MARKET
Sri Lanka’s ice cream market is estimated at around US$ 25-30 million and the per capita ice cream consumption is approximately 1.1 litres, compared to regional markets such as Thailand and Malaysia, which record a per capita consumption of 1.5 litres and 2.7 litres, respectively. At the other end of the spectrum, the per capita consumption of ice cream in Europe is approximately 13 litres, whilst in the US, it is 23 litres. These statistics all point towards the significant growth potential of the ice cream market in Sri Lanka.
Ceylon Cold Stores (CCS), or Elephant House as it is popularly known, accounts for almost two-thirds of the local ice cream market. Clearly, this brand has won the hearts, to say nothing of satisfying the tastes, of Sri Lankan consumers.
The ice cream market could be segmented into the take-home market, comprising in-home consumers, and the impulse segment, targeting out-of-home consumers. The ice cream market worldwide consists of a comparatively larger impulse segment in comparison to the take-home market. In the local market, this ratio is virtually reversed. Interestingly, the impulse segment of the local market is presently experiencing a double-digit growth trend in comparison to the take-home market, which is growing at a slightly slower pace.
Capitalising on this opportunity, Elephant House Ice Cream has stepped into the gap with a range of novelty products catering to the potentially lucrative impulse market. The brand, as always, has kept tabs on ever-changing consumer needs.
The distribution of ice cream is dependent on the availability of storage freezers and power supply to sales outlets. Over the last few years, the Elephant brand has been aggressively expanding to stamp its presence at widespread outlets. Its products have found space in the island-wide network of outlets that have the infrastructure to store ice cream.
Per capita GDP in Sri Lanka increased to US$ 1,197 in 2005, compared to US$ 1,030 in 2004 (Source: Central Bank of Sri Lanka). Following the concomitant growth in disposable income, a larger share of wallet has been reserved for food items. The phenomenal growth and expansion of supermarkets across the country have enhanced the availability of a range of products. While this has spoiled consumers for choice, changing lifestyles coupled with exposure to global trends have created a tempting opportunity to grow the ice cream market in Sri Lanka.
Top ^
ACHIEVEMENTS
The ever-popular Elephant House Ice Cream was voted the Most Preferred Food Category brand at the very first National Icon Awards, organised by the Sri Lanka Institute of Marketing in association with TNS Lanka, held in 2005. The fact that the consumers’ choice was instrumental in Elephant bagging this award is only a reflection of how much the brand’s diverse range of ice creams continues to be in demand.
At the Sumathi Awards presented in April 2006, Elephant House’s Pani Cadju commercial was awarded a silver medal for its exceptionally creative execution. And at the ground-breaking Chillies awards, the very same ice cream’s marketing campaign was recognised for its exceptional creativity vis-a-vis TV advertising in the food category.
As a result of the recent tie-up between Ceylon Cold Stores and SriLankan Airlines, Elephant House Ice Cream is now served in branded cups to passengers on board the national carrier – a first in local aviation history.
Top ^
HISTORY
Elephant House has a long and illustrious past, dating back more than 100 years. The New Colombo Ice Company Limited, the first incarnation of what was to become Ceylon Cold Stores, was floated in 1894 to purchase the Colombo Ice Company, which manufactured ice and mineral water. In 1935, Spencer & Company of Madras offered Icefruite, a type of iced lolly, to the New Colombo Ice Company at a royalty of seven shillings and sixpence a thousand. Sales were made throughout Colombo using bicycles to distribute the novel product. The year 1941 saw a historic change of name, when the New Colombo Ice Company became Ceylon Cold Stores. This was not merely a change in nomenclature, but described the company’s rapidly expanding operations.
With the acquisition of the company in 1991 by one of Sri Lanka’s leading blue-chip companies, John Keells Holdings, new strategies have been implemented to revolutionise the local ice cream market while gaining market share from competition. Elephant continues to focus on creative marketing strategies and innovative product development to stay ahead of the competition. Characteristically, even this activity takes its cue from ever-changing consumer tastes.
Top ^
PRODUCT
There is no denying that CCS markets a unique brand of ice cream. Its products are distinctive in terms of taste and texture, while almost magically retaining the flavour that is distinctively Elephant. The company places special emphasis on the production of the essences that go into flavouring its ice creams. Its vanilla ice cream, for example, is traditionally exquisite. Even a first-time consumer could differentiate this benchmark product from other brands in the market, due to its superlative taste and quality. The secret, of course, is in the vanilla essence that has been customarily produced in-house.
