Chemical Process Industries - Dairy

Products (Ice Cream)

Phase 1 - Business Profile

I. Overview
1. The Product (Description, Uses, Segmentation)
2.Production Process
3. History of the Product
a. Various Processes used in production
b. Drivers of Production
4. Market Size and Key Players
5. Company Profile of Plant Visited

II. Economic Background Setting

1. Major Economic Indicators (GDP and GNI)
a. GDP and GNI at constant US Dollars
b. GDP and GNI corrected with PPP
c. Benchmark with South East Asia and China
2. Other Macroeconomic indicators
a. Balance of Trade
b. Inflation Rate
c. Population with Age Distribution
3. GDP per Sector

III. Market Information

1. Total Market and Growth

2. Competition and Market Shares
3. Production, Imports and Exports
4. Market Segmentation
5. Global Market
6. Market Prognosis

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 OVERVIEW

Ice Cream

Ice cream is a frozen dairy dessert usually made of milk fats and other milk solids mixed
with other ingredients such as sugars, emulsifiers, stabilizers and flavors (natural or artificial). It
is usually made by freezing the pasteurized mix of the ingredients mentioned with agitation in
order to aerate it and ensure its uniformity and consistency. On a more technical and legal
terms, ice cream is defined in terms of its composition and density and this definition varies from
country to country. In the US, the US Government Standards defined ice cream as a frozen
dessert containing a minimum of 10% milk fat and 20% milk solids not fat (MSNF). [Arbuckle] It
must contain no more than 0.5% stabilizers and must have a minimum density of 4.5 lb/gal
(pounds per gallon).

The main use of ice cream is direct human consumption as a dessert or snack. It can be
consumed on its own or as an ingredient in certain dessert recipes like in halo – halo and
banana split.

Ice cream comes in different flavors, shape and sizes. According to Euromonitor, the top
ice cream flavors in the Philippines are chocolate, vanilla and double dutch respectively. Ice
cream is usually bought in the market as impulse ice cream, take home ice cream, bulk ice
cream and artisanal ice cream.

Overview of the Ice Cream Production Process

Ice cream usually contains seven main ingredients. These are fat (dairy or nondairy),
milk solids not fat (MSNF), sweeteners, stabilizers, emulsifiers, water and flavor. The milk fat
and other milk solids are usually recovered from pasteurized milk in the cream separator. These

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are then combined with the other ingredients in the liquid mix by blending and whipping. The
product is then sent to the pasteurization unit and then to the homogenizer afterwards. After
homogenization, the product is aged at a low temperature around 5º Celsius overnight. After the
cold ageing the product is shaped and packaged accordingly and then frozen at temperatures
around – 20º Celsius.

History of the Ice Cream Industry

The exact origin of ice cream is still being debated by historians. Some claim that it was
the Mongolian horsemen who first made ice cream when they packed cream inside containers
made out of animal intestines as provisions during their long journey across Gobi Desert in the
winter. It was said that as they galloped, the cream was mixed vigorously and was frozen by the
freezing weather subsequently producing the first ice cream. Some says that it was the Roman
emperor Nero who first ate ice cream after his slaves brought him frozen fruit chilled with snow
from the mountain. Despite the claims, no proof has been found to support these stories hence
until today, the exact origin of ice cream is still unknown.

The written history of ice cream however began when a scientist from Naples named
Giambattista Della Porta discovered a a way to further cool down water by adding salts in it. His
discovery in 1589 has paved the way for making frozen desserts and eventually ice cream.
Based on the records, ice cream was first served in May 1671 during the feast of St. George in
England but it was only served on the table of King Charles II. After this, more ice cream recipes
were published and the product became popular in Europe particularly in England, France and
Italy. During this time, ice cream was only available to the aristocrats. It was around the
beginning of the 19th century when ice cream was served in high end restaurants and cafes to
the well off middle class.

Back then ice cream was very expensive because it is manually produced by mixing the
ingredients in a bowl and putting it in a barrel filled with ice and salt. The sides of the bowl had
to be manually scraped as the mixture freezes in order to prevent the formation of ice crystals
which could ruin the ice cream's consistency. The production process was improved when the
first ice cream maker was invented in Philadelphia by Nancy Johnson around 1841. Her ice
cream maker contained two spatulas that are fitted to a cylindrical container. The spatulas had
holes connected to a shaft that can be easily turned using a crank. The holes made it easy to
rotate the spatula and mix the contents of the cylinder while simultaneously scraping the ice
crystals forming on the sides. This invention has simplified the ice cream production process
and has ensured a more uniform texture of the product.

A decade after, a dairy farmer, from Baltimore USA, named Jacob Fussell had a
problem with the surplus of milk supply in his farm during the summer so he decided to build the
first ever ice cream factory in 1951 which he later on expanded to Washington, Boston and New
York. Fussell sold ice cream at a price that was affordable to ordinary citizens. To this day, he is
commonly known as the father of the modern ice cream industry.

During the late 19th century, ice cream production was further revolutionized by
the invention of artificial refrigeration. Before refrigeration was known to mankind, the ice used

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in ice cream production are sourced from cold countries like Canada, Sweden and Norway. In
1873, Carl von Linde invented the first ever cooling machine using ammonia as a coolant. Using
his invention, they were able to produce large amounts of ice at a faster rate. Eventually ice
production became the norm over ice harvest.

The ice cream industry became fully industrialized in the beginning of the 20th century
when mechanical refrigeration was discovered which made the rate of cooling of ice cream
faster and consequently making the production faster as well. In 1927, Clarence Vogt invented a
continuous freezer that allowed the continuous production of ice cream instead of by batch.
Later on, pasteurization and homogenization was introduced in the ice cream making process
which reduced the concerns regarding ice creams safety.

Overview of the Philippine Ice Cream Market

The Philippine ice cream market has a total value of Php 12.1229 billion or is equivalent
to 55 thousand tons of ice cream sold in 2016. Being a tropical country, the demand for ice
cream in the Philippines is high thus importing from Indonesia, Korea and USA was necessary.
According to market predictions, the size of the Philippine ice cream market will still increase in
the upcoming years.

The leading brand of ice cream in the Philippines is Selecta which owns 46.9% of the
total market share. Selecta is owned by the Unilever RFM Ice Cream Inc. which also owns the
other top brands like Cornetto and Magnum. Next to Unilever RFM Ice Cream Inc., the other
leading ice cream sellers in the country are the Nestle Philippines Inc. and the Magnolia Inc.

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Company Profile of the Plant Visited

The Dairy Training and Research Institute (DTRI) is one of the two units that make up
the Animal and Dairy Sciences Cluster (ADSC) under the College of Agriculture and Food
Science in the University of the Philippines Los Banos. It was established on September 16,
1962, DTRI by the Philippine government and the United Nations Special fund (UNSF) with the
Food and Agriculture Organization (FAO) of the United Nations serving as the executing
agency. DTRI then became fully operational on November 1, 1962. Since then DTRI became
one of the centers for dairy research and training in the country.

Apart from being a research and academic institution, DTRI is also known for its dairy
products being sold in the locality. As of today, DTRI produces are fresh milk, choco milk,
yoghurt, and white cheese. DTRI used to produce ice cream too but it has stopped when their
ice cream maker became non-operational five years ago.

