Nestle’s Movenpick to invest in building frozen cold chain in India.

Nestle’ super premium ice-cream brand Movenpick is planning to invest upwards of $5 million to build cold chain infrastructure and logistics in India.

Having re-entered the Indian market for the third time since setting up its subsidiary back in 2000, Movenpick is present through a master franchise — Star Foods Speciality.

Speaking to BusinessLine, Dennis Korrey, Regional Business Head, South Asia, Movenpick, said, “In the past, there were issues like logistics and infrastructure in the Indian market due to which we had to withdraw our operations. Now, we will invest above $5 million to purchase the necessary infrastructure to build the Movenpick business here.’’

In fact, unlike in India, where it has sold the rights of Movenpick, Nestle continues to own the brand in places like Thailand and Australia where it has capabilities of supporting a frozen cold chain.

“Movenpick is sold in 40 countries and in places where Nestle does not have infrastructure in terms of a frozen supply chain, it engages in local partners like it has done in India,’’ added Korrey.

Meanwhile, even the MNCs Indian master franchise — Star Foods Speciality is hoping to raise money by diluting 10 per cent stake in the company to PE funds.

“With single brand retail we are allowed to dilute 49 per cent stake in the company but we have decided to sell about 10 per cent stake to a PE fund probably by next year once we realise the true value of the business in India,’’ said Tarun Sikka, Managing Director, Star Foods Speciality.

Sourcing Movenpick directly from Switzerland, the super premium ice-cream attracts steep import duties at 23 per cent in India.

“Unlike in countries like Australia with import duties for premium ice-cream at 1 per cent, duties in India are a lot more at 23 per cent. However, the relatively cheap cost of labour compensates for the high import duties making Movenpick’s pricing on par with other countries,’’ added Koorey, who is also the Country Business Head, Australia for Movenpick.

More than an ice-cream brand, Movenpick is now positioning itself as a ‘dessert’ with its cafes selling waffles, pancakes and sundaes.

Having launched its fourth café in Mumbai recently, the company is being prudent by moving away from malls to high street locations to save on real estate costs.

“We have to be careful about the kind of sites we choose for our cafes as Movenpick has yet to turn profitable in India,’’ added Sikka.

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