icecream business Mar, 28 2017

Freezing Profits with yummy Frozen Desserts

Indian summers and frozen desserts are synonymous with ice creams. This proves to be the foremost reason for the continuous growth of the Indian Ice cream industry, making it a lucrative opportunity for wannabe entrepreneurs.

By Abha Garyali Peer
Feature Writer
Freezing Profits with yummy Frozen Desserts

The ice cream industry in India generated revenue of more than USD 1.5 billion last year and is expected to achieve more than double to generate over USD 3.4 billion by 2021, according to TechSci Research. The most prominent factor for this huge growth can be attributed to the weakness of Indians towards ice creams. It is not only kids, but also adults who have a yearning for some sweet frozen dessert, after a heavy meal, and what’s better than a delicious Ice cream!!! Moreover, the ice cream sector remains untouched by any climatic variations as well as market fluctuations. People generally savour ice-creams, not only in sweltering summers, but also in shivering winters. In addition, ice cream is one dessert which anyone can afford to indulge in.

Growing market for both Traditional as well as Gelato brands
With increasing demand for premium brands in India, there is a big market for both, the traditional ice creams as well as modern gelato brands. Consumers are no longer satisfied with a typical vanilla cone and are demanding new flavours, tasty toppings and innovative ways of serving the ice cream. Due to this, many national players are launching modern gelato ice creams. Bhushan Goyal, Owner, Milky Way shares, “Started in 1994 as a pioneer of Italian style softy sundaes in Tamil Nadu, Milky Way now has more than 20 outlets across Chennai, Bangalore and Port Blair.” However, Srinivas Kamath, Director, Kamaths Ourtimes Ice cream Pvt Ltd, pioneer of Natural Ice Cream, believes that ‘Tradition never goes out of fashion’. He shares, “The traditional ice creams are always preferred over gelato brands by consumers as it is according to the Indian tastes.”

Freezing profits with National brands
Since last few years, the growth in this sector can be envisaged by the ever increasing players and their expansion pan India through the franchise route. Till a decade back, the ice cream sector was dominated by international brands, but now the scenario has changed with Indian brands leading the bandwagon in franchising. There can be lot of factors that have brought out this change. Kamath of Natural Ice Cream on the increase of national brands says, “National players understand the local preferences and taste of people unlike the international brands. Another factor which plays an important role is the price factor. Ice creams flavours launched by Indian brands are comparatively 30 to 40 per cent cheaper as compared to international players.” On the same lines, Kunal Pabrai, Owner, Pabrai’s Fresh & Naturelle Ice Cream says, “In the last few years, multiple Indian brands have propped up to experiment when it comes to ice creams. Indian companies are taking over the ice cream market with even traditional players opting for newer variants to indulge the increasingly choosy customer base.”

Adding sweetness via franchising
With franchising, becoming the sure-shot way for success in the sector, it is no wonder that most brands expand via the franchise route. Major national players as well as regional entrants like Kwality Walls, Amul, Pabrai’s Fresh & Naturelle, Natural Ice Cream, Pastonji Ice Cream and Milky Way are seeing great opportunities in the ice cream market and have taken the franchise route for expansion.

Kamath on Natural taking the franchise route said, “Franchising is the best way to expand quickly. Till now we have 123 outlets pan India, out of which 117 are franchised. In franchising, we get to rely on the expertise of local entrepreneurs on understanding the preferences of the local people.” In words of Bhushan of Milkyway, “We started franchising in 2007, when we had put all systems in place for franchising. Till now we have 20 outlets. We are expanding only through franchising and planning to open 100 outlets by way of opening in food courts in Malls and in all leading IT parks.” On expansion Pabrai says, “Pabrai’s presently has 28 franchisees in 12 cities with 3 more stores in the pipeline. We hope that in 2017-18 Pabrai’s should see an addition of about 20 more stores and we hope to close 2018 with 50 stores.”

Low in Cost, High in Success
In the F&B industry, it is the ice cream sector that offers a low investment business option to the investors. Among the main advantages of investing in a franchise business, apart from the benefit of an established brand name and strong marketing support, the ice-cream business also offers a variety of options to run the business. These are: exclusive shops, kiosks, cart- on-wheels and shop-in-shops. The costs are significantly lower for taking a kiosk and cart-on-wheels rather than setting an exclusive shop or an ice-cream parlour. The products are more or less the same, but the franchisees are not burdened with the cost of the venue and additional equipments. But, if the capital is no constraint, the franchisees can certainly invest in an ice cream parlour. Regarding investment, Pabrai informs, “Financially a base fund of Rs17-25 lakh is required; especially if the franchisee is opting to open the first Pabrai’s parlour in their city. If an existing parlour is present in their city of choice then an investment of 15-17 lakhs would be sufficient.”In words ofKamath, “Natural has 3 formats, for which the investment ranges from Rs 15 lakh to Rs 60 lakh, depending on the size and kind of shop.”

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