Food and Beverage Jul, 28 2010

Freeze profits with cool prospects

Whether it is blistering hot or chilling cold, a spoonful of ice-cream is always a tasteful delight. Taking into account the ever rising demand for ice creams, organised players are taking up the franchise route for rapid expansion. The article talks abou

By Abha Garyali
Sub Editor
Freeze profits with cool prospects

Ice creams are for everyone, irrespective of age, sex, gender, or class.  Ice creams, however have gained a fresh appeal with lot of national and international brands having taken the organised route of franchising. Earlier, the variety in the category was limited only to fewer flavours however, today the situation is like you name it and you have it.

The total ice cream market in India is Rs 2000 crore which is divided into organised and unorganised market. The unorganised market is dominated by small local and cottage industry players. On the other hand, the organised market valued Rs 800 crore is 100 million litres per annum. As per the industry research, the organised market in India is expected to grow at the rate of 15 per cent annually. The organised market consists of various national and international players that are expanding both through company-owned and franchised route.

Why Franchising?
Franchisor’s perspective: Let us now have a look at a few reasons why many ice cream companies expand via the franchise route:

  • Low cost opportunity: Ice cream franchise is a low cost opportunity with ample benefits. Established companies find it easier to set up the franchise network due to its low cost investment.
  • Easy to expand: Franchisors find it easier to expand rapidly via franchise route. Searching for franchisees for ice cream outlet does not require high qualifications. Any person having passion and dedication can take up the franchise.
  • Unproblematic locations: In this franchise, location does not pose to be a big hurdle for franchisors. This is because; ice cream franchising have many formats like carts, kiosks, parlours, shop-in-shops etc. 

Franchisee’s perspective: Aspiring entrepreneurs are also getting keen on investing in an ice cream franchise due to its benefits. Few of these are:

  • Low investment opportunity: Taking an ice cream franchise is a low investment option. As mentioned above this section has many formats which needs low investment as compared to other franchises.
  • Location not a hurdle: Ice cream franchises do not require any particular location. High rentals for outlets can also be saved by running a kiosk or cart etc. The only cost will be in terms of setting up the kiosk, the stock, and staff recruitment.
  • More flexibility: Flexibility is a great enticement for many aspiring entrepreneurs who want to invest in ice cream franchise.  As such, there is no fixed schedule, and franchisees can work at their own leisure.
  • Franchisor’s support: As electricity is a major problem in the country, it can pose a big quandary for ice cream business as well. Subroto Mukherjee, COO, Baskin-Robbins said, “We use special freezers (glycol) which hold temperature for longer periods of time. Also power back up is a provision we make for cities/ regions where there is power shortage.” Therefore, this franchise needs high involvement of the franchisor as well.

Key players expanding through franchising

Taking into consideration the parameters of success, growth and expansion of ice cream franchising in India, this article highlights the prominent players in the industry. Few of the prominent companies have been discussed as below. However, there are many other companies like Swensen’s, Vadilal, Gelato Vinto etc., who are into franchising.

Kwality Wall’s (Unilever): Kwality Wall’s is a major producer and distributor of ice cream and other dessert products in India, Pakistan, Sri Lanka, Malaysia and Singapore. For Kwality Wall’s and Swirl’s parlour, a franchisee can choose from three formats. These are: exclusive shop which requires innvestment of Rs seven lakh onwards, Kiosks requires investment of Rs six lakh and above and Shop-in Shops, need Rs five lakh investment. Presently there are more than 300 Kwality Parlours in India, which capture consumers with their delightful range of ice cream flavours and sundaes. According to official HUL spokesperson, “We currently have over 110 Swirl’s parlours in the country. Going forward, we are looking at adding 50 parlours a year for the next few years. And hence, are on a continual look out for interested and like minded franchisees who would like to grow their chain of parlours along with us.

Amul Ice Cream: This brand is among the Asia’s top 10 ice cream brands. Within a short span of six years, the brand has seen tremendous national success. Currently Amul ice cream has 70,000 outlets spread across the nation. As said by R S Sodhi, Chief General Manger, Amul, “The punch line for Amul ice cream is ‘Real Milk Real Ice Cream’ as we offer the best quality product made of real milk and milk fats and not vegetable oil. We have been able to maintain the quality because of the finely woven network of getting pure quality of milk from the 29 lakh farmers spread across the villages of India.” The company is planning to open 1,000 ice cream parlours and 2500 Amul Preferred Outlets (APO) via the franchise route by 2010. Amul with 4,500 APOs at present is planning to create 10,000 APOs by 2012.

Baskin-Robbins: Baskin-Robbins is a global chain of ice cream founded in 1953. It is one of the largest ice cream franchises in the world with more than 5,800 outlets. Baskin-Robbins sells ice cream in over 30 countries. Subroto Mukherjee, COO, Baskin-Robbins India says, “Ice cream in India was always consumed from the neighbourhood kiryana, till Baskin Robbins created the whole concept of franchise parlours. Now there are other players entering into this segment. Franchisee parlours business size is around 15 per cent of the organised sector.” Baskin Robbins offers the most robust franchise concept in the parlour segment. The company’s store formats range from a cart, to a kiosk to larger formats of parlours and lounge stores. The investment ranges from Rs 1.5 lakh for a cart franchise to Rs 20 lakh for a lounge store franchise. Regarding the expansion plans Mukherjee states, “We have been expanding rapidly in past few years. We are currently at 400 stores spread across 92 cities in India. We now aim to increase our market penetration and grow at the same rate year on year.”

Mini Melts: Mini Melts Ice cream is an international company having its operations in 20 different countries with manufacturing facilities around the globe. The company has its outlets in United Kingdom, United States, U.A.E., Taiwan, Brunei, China and India etc. Tom Mosey, CEO, Mini Melts Ice cream says, “We have grown rapidly across the globe through franchising. We have designed our factories in anticipation of the growing market in order to maintain and supply the global quality standards of our ice cream. The massive growth potential of Mini Melts has led to the rapid increase in the number of distribution channels across the globe. In India, Mini Melts is located in Himachal Pradesh, which is the latest addition to the global list of Mini Melts manufacturing and distribution centres.” To start a Mini Melts Ice cream kiosk, Mosey informed, “A franchisee must have an ideal location and area with high human traffic. The location can be standalone in a mall or within an existing fast moving business such as a supermarket/ hyper-mart, convenience store, café, amusement arcade, or any suitable venue.”

So if you belong to the category of aspiring entrepreneurs with an interest in ice cream franchise, this business has a lot of benefits for you. You can invest in any of the above franchise companies for high benefits.

Related: Add Chinese Flavour To Your Business

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