Freezing Success by Investing in Ice-Cream

Sneha Santra
Sneha Santra Jun 21 2019 - 4 min read
Freezing Success by Investing in Ice-Cream
Ice cream retail is a high returns’ business with impressive margins.

As it’s usually said, “ice cream solves everything”. Icecreams have been the most enjoyed dessert all over the world and for all age groups. ice cream from being considered as an indulgence to becoming a snacking option, the ice cream industry in India has grown remarkably in the last decade.

From roadside ice cream carts to air-conditioned outlets and kiosk in malls with a variety of flavours, the ice cream industry in India has undergone a major revolution in the last few years. With the emergence of major players like Giani’s, Baskin Robbins etc, the ice cream market has become a cool franchise business opportunity in India. Now, many domestic brands have ventured into the franchise industry with their own ice cream brand offering different varieties of flavours. Icecream retail is a high returns’ business with impressive margins, propelling to entrepreneurs to foray into this segment.

Consumer Trends

Till about a decade ago, the category was largely limited to icecreams with traditional flavours, e.g. vanilla, chocolate and strawberry, along with some other variants like Kesar Pista, mango, elaichi, traditional kulfi, etc.

But, in recent times, the category has grown with an array of innovations in the icecreams flavours that are available in different variations like a cone, cup, and waffle. Customers are increasingly opting for fresh fruit-based and exotic flavoured icecreams like hazelnut, Belgian chocolate, tender coconut, etc. Gourmet flavours are also gaining popularity and are the triggers for brands seeking premium positioning.

With innovation in flavours, different variations of ice cream are also in vogue. One such trend is Nitrogen icecreams, ice cream which are prepared live and according to the customer’s preference, using liquid nitrogen to instantly freeze the all-fresh natural cream base.

Shubham R. Jain, CEO, The Frosty Cream, says, “Nitrogen ice cream right now is very new and trending to the market. Since it is ice cream, it is cherished by every age group; from kids to aged people, everyone likes ice cream. And since Nitrogen ice cream is a new concept and the ice creams are made with fresh ingredients live, it has a great future.”

Another major trend in the ice cream industry is Turkish ice cream. Well, one must have been living under the rock if they haven’t seen a video of a Fez-capped man wearing traditional robes entertaining the buyer (and the crowd) by passing the scoop of ice cream from cone to cone while the buyer’s hand tries eagerly (and fails) to catch it.

As entertaining as it is, this Instagram-able technique has what made Turkish ice creams so popular. Thus, increasing the demand and bringing down the delicacy and the entertainment from the streets of Turkey to India, is gaining popularity via franchising ever since.

Business Model

With the change in consumer perceptions, increasing disposable incomes and greater discretionary spending, ice cream franchises can be a sweet investment opportunity for investors. Previously, where consumers used to spend INR 10-20 on the dessert, they are now willing to spend INR 100-200, highlighting the profitability factor in the ice cream business.

Starting an ice cream parlour requires a modest space of 200-500 sq. feet, making it one of the most profitable low-cost businesses. An ice cream kiosk calls for a start-up investment of Rs 12-15 lakhs, which goes up to Rs 20-25 lakhs for parlours.

For instance, Giani’s demand an investment of 13-16 lakhs for a franchise store requiring an area of 200-250 sq. ft. For starting a Giani’s kiosk, one would have to invest INR 11-13 lakhs with area requirement ranging from 80-100 sq. ft. The profits margin is the same 50% for both the formats.

If you want to invest in the trending nitrogen ice cream business, brands like The Frosty Cream offer franchises for an investment of 15-30 lakhs. The area requirement ranges from 200-400 sq. ft. The anticipated return on investment is 106% with the payback period of 1 year 3 months.

For the Turkish ice cream category, brands like Twisting Scoops are offering franchises with investment starting from 5 lakhs to 20 lakhs and high return on investment of 108%. The area requirement for the franchise is 100-300 Sq. ft.  The brand offers training of all the staff for the famous ice cream tricks. 

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