Kwality Wall's eyes bigger scoop of ice cream market after HUL demerger

MUMBAI: Kwality Wall's India, which brought Magnum and Cornetto ice-creams to local households, is looking to expand in a market where there's enough and more room to push ice-creams as an everyday snacking product.

Ice cream consumption is getting a boost due to factors like rise of quick-commerce, increasing penetration of refrigerators in Indian homes, and electrification that is enabling small kiranas to install freezers and broaden access. Kwality Wall's India (KWIL) wants to ride on the tailwinds to bolster its reach following its demerger from parent HUL and listing on the bourses, executives said.

On Monday, KWIL listed at Rs 29.90 on the BSE, a near 22% discount to its adjusted price of Rs 38. "Short-term price volatility will always exist but we need to ensure we grow competitively. Ice-cream as a category is already at an inflection point. We will see a lot of growth come in. This demerger gives us the independence to have an end-to-end focus," said deputy MD Chitrank Goel in an interview.

As part of the demerger, The Magnum Ice Cream Company, based in Netherlands, is acquiring 61.9% stake in KWIL from Unilever. On Monday, it also made an open offer to buy another 26% in KWIL, which once completed, will make The Magnum Ice Cream Company the single largest shareholder (and new parent) of KWIL. The stock price of KWIL settled at Rs 29.51 apiece on the BSE, a discount of 22.6% to the adjusted price.

The eight-decade-old company, originally known as Kwality, was acquired by HUL in 1994. As KWIL bets on quick commerce, largely used by premium households, it will face competition from new-age brands such as Go Zero and Noto are coming up with healthier, low calorie variants.

KWIL’s Goel and CFO Prashant Premrajka are charting an aggressive growth strategy wherein the company will build a portfolio play around affordability through access packs as well as premiumisation, double down on general trade and quick commerce and not shy away from bringing global brands from The Magnum Ice Cream Company’s stable to India to boost its market share.

“We will bring in the best of the brands to India so that consumers can experience brands like Ben & Jerry’s, Carte D’Or. These toolkits are available to us. When we have localised manufacturing and feel consumers are willing to pay, we will look at bringing the brands here,” Premrajka said.