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 ECONOMIC BACKGROUND SETTING

Major Macroeconomic Indicators (GDP and GNI)

GDP and GNI of the Philippines

(current US dollars)
$400.00

$350.00

$300.00
Billion Dollars

$250.00

$200.00
GDP
$150.00 GNI

$100.00

$50.00

$0.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.data.worldbank.org/indicator)

It can be seen that both the GDP and the GNI of the Philippines has continuously been
increasing for the past decade. The GNI has been higher compared to the GDP and the gap
between the two is seen to be increasing in the recent years. The increase in GDP especially in
the past five years could be attributed to the direct foreign investments in the country that has
brought jobs for Filipinos such as the BPO industry. The gap between the GNI and the GDP is
mostly due to the remittances of Overseas Filipino Workers (OFW) working in other countries.
The fact that these gap continuously increases in the recent years means that more and more
Filipino leaves the country to work abroad nowadays.

The Philippines is among the fastest growing economy in South East Asia. In 2016, the
Philippines GDP grew by 6.9% making it the fastest growing economy together with Cambodia.
Philippines fast growing economy and its large pool of low cost yet skilled labor makes it
interesting to a lot of foreign investors. In fact, according to an article in Rappler last 2015, the

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Philippines was one of the top 10 countries in the East and South East Asian Region with the
highest foreign direct investment.

To see how the Philippines economy is doing compared to its neighbors, it's important to
compare the country's GDP and GNI to other ASEAN nations

GDP, PPP (current international dollars)

$3,500.00

$3,000.00

$2,500.00 Philippines
Billion Dollars

$2,000.00 Singapore
Thailand
$1,500.00
Vietnam
$1,000.00
Cambodia
$500.00 Indonesia
Malaysia
$0.00

Year

GNI,PPP (current international dollars)

$3,500.00

$3,000.00

$2,500.00 Philippines
Billion Dollars

$2,000.00 Singapore
Thailand
$1,500.00
Vietnam
$1,000.00
Malaysia
$500.00 Cambodia

$0.00 Indonesia

Year

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 From the graphs above we can see that the Philippines has one of the biggest
economies in the South East Asian Region. This is still way smaller however compared to the
economies of other Asian countries not included in the graph like Japan and China whose GDP
and GNI has reached trillions already.

Despite the relatively higher GDP and GNI, Philippines' GDP per Capita is much smaller
compared to other ASEAN nations.

GDP, PPP per Capita

(current international dollars)
$100
$90
$80
Thousand Dollars

$70 Philippines
$60 Singapore
$50
Thailand
$40
Vietnam
$30
Malaysia
$20
Cambodia
$10
Indonesia
$0

Year

(From: www.data.worldbank.org/indicator)

The GDP per Capita is a usual indicator of the standards of living in the country. Ideally,
it should tell how much each citizen get out of its total products and services. This economic
indicator is gravely affected by the country's population. Singapore being a small country with
very few natural resources does not have a huge GDP compared to other ASEAN countries but
when it comes to the GDP per Capita, Singapore is the leading country in the region while those
with very huge GDP like Indonesia and Philippines comes at last due to these countries very
large population.

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 Other Macroeconomic Indicators

Balance of Trade

Balance of Trade in the Philippines

$100
$90 $85.9
$80
$67.7 $70.2
$70 $63.7 $65.3 $65.7 $61.8
Billion Dollars

$58.0 $60.4 $58.5 $56.7 $58.6 $56.3

$60 $54.1 $50.5 $51.5 $52.0
$47.4 $49.1$45.9 $48.0
$50 Import
$38.4
$40 Export
$30
$20
$10
$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.data.worldbank.org/indicator)

For the past ten years, the Philippines is a net importing country with a trade deficit of
$29.6 billion in 2016. This means that the average demand for products in the country is high
compared to what is being supplied locally. This could be seen as a good opportunity for
companies to increase production or to enter the local business scene provided all other factors
necessary are considered.

According to the Department of Trade and Industry, the top three most imported
products in the country are electronics, fuel and transport equipment and most of these imports
are sourced from China, Japan, Korea, US and Thailand.

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Inflation

Inflation Rate in the Philippines

9
8
8.26
7
Inflation Rate (%)

6
6.52
5
5.49
4 4.83 4.65
4.22 4.10
3 3.79
2.90 3.17 3.00
2 2.72
2.29
1 1.77
1.43
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.data.worldbank.org/indicator)

The inflation rate tells us how much the average prices of products has increased over
the years. Generally it is the government's aim to lower inflation since this gravely affects the
lifestyle of people especially the poor.

The highest inflation rate in the Philippines for the past 15 years occurred last 2008 due
to the Global Financial Crisis that affected a lot of economies world-wide. In the last two years of
the Aquino administration, the inflation in the country was all time low at 1.43% and 1.77%.
However this is expected to increase in the coming years due to the passage of the TRAIN Law.

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Population

Philippine Population
120
103.3
98.5 100.1 101.7
90.8 92.2 93.7 95.3 96.9
100 86.3 87.8 89.3
81.4 83.0 84.7
80
Millions

60

40

20

0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.data.worldbank.org/indicator)

The Philippine Population continues to grow for the past 15 years however the rate of
population increase is recently declining. The very huge population of the country poses
problems to the government especially on poverty and overcrowding in urban areas. This is the
reason why the Reproductive Health Law was passed last 2012 in order to address these
concerns. On the business perspective however, a large population may mean a cheaper
source of labor for production and a bigger market for the products.

Age Distribution of the Philippine

Population in 2015
30
25
Million s

20
15
10
5
-
12 below 13 to 19 20 to 29 30 to 39 40 to 49 50 to 59 60 to 69 70 to 79 Above
80
Age Bracket

(From: Philippine Statistics Authority)

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 Based on the age distribution given, the Philippines has a young population dominated
by children, teenagers and millennials. These demographics will have a lot of impact in terms of
the countries consumption trends for certain product group. This also shows that country has a
very huge labor force.

GDP per Sector

GDP per Sector of the Philippines

(constant 2010 US dollars)
$180
$161
$160 $150
$140
$140 $132
$124
$110 $115
Billion Dollars

$120
$95 $99 $103 $96
$100 $89 $84 $89
$78 Agriculture
$80 $65 $66 $71
$54 $57 $59 $58 Industry
$60
Services
$40 $23 $24 $25 $25 $25 $25 $26 $26 $27 $27 $26
$20
$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Years

(From: www.data.worldbank.org/indicator)

GDP from Manufacturing of the Philippines

(constant 2010 US dollars)
$70
$60
$50
Billion Dollars

$40
$30
$20
$10
$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.data.worldbank.org/indicator)

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 Based on the plots above the country's GDP comes mostly from the services sector.
One of the biggest contributor to these sectors is the BPO industry which currently employs
around 1 million people and contributes 9% of the total GDP in 2016. The GDP from
manufacturing on the other hand is almost at a plateau and is expected to be like that for the
upcoming years. Due to economic considerations, companies are now opting to manufacture in
other ASEAN countries like Thailand and just export their products here in the Philippine
market.

MARKET DISCUSSION

Total Ice Cream Market Size

Total Ice Cream Market in the Philippines

(Volume)
60 55
50.9 51.3 52.8
47.8 50
50 44.7 45.8
Thousand Tonnes (t)

42.3 43.1 43.9

40.6 41.1 41.6
40

30

20

10

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.euromonitor.com/philippines)

The ice cream market in the Philippines is continuously growing gradually every year
with a CAGR of 2.36% from 2003 to 2016. Being a tropical country and due to the effects of
global warming, the demand for ice cream and other frozen desserts will continue to increase.
Also ice cream is considered as a comfort food and is a famous desserts to kids. With the given
age distribution of the Philippine population shown above, the ice cream industry will have a big
market in the country.

