Starting an ice cream business


Starting an ice cream business

Ice cream business, a subset of the diary industry has steadily grown over the years in India. The growing middle class and culture of dining out has given tremendous boost to the ice cream industry, which is expected to record healthy growth rates over the next decade. Improvements in the availability of power and growing distribution of cold chain networks in India is further expected to strengthen and help the ice cream businesses. In this article, we look at the procedure for starting an ice cream manufacturing business in India.

Trends in ice cream business

The ice cream business used to be largely unorganized in India. However, the growth of retail chains and entry of foreign ice cream brands into India has transformed the landscape. Ice cream businesses are becoming more organized with a few players manufacturing / importing ice cream into India, supported by a large number of ice cream parlours / retail chains for selling the ice cream. Also, the choices of ice cream types available in the market has increased with the following types of ice creams now witnessing growing demand:

  • Low fat ice creams
  • Frozen yogurts
  • Cake ice creams
  • Imported Ice Creams
  • Milkshakes
  • Prepackaged Ice Cream

According to researchers and developers of ice creams – changing lifestyle and the large youngsters population in India will contribute towards 9 to 12% growth in the current market for ice creams. Thereby leaving ample scope for the development of several successful ice cream brands in the country.

Infrastructure required for ice cream manufacturing

The size and capacity of the ice cream manufacturing business plays an important role in the decision to start an ice cream manufacturing business. It is recommended that an ice cream manufacturing unit be setup with atleast the capacity to produce five thousand unit to ensure optimal break even. The following machinery would be recommended for the business:

  1. Refrigeration compressor (open type): 5 TR capacity complete with motor and
  2. Cooled condenser complete with piping and water spray assembly.
  3. Liquid receiver
  4. M.S. Brine tank
  5. Agitator fan assembly
  6. Thermocole
  7. Push Cart trolleys
  8. Ice-cream freezer complete with extension including valve, shut off valve etc.
  9. Electrical including motors: Complete set ranging from ½ to 20 hp
  10. Mechanical accessories such de-hydrator with complete set suction line, copper pipe, liquid distribution, pipe, shut off valve etc.

Registrations and licenses required for ice cream business

Entrepreneurs setting up an ice cream manufacturing unit can register as a private limited company or limited liability partnership (LLP). Further, MSME registration could be obtained for those manufacturing units in which the investment in plant and machinery does not exceed Rs.10 crores. MSME registration will help the business avail subsidy for setting up of cold chain or cold storage units.
In addition the the business registration, FSSAI food business license would be required for any ice cream manufacturing business. Based on the capacity of the diary processed, the license fall under the purview of the Central Government or State Government.
Also, for the sale of ice creams, the manufacturing unit must posses a VAT registration from the State’s sales tax department. Only VAT registration is required for an ice cream manufacturing business; whereas both VAT registration and service tax registration would be required for an ice cream parlour.
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