FLUCTUATING with the highs and lows of the tourism industry, the commercial ice-MAKING business is not as lucrative as many may think, nor is it a ‘walk in the park’.
Mtubatuba resident Hugo Timmerman has been in the business of making ice since 1995, but it was in 2003 that he went commercial with Aqua Chill.
He supplies restaurants, accommodation establishments and petrol stations in Mtubatuba, St Lucia and through an independent contractor in Hluhluwe.
While many would think ice is highly sought after all year round, given that the Zululand region barely experiences winter, the reality is that the business is only profitable during December.
And when the December tourism season is a slow one, as was the case in 2018, Timmerman’s ice business takes a dip during what should be his busiest time of year.
‘This is a very unpredictable business and can be difficult to plan for,’ he said..
‘Business was so slow in December that we did not switch on our machines until March 2019 as there was no need to make any ice until we had depleted the bags left over from the festive season that year.’
While this festive season was much better and saw Timmerman’s business sell 60 000 bags in December, the rest of the year sees about 4 000 bags sold each month, at times fewer.
‘But it is the behind the scenes and what goes into making ice, that people don’t understand.’
Not wanting to use unreliable, poor quality tap water to make his ice, Timmerman’s operation relies on rainwater which is filtered numerous times before the ice is made.
With an onsite storage capacity of 140 000 litres, soon to be upgraded, the water is sent through stringent filtration processes to ensure Timmerman’s high standard.
‘All of this costs money, and while my overheads have increased more than 300% since 2013, my product price has increased by only R2 per bag.
Timmerman said his electricity account has increased by 360%, the bags by 300% and wages by 250%.
‘In 2013 my December electricity account was R18 000, while in December 2019, it was R70 000.’
He said he was already on the back foot at the beginning of December as load-shedding cost his business 10 000 bags in sales.
‘I have installed solar panels which does help, but still my overheads cut well into my small profit margin.’
While Timmerman has kept his prices down, what the businesses who buy his product charge when selling ice to the public, is out of his control.
Cashing in on the holiday season, it was reported that some retailers were selling ice at R50 per bag, a mark-up of much more than 200%.
The gross margins for your ice cube business are typically around 40%, which is considerably high and allows you to grow your business and manage costs easily. The average time it takes to build your product is quick - typically around 7 months. This will allow you to bring your product to market faster.
Ice-making can be very profitable if your business is run efficiently and your product is marketed well. Since water is the only raw material, producing ice seems fairly simple.
The beauty of ice is that it's a high profit product – it costs about $0.25 – $0.35 in raw material to produce an ice bag that might sell for $1.50 and $3.
Step 1: Freeze warm water in a cooler for 18 to 24 hours.
Place the cooler inside your freezer with the lid off. That's it! Freeze the cooler for 18 to 24 hours until several inches of the water have frozen. You'll want to still have some water left under the ice, which prevents the ice from getting cloudy.
A commercial ice machine can be a beneficial investment for businesses in the food and beverage industry. They offer convenience, consistency, customization, and efficiency. However, they also have their disadvantages, including maintenance, cost, space, noise, and repair.
Produce between 500-800 lbs.of ice a day. Some dispensers also dispense water as well. Commercial ice dispensers are popular in a number of industries.
The market size, measured by revenue, of the Ice Manufacturing industry was $1.1bn in 2022. What was the growth rate of the Ice Manufacturing industry in the US in 2022? The market size of the Ice Manufacturing industry declined -3.4% in 2022.
Considerable energy is required to "extract" heat from water and produce ice cubes, he points out. "That energy costs money. The production of the energy to make the ice cube also has an environmental impact, most commonly carbon dioxide emissions in California."
Ice manufacturers benefit during times of economic prosperity, as ice is in frequent demand among household customers who use it to cool food, beverages and other items when traveling. Amid COVID-19, many consumers had to cut back on discretionary spending to combat the economic volatility in 2020.
Because our machines are so efficient, they make 10 pounds of ice for around $0.07. You can sell that product for $2 to $3 on average. That's up to 98% gross margin. Over 4,000% markup!
Perhaps an ice maker is a thoughtful addition to your home. These on-counter appliances turn a tray of water into dozens of ice cubes in a short period of time and continue to turn out ice as they run. If you go through a fair bit of ice, it saves you all that waiting time.
You get a lot of traffic – Whether you're a grocery store or a marina or a gas station, ice vending machines produce the most revenue if you've already got good foot traffic. People are coming and going. Boaters heading out for a day on the water need to fill up their coolers with ice.
A dedicated ice machine features metal ice trays that have water run over the cold metal ice trays. Ice forms almost instantly along the metal ice trays and builds up rather quickly. Instead of three or four hours, you could have ice in just minutes.
32°F (0°C). Share that the temperature at which fresh water freezes is called the freezing point. The freezing point is the temperature at which a liquid turns to a solid. The freezing point at which water — a liquid — turns to ice — a solid — is 32°F (0°C).
The average Ice Maker in the US makes $33,293. The average bonus for an Ice Maker is $502 which represents 2% of their salary, with 100% of people reporting that they receive a bonus each year. Ice Makers make the most in Chicago, IL at $38,647, averaging total compensation 16% greater than the US average.
Two dollars' worth of water from your tap would be nearly 350 gallons at the U.S. average price of about 0.0058 cents per gallon -- enough to make a lot of ice. You are already keeping the freezer at zero degrees, so it will take no more energy to make ice in it than you're spending now to freeze other stuff.
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