The recent clash between these two major companies has more to do with market domination than about how ice creams and frozen desserts are made
~By Ramesh Menon
As temperatures rise and the sun blazes down fiercely, it’s that time of the year when ice cream manufacturers laugh all the way to the bank. However, there is a heated court battle taking place now between Amul and Hindustan Unilever Ltd (HUL) about what constitutes ice cream and frozen desserts.
Amul was always a shining example of how cooperatives in India can, with innovation and professional expertise, excel in a highly competitive fast-moving consumer goods market. It created a furore with one of its latest advertising campaigns which said: “Real Milk. Real Ice Cream.” This highlighted how it made ice cream with milk, while competitors were using vegetable oil to make frozen desserts.
HUL, which sells frozen desserts under the Kwality Wall’s brand, hit back with a court case accusing Amul of misleading consumers and making them feel that ice creams were healthier as it only used milk as its main ingredient. In a statement, HUL said: “Amul has been airing a misleading television commercial creating apprehensions in the mind of consumers.” It accused the Gujarat Co-operative Milk Marketing Federation (GCMMF), brand owner of Amul, of “disparaging” its frozen desserts with its advertising campaign.
GCMMF’s lead counsel, senior advocate Ravi Kadam, cited cases to show that ads comparing products were done as a way of promotion and not denigration as it was not suggesting that consumers stop consuming frozen desserts. “Just saying ‘take my product’ is not disparagement,” said Kadam. GCMMF’s stand has been that its ad did not hurt Kwality Wall’s as it did not refer to it by name at all. RS Sodhi, managing director, GCMMF, said that consumers were not being told that frozen desserts were bad but Amul was just making consumers aware and it was up to them to make the choice.
The makers of frozen desserts rake in higher profits as vegetable fat costs just around Rs 50 a kilo while dairy fat cost Rs 300 a kilo.
Interestingly, nearly five years ago, the Food Safety and Standards Authority of India had announced that products made with milk fat be called “ice cream” while those using milk solids mixed with edible palm oil or vegetable oil be called “frozen desserts”.
The country’s ice cream market is worth Rs 7,700 crore and holds a lot of promise in terms of growth. Frozen desserts have come to constitute nearly 40 percent of the ice cream market and the manufacturers who make it are naturally wary about public perception about it changing as health consciousness increases in India. There are over 10,000 manufacturers of ice cream. Amul, one of the largest milk producers in the world, accounts for nearly 32 percent of the ice cream market. In the last financial year, it had a turnover of Rs 27,085 crore.
Most consumers are unaware of the difference between ice cream and frozen desserts. As vegetable oil is cheaper than dairy fat, most ice cream makers use it along with other milk solids as a smoothening agent. Health conscious ice cream lovers are likely to opt for milk products rather than those that contain vanaspati or vegetable oil after this controversy broke out. Vanaspati is considered unhealthy because of its high transfat content. But the fact is that most just don’t care.
- India’s ice cream market: Rs 7,700 crore approx
- Share of frozen desserts in ice cream market: 40 per cent
- Share of Amul in the ice cream market: 32 per cent
- Amul’s turnover in the last financial year: Rs 27,085 crore
- Amul daily milk processing capacity to go up: from 300 lakh litres to 380 lakh litres
And in mid-April, HUL hit back at Amul by unleashing a new 15-second ad on Kwality Wall’s on YouTube. It underlined the use of milk in its frozen desserts and its tagline read: “Kwality Wall’s, Made with Milk”. It cheekily shows an animated milk bottle asking Kwality Wall’s products: “Who drank the milk?” In another YouTube video, it says that ice cream uses whole milk with fat, while frozen dessert uses skimmed milk (without fat). Also, that ice cream got its creaminess from milk fat while frozen dessert got its creaminess from vegetable oil. It also claims that frozen dessert is healthier. It can all get very confusing for a health conscious consumer!
Suranjan Das, Mumbai-based brand evangelist and marketing consultant, told India Legal: “Seriously, this is a non-issue. It is just a brand war and such things have been going on for de-cades to attract consumer preference. This has also happened in the west earlier as ultimately, frozen dessert has to position itself against ice cream. Consumers are saying that they have been hoodwinked by the term, frozen dessert but they cannot complain as HUL has never claimed that frozen dessert is ice cream.”
The courtroom drama between Amul and HUL is just one of the many that India’s corporate world has seen. Brands have often taken a dig at each other and many have fought it out in court. During the hearings of this case, instances of how the Ujala Fabric Whitener ad campaign took digs at rival Robin Blue were referred to. Another case cited was how Colgate India toothpaste had attacked Dabur’s Lal Dant Manjan.
Sulina Menon, managing partner, Omnicon Media Group, Gurugram, who has been a senior advertising and marketing professional, says: “Most consumers are bothered about the experience they go through eating ice cream or frozen desserts. Ice creams are defined from childhood for most of us. On a hot summer day, it is the taste and the experience that matters. This ice cream war is not about the ingredients, it is about dominating the market.”
A senior advertising professional in Mumbai agrees: “When frozen desserts were launched by Kwality Wall’s in the nineties, one wondered if it would take off. But it did. To me, both ice cream and frozen desserts taste the same.”
Clearly, the battle is for a larger market share. In fact, in the next three years, Amul plans to step up its daily milk processing capacity from 300 lakh litres to 380 lakh litres. In the last seven years, the turnover of GCMMF has increased 3.5 times. With Amul’s turn-over steadily rising, it is in no mood to tone down its aggressive marketing campaign.
Though the prices of ice cream and frozen dessert are almost the same, it is a fact that makers of frozen desserts rake in higher profits as vegetable fat costs just around Rs 50 a kilo while dairy fat cost Rs 300 a kilo. The government plans to shortly amend the Prevention of Food Adulteration Act that will ensure that frozen desserts are labeled as “vegetable fat-based ice cream” or “non-dairy ice cream”. This may help some discerning consumers to decide which bite they prefer.
With food manufacturers increasingly whipping up attractive-looking products to rake in profits, consumers need to read labels carefully and not get taken in by smart packaging.