India is a land of tropical weather; with summers being the longest weather in the country. Thus, in niche food businesses, the Ice Cream business seems to be the most lucrative. Over the last couple of years, the ice cream business has seen some rapid innovation. Earlier roadside carts were common among the people and were frequented by mostly children and youngsters. Nowadays, the concept of ice cream parlors is fast gaining popularity, where people can enjoy ice cream at leisure.
The reason behind this changing trend is clear – one is the increasing disposable income of the middle-class family, and secondly, the Western culture is influencing consumer habits. These macro and microeconomic factors make the ice cream business more viable and profitable in present times.
In this particular article, we will take you through a step-by-step guide on how to start your ice cream business in India. Unlike other formats, the market is very niche for this particular product and format. However, if done carefully and getting a few things right, you can make your ice cream business a runaway success.
1. How To Open An Ice Cream Parlor Business In India in 2023
Here is a step-by-step guide on how to open an ice cream business in India.
i) Deciding The Format
In the present time, there are a lot of ice-cream parlor formats from cold stone, Ice cream rolls, ice cream cakes, Nitrogen ice cream, live ice cream counters, and pre-packed ice cream counters there are endless. So, the first step in starting with your ice cream business plan is to decide which type of ice cream parlor you want to open.
Ice Cream Delivery- Food delivery has become quite a rage these days, and can also be a profitable business model for ice cream parlors if done smartly. Ensure that you provide your delivery boy with ice boxes equipped with dry ice. This would keep the ice cream chilled and solid for a decent amount of time, and prevent spoiling. You can get three layers of dry ice for a meager Rs 30 per day.
ii) Investments & Area Required To Open An Ice Cream Parlor
On average, an ice cream business requires a 400-500 sq ft carpet area shop or a small food truck that has the necessary arrangements for refrigeration. In both cases, the average investment required is between Rs 5 lakhs and 10 lakhs depending upon the ambiance and sitting area you want to create. High-end ice cream parlors can require an investment of up to 15 lahks. Apart from that, one has to look for a market or catchment area where there is high footfall and people are ready to splurge.
iii) Deciding The Location Of The Ice Cream Parlor
Eating ice cream is not a necessity unlike other forms of food, but it is more fun and fashionable in the crowd. So, proper market research should be done before choosing the location. An Ice cream truck being a movable property can experiment in different areas before finalizing the location.
To open an ice cream parlor, the availability of parking space is crucial. Purchasing ice cream is usually an impulse decision by customers; therefore, the ice cream parlor should be easily accessible and have ample parking space. Look for a location near businesses, such as markets, children’s clothing/toy stores or family restaurants.
iv) Procurement Of Store Types Of Equipment For The Menu
Once the format and location are finalized, list down the number of items you want to sell at your store. Then compare it with competition around and keep the pricing low initially to penetrate the market and distribute free samples. Based on the menu, decide what all kitchen equipment you want to procure and then divide the list into two parts one with items which you want to buy new and the other with the ones which you can acquire as used or old.
v) List Of Equipment Required To Open An Ice Cream Parlor
For a Cold Stone ice cream parlor, the list of equipment (With a rough estimation )
- Cold stone refrigerator (Rs 2-2.5 lakhs)
- Chest Refrigerator with a capacity of 500L (Rs 40,000)
- Storage cupboards and utensils (Rs 30,000)
- Raw materials including packaging (Rs 1-1.5 lakhs)
- Miscellaneous (Rs 50,000).
For an ice cream parlor, power backup is indispensable, as the prime way wastage in an ice cream parlor happens when the ice cream melts. A good refrigerator can preserve the ice cream for a good two hours, but if there is a power outage for more extended hours, then you are in trouble. Therefore, remember to invest in an excellent noiseless generator. You can get this under Rs 1 lakh.
vi) Staff Required For An Ice Cream Business In India
In this particular format, the number of employees required is much less as you need three people including a cashier to serve or to make a specific flavor of the ice cream. One of the uniqueness of this format is that you don’t need a proper Chef or bartender whose salaries are way too high.
Anybody can learn how to make a particular style of ice cream with little training, so no skilled labor is required. The salary in this format may lie between Rs 30-40k depending upon the soft skills of the employees. You could use your restaurant POS to monitor your staff’s performance and keep track of their growth to ensure you increase your ice cream sales in the long run.
vii) Maintaining Consistency In Ice Cream Parlor Business
One thing that you must ensure when you open an ice cream business is maintaining consistency in taste. Whether you have one ice cream parlor or a chain of outlets, you must provide the same flavor, quality, and quantity in the ice cream portion that you sell.
Standardization of recipes is a must in ice cream parlors. If you have multiple outlets, then you must make efficient use of Central Kitchen Management, which ensures easy distribution of your products from the base kitchen to different outlets. Use a specific Point of Sales software that includes this feature, and also helps you manage your inventory apart from the regular billing operations.
viii) Licensing & Paperwork Needed To Open An Ice Cream Parlor
Since ice cream comes under the food category, so all the licenses required are quite similar to that of a QSR – Shop establishment licenses, FSSAI licenses, Local Municipal Authority license and Fire license.
In all of this, an expense of Rs 50,000 is incurred. It is always advisable to take the help of a consultancy to get all the required licenses. Since it is a very time-consuming process you can concentrate on other areas of business.
Since ice cream is usually consumed as a dessert item, the prime time of ice cream sales is 9 PM onwards. Therefore, get the license to keep your ice cream parlor open till at least 1 AM for late-night operations.
Here is a detailed guide on the restaurant licenses needed to open a food business in India and the steps to procuring them.
Lastly, executing the ice cream business plan completely depends on the unique flavors you sell, the right pricing, and the high-footfall market. Hence, if you have the right ice cream business plan, and implement the above-mentioned points diligently, then you can be certain to have an overflowing cash register.
2. How much profit margin is ideal for keeping in my ice cream business?
The ideal profit margin to be set in ice cream is somewhere between 30% to 40%, but it is also dependent on your market. Suppose you have created your own brand, manufacturing and selling ice creams under this brand. In that case, you will need to determine the profit margin after calculating making costs and other allied expenses. The selling price of your ice creams also depends on several other factors. Location plays a vital role in boosting the profits of your ice cream business.
The location also plays a vital role in boosting your profits. The profit margin for franchise owners, that is, if you have taken a franchise to sell ice creams of another brand, can be a bit low as a certain percentage of the total sale amount is to be given to the main ice cream factory.
3. Do I need to create a business plan for my ice cream parlor business?
There is more competition in the ice cream business market than you can imagine. Not every brand or upcoming ice cream business may dominate the market share, but it is very easy to find ice cream-focused brands, fast food chains that are serving the dessert, and individual sellers. Different customers are looking for different things in an ice cream parlor. Some want the classic version without experimental flavors or new fads like nitrogen. While some customers may want a more specialized experience. Irrespective of the ongoing trends, a business plan for your ice cream parlor businesses is super important to help you define the kind of establishment you want to build and the genre you are looking at, keeping your target audience in mind, location, and other key logistics.
4. How to deliver ice creams locally?
Delivering ice cream is a way more significant challenge than delivering any other food item. The packaging is of supreme importance when it comes to ice cream delivery, be it at a distance that is 5 or 25 minutes away. Use effective insulated packaging to protect your delivery against heat or other temperature variations. Using dry ice to keep the ice cream frozen is a common practice, or consider using gel packs for additional protection.
Inputs are taken from Hemant Jain, MD, Goosebumps Ice Cream, on how to open an ice cream parlor.