arokya and Hatsun which specialises in dairy products such as ice cream, milk and curd.

The sector’s growth is largely tied to discretionary income as ice cream is an impulse purchase, Chandra said.

In October, Sauce.vc invested in a company called Hocco Ice Cream. Given the large investments required to deploy deep freezers and other cold-storage infrastructure, the barriers to entry in this field have been very high, Chandra said. However, newer entrants stand to benefit as channels like quick commerce have made it more accessible and easier to tap unmet demand.

Swiggy Instamart, Zepto and Zomato’s Blinkit all have their own cold-storage units for last-mile delivery, so new ice cream brands can reduce costs in these areas and use their infrastructure to reach a wider customer base, Chandra explained.

The industry has been buzzing with investments and experts believe the overall sector looks promising