Your ice creams could get costlier this summer: Here's why
What's the story
The ongoing conflict in West Asia is disrupting supply chains and pushing up the prices of key ingredients like dry fruits and nuts. These are essential for flavoring a wide range of ice creams and chocolates. An industry executive has revealed that the cost of these inputs has gone up by 15-22% compared to pre-war levels, squeezing company margins during peak demand season.
Cost escalation
Naturals Ice Cream hikes prices by 10%
Along with ingredient costs, companies are also facing higher logistics and packaging expenses. Siddhant Kamath, director at Naturals Ice Cream, said certain inputs like dry fruits and cocoa are witnessing supply tightness and longer lead times. He revealed that many such categories rely on imports and sea-route supply chains from regions affected by geopolitical situations. To cope with these high overall input costs, Naturals Ice Cream has already hiked prices by an average of 10% across its portfolio.
Strategic adjustments
Other companies also feeling the heat
Mother Dairy has also selectively hiked prices in its ice cream range. Managing director Jayatheertha Chary attributed these changes to global commodity movements and elevated logistics expenses. Meanwhile, Zervin Rana, director of Dinshaw's Dairy Foods, said the primary impact is being felt on margins. He added that there may be no alternative but to increase the maximum retail prices (MRPs) of products due to rising costs.
Industry impact
Air transportation of goods raises costs
Chocolate makers are also facing major cost escalations. At Pascati Chocolates, the cost of hazelnuts, mostly imported from Turkey, has shot up by a whopping 75% year-on-year (YoY). Founder Devansh Ashar said regional instability has forced shipments to shift from sea to air transport, significantly raising expenses. The impact of the conflict has also extended to beverages with a shortage of aluminum cans affecting Diet Coke supplies in India.