Baskin Robbins, a high-end ice cream brand, has experienced a nearly four-to-five percent increase in its input costs. However, the company has decided against raising its prices, as it believes this could adversely affect demand during the peak summer season. Despite not having raised prices in the previous fiscal year, the company plans to maintain its current pricing strategy throughout the busy season.
Mohit Khattar, the CEO of Graviss Foods Pvt Ltd – Baskin Robbins, has stated that there has been a significant increase of approximately 10-15 percent in overall dairy product costs. Despite this, the company, which predominantly utilizes skimmed milk powder and fresh cream, has experienced a specific input cost rise of nearly four-to-five percent.
Mohit Khattar said, “As of now, we have taken a conscious call not to increase prices. We did not increase prices last year, and we will absorb the price increase as we do not want customer demand to get impacted. After this busy season is over, we may take a look at it.”
Robust growth in demand:
Having experienced a 38 percent increase in sales during FY23, the company anticipates continued growth of over 20 percent in FY24, driven by robust demand. This growth will be achieved from a higher sales base established in the previous fiscal year.
As per Khattar’s statement, the company’s growth will primarily be driven by innovative product offerings, expansion into newer markets in Tier II towns, and consolidation of its presence in existing markets.
Baskin Robbins currently has a presence in 239 cities with over 850 locations. The company aims to expand its footprint further by adding over 100 new stores across the country this year.
“We plan to expand geographically, and we will add 25-30 new cities every year mainly in Tier II cities and beyond. This apart, we also plan to strengthen our presence in some of the existing markets,” he said.
Currently, almost 70 percent of the company’s sales originate from Tier I markets. However, the company anticipates a rise in the proportion of sales coming from Tier II towns in the future.
The ice cream market in India is valued at approximately INR 18,000 to INR 20,000 crore and has been expanding at a rate of around 15-17 percent YoY. Baskin Robbins foresees its growth rate exceeding that of the industry average.
In addition to operating parlours, Baskin Robbins products are available for purchase through prominent supermarket chains, modern trade stores, general trade stores, and various food service accounts such as hotels, restaurants, and caterers. Roughly two-thirds of the company’s sales originate from the offline channel, with the remaining one-third derived from online and delivery platforms such as Swiggy, Zomato, Instamart, Big Basket, and Zepto.
To meet changing consumer preferences, cater to growing demand, and expand its customer base, Baskin Robbins has introduced 17 new products across all its parlours for the summer season. According to the CEO, these new offerings include not only fresh flavours but also innovative ice cream formats and categories.