However it is important to note that the ice cream market growth is just slightly above the
population growth rate of the country which is at 1.68% from 2003 to 2016. This means that the
increase in ice cream demand is just due to the increase in people in the country consuming it.

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Given that majority of the Filipinos comes from the middle class and minimum wage earners, ice
cream, being a secondary food, is not a priority compared to commodities like rice, fish and
meat. This is the reason why the consumption per capita of ice cream is not increasing.

Total Ice Cream Market in the Philippines

(Retail Value)
14,000.0
12,000.0
Million PHP

10,000.0
8,000.0
6,000.0
4,000.0
2,000.0
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

(From: www.euromonitor.com/philippines)

Using the retail values and the retail volume data shown above, the average price per
kilogram of ice cream for each year can be calculated. The graph below shows that the average
ice cream price is increasing most likely due to inflation. The decrease in price of ice cream in
2014 may be due to the increase in ice cream imports which has increased the local ice cream
supply thus driving the price down.

It is expected that ice cream prices will continue to increase in the following years due to
higher costs of production and distribution brought about by the passage of the TRAIN Law. The
increase in the ice cream pricing will most probably be driven by inflation and not because of a
significant increase in ice cream demand that will drive prices up. This prediction is supported
by the previous explanation that ice cream is only a secondary food and is only consumed when
there is extra money.

14 | P a g e
 Average Ice Cream Price in the Philippines
PhP240
218 220
Average Price per kg (PHP)
210 210 212 213 215
PhP220 206
202
193
PhP200 184
170 174
PhP180 167

PhP160

PhP140

PhP120

PhP100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

Local Competition

Company Shares in the Total Philippine Ice Cream

Market
(Retail Value)
Php14,000
Php12,000
Php10,000
Million PHP

Php8,000
Php6,000
Php4,000
Php2,000
Php0
2012 2013 2014 2015 2016
Others 1580.8602 1597.032 773.9994 567.975 569.7763
Food People Inc., The 201.5862 210.7195 218.028 215.8305 230.3351
Arcefoods Corp. 297.0744 310.534 316.1406 318.066 327.3183
Magnolia Inc. 838.1742 876.1495 915.7176 954.198 1006.2007
Nestle Philippines Inc. 3161.7204 3316.0595 3433.941 3544.164 3648.9929
Unilever RFM Ice Cream Inc. 4530.3846 4780.0055 5243.5734 5759.2665 6340.2767
(From: www.euromonitor.com/philippines)

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 Company Shares in the Philippine
Ice Cream Market
60.0
Unilever RFM Ice
50.0
Percentage (%)

Cream Inc.
40.0 Nestle Philippines Inc.
30.0
20.0 Magnolia Inc.
10.0
0.0 Arcefoods Corp
2012 2013 2014 2015 2016
Year Food People Inc., The

(From: www.euromonitor.com/philippines)

The Philippine Ice Cream Market is currently dominated by the Unilever RFM Ice Cream
Inc. which owns 52.3% of the total market in 2016. Unilever RFM Ice Cream Inc. owns several
of the most famous ice cream brands in the country like Selecta, Cornetto and Magnum. The
second and third key market players in the ice cream industry are Nestle Philippines Inc. and
Magnolia Inc. which owns 30.1% and 8.3% of the total market shares.

It can be observed from the plot above that the shares of Unilever RFM Ice Cream Inc.
continues to increase while those of less know companies (others) are drastically decreasing. It
is possible that in the future, the ice cream industry may be monopolized by a few companies in
the future if this trend continues.

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 Brand Shares in the Total Philippine Ice Cream
Market
Selecta (Unilever Group)
Magnolia (San Miguel Corp)
Arce (Arcefoods Corp)
BTIC (BTIC Inc)
Drumstick (Froneri Ltd)
Nestlé Cup (Froneri Ltd)
Pinipig Loaded (Froneri Ltd)
Others
Nestlé (Froneri Ltd)
Cornetto (Unilever Group)
Fruits in Ice Cream (Food People Inc, The)
Nestlé Twin Pops (Froneri Ltd)
Nestlé Kimy (Froneri Ltd)
Magnum (Unilever Group)
Magnolia Popsies (San Miguel Corp)

2.70% 1.30%
4.50%
8.10% 1.90%
1.10%
1.70%
0.90% 0.40%
0.50%
17.70% 1.10% 0.20%

13.00%
11.00%

46.90%

(From: www.euromonitor.com/philippines)

The pie chart above shows that despite the large varieties of ice cream brands and
products, almost half of the market is still owned by Selecta. With selecta alone, even without
their other brands (Magnum and Cornetto), Unilever RFM Ice Cream Inc. will still dominate the
ice cream market in the Philippines.

Selecta leads the ice cream market for several reasons. First, Selecta is the most
innovative when it comes to ice cream flavors. Recently they have tied up with the makers of
some famous sweets such as Oreo, Hershey’s and Reese’s in order to create new flavors that
will also capture the market of these mentioned brands. Second, Selecta has a very efficient

17 | P a g e
supply chain and retailing strategies. In fact, only Selecta products are found in 7- Eleven
stores. Lastly, Selecta has been very consistent when it comes to advertising. With Zoren
Legaspi’s family as their endorser, Selecta’s advertisements are very popular both in TV and in
social media.

Production, Imports and Exports of Ice Cream

Imports and Exports of Ice Cream and Frozen

Desserts in the Philippines
6000

4909
5000

4000 3617
3372
Tonnes (t)

2962
3000
2293 Import
20351999 1976 2087
2000 Export
1604

1000

0
2012 2013 2014 2015 2016
Year

(From: www.trademap.org)

While some of the local Philippine ice cream brands such as Carmen's Best and Fruits In
Ice Cream export their products abroad, the Philippines still imports more ice cream products
abroad mostly from Indonesia, South Korea and USA.

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 Local Ice Cream Production in the Philippines
55000
54000
53000
52000
51000
Tonnes

50000
49000
48000
47000
46000
45000
2012 2013 2014 2015 2016
Year

Market Segments

There are several ways to segment the ice cream market. One is by volume of
consumption and the other one is by flavors.

For volume segmentation, an ice cream product could be an impulse use ice cream
which can be consumed directly by a single person. Impulse ice cream usually comes at smaller
volumes with toppings and coatings. Take home ice creams on the other hand are the ones
bought in bulk for stocks at home and for ingredients in dessert recipes. Take home ice cream
are sold in gallons or in liters.

Due to the similarities in ingredients and texture, frozen yoghurt was also considered as
a segment of the ice cream market and among all segments, it has the lowest demand of them
all.

Take Home ice cream or cce cream sold in gallons or liters are still preferred by Filipinos
over impulse ice cream. This could be explained by several factors. First, soft served ice cream
from convenience stores and fast food restaurants directly affect the sales of impulse ice cream
compared to take home ice cream. In fact according to Euromonitor, soft served ice cream are
the biggest threat in the packaged ice cream industry nowadays. Second, apart from directly
consuming families, take home ice cream is also bought by businesses like restaurants that
uses ice cream as an ingredient in their dessert recipes. Because of this, take home ice cream’s
sales is much larger compared to that of impulse ice cream.

