Ice cream makers want to put the Cyprus variety on the map while trying to regain the lion’s share of the Cypriot market but efforts are hampered by high costs and competition from big-name brands.
Cyprus’ ice cream industry is trying to grow by claiming back the local market while increasing exports by opening up new markets.
Cypriot producers, including Papafilipou and Regis, attended Anuga, the world’s largest trade fair for food and beverages that took place in Germany, to sell Cyprus ice cream to new buyers across the globe.
The ice cream offensive is led by household name Papafilipou’s CEO and President of the Cyprus Ice Cream Makers Association, Panayiotis Papafilipou.
Papafilipou said ice cream makers are stepping up efforts to stabilise and increase exports which had been building up since 2015, only to crash in 2018.
Despite ice cream making up a small portion of the country’s industrial production, its potential for growth is great but inhibited by costs and competition from imports.
Acknowledging the industry is far from meeting its true potential, Papafilipou told the Financial Mirror that new deals for exporting Cyprus iced delights could pave the way for expansion.
Currently, Cyprus exports ice cream to countries like South Africa, Australia, Greece, Saudi Arabia and Kuwait.
Only Papafilipou ice creams have any substantial presence beyond the borders of the island, with the CEO believing great opportunities lay ahead for the ice cream and dairy industry.
According to Cystat data, exports started taking off following the disastrous year of 2013, when only €49,000 worth of ice cream was exported.
Exports shot up to €218,000 in the following year, reaching €410,000 in 2016 and €442,000 in 2017.
However, exports were more than halved in 2018, dropping to €130,000.
Papafilipou said that exports to countries like South Africa could be a “game-changer as there is fertile ground for dairy products and ice cream, and this development will greatly help the Cypriot economy”.
He revealed that it was a two-year struggle to get the necessary licenses from South Africa.
Domestically the ice cream industry is a very strong sector, but it is hampered by high production costs which have allowed imported ice cream to take the lion’s share of the local market, especially when it comes to packaged ice cream products.
Regis Sales Manager Giannos Kneknas said the sector’s growth is hampered by high electricity and labour costs, which does not allow them to be competitive with cheaper ready-packed ice cream products sold at supermarkets and kiosks.
Hotels prefer imports
He noted in recent years hotels and cafeterias were opting to sell imported ice cream rather than the local variety.
“For a number of years hotels seemed to prefer imported ice cream simply because it is cheaper.”
“The sector managed to overturn the situation with hard work and sacrifices. Cyprus ice cream is of excellent quality and has nothing to envy from the imported products."
Papafilipou noted the local industry has succeeded in regaining the majority share of the local unpackaged ice cream market, with Cypriot manufacturers working around the clock.
Cystat data support Papafilipou’s argument. It shows the Cypriot industry produced quantities worth €15 mln in 2017, while the value of ice cream products imported stands at €10 mln.
In terms of actual volumes of ice cream produced and imported, Cypriot ice cream makers produced some 7,000 tonnes (2017), while 3,500 tonnes of ice cream was imported.
Cyprus production has increased over recent years from 5,700 tonnes in 2014, to 7,200 in 2017, relying mostly on the sale of unpackaged ice creams.
According to data obtained by the Cyprus Chamber of Commerce and Industry, there are seven local ice cream producers and seven foreign brand names finding their way on supermarket shelves, cafeterias and hotels.
Trying to cope in an extremely competitive environment, Cyprus ice cream makers have invested in innovation.
Papafilipou ice cream in September 2011 was awarded the Cyprus Innovation Award for the Manufacturing Sector for producing lactose-free ice cream for the first time in Europe.
In January 2012, the company won the New Product Award from IN Business Magazine and in October 2012 was named National Championship at the European Business Awards for this innovative product.
In June 2013, Papafilipou won the Ruban d’ Honneur Award of the European Business Awards for Innovation while two months ago the company inaugurated the island’s first ice cream museum in a move to encourage locals to appreciate Cyprus flavours.
Some 3,500 visitors have passed through the museum’s doors, which is adjacent to the company’s factory in Kokkinotrimithia.
Papafilipou said his company has been able to boost exports by creating an innovative ice cream for our canine friends using honey, as sugar is a health hazard for dogs.
Kneknas said Regis is also investing in innovative ice cream while keeping their traditional products such as the “Plaka” and “Agrino” ice creams going.
Regis is currently promoting new products such as ice cream enriched with protein and low in calories, targeting a more athletic section of society.
Kneknas noted that while Cypriot companies are investing in boosting local sales and exports, they expect the state to do its part in supporting an industry with great potential.
He said ice cream makers would like to see the government helping, in one way or another, with electricity costs as Regis alone pays €30,000 a month to the Electricity Authority of Cyprus.