Ice Cream Manufacturing

INTRODUCTION

Ice cream is a frozen sweet food typically eaten as a dessert. It is extremely popular all around the world including India. People regardless of age, and seasons, love to take it. Ice cream may be made from milk, water, sugar (or an alternative sweetener), and other ingredients. There are numerous flavors of ice cream such as chocolate, vanilla, strawberries, mango, banana, orange, etc. With growing popularity, the demand for ice cream is only increasing, and it could be a profitable business opportunity for aspiring entrepreneurs aiming to cater to such demands locally.

MARKET POTENTIAL

The ice cream industry is one of the fastest-growing segments of the Indian food processing industry. The presence of a robust dairy industry, as well as significant expansion in the food and beverage sector, are major factors contributing to the expansion of the ice cream market. On average, a person in India consumes around half a liter of ice cream every year. Furthermore, market expansion especially in the rural areas is being fueled by advances in cold chain solutions and associated infrastructure. India’s ice cream market is estimated to reach a value of INR 313.5 billion by 2026, growing at a CAGR of 17.3%.

MANUFACTURING PROCESS

The first step in the ice cream manufacturing process is the preparation of an ice cream mix which can include different combinations of milk, cream, water, sweetener, coloring, and flavoring agents in an unfrozen stage. In modern manufacturing systems, the mix is then homogenized, standardized, and pasteurized. If required, small pieces of fruits and nuts are injected, and the mixture is stirred to incorporate air spaces and to prevent detectable ice crystals from forming. The semi-frozen ice cream is then extruded from the freezer and filled into different packaging containers. The packed ice cream is then hardened by a blast freezer at a temperature of minus 3 to minus 8 degrees Celsius, and the ice cream freezes in 8-12 hours. After hardening, the ice cream is ready for sale and can be stored in a deep freezer or walk-in freezer at a temperature between minus 23 and minus 29 degrees Celsius.

FUNDING SOURCE

Under the Work 4 Progress programme of the Development Alternatives Group, such enterprises have been financed by Sahiyogini Mahila Mandal (a Cluster Level Federation) through a micro-credit facility, with an average loan size of INR 40,000. 

BUSINESS ECONOMICS

FIXED CAPITAL (One Time Expenditure)
MACHINERY & EQUIPMENTAMOUNT (in INR)
Churner 1,10,000
Brine Tank1,80,000
Storage Machine (freezer) 1,65,000
Ice Cream Mould (100 pieces @ INR 150/piece)15,000
Ice Cream Cart (5 carts @ INR 21,830/cart)1,09,150
TOTAL5,79,150
WORKING CAPITAL (recurring expenditure per month)
RAW MATERIALAMOUNT (in INR)
Milk powder (25 kg tin) (1 tin @ INR 4,000/tin)4,000
Sugar (90 kg @ INR 29/kg)2,610
Chocolate oil and powder (25kg bag) (1 bag @ INR 4,750/bag)4,750
Vanilla powder (in kg) (25 kg @ INR 130/kg)3,250
Stick (950 sticks in 1 packet) (11 packets @ INR 55/packet)605
Wrapper (10,000 pieces @ INR 0.25/piece)2,500
Flavouring (500ml bottle) (5 bottles @ INR 120/bottle)600
Cream (250 litres @ INR 160/litre)40,000
Salt (180 kg @ INR 25/kg)4,500
STAFF AND LABOURAMOUNT (in INR)
Entrepreneur’s Salary (@ INR 10,000/month)20,000
Two Full-time Managers (@ INR 7,000/month)28,000
Five Seasonal Workers (@ INR 5,000/month)50,000
UTILITIES & OTHER EXPENSESAMOUNT (in INR)
Rent (@ INR 5,000/month)10,000
Electricity3,500
Water6,000
Maintenance1,000
TOTAL1,81,315
FINANCIAL SUMMARY (Annual)
FINANCIALSAMOUNT (in INR)
Fixed Cost5,79,150
Working Capital (for each cycle of 2 months duration)1,81,315
Total Enterprise Cost7,60,465
Annual Revenue15,00,000
Total Expenditure (annual working capital)10,87,890
Enterprise Profit4,12,110
Payback Period (in months)17
 BASIC ASSUMPTIONS
  • Working days: 26 days per month (8 hours work shift)
  • 100% of the goods produced are sold
  • Revenue per cycle is as follows
  • Bank loan not taken into accounts
ParticularsQuantitySelling Price/Item (in INR)Amount (in INR)
Ice Cream10,000151,50,000
Popsicle10,000101,00,000

Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.