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 Ice Cream Market Segments
(Volume)
60

50
Thousand Tonnes

40

30 46.8 48.8 Take Home Ice Cream

42.3 43.2 44.9
Impulse Ice Cream
20
Frozen Youghart
10
5 5.1 5.1 5.2 5.3
0 0.5 0.5 0.5 0.6 0.6
2012 2013 2014 2015 2016
Year

(From: www.euromonitor.com/philippines)

Ice Cream Market Segments (Value)

14000

12000

10000
Million PHP

8000
10,229 Take Home Ice Cream
6000 8,915 9,536
7,995 8,351 Impulse Ice Cream
4000 Frozen Youghart

2000
1,247 1,296 1,355 1,423 1,498
0 163 175 187 201 216
2012 2013 2014 2015 2016
Year

(From: www.euromonitor.com/philippines)

Lastly, the table below shows the top flavors in the Philippines and their ranking in terms
of the number of sales. For the past five years chocolate ice cream has been the leading ice
cream flavor in the country.

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 Table 1. Rankings of Ice Cream Flavors in terms of Sales in the Philippines
2012 2013 2014 2015 2016
Chocolate 1 1 1 1 1
Vanilla 2 6 2 2 2
Mango 7 4 3 3 3
Double 3 2 4 4 4
Dutch
Strawberry 8 7 5 5 5
Halo Halo 6 8 6 6 6
Coffee 5 5 7 7 7
Chocolate 4 3 8 8 8
Chip
(From: www.euromonitor.com/philippines)

Global Ice Cream Market

Global Ice Cream Market in 2017

Africa and Middle East 5296

North America 17353

Latin America 8130

Region

Western Europe 19443

Eastern Europe 4996

Australasia 2251

Asia Pacific 20393

0 5000 10000 15000 20000 25000

Million US Dollars

(From: www.euromonitor.com/philippines)

Based on the graph, it can be seen that Asia Pacific is the biggest ice cream market in
the whole world with a total sales of 20.393 US Dollars. It is followed by Western Europe and
then by North America. One major key factor that plays here is population. Since Asia Pacific
has a large population, it is expected to have a bigger ice cream market compared to the other
counties.

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Market Prognosis

Philippine Ice Cream Market Projections

68.0
66.0
64.0
Thousand Tonnes

62.0
60.0
58.0
56.0
54.0
52.0
2017 2018 2019 2020 2021 2022
Years

(From: www.euromonitor.com/philippines)

According to Euromonitor, the Philippine ice cream market is expected to grow from
2017 to 2022 at a CAGR of 7.8%. With the increase in Philippine population and with the
country’s GDP increase, it is expected that the consumption of ice cream in the country will
increase in the next five years. Furthermore, the innovations in ice cream flavors will still
continue to be one of the major drivers among competing companies in growing their sales in
the future.

22 | P a g e
PHASE 2 - PROCESS DESCRIPTION

Raw Materials

The ice cream production process revolves mainly around all the the physical changes
undergone by the ice cream mix. The usual ice cream mix has seven main ingredients mainly
milk fat, milk solids not fat (MSNF), sweeteners, emulsifiers, stabilizers, water and flavorings.

Table 1. Ice Cream Formulation

Ingredient Amount
Milk 2500 mL
Cream (Elle and Vire) 914 mL
Skim Milk Powder 77 grams
Stabilizer and Emulsifier 60 grams
(Recodan)
Sugar 400 grams
Water 49 mL
TOTAL 4000 mL

Milk Fat (Cream)

Milk fat is one of the most important ingredients in dairy ice cream which is usually
supplied directly by fresh cream from fresh milk, frozen cream, or butter fat. Fat is present in
milk as small globules surrounded by protein and phospholipid membranes which prevents
them from coalescence. Milk fat provides richness to the creamy flavor of the ice cream since it
has the ability to dissolve fat soluble flavors that water can’t dissolve It aids in the ice cream’s
smooth texture and acts as a lubricant inside the freezing barrel during the crucial freezing step.

Fresh cream is the best source of milk fat for ice cream production because it produces
the best flavors among all sources. Furthermore, it is easier to handle because it is in liquid
form. However, fresh cream is the most expensive of all milk fat sources and just like milk it
supports bacterial growth thus it has to be kept at low temperatures to inhibit this. When there is
a surplus of fresh cream, it is usually kept frozen at - 25 degree celsius for not more than six
months after being pasteurized at 75 degree celsius for 15 minutes. Next to fresh cream, frozen
cream is the second best choice for milk fat source in ice cream making and it is cheaper
compared to fresh cream.

The last milk fat source available in the market is butterfat which is a lot cheaper than
cream and more readily available. However, butterfat is usually the last resort option because
using it usually produces off salty flavors in the ice cream and it gravely affects the ice creams
freezing properties when not properly homogenized.

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 Milk Solids Not Fat (Skim Milk Powder)

Milk Solids Not Fat or what we refer here as MSNF are usually composed of milk
proteins, milk sugars (lactose) and some minerals. Milk solids does not affect the ice cream
flavor that much but it does affect its texture and palatability. Moreover, MSNF increases ice
cream’s viscosity and resistance to melting while lowering its freezing point. MSNF are usually
supplied in the mixture as either concentrated milk or as dried solids like skim milk powder.

Lactose slightly adds to the sweetness which is mainly supplied by sweeteners. Since it
is a dissolved solid, it contributes to the ice cream’s freezing point depression. Lactose content
of ice cream is usually regulated however due to the fact that some consumers are not able to
digest lactose properly. Furthermore, high concentrations of lactose will induce crystallization
and solidified lactose may cause undesired sandiness in the ice cream’s texture.

Milk proteins are made of two types, whey and casein. These proteins are important in
the ice cream making process because they stabilize water continuous emulsions and foams
due to their surface activity. This ability of proteins is crucial especially when air bubbles are
incorporated into the ice cream mix during the freezing step.

Sweetener

Sweeteners are solid ingredients, usually sucrose (cane or beet sugar) or corn products
(high fructose corn syrup) that provide ice cream its sweetness. Improving ice creams
sweetness is important because it improves the product acceptance by enhancing the ice
creams creaminess and fruit flavors. It is important to note however that sweeteners could
overshadow the flavors added to the ice cream hence it has to be used in moderation. Too
much sweetener will also affect some of the products handling properties.

Originally sucrose alone was used as sweetener in the ice cream industry. However, due
to economic handling and storage reasons, sweetening mixes are now popular which are
usually combinations of sucrose and corn syrups.

Emulsifier and Stabilizer

Emulsifiers are surface active compounds that produces stable suspensions of liquids
that usually do not mix such as water and oil. Emulsifiers are usually made of mono or
diglycerides fats that are added in the ice cream mix to stabilize air bubbles upon incorporation
in the mix. This leads to reduced whipping time and a smoother ice cream product. Traditionally,
lecithin from egg yolks were used as emulsifiers in ice cream production but they were later on
substituted by other more effective mixes.

24 | P a g e
 Stabilizers, on one hand are complex carbohydrates usually gelatin and agar which are
added to the ice cream mix to prevent the formation of large ice crystals in the freezing process
and to increase ice cream’s viscosity. Increased viscosity will make the product more uniform
and smooth and it will prevent ice cream’s shrinkage upon storage.

It is also important to note that stabilizers must have a clean, neutral flavor which will not
contribute nor alter the flavors added by the flavoring ingredients. Although the have a
significant effect on the viscosity, stabilizers do not alter the ice cream mix’s freezing point.

Nowadays, stabilizers and emulsifiers are being sold commercially as blends to ice
cream manufacturers. The most commonly used ingredients for these blends are cellulose gum
and carrageenan. Stabilizers and Emulsifiers appears in least amount in the ice cream mixes as
indicated by federal standards.

