Six years after selling their Havmor brand to Lotte of South Korea for Rs 1,020 crore, the Chona family has returned to the ice cream business, investing over Rs 100 crore in a new manufacturing plant in Bavla. The plant has the capacity to churn out 50,000 litres of ice cream daily, which will be marketed under the brand name HOCCO (short for House of Chona Collaborative).
Addressing a news conference in Ahmedabad on Thursday, Hocco Industries managing director Ankit Chona said that the family has been testing the markets ever since its non-compete agreement with Lotte lapsed last year. “We really missed the ice cream business. It’s great to be back,” he said.
The size of the Indian ice cream market is currently pegged at Rs 20,000 crore, of which Gujarat accounts for Rs 3,000 crore. Addressing the news conference, chairman Pradeep Chona said that the launch of the Hocco brand will serve to boost overall growth, just as the entry of Amul into the ice cream sector in 1996 had doubled the size of the market. “We have decided to price our products on par with competing brands. We will compete on product quality,” he said.
While selling the Havmor ice cream brand to Lotte in 2017, the Chonas retained the chain of Havmor restaurants, which they renamed Hocco Eatery. The Hocco ice cream brand is currently distributed through the company’s 65 Hocco Eateries, and according to Pradeep Chona, demand outstrips supply: “We are in the process of doubling the capacity of our manufacturing facility. Only then can we expand distribution.”
The logistics of ice cream distribution requires a cold chain, which in turn requires volumes, so Hocco will remain focused on Gujarat for the time being. “We plan to reach all the cities and 80% of the ice cream consuming population of Gujarat by next summer. Then we will move into neighbouring states like Maharashtra and Rajasthan,” says Ankit Chona.
Hocco will be launching its first ice cream parlour in Shilaj around Diwali, with innovative products like an ice cream cake sandwich, a sugar free range and lots of kulfis. “We’ve decided to spend a little bit extra on packaging this time around,” says Pradeep Chona. “Experience has taught us that looks count for a lot.”
At the Hocco ice cream plant in Bavla, the packaging machinery is Indian, but most of the other machinery is imported from Italy and China. Chief Production Officer Nitesh Mathur is one of the many executives who became a part of Lotte, when the Chonas sold Havmor, but have now returned. What prompted him to quit a job with a multinational and join Hocco? “I missed working with the Chonas. They are a great family to work with,” he says.