Surely, as children, many dreamed of working in an ice cream factory or selling popsicles. Naturally, they didn't think about making money; the main thing was that the workplace was "tastier." However, as adults, many realized that selling ice cream could be a profitable business.
The first ice cream appeared in ancient China 5,000 years ago. The Arabs adopted recipes for this delicious dessert from the Chinese, and later, ice cream in the form of fruit ice cream appeared in Europe. In August 1799, the first ice cream parlor opened in Hamburg. In addition to numerous soft drinks, customers were offered only a few types of ice cream. The cost of its opening is unknown, but contemporaries entered the business for a pittance. In 1945, Irwin Robbins needed only $6,000 to open his first parlor, selling exclusively ice cream. He knew that a successful business required more than just one location, so he leased one space after another, and soon, together with his cousin, Burton Baskin, acquired an ice cream factory. The chain subsequently developed through franchising.
Today, Kyiv has about 120 ice cream parlors under four or five brands. Opening a parlor from scratch would cost around $300,000. While this market is quite developed globally, it's just getting started here. The Ukrainian ice cream business is still in its infancy, but it holds great promise. According to estimates from the Association of Ice Cream Makers of Ukraine, each Ukrainian eats about 15 kg of ice cream per year, while a German eats 40 kg.
Ice cream, who wants ice cream?
There are two types of ice cream parlors: brick-and-mortar and those located in shopping malls. There are about 30 of the latter in the capital, as shopping malls themselves are few and far between. Only two specialized chains—Gelateria Roma and La Gelateria Italiana—are currently opening such outlets. Until recently, there were three—Ukrainians had already gotten a taste for American ice cream from Baskin Robbins. However, according to a Baskin Robbins representative who wished to remain anonymous, the company is ceasing operations in Ukraine. She declined to comment on the reasons for the closure. However, all other players in the business interviewed stated that the prospects for this format are very bright. "Firstly, Ukraine is actively developing new shopping malls. Secondly, ultimately, renting retail space in a shopping mall is cheaper than similar space in conventional buildings in busy, equivalent parts of a given city—around $100-180 per square meter." "The rent is only for the production space; the food court area is not. A typical space rents $50-$150 per square meter of total space. However, the tenant also pays for the restroom, hallway, and other space, meaning it doesn't generate revenue. Thirdly, there are fewer renovation costs, since there's no need to do any. You can also ditch the ice cream production if someone else in town already does it," explains Dmitry Migunov, project manager for Gelateria Leonardo.
Another advantage of cafes in shopping centers is the minimization of advertising costs. If the shopping center is popular, customers flock to the cafe spontaneously. However, if the shopping center is poorly located, no amount of advertising will attract customers.
To make or to buy?
A crucial question for ice cream parlor owners: should they produce their own ice cream or source it? If it's a small, outlying town where the chain isn't yet established, opening a café with its own production facility is still the best option. In Ukraine, the following brands offer Italian ice cream: Gelateria Roma, La Gelateria Italiana, Gelateria Leonardo, and, until recently, the American company Baskin Robbins, as well as the Ukrainian company "Lakomka."
Soft-serve ice cream is made from special dry mixes diluted with regular water in a 1:3 ratio. American-made Frosty Freeze mixes cost $5.10 per 1.75 kg package, while domestically produced mixes can be purchased for $4 per kg. Some Ukrainian producers make their own mixes. For making fruit ice cream, it's best to use frozen fruit—it's always delicious. Fresh fruit, on the other hand, can be bitter or impart an undesirable tartness. Ice cream is sold in plastic cups or waffle cones. The latter option is preferable—customers prefer the crispy packaging. Furthermore, waffle cones are three times cheaper than plastic cups. For example, Ukrainian cones can be purchased for 16 kopecks each, while rosettes cost 55 kopecks. But, as the owner of one ice cream parlor, who wished to remain anonymous, explained, domestically produced cones aren't very tasty, so it's better to buy Italian ones, which cost 3 kopecks. And in the future, even baking them yourself. The production cost of one serving of Lakomka soft-serve ice cream is approximately 1 UAH. The retail price is approximately 5 UAH per 100 grams. Therefore, the profitability of this business (including rent, salesperson's salaries, and taxes) is approximately 40%. In contrast, the profitability of a business selling Italian or American ice cream is approximately 30%.
Ice cream can also be packaged in special containers (10 UAH) for takeaway. In these containers, the cold treat can be stored for two to three hours without freezing. Another service offered by ice cream parlors is custom-made ice cream cakes (1 kg - 250-300 UAH). Of course, the customer chooses the flavors for the dessert.
To prepare the ice cream, you'll need a freezer , which pasteurizes, churns, and freezes the mixture at temperatures down to -5°C. These can be purchased for between $5,000 and $30,000. According to the specifications, such a machine can produce up to 30 kg per hour, though the speed is limited by the ice cream hardening (cooling) process, which typically takes 30-40 minutes. An ice cream hardening system costs approximately $3,000-$5,000 (the price depends on the size and capacity of the machine). You'll also need a blender/mixer for blending fruit, grinding nuts, and making spreads. Ice cream storage and distribution require cabinets or freezers. A small cabinet with 20 ice cream containers costs up to $2,000.