Elephant House’s range of take-home products varies in terms of volume and variety from the 500 millilitre to four-litre ice cream tubs of Vanilla, Strawberry, Chocolate, Fruit And Nut and Ripple. A premium range of ice creams includes the mouthwatering Karutha Kolumban, Jugger-nut, Cookie Cream, Toffee Caramel and Coffee Grand.
Catering to impulse buyers, the brand has a range of 80 millilitre tubs, with ice cream in the basic flavours as well as Fruit And Nut and Manga Batta. The Jumbo Jolly range with Wonder Cone, Wonder Bar, Trio, Jigsaw and Sweethearts, made especially for Valentine’s Day, has added variety to this range. These contemporary and exciting products, which have nonetheless retained the CCS attributes that define its brand value, have kept Elephant increasingly in demand across the consumer demographic.
Importantly, catering to local tastes, the brand has not neglected to maintain the international standards for which it has been long reputed.
Top ^
RECENT DEVELOPMENT
The Elephant House Ice Cream logo has been modernised to look contemporary and fashionable. The introduction of a creative ribbon concept captures the brand’s energy. For the first time in the country, an FMCG company has adopted the innovative technique of the in-mould printing of branded labels on its ice cream containers, boosting brand identity as well as augmenting consumer appeal.
Venturing beyond the local market, CCS began its Maldivian operation in 2001 and has captured over 70% of the ice cream market in the archipelago, outperforming leading multinational rivals. Elephant House Ice Cream is freely available in the Maldives and the brand has enjoyed a growing demand for its on-premise category, comprising cups and iced lollies. Elephant is also favoured by the many resorts and hotel chains that dot the island group.
In the increasingly important sphere of corporate social responsibility, CCS has worked to benefit the rural economy, generating employment and improving the living standards of the farming community. The company has invested significantly in maintaining sustainable partnerships, whilst strengthening its supply chain.
The purchase of raw materials directly from the local communities in which it is present has resulted in about 160 farmer families benefiting from the Treacle Project. Here, CCS procures palmyrah honey directly for one of its most innovative products, Pani Cadju ice cream.
The Cashew Outgrower Project has also been a blessing to local cultivators. Previously, the company imported 40% of its cashew requirement from India. In 2005, CCS signed forward-sales agreements with local cashew growers. This proactive patronage enabled the company to purchase its total requirement locally, ensuring that farmers obtained a fixed price for their produce.
CCS is presently reaping the rewards of another salient investment, its Vanilla Outgrower Project. A key ingredient in Elephant House Ice Cream, vanilla was previously imported from Madagascar. But due to the global demand for this raw material and correlated issues impacting on vanilla cultivation, the company decided to enter into a mutually beneficial agreement with local farmers. Thus, it undertook to purchase Sri Lankan farmers’ vanilla crops at a predetermined price.
Top ^
PROMOTION
The company’s success has been attributed to the positioning of its key brands. Leveraging on its primary brand strengths, CCS has competed effectively in marketing its products locally through the development of a range of innovative ice cream products. Its hallmark Karutha Kolumban, Pani Cadju, Manga Batta & Wonder Bar sub-brands have enabled Elephant to stand its ground amidst fierce competition.
The brand’s dominance in the local market can be attributed to better understanding of the local consumers’ psyche, translating readily into its success in marketing it products.
Elephant House’s preferred medium for advertising its ice creams is TV. A substantial chunk of the brand’s marketing budget is allocated to above-the-line communications, while below-the-line consumer promotions and sponsorship activities are also used effectively to promote the brand.
Top ^
BRAND VALUES
Elephant House Ice Cream is perceived as tasty, trustworthy and of the highest quality. The brand’s continuing quest is to maintain its values and retain the trust of its consumers, won over many decades. Innovation, continuous responsiveness to consumer needs and strong supply-chain management have been the triune pillars of its sustained success.
Top ^
THINGS YOU DONT KNOW ABOUT Elephant House Ice Cream
♥ Elephant House is the number-one choice among consumers of ice cream in Sri Lanka, commanding a share of over two-thirds of the local market.
♥ The brand’s ice creams have survived challenges to its success, posed by stiff competition from rival multinationals, by being responsive to consumer needs.
♥ The CCS strategy of purchasing raw materials from local farmers has been mutually beneficial and is an ongoing boost for the rural economy.
♥ Sri Lanka’s ice cream market is poised to grow, as the per capita ice cream consumption is comparatively low when compared with the region, at 1.1 litres per year.
Top ^
www.keells.com
