Lovello sets sights on untapped rural markets
The government's efforts to ensure electricity at rural areas have opened the doors to a vast untapped market for the ice-cream and processed food sectors, said Md Ekramul Haque, managing director of Taufika Foods and Agro Industries.
Taufika Foods and Agro launched its Lovello Ice Cream company on February 14, 2016.
Five years later, 60 % of Lovello's sales originated from the country's rural areas.
And so, the business now aims to become the main local ice-cream company through higher revenue in the countryside.
"We achieved the quantity three position with regards to market share within four years of inception," Haque said.
Lovello is available even in spots where any branded ice-cream is seldom heard about such as St. Martin's island, Bandarban and Khagrachari.
"It might not come to be profit-worthy to always choose sales in the countryside but we do not think about profit atlanta divorce attorneys step," he said, adding that when persons find their product found in remote areas, it boosts the brand image.
In response to a query, Haque said the lack of top quality ice-cream products at affordable rates in rural areas managed to get likely for Lovello to seize such a great share of the market.
"Our research demonstrates around 150,000 retailers in these areas can keep a refrigerator for their business but major ice-cream manufacturers are yet to attain them.
"As a result, we are adding 16 more automobiles to our transport fleet and adding 10 extra depots," he added.
The export of locally built ice-cream also offers good potential.
For instance, India's domestic industry for ice-cream will probably be worth around $124 crore, rendering it a probable destination for exports.
"So our target isn't a dream just," Haque said.
This past year, the ice-cream industry authorized revenue of around Tk 1,500 crore whereas the marketplace size was around Tk 2,000 crore earlier.
This is because there was a gap between your real market for ice-cream and sales due to the insufficient preparation for Covid-19 from ice-cream producers.
On the other hand, the ice-cream industry witnessed double-digit growth.
"So, we will expand our organization," the managing director added.
Lovello currently can produce Tk 500-700 crore value of ice-cream products yearly.
Taufika raised Tk 30 crore from the currency markets when it got listed with the country's bourses previous this month.
The business believes the arises from the original public offering will help it increase its production capacity by another Tk 300 crore within 2022.
"So our production capacity will be around Tk 1,000 crore within a single or one . 5 years," he said.
"We goal to tie up with an excellent foreign ice-cream manufacturer. But to do so we desired a compliant factory and needed to be shown with the stock market," Haque added.
"Raising a fund had not been my intention but to be listed as a good company and see its valuation is the primary target," Haque explained, adding that Lovello is a blue-chip inventory within five years.
Blue-chip companies are actually those that have larger capital and pay dividends consistently.
In regards to merchandise innovation and diversification, Haque said that Lovello recently launched its Shahi Khajur Malai ice-cream, which is made of date palm jaggery.
"This is our very own recipe," he added.
Lovello launched a handful of smaller products in lower prices in order that university pupils could afford them.
"A cone ice-cream worth Tk 70 is costly for a university scholar. So, we introduced Mini Cone at 50 % price. It was an initial of its kind initiative in the industry and a hot product."
He said almost 15 % of the company's sales result from the sole mini-cone item.
The reduced price also allows everyone in rural areas to easily afford the product.
The frozen foods sector has huge prospect of export aswell alongside local industry demand.
Taufika Foods has programs to choose frozen foods now, Haque said.
"We've already selected our items to create a foray in to the frozen foods market within the next six months."
Initially, Lovello begins with 10 lines where products such as for example Paratas and Samuchas will be developed.
"We also have a plan to create chocolate in the united states," Haque said.
The majority of the chocolates consumed found in Bangladesh are imported therefore Lovello has programs to get started chocolate production from next year.
The brand's mom company is largely based on construction, engineering and consultancy while Haque has a existence in the banking sector aswell. He is the director of NRB Bank.
"But my dream business is ice-cream," he explained.
Haque admires the beauty of ice-cream as a product and that's the reason he arrived to the industry.
"We named our brand relating to the term love," the managing director explained.
And so, it is zero coincidence that its business operation started on February 14 or the Valentine's Day.
"Although I am a good civil engineer, ice-cream meets my mindset better," he said with a smile.
The neighborhood ice-cream industry has big potential but there are few marketplace players, so that it is easy to reach the main spot.
"Because of the government's massive gets results for rural electrification, we were able to launch operations found in the rural areas," Haque said.
The neighborhood ice-cream industry faces three main challenges for growth. The foremost is import dependence for raw materials like chocolate, milk extra fat and other ingredients.
The problem is that the National Panel of Revenue changes the work imposed on recycleables every once in awhile while ice-cream prices remain stagnant.
The second challenge is logistics.
"Our fridges happen to be imported but we are now trying to buy them from Walton. Moreover, the transport automobiles and our wintry chain are imported since they are incredibly sophisticated," he said.
The third challenge may be the country's natural disasters, which hit almost every year in the coastal areas.
Last year, the ice-cream industry was largely influenced by the ongoing coronavirus pandemic as persons were reluctant to eat ice-cream in fear of infection.
"A rumour that ice-cream may improve the possibility of an infection impacted the industry," he said.
However, since Lovello acquired taken whole preparation beforehand, these were in a position to sell their goods at a discount as well as on credit rating. This ensured the business to keep their revenue stable.
"We took the strategy that it is easier to sell at lower rates than keep them in the fridge," Haque added.
Besides, the Covid-19 fallout had a greater effect in the capital than it did found in the rural areas, where Lovello gets the majority of its sales.
"So, when others failed to sell their ice-cream, our product sales were better and we logged earnings also within the last fiscal and found in the first 50 % of the existing fiscal,'' he said.
In response to a query, Haque stated it is very costly to attain the rural areas but their target was to reach a break-even point initial and then make profit taking into consideration the enormous potential in rural areas.