Water

Water is important in the ice cream mix because they tend to dissolve water soluble
components of the mix. Water may be added directly as potable water but the usual source of
water in ice cream mixes is fresh milk itself since it is primarily 87% water. The use of fresh milk
is also preferred because it also provides milk fats and milk solids not fat.

Flavoring and Coloring

Flavors and Colors are heat sensitive materials that alters the flavor and the color of the
ice cream. Since they breakdown at high temperatures, these materials are usually added in the
ageing step of the ice cream making process. The most popular flavors used in ice cream
production are chocolate and vanilla.

Air

Though not officially considered as an ice cream ingredient, the incorporation of air is
very important in the ice cream production process because it gives the ice cream its
characteristic texture and stiffness. The amount of air in the ice cream mix is usually
characterized by the percent overrun. When air gets removed from the ice cream, it is called
shrinkage and this phenomenon gravely affects the texture and taste of ice cream.

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Process Flow Diagram

Figure 1. Block Flow Diagram of Main Steps in Ice Cream Production and its
corresponding Temperature Profile

Major Unit Operations

Mixing

Mixing is the process where in all ingredients, both liquid and dry, are added to a mixing
tank or sometimes high shear blenders in order to dissolve or disperse them. Liquid ingredients
are added first and then these are heated to 50 degree Celsius, solid ingredients are then
added afterwards when the liquid is warmer in order to dissolve or disperse them fully. The high
temperature of mixing was necessary also in making the process smoother because the next
processes are needed to be at much higher temperatures.

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 Homogenization

Homogenization is employed to breakdown fats into smaller globules so that a

permanent suspension would be formed afterwards. If the ice cream mix is not homogenized, it
is possible that the fat would just form a cream layer at the top of the mix and this could lead to
a greasy feel and taste for the final ice cream product.

Homogenization is done by passing the mix through two positive displacement pumps
putting them at very high pressure (250 bar). This method is usually done at around 62 degree
Celsius to achieve maximum results. Performing homogenization at lower pressure and
temperature will lead to clumping of cream which will increase its viscosity making it hard to
transfer.

Pasteurization

Pasteurization strategically comes next after homogenization because this process is

already done at higher temperatures already. Pasteurization is important because it kills
microorganisms and other pathogenic entities in the ice cream mix which could threaten the
well-being of the consumers. Moreover, pasteurization denatures all the hydrolytic enzymes
present in the ice cream mix that could potentially breakdown the flavors and the structures of
ice cream later. To perform pasteurization, the ice cream mix is immediately heated to around
85 degree Celsius and then cooled to around 5 degree Celsius after a short period of time.

Pasteurization is usually done using a plate heat exchanger with steam as the heating
fluid. Plate heat exchangers are very compact hence they provide very large surface areas for
heat transfer while not consuming much space in the plant. The most common pasteurization
method employed in ice cream production is the High Temperature Short Time (HTST)
pasteurization. This pasteurization method is preferred because it is done fast yet it has very
desirable effects.

Aging

After pasteurization, the cooled mix is then put inside aging tanks where they are kept
without contact to the atmosphere at 4 degree Celsius for 4 to 24 hours. Aging is important
because the small fat globules formed in the homogenization stage must crystallize first before
proceeding to the next step, the freezing part. At 4 degree Celsius, fat globules starts to
crystallize but on a very slow rate thus it has to be aged for almost a day in order to fully
crystallize the fat in the mix. The crystallization of the fat is important because without it, it is
impossible to incorporate and stabilize air bubbles later.

It is important to note that flavors and coloring materials that are usually heat sensitive
are usually added in this part of the ice cream production process since the temperature is
already low. Also, all ingredients added to the mix at this part are ensured to be safe and free

27 | P a g e
from biological and chemical contaminants since the pasteurization part is already done. These
process is best done with an airtight closed vessel.

Freezing

Freezing is the most important step of the ice cream production process. This is where
the ice cream mix gets transformed into ice cream through simultaneous freezing, aeration and
sometimes whipping. From 4 degree Celsius, the ice cream mix is frozen to about - 5 degree
Celsius using either a continuous or batch freezer. In the process of freezing, air is incorporate
into the solidifying ice cream structure through whipping.

For industrial applications, continuous freezers are used which operates via mechanical
refrigeration which uses ammonia as the cooling fluid. It is also during the freezing steps that
other solid ingredients are added in the mix like nuts, chocolate chips and fruits.

Hardening

After freezing, ice cream is already packaged accordingly and is placed inside a
hardening cabinet where they are further cooled down to - 25 degree Celsius. It is important to
harden ice cream to ensure that it won't melt easily upon transport and storage.

Major Equipments

Every step of the ice cream manufacture comes with the following specific equipment. It
should be noted that this equipment here are used in continuous ice cream production process
which produces larger ice cream volumes. Batch production of ice cream, which produces
smaller volume requires a different set of equipment. All the photos and specifications of the
equipment shown here are taken from a brochure published in 2011 by Technogel, an Italian
company that develops ice cream making technologies.

Mixworking Equipment (Continuous Mixing, Pasteurization and Homogenization)

Mixing Tanks

Homogenizer

Pasteurizer

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Figure 2. Mixworking Set Up
 In large scale ice cream plants, the ice cream mix is prepared, homogenized and
pasteurized continuously using the network of equipment above known as the mixworking set
up. This set up contains a homogenizer, a mixing tank and a pasteurizer. This set up has a
maximum capacity of 600 liters and has an overall dimension of this set up is 6.5 by 1.8 by 1.8
meters.

There are two mixing tanks with openings at the top where the ingredients can be
manually put inside. There is also a sensor at the top that detects the temperature and the
amount of ice cream mix inside the tanks.

The ice cream mix from the tank is directly sent to the homogenizer in the figure and is
homogenized at around 75 degree Celsius and 250 bar. In this set up, the homogenizer is a
two-stage homogenizer composed of two positive displacement pump. Its mechanism is shown
below.

Figure 3. Homogenizer Mechanism

Lastly the pasteurizer shown is primarily composed of a plate heat exchanger that heats
up the mix up to 85 degree Celsius. Though, the control panel of the whole mixworking set up is
located at the pasteurizer, it also controls the rest of the units in the set up. The usual
pasteurizing method employed in the ice cream manufacture is the High Temperature Short

29 | P a g e
Time (HTST) pasteurization which only needs to be done for 15 minutes. After this, it is
immediately cooled to 4 degree Celsius just prior to aging.

Aging Tank

Figure 4. Aging Tank

The role of aging tanks is basically to store the ice cream mix after pasteurization for 4 to
24 hours at very low temperatures usually around 4 degree Celsius. The aging tank shown is
basically a cylinder with a diameter of 0.925 m and a height of 1.325 m. It has a lid on top which
is opened for inspection and introduction of ingredients like coloring and flavoring. To maintain
the low temperature inside the tank, cold water is being introduced inside the jacket surrounding
the tank.

Continuous Freezer

Figure 5. Continuous Freezer

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 The continuous freezer is the most important equipment in the ice cream plant because
it converts the mix to the ice cream product. One of the biggest advantage of continuous freezer
over the batch freezer is that it produces larger volumes of ice cream in a given period of time.
The continuous freezer shown above can produce around 200 liters of ice cream per hour. Its
dimensions are 0.7m x 1.05m x 1.45m.

The continuous freezer has a piston pump that sucks up the mix from the aging tanks
and compressed air and delivers them to an internal cooling chamber where they are mixed
evenly by a rotating shaft with stainless steel scrapers producing an ice cream of great
structure.

