Ice cream makers pass the worst year

The ice-cream industry was getting ready for their busiest season of the year in March. But instead of hauling in record sales, the industry witnessed its steepest lean period because of the coronavirus pandemic as people opted to stay indoors mostly.

The economy reopened in June, but the sales did not pick up much as many people still prefer avoiding the option of eating out. As winter kicks in, the industry stares at its worst year.

Already, many non-branded ice-cream producers have been compelled to shut factories. Ice cream brands are incurring losses and have so far been able to stay afloat because of strong financial backup.

“I have never seen such a bad year for the ice-cream industry in my 11 years of retailing,” said ice-cream vendor Abdur Rahim, who parks his cart in front of the TSC building at the University of Dhaka every day.

His daily sales in the last couples of years reached Tk 2,000 to Tk 2,500 on an average. Because of the pandemic, it has now dropped to Tk 400 to Tk 500.

“I sold nothing during the two-month lockdown,” he said, referring to April and May when the country enforced a strict restriction on movement of people and vehicles.

His sales were affected mainly because the presence of students and visitors on the TSC premises remains thin as the university has been closed for most of the year.

Bangladesh reported its maiden coronavirus case on March 8. As the number of cases surged, the government announced a general leave from March 26 to contain the spread of Covid-19.

Although the economy reopened from June, the government has refrained from opening educational institutions.

“I’m fond of having an ice-cream two or three days a week when I go to university. But this year, I was bound to rein in the habit as it might be a reason for me to catch the pathogen,” said Tajkia Jannat, a student of the university.

The third-year student said she had been confined to her house most of the time since March.

The industry usually sees the highest sales in April when temperatures soar.

But this year sales dropped from March due to the fear of the contracting the Covid-19, and this continued to July, said Ahmed Rajeeb Samdani, chairman of Golden Harvest Group, which has 15 per cent share of the market with Kwality and Bloop brands.

“This year has been the worst-ever for the ice-cream industry.” As winter has already arrived, sales would fall automatically, he said.

The second wave of infections is knocking at the door. It means people would again limit going out.

“It might be devastating if the situation worsens because of the second wave,” he said.

The primary season for the ice-cream industry starts from March which continues until July. It witnesses lower sales from November to February.

Next year would mark the 50th anniversary of Bangladesh’s Independence and the industry was hoping for a massive sale during the year. “But the second wave may shatter the hope,” Samdani said.

Sales may drop to 30 to 35 per cent at the end of the year.

“If the ice-cream industry fails to attain sales of at least 50 per cent in 2021, it will be difficult for many good companies to survive,” Samdani said.

Annual sales of the industry were around Tk 1,500 crore when circumstances were normal, with brands accounting for 65-70 per cent of the turnover.

“Many non-branded ice-cream sellers have already closed their production,” he added.

“We have been witnessing a historic low in terms of sales,” said Tanvir Haider Chaudhury, CEO of Kazi Food Industries, whose two brands Za’n Zee and Bellissimo account for 12 per cent of the market share.

“We lost most business during Pahela Baishakh and the two Eid festivals this year,” he said.

Vendors like Rahim make about 70-80 per cent of the ice-cream sales. But it dropped drastically because of people’s thin presence outside and a reluctance to eat out, he said.

“The industry would make a turnaround next year if vaccines are available,” Chaudhury said.

Osman Goni, the owner of Shapla Ice Cream Properties, a non-branded ice-cream producer in Demra, closed his factory in April when sales dropped to zero.

“I could not afford the operational costs.”

He is waiting for better times to return. “Now I am shouldering the rent of my factory from previous profits. But it will not be possible after another two months,” he said.

“If low sales persist, I would have to shut my factory permanently.”

Goni said he did not receive any support from the government although many stimulus packages were announced after the pandemic hit the country.

Many ice-cream producers are trying to sell products offering discounts, but sales continue to stay low, said SM Momtazul Islam, CEO of Golden Harvest Ice Cream.

“As our biggest target consumers are students so until schools, colleges and universities open, the situation would not be better,” he said, adding that the year 2020 gave no hope for which they were making plans for the next year.

“The industry’s sales in hotels, restaurants and parlours are almost zero,” added Islam, who has worked for Igloo, Polar and other ice-cream and frozen foods producers since 1990.