Kwality Wall’s Targets Snacking Market Expansion with New Growth Strategy

In its transition out of Hindustan Unilever, ice cream seller Kwality Wall's (India) intends to become a "snacking" company that sells its products all year round. According to Chitrank Goel, executive director of Kwality Wall’s (India) Ltd, the company is spearheading the transition of ice cream from a dessert to a commonplace frozen food.  KWIL, which separated from parent company HUL in December, said in an interview just before the company's stock exchange listing on February 16th. Following last month's offering on the Euronext Amsterdam and demerger from the parent company Unilever, the Indian spinoff was announced.

Why KWIL is Shifting its Business?

The goal of Kwality Wall's marketing campaign is to change people's ideas about ice cream as just a summertime treat and instead promote its goods all year round. This is an impulse category, according to Prashant Premrajka, Kwality Wall's chief finance officer. "When I want to snack, ice-cream is the healthiest choice that is available to me," he added. The summer months, nevertheless, account for over 60% of the company's yearly sales, he pointed out. Present-day India is home to three iconic Kwality Wall's brands: Magnum, Cornetto, and Kwality Wall's.

The top four ice cream brands in the world—Magnum, Ben & Jerry's, Cornetto, and Wall's—are all part of The Magnum Ice Cream Company. The Indian branch of The Kwality Wall's has stated that they are considering bringing a few of these international ice cream brands to the Indian market. According to a letter from 19 November from equities broking firm Nuvama Institutional Equities, HUL investors benefited overall from the demerger.

What Demerger will Give to Investors?

According to Nuvama, an equity broker, the demerger will allow current investors to take a direct stake in a wholly-owned ice cream company that generates about INR 2000 Cr in annual revenue. In addition to a portfolio of well-known brands including Magnum, Cornetto, and Kwality Wall's, it offers a robust CAGR potential of 15-20%. Historically, the division has produced good EBIT margins ranging from 5% to 9%. A dominant listed ice cream company in India will be formed as a result of the ice cream business's demerger.

As a result, it would be able to reach its maximum potential thanks to its laser-focused leadership and increased leeway to implement plans that are tailored to its unique business model and the dynamics of the market. Until 2031, the ice-cream market in India is expected to expand at a CAGR of 15%, according to Nuvama researchers. Both Vadilal Industries and Hatsun Agro, the regional dairy corporation that owns Arun Ice Cream, are listed ice-cream companies in India. Hatsun Agro has a market worth of over 20,000 crore, while Vadilal Industries' is slightly over 3,700 crore.