Exclusive offer
Everyone loves ice cream, regardless of age or status. Therefore, when choosing your selection, it's important to consider the tastes of all customers. You want both children and respectable gentlemen to be spoiled for choice when faced with the abundance of ice cream. At the same time, customers should want to try different flavors. Then, there's a good chance they'll come back again and again.
"The key feature of an ice cream parlor is the display case, which functions as a salesperson. A customer walks in, sees it, and immediately wants to buy some ice cream," explains Mr. Migunov. The selection naturally depends on the location, but in any case, there should be at least 10-15 varieties. Reputable parlors offer many more. For example, Gelateria Leonardo and Gelateria Roma offer around 40 varieties of ice cream.
To avoid getting bored with the same ice cream, the product line needs to be regularly updated. This can be achieved by conducting customer surveys and, based on these surveys, adjusting existing recipes and creating new ones. For example, Leonardo makes ice cream flavored with champagne, licorice, salmon, and even garlic. La Gelateria Italiana offers ice cream flavored with mastic resin. Representatives of Italian ice cream parlors say that some popular Italian flavors have not caught on in Ukraine. For example, they tried making ice cream with licorice root. It tasted bitter and only a few people liked it, but because of one or two customers, no one made it a regular product. However, recently, Ukrainian consumers have gradually begun to accept low-fat and diabetic ice cream varieties.
Olga Nasonova, CEO of Restaurant Consulting, explains that ice cream consumption is directly related to the season. "Naturally, people eat more during the warmer months and less during the colder months. And in shopping malls, the appetite for cold treats remains strong, whether in winter or summer. In winter and during the summer holidays, ice cream sales only drop by 10%—a drop that's nothing compared to the losses suffered by street kiosks."
The rule "flowers for the wife, ice cream for the kids" is essential to winning the affection and respect of a friend's family. But for an ice cream parlor, it can be rephrased: "cake for the wife, coffee for yourself, and ice cream for the kids." And your business's profits will increase severalfold. Many adults take their children out for frozen treats on weekends, while they themselves prefer a cup of their favorite coffee. Ice cream isn't ideal for business meetings either, but tea is just right.
In Kyiv and other regional centers across Ukraine, many cafes bill themselves as ice cream parlors, but their menus also include coffee and wine lists, and, of course, a wide selection of various sweets. The reason for this is quite simple: to quickly turn a profit. Milkshakes made from any type of ice cream are a must-have on the menu of every ice cream parlor.
Let's begin...
An ice cream parlor can be purchased, built from scratch, or franchised. The first option is less accessible: such establishments rarely go on sale. The second option is most often chosen by professionals familiar with the intricacies of the business, who already know the suppliers and preferences of their future customers. The third option—purchasing a franchise from a well-known company—is favored by investors with little experience in the food service industry. Currently, a franchise can be purchased, for example, at Gelateria Leonardo for approximately $8,000. For this price, the franchisor provides consultations on determining the optimal location, selects and installs equipment, and supplies the basic raw materials for ice cream production.
Olga Nasonova notes that "if an entrepreneur chooses an option that involves making their own ice cream, it's worth remembering that not only retail sales but also wholesale sales to restaurants or stores will be quite successful."
To open an ice cream parlor with a production facility, you first need to obtain approval from the sanitary and fire departments. Additionally, you need certified equipment and certified products. You'll also need to describe and then register the technical specifications for ice cream production.
According to sanitary regulations, the future production facility must consist of a production area, a storage room, and a sales floor, with a total area of at least 130 square meters. However, abandoning the idea of a full-cycle production facility will take a completely different turn. To get started, the main thing is to sign an ice cream supply contract and find a favorable rental location. This will require a significant investment, as the ice cream production equipment alone will cost $55,000. Plus, one square meter of rented, renovated, and equipped space will cost $2,500. That means a total of $325,000 for 130 square meters.
According to restaurateurs, small seasonal locations in busy areas offer the best prospects. The key is finding a suitable location, obtaining permits, and signing a contract with the manufacturer. "The outlet should be equipped with a refrigerator and freezers, into which the frozen mixture is poured from special disposable plastic bags for further cooling," explains Alla Ternovaya, chief production technologist at Lakomka. This means the costs are much lower than opening a full-fledged cafe.
Oddly enough, the best advertising in this business is word of mouth: I tried it myself, and next time I came with a friend. "A good option is a social project. For example, holding events for orphans. It's fun for the kids, and it's good material for the media," says Dmitry Migunov. But not a single ice cream parlor in Ukraine spends much on advertising yet.
The main rule, as market players insist, remains the age-old truth: everything must be done honestly. It must be delicious not only at first, but all the time. After all, the most important person in an ice cream parlor is the customer, so your business must be built specifically for them.
Vitalina Kovalchuk
