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ANALYSIS 5
Value and volume of ice cream market in Indonesia
10,000,000
Value (million Rp) Volume (L) 8,739,657

12 August 2010 Media 21

Unilever hopes that Indonesians will take to Walls


Despite having one of Asias lowest per capita incomes, Indonesia is a target for Unilevers ice creams. By Glenn Smith

SECTOR INSIGHT
ndonesias neighbours are gluttons when it comes to ice cream. New Zealand has the worlds highest per capita consumption 28.4 litres annually while Australia weighs in third at 18 litres, and equatorial Singapore wears the crown as Asias ice cream leader with 2.4 litres. Indonesia, in contrast, probably has the lowest. Yet Unilever, marketers of Walls ice cream, sees the country as the next hot spot for frozen desserts and, by investing in product development, promotion and distribution, the multinational appears to be single-handedly growing the market. Last year, according to Nielsen Indonesia, ATL advertising for ice cream totalled Rp288.5 billion (US$27.7 million), and Unilever was dominant, spending Rp269.5 billion, more than 90 per cent of the category on its Walls brand. Eight of Unilever Indonesias 16 flavours were promoted last year, including Cornetto (Rp67.8 billion), Paddle Pop (Rp60.5 billion) and Moos Active (Rp45.5 billion). Each ice cream Unilever promoted had an ATL budget larger than the total budget of Walls biggest rival Indonesias Campina. Nearly all of the remaining adspend came from Campina (Rp14.2 billion). It advertised its brands Avatar and Baby Concerto, as well as ice cream cakes. Two other major ice cream makers, Indolakto and Diamond Cold Storage barely spent a rupiah. Nor did Hagen-Dazs, Baskin-Robbins, New Zealand Natural or any of the other international ice cream parlours that dot Jakartas affluent shopping malls. Unilever has big plans for Indonesia. But the countrys per cap-

ita income is $599.24, one of the lowest in Asia, and 32.3 per cent goes to the top one per cent. Big tubs of ice cream for the home are out of reach for most Indonesians, says Debnath Guharoy, regional director, Asia for Roy Morgan Research. This is why penetration is static at around 10 per cent, even though volumes may be growing via affluent homes. Euromonitor estimates Indonesians consumed 85.2 million litres of ice cream last year, a minuscule 0.35 litres for each of the archipelagos 243 million people. Yet even that consumption level marked a great leap forward 34.2 per cent from the 63.5 million litres consumed in 2004. Significantly, value sales grew at double that rate last year compared to 2004 sales. Ice cream is growing faster than other food and beverage products sold through modern retail, says Teguh Yunanto, executive director, retail measurement, Nielsen Indonesia. Nielsens home panel, conducted in Indonesias five major cities: Jakarta, Bandung, Surabya, Semarang and Medan, shows that less than 70 per cent of households buy ice cream. Those that do, purchase it about 10 times a year. According to Yunanto, trade is approximately 10 to 15 per cent of the total grocery category. That means that nearly four fifths of sales come from smaller cities and rural areas. Yet, in these districts incomes plummet, as does the penetration rate of household refrigerators, which is 20 per cent in Indonesia, according to one regional survey. This is compared to 40 per cent for the Philippines and China, 80 per cent in Thailand, and more than 90 per cent in the rest of Asia. Euromonitor reports that one third of national ice cream sales are single-serving, impulse pur-

Analyst comment
Yvonne Kok Research manager, Euromonitor International

8,000,000
6,947,503 5,820,060

6,000,000

4,000,000

2,000,000
192,074 2007 269,108 2008 353,584 2009

0
Source: Nielsen

Ice cream brand adspend in Indonesia (Rp. m)


2009

Walls Mini Cornetto Walls Paddle Pop Walls Moo Active Walls Cornetto Royale Walls Cornetto Walls Walls 3 in 1 Campina Campina Avatar Walls Viennetta
Source: Nielsen Media Research

67,800 60,468 45,474 33,281 28,504 15,362 13,554 6,243 5,672 4,554

Walls Cornetto... top 2009 adspend

Campina... just a 20 per cent share

chases from vendors cruising residential areas on bicycles. That is yet another channel that Unilever is developing for its Walls ice cream, covering this lower than average price point, while offering pricier variants through retail outlets, and flirting with the upper end by taking the Walls brand into malls at

its recently launched Swirls ice cream counters. It seems to be paying off. Euromonitor found that Walls market share grew to 51.2 per cent in 2008 from 44.9 per cent in 2004, while Campina simply held share at 20 per cent. Got a view? Email feedback@media.asia

Unilever is the clear leader in ice cream sales in Indonesia, but its not resting on its laurels. The company is pushing beyond conventional marketing and launching innovative initiatives to entice ice cream lovers. Moving away from traditional TV and billboard advertisements, Unilever is using modern digital technologies. As an Indonesian first and as part of a global initiative, the company rolled out two animated movies Paddle Pop Pyrata and Paddle Pop Kombatei that seek to inspire young children with the values of courage, adventure, and cooperation. Unilever has extended this content with interactive online games and DVDs. For Unilever, the result is pesterpower, which plays a significant role in impulse purchases. Elsewhere, Unilever is adapting to evolving media. Indonesia ranks as the third largest country globally for Facebook accounts, and Unilever has established a Facebook presence to foster discussion of Unilevers products to inform the youth and young-adult segments of its new ice cream flavours and innovations. Unilevers Facebook community is built on top of its existing community of consumers on Friendster/Twitter. Such social networking efforts are complemented by websites. For example, www.icecreamoflove. com, which likewise bolsters brand presence through the emotional draw of social events and life experiences. Mothers are not left out in the cold, and Unilever lets them air their views at www.mamamootemanmoo.com, completing a comprehensive arc of modern-day communications all of which is dedicated to ice cream.

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