Opening an Ice Cream Parlour Business in India – The Complete Guide

Nothing’s better than chilled ice-cream on a hot summer day or hot chocolate fudge on a cold winter night. While foodies may debate over the best cuisine, pizza vs burger, etc. everyone is on the same page when it comes to love for ice cream. India is a nation where everyone is born with a sweet tooth & desserts are the most awaited part of a meal. 

The ice cream parlour business has expanded multi-fold in the past few years. As per FICCI’s India Food Service Industry report, frozen dessert & ice cream market alone is expected to grow to nearly 1 Billion USD by 2022 which proves that love for ice cream is growing year-on-year & there are more people willing to make a purchase in the economy to satiate their dessert cravings. Since the last 10 years, a lot has changed in the ice cream business as we have quickly moved on from ice cream sticks worth Rs.10 being sold roadside to small yet lavish cafes offering several ice cream flavours in high priced waffle cones, ice cream rolls, sundaes, fudge shakes & more! A lot of brands are trying to penetrate the market as they can identify the market potential & are ready with drool-worthy desserts for the customers. But is it the right business for you? 

ice cream business

Steps for planning the opening of an ice cream parlour (Consideration Steps)

If you are planning to open up an ice cream parlour, then you must ask yourself three quick questions to narrow down your thoughts to that one big delicious idea! 

What’s your niche?

The ice cream parlour business is a niche market with a high potential for success. So you need to ensure that you are treating your customers with something that they have been missing out on all their lives. New concepts such as waffles, ice cream rolls, thick shakes have already picked up in the market & have gained huge popularity. They can now be seen in the menu items of all successful ice cream hubs. So if you’re ready with your secret recipe which will change the way people savour ice cream then it’s Game On!

What is your format?

An ice cream truck, a dark kitchen or a small cafe. You would need to decide on the format of how your customers will reach out to you. Ice cream trucks are less popular in India but would certainly hold the attention of all foodies. It all depends on how you imagine your customer to enjoy your delicious treats. A lot of ice cream parlour chains have opened up recently which has gained huge popularity with the masses while high-end cafes in posh societies have also become famous for their top-notch taste at a premium price. 

Who are you catering to?

Answer to this one depends a lot on the answer to the first two questions as your product range & the location of your business would primarily decide your target audience. You can cater to almost everyone if you have a full stack of product range which includes traditional ice creams, classic Indian desserts & beverages. However, you don’t need to cater to everyone if you know that your offering (say waffles) would be a hit only with the perfect customer group who is ready to relish your desserts!

So once you have got the answers to these three questions you can begin with the process of opening up your own ice cream parlour.

Cost involved in opening an ice cream parlour

Let’s talk about money. A successful restaurant business is a summation of several good decisions made & you would have to make a lot of them while opening an ice cream parlour. There are multiple costs involved in the process. Here’s a step-by-step guide on all the costs that you will incur.

Location/Space Cost

Carpet area of 400-500 SqFt is sufficient to set up a fully functioning ice cream parlour with a sitting capacity of five to ten. An ideal location for your ice cream parlour venture would be a busy shopping street, posh society, shopping mall or near a school & college campus. Location costs can go very high if you’re purchasing a space but on rent, the monthly costs would be in the range of INR 50,000 – INR 1,50,000 basis the locality that you select. 

Kitchen Equipment

An ice cream parlour will have equipment that is much different from the one that is used in a traditional restaurant. The first thing on your list should be a cold stone refrigerator which shall cost around INR 2-2.5 Lacs, this will be your central storage system. Apart from this, you will require a chest refrigerator, storage cupboards, packaging material & daily use utensils. You must ensure that your parlour has a 24/7 power supply because with ice cream there is always a risk of them melting. So a power backup generator could also be an essential add-on for your kitchen. Overall costs for kitchen equipment upfront can up to INR 5,00,000 to INR 7,00,000.

Inventory

Raw material required would be decided basis the format that you’re going with when it comes to your ice cream parlour. Tubs of ice cream, waffle cones, nuts, choco chips, whipped cream, hot chocolate & more would be required basis your recipes & final offerings. You can stock up raw material which doesn’t get perished too soon in higher quantities compared to the quickly perishable raw material & restock basis the actual consumption once the business commences. Inventory costs would be in the range of INR 2,00,000 to INR 3,00,000 at the time of setup. 

Working Capital

Kitchen staff (ideally a team of 5-7 employees) managing all parts of operations including making dishes & serving the customers would be required. Along with its utility costs & miscellaneous costs such as freight, suspense, etc. also need to be accounted for. This will be around INR 1,00,000 to INR 2,00,000 but can be controlled if you begin with a smaller team at first. 

