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How to Start a Profitable Ice Cream Manufacturing Business

Do you want to start a small-scale ice cream manufacturing business? This article includes an ice cream making project sample profile with machinery, cost, commercial production process, and raw materials.

Ice cream is a very popular food item for people irrespective of age. Apart from that, it is an important dessert item in almost every celebration like the birthday party, wedding ceremony, kitty party, an office party.

Currently, the retail sale of ice cream is growing like anything. According to industry experts, ice cream is a recession-proof industry. Though the ice cream sale grows in the summer, the product has good domestic demand throughout the year.

The ice cream-making process is simple. You can procure the necessary raw materials easily from the local market. From a single unit, you can produce a variety of ice creams in different flavors. And finally, the ice cream ensures an inspiring revenue return to the enterprise. Hence, we can conclude that ice cream manufacturing is a great way of starting a food business in India.

10 Steps to Start Ice Cream Making Business

Step 1: Market Study

This is the first step in starting as such any project. Yes, you don’t need to analyze whether ice cream has a good demand or not. However, you need to analyze what type of ice cream has demand in your locality.

what is the total market size in your area? Which brands operate there with what products? What is the retail price of the most popular type of ice cream? These all will help you in making decisions in initiating your own ice cream business.

Step 2: Determine the Product & Business Model

Nowadays, ice cream comes in different colors, flavors, and even different forms. Generally, ice cream bars are popular for bulk use. Ice cream parlors buy ice cream in weight. Also, ice cream cups are popular in retail sales. So, you need to determine the specific type of ice cream that you want to produce.

Additionally, it comes in different flavors and colors. Some of the most popular flavors are mango, chocolate, strawberry, vanilla, Kesar Pista, Gulab, butterscotch, etc. So, you need to choose the flavors according to the taste of the local population.

Also, you need to craft the business model. That means how you going to sell the products. The most popular and successful way is distribution. In this option, you will recruit distributors and they will distribute the product to the dealers or retailers. Another popular option is distributing the ice cream to the retailers directly. Also, you can consider selling the ice cream from your own ice cream parlors in retail.

Step 3: Prepare the Business Plan or Project Report

Before initiating the unit, you will need to prepare the commercial ice cream manufacturing business plan or project report. In the business plan, you will need to mention the business objective, organization pattern, means of finance, production process, and financial aspects including the marketing plan.

A customized project report consists of two basic parts. These are the technical aspect and project economics. The technical aspect includes the machinery, raw materials, manufacturing technology, etc. On the other hand, project economics consists of the project cost and profitability ROI.

Financial Aspect

The total capital requirement including fixed capital and working capital is estimated at Rs 19.57 lakhs here. This is purely a sample cost calculation. Your specific project cost may vary depending on the unit size and production output.

Fixed Capital 

Land on rent & Land Development Cost = 0.50 Lakh

Building /Civil works = 0.80 Lakh

Plant & Machinery = 6.40 Lakh

Misc. Fixed Assets = 2.00 Lakh

Preliminary & Pre-operative Expenses = 0.60 Lakh
Contingency provision = 0.65 Lakh
Total = 14.95 Lakh

Working Capital

Raw materials/Packaging consumables for 7 days = 1.12 Lakh

Working expenses for 1 month = 1.10 Lakh

Finished goods for 3 days = 0.50 Lakh

Receivable for 5 days = 1.50 Lakh
Total = 4.62 Lakh

Step 4: Arrange Finance

Depending on the project cost, you will need to arrange the finance. Definitely, you can establish the unit with your own capital. Also, you can apply for bank loans. There are several subsidy facilities also available for the food processing units.

In the case of total project finance, you will need to deposit the collateral security. Also, you can apply for machinery finance on the hire purchase leasing agreement. In addition to that, you can apply for the overdraft or cash credit facility for working capital requirements only.

Step 5: Business License & Registration

In every commercial activity, business registration is a must. And you can only apply for the necessary licenses and permissions after getting the registration. Apply for MSME Udyog Aadhaar registration for the small and medium-scale operation. It helps in getting Govt. grants and subsidies.

Any type of food business requires an appropriate license under the PFA Rules and registration certificate under the Milk and Milk Products Order. Additionally, you need the license under the Standards of Weights & Measures (Packaged Commodities) Rules. It is advisable that you consult with a small business consultant to get specific guidance.

Step 6: Establish the Unit

After getting the necessary licenses and permissions, you will need to establish the unit. First of all, select the right location for the business. As you are dealing with the food item, you need a clean covered space with a sufficient water supply facility.

In establishing the ice cream making unit, you will need the power supply for machinery operation. Select a space that has a wide entrance. Generally, you can operate a small-scale unit in a 1000 Sq Ft area. Ask the machine supply company to help in preparing the floor plan before installing the machinery.

Step 7: Procure Machinery

Machinery plays an important role in small-scale unit operation. So, select the machinery carefully according to your specific requirement. Here, we have provided some basic machinery detail for your ready reference.

  1. Refrigeration compressor with motor and accessories.
  2. Cooled condenser complete with piping
  3. Water spray assembly.
  4. Liquid receiver
  5. M.S. Brine tank
  6. Agitator fan assembly
  7. Thermocole
  8. Push Cart trolleys
  9. Ice-cream freezer complete with extension with valve, shut off valve, etc.
  10. Electrical including motors complete set
  11. Mechanical accessories such as dehydrators. Complete set suction line, copper pipe, liquid distribution pipe, shut off valve, etc

Step 8: Arrange the Raw Materials

In the commercial ice cream-making business, the major raw material is milk. Apart from the milk, you need whole milk powder, skimmed milk powder, emulsifiers, stabilizers, sugar, and different types of flavors. Also, you need packaging consumables like cups, cardboard boxes, etc.

Step 9: Commercial Ice Cream Making Process

First of all, you will need to procure fresh milk. After receiving the milk in can chill in the can cooler. After the pasteurization, take the milk to the homogenizer. Here, add the required quantities of skimmed milk powder, whole milk powder, sugar, flavours, emulsifiers, etc. Mix properly.

The mix is homogenized thoroughly and aerated till the homogenized mass gives twice its volume. Simultaneously, the mass is chilled. Then transfer it to a vat. Here, allow it to mature and overrun under chilled conditions. Finally, transfer to the batch freezer for freezing, followed by storage under refrigerated conditions.

Step 10: Quality Control for Commercial Ice Cream Making

  1. You must prepare the ice cream with cow or buffalo milk.
  2. You will need to use only the permitted food colors.
  3. The product should be free from mold and fungal growth.
  4. Also, it should be free from any fermented odour, coliforms, salmonella, and streptococci bacteria
  5. Ice cream shall contain a minimum of 10% milkfat, 3.5% protein, and 36% total solids.
  6. And finally, you must not apply the stabilizing agents exceeding 0.5% by weight.

In a country like India where the population density is very high, ice cream making is a profitable venture to start for entrepreneurs. However, it is a working capital-intensive business. Hence, you must have a clear knowledge of distribution and channel management.