Starting An Ice Cream Business

Ice cream business, a subset of the dairy industry has steadily grown over the years in India. The growing middle class and culture of dining out have given a 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 the 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 have increased with the following types of ice creams now witnessing growing demand:

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

According to researchers and developers of ice creams - changing lifestyle and the large youngster's 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 play an important role in the decision to start an ice cream manufacturing business. It is recommended that an ice cream manufacturing unit be set up with at least the capacity to produce five thousand units to ensure optimal break even. The following machinery would be recommended for the business:

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

Ice cream manufacturing process

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, obtain MSME registration 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 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 falls under the purview of the Central Government or State Government.

Also, for the sale of ice creams, the manufacturing unit must possess a GST registration from the State's sales tax department. GST registration is required for an ice cream manufacturing business.

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Frequently Asked Questions

Common questions about Ice Cream Manufacturing Business Setup in India.

The ice cream business in India is witnessing a shift towards more organized players, with the entry of foreign brands and the growth of retail chains. Additionally, there is an increasing demand for low-fat ice creams, frozen yogurts, cake-based ice creams, imported varieties, milkshakes, and pre-packaged options. The changing lifestyle and the large youth population in India are expected to contribute to a 9-12% growth in the current market for ice creams.

It is recommended that an ice cream manufacturing unit be set up with at least the capacity to produce five thousand units to ensure optimal break-even. This minimum capacity helps in achieving economies of scale and efficient operations.

The key machinery and equipment required include a refrigeration compressor, cooled condenser, liquid receiver, brine tank, agitator fan assembly, ice-cream freezer, electrical motors, and mechanical accessories such as a dehydrator, suction line, copper pipes, and shut-off valves.

The important registrations and licenses required include registering the business as a private limited company or a limited liability partnership (LLP), obtaining an MSME registration for availing subsidies, acquiring a FSSAI food business license (either from the Central or State Government, depending on the capacity), and obtaining a GST registration for the sale of ice creams.

Obtaining an MSME (Micro, Small and Medium Enterprises) registration can benefit an ice cream manufacturing business by allowing them to avail subsidies for setting up cold chain or cold storage units, which are essential for the ice cream business.

The growth of the ice cream business in India is driven by the rising middle class, the increasing culture of dining out, improvements in the availability of power, and the growing distribution of cold chain networks across the country.

Setting up an ice cream manufacturing unit with a minimum capacity of 5,000 units is recommended to ensure optimal break-even. This minimum capacity allows the business to achieve economies of scale and operate efficiently, which is essential for profitability and long-term sustainability in the ice cream manufacturing industry.

The different types of ice creams witnessing increasing demand in India include low-fat ice creams, frozen yogurts, cake-based ice creams, imported ice cream varieties, milkshakes, and pre-packaged ice creams.

The legal structures recommended for setting up an ice cream manufacturing business in India are registering as a private limited company or a limited liability partnership (LLP).

Obtaining a FSSAI (Food Safety and Standards Authority of India) food business license is mandatory for any ice cream manufacturing business in India. This license ensures that the business complies with food safety standards and regulations, which is essential for building consumer trust and maintaining a good reputation in the market.