The ongoing West Asia war, particularly the US-Iran conflict, is disrupting supply chains and driving up the cost of key ingredients for ice cream and chocolate makers in India. Prices of dry fruits and nuts, essential for flavoring, have surged by 15-22% compared to pre-war levels, squeezing profit margins. While some companies are holding off price hikes during the peak summer season, rising logistics and packaging costs are adding to the pressure.
Impact on Ice Cream Companies
Siddhant Kamath, director at Naturals Ice Cream, noted that inputs like dry fruits and cocoa are experiencing supply tightness and longer lead times, as many categories depend on imports through sea routes affected by geopolitical tensions. Naturals has already taken an average 10% price hike across its portfolio. Mother Dairy's MD Jayatheertha Chary confirmed selective price increases in ice creams, driven by global commodity movements and higher logistics costs.
Challenges in Recipe Adjustments
With the war starting close to summer, companies had little room to adjust product recipes. Zervin Rana, director of Dinshaw's Dairy Foods, emphasized that reducing dry fruits and nuts would compromise quality. "The primary impact is being felt on margins. As a result, there may be no alternative but to increase the MRPs of products," Rana said.
Chocolate Sector Hit Hard
For Pascati Chocolates, hazelnut procurement costs have risen 75% year-on-year. Although hazelnuts are mainly imported from Turkey, regional instability has forced air shipments, escalating costs. Founder Devansh Ashar stated, "Thermocol box and packaging costs have also increased. Eventually, in the next month or so, we will have to increase the price of our hazelnut-based chocolates and pass that on to the customer." A spokesperson at Walko Food Company warned that further fuel charge hikes would be another blow to the industry.
