Business Overview
Ice cream shops offer customers convenience and the chance to indulge in frozen treats. Many stores sell soft serve or traditional ice cream and custard, gelato, sorbet, frozen yogurt, and organic ice cream in a cup or freshly made waffle cone. Most ice cream shops offer different toppings and a wide variety of flavors, giving customers more choices and access to premium products they wouldn’t have in their freezer at home.
The most common business models in this industry include:
- Scoop Shops: Traditional storefronts selling single servings of ice cream by the scoop, often with cones, cups, and toppings.
- Specialty Stores: Offering unique or premium products, such as handmade, organic, or dairy-free options.
- Ice Cream Trucks: Bringing frozen treats to customers at parks, neighborhoods, and events.
- Seasonal Stands: Operating during warm-weather months in high-traffic areas such as beaches, parks, or fairs.
- Franchised Locations: Running ice cream shops under a well-known brand, benefiting from existing recognition and support.
Related: Checklist To Start A Business
How Do Ice Cream Shops Make Money?
Ice cream shops generate revenue through the sale of frozen desserts and related products. The income depends on factors like location, menu offerings, and customer volume.
Common ways ice cream shops make money include:
- Single-Serving Sales: Selling individual servings of ice cream, gelato, or sorbet in cups, cones, or bowls.
- Toppings and Add-Ons: Charging extra for toppings such as sprinkles, syrups, candies, and whipped cream. These add-ons enhance customer satisfaction and increase ticket sizes.
- Pre-Packaged Products: Offering pints, quarts, or novelty items like ice cream sandwiches and popsicles for customers to take home. These products allow for additional sales outside of immediate consumption.
- Specialty Desserts: Selling sundaes, milkshakes, floats, and other custom creations.
- Event Catering: Providing ice cream services for parties, weddings, and corporate events.
- Merchandise Sales: Selling branded items such as T-shirts, hats, or reusable containers.
Industry Statistics
Ice cream shops sell frozen desserts and treats through counter service, drive-through windows, and delivery options. This industry falls under NAICS code 722515 – Snack and Nonalcoholic Beverage Bars. Here are some statistics about the industry.
Ice Cream Shop Industry Size & Growth: The ice cream shop industry generated $7.1 billion in revenue last year. The industry has grown by 3.6% annually over the previous five years. Growth is expected to continue over the next five years as consumers show steady demand for frozen treats and premium dessert options. The rise in drive-through and delivery services has helped expand market reach (IBISWorld).
Number of Ice Cream Shops: There are 17,760 ice cream shops operating across the country. The industry remains largely fragmented, with no single company controlling more than 20% of the market. Cold Stone Creamery holds the largest market share at 19.2%, followed by Berkshire Hathaway at 1.4% (IBISWorld).
Ice Cream Shop Profit Margin: Profit margins in the ice cream shop industry have decreased slightly in recent years due to rising milk prices. The average net profit margin is 10.7% for most operators. Shops offering premium products or maintaining efficient operations can achieve higher margins (IBISWorld).
Startup Stories
Also See: Ideas for Naming an Ice Cream Shop
Costs To Start an Ice Cream Shop
Starting an ice cream shop could range from $35,000 to $125,000. The lower end represents a small shop with basic equipment and minimal renovations, while the higher end includes premium equipment and extensive renovations.
Here are the main costs to consider when starting an ice cream shop:
Equipment ($15,000 – $45,000): Commercial ice cream freezers, display cases, batch freezers for making ice cream, prep tables, and storage freezers form your core equipment. Smaller shops might start with a soft-serve machine and display freezer, while larger operations need multiple pieces of production equipment.
Location Setup ($12,000 – $50,000): The first and last month’s rent plus security deposit starts your lease. Renovations include plumbing, electrical work for heavy-duty equipment, customer counter space, and food-grade surfaces. Finding a previous food service space can reduce renovation costs.
Initial Supplies ($5,000 – $15,000): Inventory needs include ice cream ingredients, toppings, cones, cups, spoons, napkins, and cleaning supplies. Storage containers, scoops, preparation tools, and display items help maintain efficient operations.
Cold Storage ($3,000 – $15,000): Walk-in freezers or multiple commercial freezers maintain proper storage temperatures. Backup systems protect inventory during equipment maintenance or power issues.
These cost estimates are approximate, and actual expenses will vary based on your business model and scale of operations.
Resources:
Ice Cream Alliance
International Association of Ice Cream Distributors and Vendors
National Ice Cream Retailers Association