Supply Chain Management at Kwality Walls
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Kwality Wall's is a major producer and distributor of frozen desserts in India. The document reviews Kwality Wall's supply chain, products, market share, and strategic concerns. It finds that 70% of distributors lack cold storage and rely on deep freezers. Issues around uneven distribution capacity, product damage risks, and regulatory identity issues are discussed. A strategic alliance cost-benefit analysis shows potential annual profits of over 4.8 crore rupees within 5 years for Kwality Wall's by addressing cold storage gaps. The document provides an overview of Kwality Wall's operations and an analysis of opportunities to strengthen its supply chain and market positioning.
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Supply Chain Management at Kwality Walls
- 1. SCM AT KWALITY WALL’S: A REVIEW GROUP 7
- 2. AGENDA • About the industry • Kwality Wall’s: Highlights • Product wise break-up • Company analysis • Supply chain • Concerns • Strategic alliance • Learnings • References
- 3. ABOUT THE INDUSTRY 1) Total Market size (organised+unorganised) – Rs 3,000 crore 2) Annual per capita consumption in India: 350 ml 3) Annual per capita consumption in the US: 23 litres 4) Vanilla, strawberry, butterscotch and chocolate flavours constitute around 80 per cent of the total market 5) Average fat content in ice creams: Premium – 16%, Regular – 12%, Medium – 9%, Low – 6% 6) Market expected to grow at a CAGR of 17.6 % during 2012 to 2017 Source: Ernst & Young*
- 4. KWALITY WALL’S • Major producer and distributer of Frozen desserts i.e. desserts made out of milk, cream and vegetable fat • Formed through an amalgamation of India’s Kwality “Market leader in Indian consumer products” and Great Britain’s Walls its cream Beverages One of the power brands in ice Food &brand “Most trusted brand” • Product range includes cornetto, feast, fruttare, division. paddle pop, kulfeez, cassatta, carte d’or and creamy delights • Segment: Quality conscious children and adults • Target Group: Kids, teenagers and families • Positioning: A dessert to celebrate happy moments in life • Tagline: A treat for every occasion • Strategy: 30 major cities account for 70% consumption in the country (30:70 principle)
- 5. PRODUCT WISE BREAK-UP Sundaes 27% Feast 20% Chocobar 26% Others 10% Cornetto 17% Base: Total sales
- 6. COMPANY ANALYSIS Strong brand name Food products have limited shelf life Excellent advertising and visibility Non milk-fat product compared to Amul Good product distribution and availability FSSAI standards for ice cream and frozen products Lots of flavour and varieties available SWOT Better and newer flavours New Kiosk and shop-in shop set up Metro cities grip Threats from existing ice cream brands Niche sellers like Baskin Robbins, Naturals and Nirula Same market targeted
- 7. REQUIREMENTS IN SUPPLY CHAIN Pre-cooling facilities Cold room within 100 metres of factory Cold storages Minimum -18⁰ C Refrigerated carriers Reefer trucks, containers, ships etc. Packaging IMS To ensure shelf life Tracking and & increase the traceability longeitivity of frozen products
- 8. KWALITY WALL’S SUPPLY CHAIN
- 9. KWALITY WALL’S SUPPLY CHAIN
- 10. KEY POINTS Cold Room • Within 100 metres of factory • Temperature to be maintained at -18 C • Cabins installed with cameras & sensors remotely controlled by the HQ at Mumbai C&F • • • • Mostly 3rd party Constantly monitored by Area sales manager Generally carries capacity of 2-3 trucks ½ to 2% commission Distributor • 80% don’t have cold rooms, operate deep freezers • Capacity depends from city to city
- 11. LOADING CONCERNS
- 12. STORAGE & DISTRIBUTION CONCERNS 70% distributors don’t have cold rooms; use deep freezers Stock depletion rate increases during summers High energy consumption even at lower stock levels Cannot be stored with other frozen foods like chicken, fish etc. Carrier trucks must attain -18 C prior loading
- 13. MARKET CONCERNS Uneven distribution of capacity High chances of product damage Industry attractive for FDI
- 14. BRAND CONCERNS FSSAI ruling against advertising as ice cream Negative perceptions about frozen desserts Identity crisis: No clear positioning
- 16. COST-BENEFIT ANALYSIS Avg. Footfalls Total Outlets Footfall/outlet Ice-cream Buyers (@10%) Avg. Bill Amt Total Revenue Yearly Revenue Cost of refrigerator 70000 148 473 47 80 3784 1135135 85746 * Profit increases 10% every year ** Per store per year data Initial Inv Profit* PV NPV** Electricity Units Consumed Cost of Electricity Yearly Operational Costs COGS Yearly Earnings Commission (@30%) Profit 75 5.17 116325 454054 564756 169427 395329 1 85746 395329 309583 16,26,389 2 0 434862 434862 3 0 478348 478348 4 0 526183 526183 5 0 578802 578802 Total Potential Profit/year 481,41,101
- 17. LEARNINGS Understanding of ice cream industry A look into Supply chain flow Logistics and operational issues Insights into 3rd party alliances
- 18. REFERENCES • Secondary • Indian ice cream market survey by Netscribes • Kwality wall’s website • India briefing: The challenge of distribution by Raghavendra Verma • Primary • Mr Harshit Kapoor, HUL Ice cream division, Kirpalpur village, Nalagarh • Mr Vipin Yadav, Distributor, Karkarduma region • Mr Rajkumar, P.C. Enterprises, Model Town
- 19. Thank you Amit Choudhary Himanshu Arora Mohit Sharma Sukrit Kumar Saumya Gupta Vladimir Ngueyap