Hardening Unit

Figure 6. Hardening Unit

The hardening unit back then was simply a cabinet maintained at temperatures around –
25 degree Celsius. Nowadays, since the ice cream industry has grown so big, hardening units
today can be as large as a room. The room is maintained at around -25 degree Celsius by
circulating cooled air inside. The hardening unit has stacks of trays where the packaged ice
cream can be placed. Normally, the hardening unit has conveyor belts inside in order to move
the ice cream around. The configuration of the trays and conveyor belts are important when
designing hardening units because they affect the hardening time of the ice cream.

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Control Systems

Ice cream production nowadays in big companies are almost fully automated. The mix
formulation can now be encoded in a punch card and each unit operation has sensors to
indicate conditions and to signal the whole system what to do. Machines that are also
automated are now used as well when it comes to ice cream packaging.

Economics of Production

According to the study of Kizilkan et. al (2015), a typical ice cream production plant that
produces around 1200 liters of ice cream per day consumes around 85.1 kWh of electricity per
day. Given this information and the price of electricity in the Philippines today, we can get the
cost of electricity needed to produce these much ice cream.

Summarizing this and the cost per ingredient, we can see how much it costs to produce
a liter of ice cream in the Philippines.

Table 2. Cost of Ice Cream Production the the Philippines

Ingredient and Utility Amount Price per unit Cost
Milk 2500 mL 25 php/liter 63 php
Cream (Elle and Vire) 914 mL 350 php/liter 320 php
Skim Milk Powder 77 grams 3600 php/ 25 kg 12 php
Stabilizer and Emulsifier 60 grams 340 php/ kg 21 php
(Recodan)
Sugar 400 grams 53 php/ kg 22 php
Water 49 mL - -
Electricity (production) 0.284 kWh 10 php/kWh 3 php
TOTAL 4000 mL 441 php

The cost of electricity per liter of ice cream may not be that big based on the calculation
but it is important to note that this electricity consumption excludes the electricity needed for
storage and distribution of ice cream which requires a very low temperature.

Given the current ice cream price which is around 220 per liter, 4000 mL of ice cream
would cost around 880 php. This value is much bigger compared to the calculated cost at 441
php. This leaves a room for other costs like labor, storage and delivery, marketing and still leave
some amount for profit.

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Logistics and Supply Chain

Raw Material Sourcing

Raw materials for ice cream production is easily sourced because they are readily
available in the market. Usually big ice cream manufacturing companies have direct suppliers
for these materials in order for them to get them at lower price. The milk is usually supplied by
local farms while the rest of the ingredients are sourced from local suppliers (sugar, skim milk
powder) while some are exported from abroad (stabilizers, cream).

The frequency of delivery of raw materials depends on the shelf life of their shelf life. For
example, fresh milk from farm usually needs to be used within 4 days thus the delivery of milk is
more often compared to the other ingredients that can last longer.

Product Distribution To Markets

Table 2. Ice Cream Distribution Sequence

On average, ice cream has a shelf life of 3 to 4 months if left refrigerated and unopened.
Basing on the distribution sequence above, it takes almost two months for an ice cream product
to reach the homes of the consumers. Among the several problems encountered in the ice
cream supply chain are melting, shrinkage and sometimes spoilage. All of these three affects
the ice cream's quality gravely.

It can be observed that the storage and distribution of ice cream relies heavily with
refrigeration because the product has to be kept at very low temperatures. This also implies that
the transport and distribution of ice cream is costly due to these considerations.

Furthermore, according to Euromonitor, ice cream reaches homes only through store
retailing. Non-store retailing for ice cream like e-commerce is not an option for ice cream
distribution because of the high cost of ice cream transport. Traditional store retailing options for
the distribution of ice cream is shown below. It can be seen that ice cream can most likely be
found in modern grocery retailers such as supermarkets and hypermarkets.

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 Figure 7. Ice Cream Distribution Outlets in the Philippines
(From: www.euromonitor.com/philippines)

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CHEMICAL PROCESS INDUSTRIES –
DAIRY PRODUCTS (ICE CREAM)

PHASE 3 – Health, Safety, Environment and

Quality
Research and Development

HEALTH, SAFETY, ENVIRONMENT AND QUALITY

Just like any other industry, ice cream production needs to abide with regulations that
ensure the safety of its processes both for the workers and the environment. Furthermore, since
ice cream production falls under the food and beverage industry, its products should not only be
of superior quality, but they should also be safe for direct human consumption. These are the
factors that are taken into consideration when assessing the safety of a production process.

Hazards that pose potential damage to properties, to workers, to the quality of final
product and to the environment are listed down here with their corresponding risk mitigation
procedures. These hazards and the severity of the risks they pose are identified using the Risk
Assessment Matrix in order to fully understand and manage them.

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RISK ASSESSMENT MATRIX

Figure 1. Risk Assessment Matrix

The Risk Assessment Matrix is a tool used in project management particularly in risk
management in order to assess and classify the risks identified according to two criteria;
likelihood of occurrence and severity of the corresponding consequences. This tool is very
useful in prioritizing which risks need to be addressed first and how these risks are going to be
managed. A risk assessment matrix looks like the figure below. The risk assessment matrix was
used in the ice cream manufacturing plant in order to classify risks to occupational health and
safety, environment and product quality.

According to Sidharth Thakur (2015), the likelihood and severity of a risk event are
graded and classified according to the following criteria:

Likelihood

1. Frequent: A risk that is almost certain to show-up during project execution. If you’re
looking at percentages a risk that is more than 80% likely to cause problems will fall
under this category.
2. Probable: Risks that have 60-80% chances of occurrence can be grouped as likely.
3. Occasional: Risks which have a near 50/50 probability of occurrence.
4. Remote: Risks that have a low probability of occurrence but still cannot be ruled out
completely.
5. Improbable: Rare and exceptional risks which have a less than 10% chance of
occurrence.

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Severity

1. Negligible: Risks that will cause a near negligible amount of damage to the overall
progress of the project.
2. Marginal: If a risk will result in some damage, but the extent of damage is not too
significant and is not likely to make much of a difference to the overall progress of the
project.
3. Critical: Risks with significantly large consequences which can lead to a great amount
of loss are classified as critical.
4. Catastrophic: These are the risks which can make the project completely unproductive
and unfruitful, and must be a top priority during risk management.

Once classified in terms of likelihood and severity, the risk events are placed inside the
matrix and then the combined effects of its likelihood and severity gets fully elucidated. From
this elucidation, the risks that needs to be handled and their order of priority gets identified.
According to Sidharth Thakur (2015), All risks placed inside the matrix may fall under one of
these classifications:

High: The risks that fall in the red cells, are the risks that are most critical and that must
be addressed on a high priority basis. The project team should gear up for immediate action, so
as to eliminate the risk completely.

Serious: Denoted with the orange background in the risk assessment template, also call
for immediate action or risk management strategies. Here in addition to thinking about
eliminating the risk, substitution strategies may also work well. If these issues cannot be
resolved immediately, strict timelines must be established to ensure that these issues get
resolved before the create hurdles in the progress.

Medium: If a risk falls in one of the yellow cells, it is best to take some reasonable steps
and develop risk management strategies in time, even though there is no hurry to have such
risks sorted out early. Such risks do not require extensive resources; rather they can be handled
with smart thinking and logical planning.

Low Risk: The risks that fall in the green cells marked, can be ignored as they usually
do not pose any significant problem. However still, if some reasonable steps can help in fighting
these risks, such steps should be taken to improve overall performance of the project.

