Ice cream manufacturing is a cool area to invest. In case you need any further prodding, meet Johnson, who has tasted sweet success by scooping out ice creams.
Johnson wanted to be an entrepreneur. He thought of ice creams because he had some experience working in an ice candy making unit. He knew he could make a profit making ice creams.
He set up Anna Food Products at Meenangadi in Wayanad district. He named his brand 'Fizzy.' The company was not without its teething troubles.
His applications for loans under the PMEGP were rejected by multiple banks, who thought ice creams could not be sold in the cool climes of Wayanad! He got a lifeline when the Wayanad District Cooperative Bank borrowed him Rs 24 lakh.
The next stumbling block was the electricity connection. He had put everything in place – even fixing the date of inauguration – when he was asked by the electricity company to pay a deposit of Rs 9 lakh for the transformer due to a change in norms.
He went to the court for relief. The court ordered the Kerala State Electricity Board to supply him electricity because they had an agreement to the effect. Precious six months were lost by then. The enterprise was not yet in track but the bank send a notice to claim its dues.
Johnson survived the crises to start operations by the end of 2011. He was assured of a market even bigger than what he had expected. He turned a profit. He paid the bank its dues. After three years, he was ready to expand his business. The banks' attitude had changed. They were ready to borrow as much as he wanted.
Johnson comes from a modest family of farmers. He was the sixth son among eight children. He worked abroad for two years.
He gets ample help from family. His brother and sister-in-law are active in the business. Johnson, a B Com graduate, is in charge of marketing while his wife, Sheela, looks after the line of production.
The enterprise that started out with just five workers now employees about 60 workers. Every stage of production including pasteurisation, homogenisation, surface cooling, ageing in vat, continued freezing, candy making, packing, cold storage and coding are mechanised.
He even commands a few vehicles for distribution. He has invested about Rs 2 crore in the enterprise so far. The company owns a building with 4,000 square feet and attached facilities.
The turnover touches Rs 20 lakh to Rs 30 lakh per month. A net profit of 15 to 20 per cent is assured. The product being ice cream, the success of the business goes through seasonal variations.
The secret recipe
The secret ingredient to a great ice cream is quality milk, of course. Johnson's company procures about 600 litres of milk, from local societies of dairy farmers. (Not all ice creams you taste are made of milk. There are some manufacturers who put no milk into their ice cream.)
Johnson's other ingredients include sugar, butter, stabilisers, flavours, colours, chocolate, spices, nuts, oil, fruits, dry fruits and honey. He buys almost all his ingredients from local sources, except milk powder from Bengaluru and packing materials from Sivakasi. Fruits like mango, pineapple and jackfruit and tender coconuts are bought directly from farmers. They come cheaper and in abundance.
The company has distributors in Kasaragod, Kannur, Kozhikode and Malappuram districts. Products are directly distributed by the manufacturer in the Wayanad district. 'Fizzy' is also sold in Chennai, Mysore and Gudalur. Johnson says he stays on top of the competition thanks to his insistence on quality.
He says his fruit-based ice creams are made of real fruit pulp, lending them natural flavours. Fizzy ice creams are cheaper than other brands. The company also offers boards and freezers to retailers. Ads are given out on TV channels and social media.
The company has a trusted customer base. Sometimes the company struggles to meet the orders in high season.
Ice cream lasts for nine months and 12 months in freezers. Fizzy ice creams are sold through the year, shattering a myth that Wayanad was not a place to sell ice cream.
The company is not bothered by credit crunch. Johnson says that ice cream manufacturing is a profitable business. You do not need high investment to start this business. Ice cream making can be started with a modest machine that costs just Rs 10 lakh. You can increase investment as your market grows.
Even if you are assured of sales of Rs 3 lakh per month, you can make a profit of Rs 60,000, employing five persons.