What is the best way to beat the heat on a hot, humid day? Sit in an air-conditioned room? Go swimming? Drink lots of chilled water, juices, sorbets and smoothies? Stock up on frozen goodies? Regardless of the items, no list of summer treats or activities is complete without ice-cream and if you are someone who grew up in Pakistan in the seventies, you are likely to remember the launch of IGLOO , the first packaged ice-cream to be introduced in Pakistan.
The brand has recently completed 50 years and Aurora decided to chart IGLOO’s brand journey and the milestones it has achieved over the decades.
IGLOO’s first flagship product KING Cone was launched in 1971 by Khalil-ur-Rehman, who owned three ice-cream factories in Chittagong, Dubai and Karachi. In 1974, Rehman sold his ice-cream business to Pakistan Dairy Products (PDP), which was part of Ebrahim Group of Companies (a group involved in beverages, salt and paper mills and textiles businesses). PDP was established in the same year to diversify into the food category.
Soon after the acquisition, PDP sold their factories in Chittagong and Dubai. According to Ismail Ebrahim Teli, MD, Ebrahim Group of Companies, at the time there was huge potential for growth in the ice-cream category and IGLOO entered the market as the first industrial ice-cream manufacturers with state-of-the-art American and European equipment. At that point, there were no international players and only a few local ice-cream brands in the market, most of which were very small scale – Amsons, Eskimo and MF ice-cream in Karachi and Hico in Punjab. Apart from these brands, a few ice-cream shops, hotels and restaurants offered freshly made ice-cream as did the unorganised sector which sold handmade ice-cream on tricycles. Polka, another iconic Pakistani ice-cream brand was launched shortly after IGLOO in the late seventies and Yummy and Rocco entered Punjab in 1981 and 1984 respectively. Wall’s was launched in 1994 and Unilever acquired Polka in 1995; Engro’s Omoré made its entry in 2009.
With an initial production capacity of 0.5 to one million litres, IGLOO introduced their flagship product KING Cone (vanilla and strawberry). They also made stick ice-creams (choc bars and lollies later branded as Tropica and Mamamia following the entry of international brands in the nineties along with cups in various flavours and family packs.
Although the business gradually picked up, Teli says it was a challenge initially to sell a five rupee cone in the market. “Selling ice-cream in Pakistan is not an easy business, because we are a very price-conscious market and even today, ice-cream is considered a luxury food item.”
For context, ice-cream consumption in Pakistan is among the lowest in the world; Pakistanis consume 0.2 litres per capita annually. The world’s top three ice-cream consuming countries are New Zealand (28.4 litres), the US (20.8 litres) and Australia (18 litres). India and Indonesia are the lowest on the list, with 0.1 litres per capita consumption annually. (source: World Atlas)
IGLOO’s target market was the lower to middle income segment, of which the biggest chunk were children. All IGLOO products were initially sold on tricycles or pushcarts and the company provided deep freezers to retailers, who had to sign a contract whereby IGLOO would retain a security deposit of Rs 20,000 and the retailers committed to maintaining the deep freezers at their outlets. “We don’t take deposits any more but the downside is that some retailers now close their shops within six months and take the freezers home,” comments Teli.
From their factory in Karachi, IGLOO supplied Sindh and by the eighties, they had a stronghold in Karachi and were selling ice-cream in plastic tubs in a ‘family pack’ (one litre of ice-cream). It was also during this time that IGLOO entered Balochistan.
During the nineties, the company introduced stick-less products under the brand CHOC-ICE and experimented with desi flavours, some of which were launched as limited editions such as falsa, imlee and lychee lollies, tangy twist (orange pop with chocolate dip) and flavours such as ice-cream soda, almond joy, falooda, kheer, lal amrood and piña colada. “We kept innovating and tried multiple flavours; we were a local company and did not need international approvals,” says Muhammad Fareed Tharani, Manager Marketing, IGLOO. The innovation continued into the Millennium and new products were launched, including Ball Cone, Lava ice-cream stick and frozen yogurt. Their premium brand Moments was launched in 2010 in tubs and later in cones and bars.
In 2011, Karim Teli (Ismail Teli’s son) took over the management of the company and several operational changes were introduced, including streamlining both dealerships and the retail trade and new pricing strategies were introduced.
According to Karim Teli, “the market has evolved drastically in the past 10 years, especially in metropolitan cities. In Karachi, the retailer network, including the small shops, have been converted into mini-marts and their needs have changed as well.” He adds that in the past few years so many frozen food companies have entered the market that everyone is giving away deep freezers, with the result that retailers do not have space and are charging a premium for the space. IGLOO have also outsourced their distribution network in cities other than Karachi, because according to Karim Teli, paying too much attention to distribution makes it difficult to focus on expansion.
In the last five years, PDP have diversified into the chocolate business and launched The Chocolate Factory, which manufactures B2B products, such as cooking chocolate slabs and chocolate covertures to bakeries. “The chocolate market was growing and we used to import chocolate from Belgium, but it was becoming expensive with the depreciation of the rupee and procuring it locally had quality issues. So we set up our own plant, imported raw cocoa and produce quality chocolate using our own recipes,” says Karim Teli.
Two years ago, The Chocolate Factory set up a new plant to manufacture chocolate chips which are supplied to biscuit manufacturers. “The bakery culture has evolved so much, especially in Punjab and today you find chocolate chips in kheer, trifles and chocolate mousse, as well as home baking.”
Another new venture under the PDP umbrella is Homemade, a brand launched two years ago, that offers frozen chappatis, parathas and puris. According to Tharani, the company has an edge over others in this category because of their end-to-end cold chain structure. HomeMade has a five percent market share in this category.
IGLOO’s first advertising agency in the seventies was MNJ Communications and it was Javed Jabber who wrote the first jingle, which was composed by Anjum Effendi. Later, when PDP took over the company, the communication was handled by Paragon Communications. Today, the brand’s advertising agency is Manhattan International.
Regarding the challenges of running an ice-cream business, Karim Teli confesses that “had my family not owned it, I think I would not have started it. You need 24/7 electricity to keep ice-cream frozen, water to produce it, gas to keep the facility going, none of which we get consistently.”
Another challenge is the informal sector, which is growing massively by selling cheap quality, counterfeit products, especially in the rural areas. “We found someone selling an orange lolly using IGLOO and Wall’s wrappers using colour meant for dyeing clothes,” says Karim Teli. Such inferior brands penetrate the market by using the distribution networks of the branded ice-cream manufacturers. If IGLOO sell their lolly for Rs 15, a counterfeit product will sell for eight rupees.
PDP recently launched IGLOO in Multan, Rahimyar Khan and Sadiqabad and plan to take it to Lahore in the next two years. This move is aimed at increasing IGLOO’s market share, which stands at about 20% in the branded ice-cream category. (The estimated market size of ice-cream and frozen dessert category in Pakistan is around 150-200 million litres per year, of which 80 to 100 million litres are branded).
Karim Teli sums up IGLOO’s brand journey by saying that “the secret of our success is the consistent quality of our ice-cream and which has earned us brand loyalty over the years. Our prices and quality are unbeatable and some of our products are still better than any of our competitors.”
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