Bulla Ice Cream Situation Analysis - Research Paper Example

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1. Market background The dairy industry is Australia’s major rural industry which had a production value of $3.4bn in 2009/10 (Dairy Australia, 2011). The sector employs approximately 40,000 people in rural farms and dairy products manufacturing and processing plants…
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Bulla Ice Cream Situation Analysis
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Download file to see previous pages The first commercial ice-cream was produced in Australia in 1907 (Unilever, 2010). Streets ice-cream marked the beginning of the ice-cream industry in Australia in 1920 (Unilever, 2011). This was subsequently taken over by Unilever and is now one of the biggest and best known manufacturers with brands such as Magnum, Paddle Pop and Blue Ribbon. This was the first ice-cream available on sticks and today Magnum sells about 1 billion units per year. 2. Market Statistics Positive change in both value and volume in the Ice-cream sales (Appendix A) in Australia suggests that economic downturn ash not impacted the sales of this luxury food item. Sale has increased by about 9% in value 2 years from 2007 and about 5% in volume. However, there have been significant increases in the sales of tubs (23.2% by volume) while the sales of multipacks and desserts have declined. Again, while Nestle and Unilever have seen declining sales, Bulla’s sales in two years has increased almost one hundred percent. All other brands such as Weis and Sara Lee have seen sales decline over this period. Amongst the popular brands those of Nestle – Peters Original and Peters Light & Creamy have steadily declined. Brands such as Bulla Real Dairy, Bulla Ribbon and Bulla Creamy Classic have almost doubled in two years. Bulla Ribbon has registered the highest growth (more than 100%). 3. Business Environment Political Australia has very low risk of political stability and the country ranks third in the world for political stability (NSW, 2011). This makes it a safe investment location. Australia is a constitutional democracy based on federal division of powers. Economical Australia offers an environment that encourages freedom of speech and freedom from internal control (MIEPA, n.d.). Business investment and foreign entrepreneurship is encouraged in all sectors. Despite economic downturn ice-cream continues to be an affordable indulgence for the Australians leading to a sustained growth of 3% in 2010 (Euromonitor International, 2010). The ice-cream industry shows an increase at an annualized rate of 2.3% to $485 million in the five years through 2010-11 (Ibisworld, 2011). Socio-cultural – health and wellness products are in high demand and shape the performance of indulgence and impulsive purchase such as increase-creams (Euromonitor International, 2010). This is the reason that despite constrained consumer spending sales remained robust. Impulse ice-cream is identified as a quintessential activity in Australia and a key aspect of Australian life. However, as the consumers have become health-conscious innovative product lines and adapting to changing consumer trends has become important. Technological Australia has the latest technology in ice-cream production and research is an on-going process in Australia. Competition Unilever continues to dominate the entire Asia-Pacific market in ice-creams having 8.6% of the total market share (Appendix B). Nestle and Bulla Dairy are the other two main contenders in this sector 4. Bulla Ice Cream analysis Bulla Dairy is an Australian-owned family business that constantly introduces new products based on technological innovation. Started in 1910, the organization sells its products all over Australia and also exports throughout Asia and the Pacific region. It has diverse range of products categorized into Retail, Foodservice, Route and Export. Yoghurt, ice-creams, cheese and cream are its specialties. ...Download file to see next pagesRead More
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