OCCUPATIONAL HEALTH AND SAFETY

Table 1. Risk Classification for Occupational Health and Safety

RISK EVENT LIKELIHOOD SEVERITY RISK

CLASSIFICATION

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1 Ammonia Leakage Occasional Critical
2 Entrapment inside Probable Critical
Hardening Unit
3 Explosion (Boiler) Occasional Catastrophic
4 Electrical Hazards Occasional Catastrophic
5 Contact with Hot and Frequent Marginal
Cold Surfaces
6 Noise (90dB) Frequent Marginal
Table 2. Occupational Health and Safety Risks and Corresponding Mitigation Procedures
Risk Event Possible Damage and Impact
1 Ammonia Leakage  Inhalation of ammonia
causes burning sensation
to the nose, throat and
lungs of the worker which
may lead to respiratory
failure or even death.
 Ammonia, being
poisonous, may
contaminate the ice cream
mix upon freezing making
it not fit for human
consumption.
 Unwanted formation of
toxic chlorine gas occurs
when ammonia reacts with
bleach used in cleaning
the plant.
2 Entrapment inside  The hardening unit of big
the Hardening Unit ice cream companies can
go as large as rooms.
These rooms are kept at
temperatures that could
go as low as – 25 ⁰C.
Anyone trapped inside
these rooms will suffer
from hypothermia and will
eventually die.
38 | P a g e
High
High
High
High
Serious
Serious
Risk Mitigation Procedures
 Apart from its pungent
odor, ice cream plants
usually have
ammonia sensors that
can detect ammonia
in air even at trace
amounts (around 2
parts per billion)
 Prior to operations,
every equipment is
checked for holes and
leakages and this
included the freezer
as well. This is usually
done when the
equipment is being
cleaned.
 To avoid inhalation
and contact with eyes
when ammonia leaks,
face masks and
goggles are worn by
the workers all the
time
 All plant workers that
are assigned to enter
and work inside the
hardening unit are
required to wear
special protective
equipment in order to
save them freezing
inside.

3 Explosion (Boiler)  Steam used in
pasteurization and heating
up the ice cream mix is
generated at the boiler
which is at risk of
exploding due to high
pressure, thermal shock
and combustion. This
explosion may disrupt the
ice cream production
process and cause major
damage to the plant
facilities.
 Explosion will also cause
major injuries to plant
workers and in worst case
scenarios, this may lead to
death.
4 Electrical Hazards  Almost all equipment in
the ice cream plant
requires electricity upon
operation and this means
that the ice cream plant is
39 | P a g e
 Majority of the
hardening process is
now automated with
the use of conveyor
belts and digitized
control systems thus
minimizing the
manual labor that
needs to be done
inside the hardening
units.
 Hardening units can
be locked and opened
both from outside and
within. Furthermore,
alarm systems are
usually installed
inside hardening units
in case of
emergencies.
 Boiler log is
constantly updated in
order to monitor boiler
activities and boiler
condition.
 Safety valves and
steam valves are
ensured to be working
properly.
 All safety devices in
the boiler are wired to
the burner control
system which
immediately cuts the
fuel source during
emergencies
 Water level inside,
system temperature
and pressure are
constantly monitored.
 Regular maintenance
is being conducted to
ensure all electrical
elements in the plant
are safe and well-
 at risk from electrical
hazards such as faulty
wiring and high voltage  Plant layout is
equipment which could
cause fire in the plant
and/or electrocution of
plant workers
functioning.
designed in such a
way that outlets and
sockets are never in
contact with water to
avoid electrocution of
plant orkers and
equipment damage.

5 Contact with Hot and  Plant workers work with  Plant workers are
Cold Surfaces varying temperatures made to wear
along the production line, personal protective
both very hot and very equipment such as
cold temperatures. gloves and mittens
Exposure to such extreme that may help them
conditions may hurt the avoid scalding and
plant workers. frostbites.

 Each equipment
along the production
line has sensors with
corresponding
displays to indicate
the equipment’s
current temperature.
6 Noise  Ice cream production is a  Shorten the exposure
noisy process especially of workers to loud
the continuous freezing noises by either (1)
part. The noise generated having a shorter
in the ice cream plant operating time (2)
could go as high as 90 dB rotation of shifts
and prolonged exposure among the
to such a loud noise can manpower.
damage the human ear.
 Use of earplugs as
 Apart from health part of the Personal
concerns, too much noise Protective Equipment
in the plant could also of workers to lessen
affect the focus and the impact of noise to
concentration of the workers.
employees. It could also
affect their verbal
communication amongst
each other.

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ENVIRONMENTAL IMPACT

Table 1. Risk Classification for Environment

RISK EVENT LIKELIHOOD SEVERITY RISK

CLASSIFICATION
1 High FOG Frequent Critical High
concentrations in
wastewater
2 High nutrient Frequent Marginal Serious
(phosphate
concentration)
3 Ammonia Remote Catastrophic Serious
contamination in
wastewater
4 Excessive Energy Frequent Negligible Medium
Consumption

Table 4. Environment Risks and Corresponding Mitigation Procedures

Risk Event Possible Damage and Impact Risk Mitigation Procedures

1 High concentrations  Ice cream waste water is
of fats, oil and grease
(FOG) in the
wastewater
 Since FOGs are not
abundant in FOGs since
one of the main
ingredients of ice cream is
milk fat. FOGs are
undesired in wastewater
treatment plants because
they tend to float on top of
the water, solidify and clog
the pipes and sewers.
treated at waste water
treatment facilities,
grease traps are used
to capture FOGs from
wastewater just
before it goes to the
sewers.

 Typical wastewater
facilities does not have the
ability to process FOGs
thus its removal from the
wastewater is necessary.

2 High nutrient  Phosphates are present in  Usually nutrients are

(phosphates) the cleaning powder used already treated in the
concentration in the in sanitizing the equipment wastewater treatment
wastewater in the ice cream plant. However, if

41 | P a g e
 production plant. High
phosphate concentrations
may cause eutrophication
in bodies of water which
will eventually lead to the
biological death of the
body of water.
3 Ammonia  Even at smaller
Contamination in the concentrations, if
wastewater ammonia gets discharged
in bodies of water alters its
pH, poisoning all aquatic
life forms in it.
4 Excessive energy  Ice cream production is
consumption energy intensive and
using too much energy
may raise the ice cream
plant’s carbon footprint.
This may mean that ice
cream production may
contribute significantly to
the accelerated depletion
of our energy resources
PRODUCT QUALITY
Table 5. Risk Classification for Product Quality
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wastewater is going to
pass through open
channels, chlorination
might be necessary to
prevent algal bloom.
 Removing ammonia
from wastewater is
difficult because it
readily forms
ammonium ions upon
contact with water.
 The best option to
prevent this
phenomenon is to
prevent leaks by
constantly checking
equipment before use
and using ammonia
sensors in case of
leaks to mitigate
them.
 To lower energy
consumption, the
operations should be
planned in such a way
that energy
consumption is
minimized.
 Innovate new
equipment and
process that could
lower the energy cost
of ice cream
production.
 RISK EVENT LIKELIHOOD SEVERITY RISK
CLASSIFICATION
1 Presence of Pathogens Frequent Catastrophic High
2 Contamination Probable Catastrophic High
3 Shrinking of Ice Cream Frequent Marginal Serious
4 Overheating the Ice Probable Marginal Serious
Cream Mix
5 Fat Lumping Probable Marginal; Serious

Table 6. Product Quality Risks and Corresponding Mitigation Procedures

Risk Event Possible Damage and Impact Risk Mitigation Procedures

1 Presence of  High levels of bacteria in
Pathogens the final ice cream product
may make it unfit for
human consumption due
to the various diseases
these microorganisms
could bring.
 The main purpose of
the pasteurization
method in the ice
cream production is to
kill these bacteria
present in the ice
cream mix.

