Heritage Foods Targets Rs 700 Crore Revenue From Ice Cream Business In Next 5 Years

Heritage Foods Ltd. targets to scale its revenue from the ice cream business to Rs 700 crore in the next five years, according to the company's chief executive officer Srideep M Kesavan.

Speaking to NDTV Profit, Kesavan said that the topline growth will be driven by enhanced capacity from its newly announced plant in Telangana.

Heritage Foods' board on Wednesday approved a proposal for setting up a new ice cream manufacturing unit in Telangana's Shamirpet. The capacity, with a capital investment of Rs 204 crore, will be financed through debt and internal accruals, the company said in an exchange filing.

"The new capacity allows us to grow our annual revenue rate (from ice-cream business) of rough Rs 110 and Rs 120 to Rs 650 to Rs 700 crore. That's the kind of headroom we will be exploding in the next three to five years," Kesavan said.

Value-added dairy products contributed 38% to Heritage Foods' revenue in Q1 including a 10% or Rs 31 crore portion from the ice cream business, he added.

Kesavan emphasised that there's tremendous growth potential for the ice cream business in the Indian market.

"We have barely scratched the surface as far as ice creams are concerned. In a country where impulsive category retail penetration is about 3.5 to 4 million, ice cream is just 3.4 to 4 lakh outlets. Barely 10% of the retail impulse purchase space has been penetrated by ice cream. The headroom to grow is tremendous," the top executive said.

Heritage Foods expects the plant to be commissioned by the third quarter of 2025.

“The month of August or November (2025) is when we will have the new line running. We are expecting the capacity to be fully utilised by the next four or five years time," Kesavan said.

The company will be completing a large portion of the investment in the Telangana plant by October next year.

"We would be adding certain other capabilities in the subsequent years... we will be able to manufacture several new products and innovation that we are not able to do in our current line," Kesavan concluded.

Founded by Andhra Pradesh Chief Minister N. Chandrababu Naidu in 1992, Heritage Foods has a strong presence in the retail market of the southern states.