An Interview with Brand Manager of Omore Icecream of Pakistan
Please briefly tell us about your educational and professional background?
I have a Masters degree in Strategic Marketing from the Cranfield School of Management in the UK and Bachelors in Business Administration and Political Science from the University of Western Ontario in Canada. I have been working in the FMCG sector with major multinational corporations for over 8 years and have been a member of the Omoré marketing team at Engro Foods Limited since 2008.
What is the present situation of the Ice cream business in Pakistan?
The ice-cream business is still at the growth stage in the country. Traditionally, this category has been dominated by a single large entity. With Omoré, Engro Foods has proven to be a catalyst for greater consumer awareness, choice, and usage as far as ice cream is concerned. The overall market remains high volume and relatively low value as ice cream is a luxury product and is still mostly restricted to urban centers. While there are potentially large opportunities to develop the ice cream market further, there are also challenges in terms of energy and logistics that the ice cream cold chain requires. To sum it up, this is one of the most exciting and dynamic categories within FMCG in Pakistan.
Tell us the background of Omoré ice-cream?
We started working on Omoré in 2007. The idea was to introduce a quality ice cream range which challenges the status quo and the lack of consumer choice. Engro felt that given its success in the dairy sector and its strong infrastructure in terms of distribution and sales, it was the ideal time to venture into this business. Two years after our launch we can still see massive potential in this market as we have not only done well in terms of growth but also have several opportunities to fuel future growth. There is still a long way to go in terms of per capita consumption of ice cream, innovations and new formats, consumption occasions, coupled with a growing and young population. The long term opportunity is expanding into semi-urban and rural areas once the conditions become conducive.
Tell us about the brand Omoré? What were the major difficulties while starting this brand?
Ice-cream is creative. It is like a painting. You start with a blank canvas on which you can paint anything at all and there, right there, is your first problem. For every good painting you might create, there are a million bad paintings just aching to drip off your brush. You pick a color. The next color you choose has to work with the first color. The third color has to work with the first and second color. The fourth color……You get the idea. You are committed now and cannot stop. You have invested. There is no reverse gear on this thing.
Ice-cream business is primarily Capital Expenditure driven due to it being dependent on the cold chain distribution model. You have to plan out your cold chain and production capacities to the minutest of details as it is not easy to add capacity every year without having major financial implications. With a diverse consumer base in terms of preferences, we are faced with many challenges as a normal freezer can only hold some 80 liters of ice cream and if there isn’t something for everyone in the freezer then we start losing sales. Therefore, forecasting and sales planning is a major challenge as this is one category where standing still means commercial suicide.
Tell us about your distribution network? Which regions are your prime targets?
Omoré is a brand which has universal appeal and has a product mix that caters to every Pakistani. We are now present almost throughout Pakistan with a focus on urban and semi-urban areas as ice cream distribution is linked to availability of electricity infrastructure. Our presence spans across 150+ towns and 20,000+ outlets and our ambition is to be at an arm’s length from every Pakistani who desires to have ice cream in any shape, format, or flavor.
How much work force does Omoré have?
Omoré is an Engro Foods Ltd Brand, and Engro as a company is committed to contributing to Pakistan’s economic progress by adding value to our dairy sector. As a consequence of our business activities, we provide direct and indirect employment to 12,000 households. These include the farmers who provide milk, suppliers and vendors who provide packaging materials and ingredients, people who run and maintain plant and equipment, our scientists and innovators who dream up new ideas, our partners in logistics, distribution, and sales, and the many hundreds of passionate and brilliant people who help us make Omoré a happy ice cream for the people of Pakistan.
What is your annual production capacity and what is the approximate percentage that you are utilizing?
Without going into commercially sensitive numbers, suffice to say that we have a very positive view of the ice cream growth potential in Pakistan and our investments in capacity support confirm this commitment. We are looking to build a sustainable long term growth oriented business with the Omoré brand and geared to drive this growth. Capacity utilization is a complex subject in ice cream as the category is highly seasonal. The more important area is capacity planning which involves a combination of production and storage facilities. In this area again, we have some of the finest professionals in Pakistan making sure that our consumers always get the freshest ice cream possible wherever they live in Pakistan.
What is the annual consumption of Omoré ice cream in Pakistan?
The demand we have seen has been very encouraging so far. Over the last two years, the growth we have experienced in volume and market share has been phenomenal. Annually speaking, we have witnessed a growth in the volume of Omoré ice cream sold but also the growth has come from our continued expansion into multiple segments and that of our product portfolio. The growth of our annual volume has been on the back of a portfolio that now caters to all consumer segments.
What gives us even greater confidence for the future is the health of the Omoré brand itself which has resonated extremely well across demographics throughout Pakistan. Not only has the brand established itself in Punjab and Khyber Pakhtunkhwa, it is also doing well in Karachi, where we launched earlier this year.
How does the supply chain work?
The cold chain process starts at the plant where the product is produced under strict international quality and safety/environmental standards. From there the product is transported to regional warehouses through refrigerated trucks and from these regional warehouses the product is delivered to the retailers through refrigerated vans. A specific level of stock has also got to be maintained in the freezers at the trade level so that sales are not lost and in addition the freezers have to be placed at the most promising locations as there are only a finite numbers of freezers that the company can deploy.
This sounds simple enough but it is challenging as at all times a specific temperature has to be maintained and safety standards observed. Ice cream is an extremely perishable item and therefore this system has to work perfectly to eliminate damages and quality compromises.
How many local and international competitors does Omoré have in the market?
At present we have one major international competitor and some half a dozen local competitors. We face direct competition on a national level from the international brands while the local competition is mostly just geographically limited to specific parts of the country.
In terms of product portfolios, only a handful have full portfolios that cater to all segments while others only concentrate on specific segments where their products are popular. Not all brands are very active in terms of marketing and most just depend on off-take through availability. The larger national brands invest heavily in market and category development through advertising, new product launches and promotions
What are your future plans?
We are looking to expand the brand through various methods in the coming years. As mentioned earlier, there is still massive potential in terms of increase in per capita consumption of ice cream in Pakistan and with a growing population there will be a growing consumer base. With penetration into the rural sector posing a minor problem, we will be looking to grow the ice cream market in the urban areas of Pakistan and then focus on the rural market once there is sufficient infrastructure to support the product.
In addition to the above, we will be striving to maintain our position as the brand that delivers innovative and quality offerings to our consumers.
Where do you see this business in the next 5 years?
We have grown phenomenally over the last two years and with our launch in Karachi we expect the same trend to continue. We see immense promise in Pakistan and the Pakistani ice cream market in particular and we will continue to be strong players in this growing market. Ice-cream is still a luxury and we hope to make it a part of the Pakistani consumer’s lifestyle. We see immense promise in Pakistan and the Pakistani ice cream market in particular.