Keeping it in the family
Chomthana, one of Thailand’s ice cream manufacturers, is looking for a strong sales uptick this year, with both local customers and export markets expected to increase orders for the company’s products.
As part of efforts to lift sales, Chomthana has targeted younger customers with its new products, launching several new ice creams on sticks at the end of 2015, aimed at school aged children, but which the company hopes may also appeal to adults.
One such item is Tangmo watermelon ice cream on a stick, which debuted in October. The 60g extrusion made ice cream is triangular in shape, with green ice cream for the base and red ice cream on top with small chocolate buttons scattered on the surface as seeds, to resemble a watermelon slice on a stick.
“We are aiming mainly at children with this as it’s also sold in schools,” explains Soh Li Yin, marketing Executive at Chomthana. “We have put Tangmo in our freezers in government offices and schools as well.
“We sold all our initial Tangmo stock in Thailand and to overseas customers. It was launched in Cambodia on Loy Krathong Day in November, and also in Vietnam.”
Also launched at the end of 2015 was a new 60g push up ice cream on a stick called Cooliz, which is available in three flavours: mocha, green tea, and cookies and cream.
“The paper packaging is a new design so that people can unwrap the ice cream or they can push it up with the stick,” Soh says. “These are ‘grab and go’ ice creams. We have studied peoples’ lifestyles – people do not have time to sit around, so they can eat these on the go.”
Chomthana’s other recent launch is a silver, 900ml family sized tub, Take 1, which is being sold through supermarkets and is available for export. “We chose a silver tub as it’s different to what’s now in the market. We wanted it to stand out from the crowd,” Soh says. Flavours available are strawberry, taro, chocolate, chocolate chip and French vanilla, lime and coconut.
Chomthana produces a range of ice cream varieties under the Cremo brand including scoop ice cream, sundae ice cream in tubs, stick lollies with ice cream centres, consumer tubs, food service tubs, ice lollies and extrusion ice cream, most of which is chocolate covered.
Soh reveals that new scoop ice cream flavours are also being launched this year, which includes banana brownie, apple sorbet and grape sorbet. Flavours include durian, taro, coconut, mango chunks, jackfruit, blueberry, strawberry, Thai tea and tapioca, pandan with coconut cream, vanilla, chocolate, mocha chip, lime and lychee sorbet.
Imported milk powder and whey from New Zealand is used, while real local fruits are used along with sugar from Thai plantations. “We specialise in local tropical fruit flavours; mostly ice cream in tubs,” Soh says, noting that bulk ice cream sales account for 45 to 50 per cent of the company’s total sales.
“In Thailand chocolate, chocolate chip, strawberry and vanilla are our most popular flavours, while Thai fruit flavours are most popular for export,” he notes.
Established in 1979, Chomthana moved to its present site in Pathum Thani, 50km north of Bangkok, in 2004. Soh says the company left its original plant in north Bangkok for its current location, which covers a total of 23 acres to have sufficient space to build more production facilities and expand operations.
Chomthana soon diversified production by opening a confectionery factory making buns on the Pathum Thani site in 2005. In 2007 the company started production of ice cream.
“Cones we use ourselves and also sell to hotels and food service customers,” Soh says.
More recently Chomthana built a new cold store in 2012, designed to hold 5,000 pallets as part of plans to expand ice cream production for local sale and export. Other facilities in the complex include a wastewater treatment plant.
Competition is growing in Thailand’s ice cream market as the range of products and flavours on offer grows each year. “We are seeing more gelato shops opening here,” Soh says. “There is a trend for customisation of ice cream here – it started in Bangkok.”
Chomthana supplies vanilla and chocolate soft serve powder and pre-mix for soft serve machines. “Customers buy their own soft serve machines,” Soh explains. “Soft serve is growing; our customers include a Swedish department store. We also supply soft serve to fast food restaurants and export to Malaysia.”
Domestic sales in 2015 showed little change from the previous year with political instability having affected the Thai economy and consumer spending during the past two years.
In addition to launching new ice cream products, Chomthana is looking to expand business by developing online sales. The company also is considering opening its own Cremo ice cream parlours.
In provincial towns and villages, Chomthana has pedal carts and motorcycle carts to sell to families in their homes.
Keen pricing is a key element in Chomthana’s marketing programme. “Competition is tough as there are big players. As an SME company we compete with better products and a better price range For THB20 (€0.55) people can buy some of our cones; in fact, our new baby cone is just THB5 (€0.12) each,” Soh says. “We use our marketing budget to lower our prices. We get the same margin with a lower sales price.”
Meanwhile, exports are growing to the 15 countries that Chomthana supplies, with Southeast Asian countries accounting for about 70 per cent. Malaysia is the largest market, taking Chomthana’s entire range.
“In Thailand we are not in the high end brand range but in Malaysia we are in five star hotels and big shopping malls,” Soh says. “We are a mid-high range brand in Malaysia. We do OEM business for a Malaysian customer but we have our own brand name that we want to export.”
China is the company’s second largest export market. “We export to Xiamen under the Cremo brand. The distributor takes 12-litre food service tubs in all kinds of flavours for restaurants and hotels. We expect that exports to China will increase this year,” Soh notes.
Other important export markets are Cambodia and Vietnam. “Cambodia is growing fast. Even though there is competition from international ice cream companies our export volume still increases there,” Soh says. “The main ice cream market in Cambodia is in Phnom Penh but we have national distribution as our distributor is increasing its cold truck fleet to expand distribution.”
“Cambodians like our whole ice cream range as they can find all our fruits in their country, but it’s not just fruit flavour ice creams that attract them. We expect good growth this year in Cambodia.”
Exports to Vietnam also are growing at a double digit rate with most ice cream shipped there being delivered to southern Vietnam, the country’s fastest growing region. “Most of our sales are to Ho Chi Minh City. We supply freezers to customers there,” Soh says.
In addition to Cremo, Chomthana uses Iberry as another export brand to supply different customers. Singapore, for example, takes Atom chocolate coated, vanilla ice cream nuggets under the Iberry brand.
“We multibrand Cremo and Iberry to supply different customers in the same country,” Soh explains. “Our Iberry brand is mainly for the Singapore market. We supply Singapore Airlines with Atom through our agent.” Elsewhere, Chomthana also exports tropical fruit flavour ice cream to the EU, where Chinese communities living in Germany and France are the main markets.