H&M Gelato Ice Cream Center

Frozen Yogurt Product Cost and Suggested Selling Prices

June 30th, 2011

Product Cost and Suggested Selling Prices

Liquid vs. Powder Mixes

Advantages of Powder:

• Dry Storage – No need for storage equipment that requires electricity

• Theoretically easier to source – no need for supplier to have frozen distribution capabilities

Disadvantages of Powder:

• Might be more expensive than buying frozen liquid mix

• You need more ingredients – skim milk, filtered water

• Takes longer – need to mix it – about 15-20 minutes per batch
• Labor intensive – employee needs to mix

• Consistency can be a problem. If mixed by different employees, they might make each make it slightly a different tasting product.

How does the powder product work?

• In short, employee uses approximately one pound of dry mix, corresponding amount of flavoring mix, 2 gallons of skim milk and ¾ gallon of filtered water. Put all this in a food grade plastic 5 gallon bucket and mix with a free standing motorized mixer.
• The above will yield approximately 3 gallons of product, which is the appropriate size hopper for a typical self serve shop.

LIQUID MIXES

Advantages of liquid (frozen, then defrosted) mix:

• Less labor necessary – just pour mix into machine
• More consistent – pre-mix at factory means you don’t have to worry about flavor variations
• Less materials – no need to source skim milk on a regular basis or worry about filtered water sourcing
• Possibly less costly than using powder

Disadvantages of Liquid Mix

• Need freezer and refrigerated stored to manage inventory

Topping Costs – (the million dollar question!)

Fruit, candy, etc.

The toppings will definitely cost you more than the yogurt. A range is between .10 and .40 cents per ounce – so be very careful in what toppings you choose to offer, since your retail price per ounce is fixed between 35 and 50 cents per ounce.

The other “wild card” or “million dollar question” is what the ratio of yogurt to toppings is for the typical customer. In other words, if you’re paying 7 cents an ounce for the yogurt and 20 cents an ounce for the topping, you will be a lot more profitable if the customer goes mostly with yogurt. The good news is that they do. A typical breakdown of yogurt/topping is 75% yogurt 25% topping.

After you’ve been open for a month, you will have a much clearer picture of your ratio. Upon further analysis, you can decide if you need to raise the per ounce retail price a few pennies.

Where to buy toppings? Costco, Sams, Restaurant Depot, Target, Walmart, Grocery store, etc. Basically, find somewhere that is convenient to buy from on a daily basis and sells candy and fresh fruit at the low prices.

• Average serving sizes
• Typical ring is 8 ounces. At .45 per ounce = $3.60

Entry Filed under: Gelato Ice Cream Machines