Friday, May 27, 2011

The Ice Cream Parlor Business - Is it the best investment option in the food business in India today?


Based on what I know, I believe that starting an ice-cream parlor (similar to Corner House in Bangalore) is one of the best investment options in the food services business currently in India, especially for first generation entrepreneurs with minimal investment capital radily available to them.

The attached link will give you the financial model for this.

https://docs.google.com/spreadsheet/ccc?key=0ArRHiZ3ki5n9dE9WNkNQdXVxVHJLN3BWWTZuVTdraVE&hl=en_US#gid=0

My big reasons for this:
1) Real Estate Costs are Lower: A small space is sufficient (300-400 sft) - so even a really prime location won't cost you as much to rent and of course the rental deposit will be lower, thus reducing the overall initial investment you will need to make.
2) Food Wastage and Pilferage is easy to contain: Wastage will be minimal without any pressure on forecasting volumes. Most ice-cream suppliers provide ice-creams that have a shelf-life of 6 months. So if you have a good freezer, you can store the ice-cream. Plus you can easily track the quantity of ice-cream bought with the number of ice-creams sold and contain pilferage. See note on this below.
3) Easier Labour Management: An ice-cream shop does not require a lot of skilled labour. 1 or 2 good/trusted guys with a few more helpers thrown in will do the job and keep your place up and running throughout the day. Making sundaes etc. is a easy skill to pick up in a couple of days.
4) Easy avaiability of ice-cream: There are quite a few ice-cream makers in each city and they will be happy to supply ice-cream at ridiculuously low prices (a gallon - 4 litres of ice-cream at around 160-200 bucks). Most manufacturer's ice-creams taste the same - except for folks such as Naturals and Orchard Fresh.
5) Tremendous scope to creatively serve ice-cream that appeals to different segments. e.g. servings for kids in cartoon cups. The ambience of the parlor can also be creatively designed based on your concept.
5) India's ice-cream consumption is very low (outside of Gujarat) compared to most other countries, thus offering tremendous growth potential. A Google search should return a few research reports on this.
6) Amul, Unilever India (Swirls - Walls Ice-cream), Vadilal (Happinez), Nirulas, Naturals, Dairy Day (Scoops), Amritha Dairy (Natural Fresh Chennai) etc. are trying to grow the ice-cream parlour business very aggressively. So if these big guns are so bullish about the market opportunity, that validates the idea quite a bit.

Note on storing ice-cream in a freezer: If you have wondered why the Walls ice-cream you pick at your grocery store doesn't taste as good as the ice-cream at Corner House or at an ice-cream parlor, here are the reasons:
1) The parlors store ice-cream in a freezer that can be set at the most optimal temparature range for ice-creams (temparature at which the ice-cream will not become icy or too soft). Grocery stores use freezers for all kinds of frozen food and set a generic temperature.
2) Fresher ice-cream stays fresh - the parlors typically buy ice-cream atleast once a week - so most ice-creams you get there are quite fresh and hence tastes better. The packaged ice-cream you buy at grocery stores have probably been manufactured atleast a month or two before you buy them - they do have a printed shelf life of 6 months.

30 comments:

  1. The link is not working. Can you please check and share

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  2. The link is not working...Would be great if you can re-upload the same..

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  3. Have uploaded the link again - Kindly check.

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  4. Thanks ...Its been grt reading your acticles...

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  5. Thanks for sharing, I will bookmark and be back again





    Start Company in India

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  6. Dear Jayanth,

    Thank you very much for posting such a valuable information about restaurants and ice cream parlours in India.

    I have some interest in opening a havmor franchise in my city. However, I may not be able to allocate full time to the business and hence the shop will be completely in the hands of my employees.

    In such a case what are the steps required to make sure that there are no bad practices (accounting/customer service/quality related) being followed by the employees.

    In simple words, I wish to ask that on a particular day, if the sale is worth 5000INR,
    How do we make sure that the store employees inform me about the exact amount and doesn't take away unnecessary commission.?

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  7. ice creams will sell well in summer - but in winter? espcially in bangalore? can a ice cream parlour double as a soup/snacks (samosas, chat etc) joint?

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  8. Hey Jayanth, Great post! really gives you some idea..
    Btw, i sent you a mail on jayanth@jlnventures.in, just some curious questions about this business. Your thoughts would really help..
    Appreciate it!

    Thanks
    Prashant Shetty

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  9. this is ravi from bangalore. i want to start ice cream parlor in bangalore, so i want details about ice cream suppliers & equipment suppliers(required for a new ice cream parlor).

    if possible plz mail me to my mail id: raviprakash1003@gmail.com

    ReplyDelete
  10. linked worksheet is very informative and useful. Appreciated. -

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  11. As per linked model worksheet, 2 Million minimal investment is a good idea?

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  12. Nice Post!!! If you are thinking about investing in the restaurant business, you need to stay on top of new trends and restaurant investment opportunities of restaurantindia.in.

    ReplyDelete
  13. Hi Guys,

    I am planning to open a fast food outlet [Only delivery] having key offerings as Pizza, Rolls and Sandwiches in Navi Mumbai. Could you guys please help me with estimated product costing and distribution model.

    Please mail same @ pravindaud@gmail.com

    ReplyDelete
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  15. sir i would like to know how much it wil cost to start a fresh ice parlour in india?

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  16. Hai Jayanth,
    Thank you for such a valuable information. Could You pls suggest me if i start an icecream parlour in a 2-tier city , what will be my investment and what will be my revenue per month or per year?

    ReplyDelete
  17. wow that was pretty helpful. thanks a lot. could you please throw some light on whether taking a franchise of a specific brand eg. Baskin Robins will show profits in accordance to your balance sheet (excel).

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  19. Hi I am planning to open a ice cream joint where I can accomaodate different kinds of ice cream and juices
    Can u please help me with your set of ideas as how to go about it

    ReplyDelete
  20. Hi I am planning to open a ice cream joint where I can accomaodate different kinds of ice cream and juices
    Can u please help me with your set of ideas as how to go about it

    ReplyDelete
  21. Hello, I am looking out for info about Corner house Franchise.
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  23. I want to start ice cream parlor in navi Mumbai and sanck corner also so please give me some information related to these two business at my email ld poonamkhedkar1910@gmail.com

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  24. I want to start ice cream parlor in navi Mumbai and sanck corner also so please give me some information related to these two business at my email ld poonamkhedkar1910@gmail.com

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  28. I start already 3 moth after start work my father ice parlour big hotel I want know business how to staff set up plzz help me

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