1.SCM AT KWALITY WALLS: A REVIEW GROUP 7

2. AGENDA About the industry Kwality Walls: 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 WALLS Major producer and distributer of Frozen desserts i.e. desserts made out of milk, cream and vegetable fat Formed through an amalgamation of Indias Kwality Market leader in Indian consumer products and Great Britains 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 dor 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-UPSundaes 27%Feast 20%Chocobar 26%Others 10%Cornetto 17%Base: Total sales 6. COMPANY ANALYSIS Strong brand nameFood products have limited shelf lifeExcellent advertising and visibilityNon milk-fat product compared to AmulGood product distribution and availabilityFSSAI standards for ice cream and frozen productsLots of flavour and varieties availableSWOT Better and newer flavours New Kiosk and shop-in shop set up Metro cities gripThreats from existing ice cream brands Niche sellers like Baskin Robbins, Naturals and NirulaSame market targeted 7. REQUIREMENTS IN SUPPLY CHAIN Pre-cooling facilitiesCold room within 100 metres of factoryCold storagesMinimum -18 CRefrigerated carriersReefer trucks, containers, ships etc.PackagingIMSTo ensure shelf life Tracking and & increase the traceability longeitivity of frozen products 8. KWALITY WALLS SUPPLY CHAIN 9. KWALITY WALLS 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 MumbaiC&F Mostly 3rd party Constantly monitored by Area sales manager Generally carries capacity of 2-3 trucks to 2% commissionDistributor 80% dont have cold rooms, operate deep freezers Capacity depends from city to city 11. LOADING CONCERNS 12. STORAGE & DISTRIBUTION CONCERNS 70% distributors dont have cold rooms; use deep freezersStock depletion rate increases during summersHigh energy consumption even at lower stock levelsCannot 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 CONCERNSFSSAI ruling against advertising as ice creamNegative perceptions about frozen dessertsIdentity crisis: No clear positioning 15. STRATEGIC ALLIANCE 16. COST-BENEFIT ANALYSIS Avg. Footfalls Total Outlets Footfall/outletIce-cream Buyers (@10%) Avg. Bill Amt Total Revenue Yearly RevenueCost of refrigerator70000 148 47347 80 3784 113513585746* Profit increases 10% every year ** Per store per year dataInitial Inv Profit* PV NPV**Electricity Units Consumed Cost of Electricity Yearly Operational Costs COGS Yearly Earnings Commission (@30%) Profit75 5.17 116325 454054 564756 169427 3953291 85746 395329 309583 16,26,3892 0 434862 4348623 0 478348 4783484 0 526183 5261835 0 578802 578802 Total Potential Profit/year 481,41,101 17. LEARNINGSUnderstanding of ice cream industryA look into Supply chain flowLogistics and operational issuesInsights into 3rd party alliances 18. REFERENCES Secondary Indian ice cream market survey by Netscribes Kwality walls 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