Hocco, an Ahmedabad-based ice cream brand, has raised INR 100 crore ($12 million) in a funding round led by its promoter group, the Chona family, and existing investor Sauce VC. This primary capital infusion, which values the company at INR 600 crore post-investment, also saw participation from angel investors, including film producers Ritesh Sidhwani and Farhan Akhtar.
Hocco’s Managing Director, Ankit Chona, stated that the funds will be used to expand the company’s manufacturing capacity. The eight-month-old brand anticipates generating INR 200 crore in revenue by the fiscal year ending March 2025.
In 2017, the Chona family sold its legacy brand Havmor to the South Korean conglomerate Lotte for INR 1,020 crore. At that time, Havmor’s annual turnover was estimated to be around INR 450 crore.
Following this funding round, Sauce VC, a consumer-focused investment firm known for supporting new-age brands like Mokobara and The Whole Truth, now holds approximately a 10% stake in Hocco.
“We started in October of last year. We were very optimistic, but we did not expect this kind of response. What we expected to do in the second or third year, we actually did in the first year. Our plant’s current capacity ranges between 40,000 and 50,000 litres per day, with an original projection of 15,000 litres by May. By next summer, we will have tripled our capacity to 1.3 lakh litres per day,” Chona said.
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The Ice Cream Industry Landscape in India
The ice cream industry in India, estimated to be around $5 billion this year, has witnessed the emergence of several new-age brands in recent years.
These new brands include Noto, Get-A-Way, Go Zero, Frubon, and Minus 30, all aiming to carve out a niche in a market dominated by legacy players like Amul, Mother Dairy, Hindustan Unilever’s Kwality Walls, and Jaipuria group-owned Cream Bell.
Risk capital investors in this sector encompass DSG Consumer Partners, Jungle Ventures, Saama Capital, and Fireside Ventures.
Manu Chandra, founder and managing partner of Sauce VC, remarked, “The growth in the ice cream market mirrors the rise in disposable incomes directed towards impulse and indulgence categories. Platforms such as quick commerce facilitate connections with digitally adept new-age consumers seeking instant gratification for their sugar cravings, a trend not viable five years ago.”
He stated, “The brands currently occupying this price segment have a long history, and our consumer research indicates that Gen Alpha, Gen Z, and even millennials no longer resonate with them.”
Potential Spin-off of HUL’s Ice Cream Business
Earlier, Snackfax reported in April that Hindustan Unilever – India’s largest FMCG company – is exploring the option of spinning off its ice cream business, in possible preparation for eventual sale. The category accounts for around INR 2,000 crore, or roughly 3% of HUL’s sales.
Continue Exploring: Hindustan Unilever evaluates options for ice cream business future amid global restructuring by parent company
Hocco’s Chona mentioned that the company sees quick commerce as an opportunity to expand its business to geographies outside Gujarat – its key territory.
He mentioned, “At present, the majority of our revenue comes from Gujarat with a portion from quick commerce. We initiated quick commerce in February, and since then, our sales through this channel have been doubling every month.”
Future Sales Targets and Strategy
Chona stated that Hocco aims to double its sales in FY26 compared to what it achieved in FY25.
He explained, “Our strategy involves delving deeper into Gujarat while simultaneously expanding into adjacent regions. By the upcoming summer, we intend to launch operations in Rajasthan, Maharashtra, and Delhi-NCR.”
He added, “Quick commerce is poised to significantly disrupt the ice cream industry. As an impulse purchase, it meets demand with 10-minute deliveries. However, the challenge lies in the multitude of brands offered on quick commerce platforms, limiting the depth of available SKUs. Nevertheless, it presents a substantial opportunity.”
Continue Exploring: Havmor Ice Cream unveils exciting new flavors ahead of summer, including Korean-inspired treats