Marketing & Design

The most important one! This is the only cost that will help you generate revenue & bring you business. Customers today are attracted by big neon light boards, quirky brand names written in a cursive font & a witty tagline making branding essential for your business. A good marketing team would be able to help you with branding & designs for your packaging, wall art for indoors & a social media launch of your ice cream parlour. Your ideal budget for marketing should be around INR 2,00,000 to INR 3,00,000 in total for the first three months. 

Total initial investments would sum up to INR 10,00,000 to INR 15,00,000 including everything. 

Licenses needed to open an ice cream parlour business

As you set shop, you need to ensure that you have all the licenses required legally to run an ice cream parlour. There are multiple licenses required so you need to jot down all of them as you are in the process of starting operations at your facility. 

ice cream parlour business

The Food Safety & Standard Authority of India issues FSSAI license which is the most important license required to open up a restaurant in India. It’s a 14 digit registration number which ensures that food that you’re serving qualifies standards set by FSSAI. 

Fire Safety License is also essential. You need to install fire safety equipment such as fire extinguishers & ensure that the floor map is built with easily accessible exits that can be used in case of a mishap. You can apply online on state government website to get an NOC. The NOC is granted once chief fire officer approves fire safety measures during the inspection.

Health license is also required & is a must to ensure the customer that your ice cream parlour running within compliance of the health department. An eating house license is also required if you have seating arrangements for the customers. In that case, you would need to submit your floor map along with photographs of the place & other legal documents to the licensing police commissioner to get approval. 

Getting all the licenses may be an exhausting process if it’s your first time in the restaurant business. Helping hand from someone with experience in F&B Industry or a consultancy would help you ease off the load & shift focus on making delicious ice cream. 

5 things to keep in mind for a profitable ice cream parlour business

Power deliveries with dry ice

Sign up with delivery aggregators & don’t limit your sales to just day to day footfalls. To getting constant orders from third-party platforms & deliver the orders with dry ice to avoid the catastrophe of delivering melted ice cream to a customer. You can expect your business to grow from 20% to 2X with steady orders flowing from third-party platforms.

Win back your customers

Focus on the lifetime value of a customer. Ice cream as a delicacy can be savoured as frequently as twice per month from a loyal customer. Leverage CRM tools such as SMS/Email marketing and loyalty programs to give your customers constant brand recall while incentivizing them with loyalty points and offers tailor-made for them. In an ideal scenario, you should get 60% of their monthly sales from loyal customers.

Ace the social media game

Clicks & impressions turn into orders & revenue pretty quick! With the correct brand positioning & reach on social media platforms you can easily ensure new customers showing up at your ice cream parlour. Giving freebies to customers for Facebook check-ins & posting on Instagram is the swiftest way to get your social media page going. 

Keep innovating

Millennials are constantly looking for new reasons to savour their favourite treats which makes innovating a necessity for any ice cream parlours. Ice cream rolls & nitrogen ice cream are the newest addition to the menu which has become an instant hit with foodies. You need to surprise your customers with quirky add-ons to enhance their experience every time they visit or order from you. So mix and match, upside-down or inside-out but never stop innovating with flavours! 

Put analytics to use 

Analytics can do wonders for your brand! Your sales data is enough to give you valuable insights such as best-selling items, best performing day of the week & products that have high margins but are not doing so well. With an inventory management tool, you can always have visibility of your stock & raw material which will ensure that your ‘hero-dish’ never goes out of stock.

Successful ice cream parlours in India

With new brands coming up with multi-outlet chains, the ice cream parlour business has grown exponentially in the past few years & competition between big brands are getting stiff day by day. Kwality Walls, Cream Bell, Mother Dairy & Amul used to be the brands’ 90s kids used to look at they had a sweet tooth, Giani’s was a luxury. However, the market has completely changed with new brands such as Gelato Vinto, Cocoberry, Oh So Stoned & Chocolate Room coming into the picture. Moreover, customers are willing to pay up to Rs.500/- for ice cream which was unimaginable a decade back. This has happened due to an increase in disposable income of the middle class and new brands opening up following the footsteps of successful brands in the west. Most of these successful ice cream parlour businesses are at a stage where they are looking to add more outlets to their chain & reach out to a broader audience. Even an old-school brand such as Giani’s is operating with the same model. Successful ice cream parlours right now can be broadly divided into two groups, multi-outlet chains that are available at all prime locations and single outlet hero brands which are popular because they have been in business for decades.  

Now that you know all the key steps required to open an ice cream parlour business in India, start your ice cream parlour right away & make the world a sweeter place. 

Opening an Ice Cream Parlour Business in India – The Complete Guide
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Shourya

Shourya

Shourya is a Business Analyst at LimeTray. He makes excel dashboards and business processes for his bread & butter. Loves cinema, exploring new music & boxing (but only somedays). Reach him on: Instagram @shouryarajgupta