Dmitry Dokin Highlights Nine Systemic Issues in the Ice Cream Market in the CIS at AqAltyn

According to the data presented by Dmitry Dokin, 1,043 new ice cream products were introduced to the Russian market in a year.

"Four of them accounted for 18% of sales in physical terms and 25% in monetary terms. The question is: are the remaining 1,039 new products a missed shot? Or were they made just for the sake of reporting new products?" the speaker pondered.

According to Dmitry Dokin, the key systemic issue of the ice cream market is the lack of an industry school - a combination of recognized experts, a scientific base, and institutional continuity.

"The industry lacks roots, lacks its own school. There's no pride - technologists, manufacturers, professionals, and stars who drive quality breakthroughs. Universities poorly train in research, analyzing information, making decisions, and formulating development strategies," he stated.

The expert compared the state of the industry to wandering for years: "Like Moses, we've been wandering the market for 30 years with a few weakened and scattered stars."

In response to this challenge, he announced the company's initiative to launch a joint department of dairy production at their factory in partnership with a local polytechnic university. The goal is to combine the "hard-earned lessons" of practitioners with academic training, which he believes is clearly lacking.

The second major problem is brand architecture and packaging design. Despite ice cream being an emotional and impulsive product, the shelves are filled with similar, poorly differentiated goods.

"Ice cream is an emotional, impulsive product, yet there are few interesting products on the shelf with vibrant brands, new packaging solutions, and juicy designs. Stores are filled with gray products with dreary clichés that everyone is tired of reading," Dmitry Dokin noted.

According to him, the typical task given to designers today sounds primitive: "The technical assignment often boils down to one thing: 'Make it brighter to sell better'."

Meanwhile, the industry, according to the expert, is gradually shifting responsibility to technology and neural networks: "Everyone looks at AI as a panacea in product design. We just wash our hands and say: go ahead. But without understanding the product and the consumer, AI will not solve systemic problems."

As for consumer behavior analytics, the expert noted that statistics in the category often describe the past but poorly suggest what exactly the manufacturer should do.

"We need to increase the home category of ice cream consumption for dynamic growth. But there is almost no guidance and 'solution sets' fr om analytical agencies," he noted.

Dmitry Dokin emphasized: the market needs strong 'home' brands and SKUs that are consistently present in the fridge, not just on the impulse shelf; without such 'home stars', the category as a whole, as well as individual brands, "will not move forward."

However, the development of multipacks and family formats rests on capital-intensive automation: "The home category of multipacks in the West is the growth engine. But its development requires automation and millions of dollars. Most players do not have these investments."

Dmitry Dokin noted that in ice cream, the brand has disproportionately high importance: the sum of 'beta' and 'sigma' indicators in the category is 89.4%, which is higher than in many other FMCG segments.

"The greater the sum of beta and sigma, the more important the brand. In ice cream, it is one of the highest values. Every manufacturer should use this, developing the brand, not just 'ice cream in a package'," he emphasized.

This is directly related to exports. According to Dmitry Dokin, the discussion about 'too great distances' between markets largely masks the key topic - the price per kilogram on the shelf. He cited an example wh ere, with a distance of 5,000 km between Almaty and Minsk, 'Shin-Line' sells more ice cream in Belarus than any Russian manufacturer.

A separate block of the meeting was dedicated to the automation and robotization of logistics and warehouses.

"As everyone has already said, robotization costs money. And for a long time, we proved to ourselves that we didn't need it: after all, we have cheap labor. But suddenly this labor started to disappear, and the whole stadium unexpectedly emptied," said Dmitry Dokin.

He gave a telling example of a shift in focus when evaluating investment projects: "In our robotization projects, the payback section disappeared, but a point 'maintaining business sustainability' appeared. The question is no longer about how many people you reduced, but whether your warehouse is operating today or not."

According to Dmitry Dokin, such investments are so far feasible primarily for market leaders, but without structural investments in automation, talking about long-term growth is impossible.

Analyzing export strategy, Dmitry Dokin criticized the common approach, 'you need to sell your own, not adapt to the market'.

"This is a hackneyed quote. The question arises - how? How to sell 'your own' if the market is structured differently?" he emphasized.

As an illustration, he cited an example of working in the Chinese market, where one SKU of ice cream has been selling for six years with a circulation of about 40,000 contacts, whereas other products launched under the principle 'we'll take what we have' didn't take off in the market.

Speaking about interaction with retail networks and private labels (PL), Dmitry Dokin emphasized that trying to fight the growth of PL is pointless - their share will increase, and pressure on suppliers will intensify.

"PL will only grow, and they will become even more aggressive. Think and create a product interesting to them. Help networks manage the category because you are professionals," he noted.

He gave an example of a joint project with one of the Kazakhstani networks, where changing the layout (showcases in freezers) allowed increasing ice cream sales in the category by 15% and gaining about 20% of shelf space.

According to him, PL can be of interest to the manufacturer in two cases:

• if they can work with low cost and are able to sell under PL or their own brand slightly cheaper than competitors;

• if it comes to joint brands of the network and the manufacturer - as in cases like Sarafan with X5.

Answering questions from congress participants, Dmitry Dokin emphasized that global trends do not always directly scale to post-Soviet markets. In particular, worldwide, ice cream fat content is decreasing from 8% to 5%, while in the industry leaders in the CIS, fat content is increasing - from 12% to 15%; globally, there is a massive replacement of dairy fat with vegetable fat, whereas in the region, vegetable fats are stigmatized.