 Aging tanks are kept

at very low
temperatures to inhibit
any bacterial growth.
Also, aging tanks are
sealed off so that
there will be minimum
contact with air where
new bacteria could be
introduced.

 Along the production

process, the ice
cream mix and the
final ice cream
product are tested if
they contain
significant amounts of
microorganisms.

2 Contamination of the  When milk ingredients in  All equipment used in

ice cream mix the ice cream mix are
exposed to copper or to
iron oxides, it gets rancid
and the milk’s rancidity
brings about off flavor in
the final ice cream
ice cream production
is ensured to be made
of stainless steel.
 Facilities are
maintained regularly

43 | P a g e
 product.
 Some contaminants may
also come from the body
of the plant worker (e.g.
sweat, hair, etc.). These
contaminants will gravely
compromise the credibility
of the ice cream plant in
terms of cleanliness and
hygiene.
 Contamination may also
occur during changeovers
especially if only one
production line is used for
several SKUs (flavors).
This will gravely affect the
flavor and the color of the
product which will impact
its marketability
negatively.
3 Shrinking of ice  Ice cream shrinking
cream means that the apparent
volume of the ice cream
decreased due to the loss
of air within the ice cream
structure. This
phenomenon occurs when
ice cream gets melted and
refrozen improperly.
 Shrunk ice cream has a
much different texture
than the original one. This
change in texture also
alters the palatability of ice
cream greatly.
4 Overheating the mix  When the ice cream mix is
heated above 85 ⁰C, the
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and properly. Leaks
and rusting parts are
usually identified
during the equipment
sanitation process.
 No equipment will be
used without
undergoing proper
sanitation procedure.
 Workers are required
to wear personal
protective equipment
like lab gown, gloves,
face masks and
hairnet while working
inside the plant in
order to avoid the
contamination of the
ice cream mix.
 To avoid shrinking, it
must be ensured that
the ice cream mix
should be properly
homogenized but not
overly pasteurized.
The right amount of
stabilizer must have
been added to the mix
as well so the ice
cream product could
hold its frozen
structure much
longer.
 As for the final
product, it must
always be kept frozen
all the time (storage
and transportation)
and must never be
allowed to melt until it
reaches the
consumers.
 The pasteurizer used
has very sophisticated
 proteins in the milk starts
to get denatured and loses
their structure. As an
effect, ice cream flavor is
altered and the ability of
the mix to capture air
during freezing is also
compromised.
5 Fat Lumping  If not properly
homogenized, fat globules
from the ice cream mix
may lump out and form a
grease layer on top. Not
only does this give the ice
cream consumer a greasy
feeling upon eating, it also
reduces the creaminess of
the ice cream.
OTHER RISKS IDENTIFIED
Table 7. Classification of Other Risks
RISK EVENT LIKELIHOOD SEVERITY
1 Human Accidents Frequent Critical
(Slipping)
2 Poor Quality Raw Frequent Marginal
Materials
3 Economic Losses Frequent Negligible
Table 8. Other Risks and Corresponding Mitigation Procedures
Risk Event Possible Damage and Impact
1 Human Induced  Accidents inside the plant
Accidents (Slipping) may harm the workers and
sometimes it can cause
equipment damage as
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controls that ensures
the temperature of the
system is accurate.
 High Temperature
Short Time
Pasteurization is the
one used in ice cream
production to make
sure that the mix is
only exposed to high
temperatures at a
very short amount of
time.
 To avoid fat lumping,
the ice cream mix
must contain the right
amount of emulsifier
and it must be
properly homogenized
at the right
temperature and
pressure.
RISK
CLASSIFICATION
High
Serious
Medium
Risk Mitigation Procedures
 Accidents are avoided
if plant workers are
given proper training
in order to familiarize
 well.
2 Poor Quality of Raw  Raw materials of poor
Materials quality will most likely
result to poor product
quality. Poor raw material
quality is an indicator of
poor procurement practice
and poor materials
handling.
3 Economic Losses  This are losses due to
competitors in the market
and other business
factors. Economic losses if
not recovered may lead to
the closure of the ice
cream plant.
RESEARCH AND DEVELOPMENT
Product Innovations
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themselves with the
plant operations.
 Safety signage and
first aid kits should be
present all over the
workplace.
 The use of personal
protective equipment
(working boots) will
also reduce the
chances of accidents.
 This could be properly
addressed by having
credible raw material
suppliers whose
products are known to
be of superior quality.
 Knowledge on proper
raw material handling
and storage should be
taught to the workers
too.
 To thrive in the ice
cream business, it is
important to have an
effective marketing
strategy, good
business
management
practices and
continuous product
innovations.
 Low Fat and Low Sugar Ice Cream

Figure 2. Low Fat and Low Sugar Ice Cream from Breyer’s

Due to health considerations, ice cream manufacturers are looking into the production of
low fat and low sugar ice cream so that huge consumers of ice cream will no longer worry of
being at risk of diseases like diabetes and hypertension. Low fat and low sugar ice cream are
also good for those consumers who are monitoring their weight since these products have lower
calorie content compared to the usual ice cream.

Low fat ice cream usually replaces fat with water and use bulking agents like whey
protein and some complex carbohydrates in order to produce the desired texture and flavor that
fats can provide. The usual problems with this substitution is the increase in ice cream hardness

and a faster melting rate.

As per low sugar ice cream, the idea is much simpler. No more sweeteners are added to
the ice cream mix. This does not alter the ice cream’s texture but it has a significant effect when
it comes to the fullness of the ice cream flavor.

Flavor Innovations

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 According to market studies, it is the flavor innovation that grows the ice cream sales
and not the innovation of healthy alternatives. Through the years ice cream manufacturers
across the globe has been very creative in creating new flavors that will capture the tongue of
their customers. Among the most popular flavors in the US last 2017 are Salt & Straw’s
Breakside Brewery’s Spent Grains & Bacon S’mores, Phin & Phebe’s Vietnamese Iced Coffee

and Salt & Straw’s Meyer Lemon Buttermilk with Blueberries.

Figure 3. Most Popular Ice Cream Flavors in the US for 2017

In the local scene, Magnolia Inc. has produced ice cream flavors from some of the

favorite local fruits in the country such as langka (jack fruit), macapuno and avocado. These
fruits are popular to Filipino consumers despite not being readily available in the market all the
time.

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 Figure 4. Magnolia’s Best of the Philippines Flavors

Process Innovations
Use of Liquid Nitrogen (Cryogenics)

The use of cryogenic fluid such as liquid nitrogen in the production of ice cream is being
looked into by ice cream manufacturers due to its several advantages. Normally, there is a
portion of the ice cream product lost during the freezing step due to the products strong
adhesion to the freezer walls. With the use of liquid nitrogen, the adhesion of the product to the
walls of the freezer becomes negligible and almost all of it are recovered. Also the use of liquid
nitrogen in freezing makes the process faster. As a result, smaller ice crystals are formed and a
smoother ice cream is produced. Some of the cons however that needs to be considered in the
use of liquid nitrogen is the cost of its production and storage.

Ultra – High Pressure Homogenization

Homogenization is usually done at 200 bars. However, with Ultra High Pressure
Homogenization, the ice cream mix may be homogenized at around 2000 bars. This new
process produces much smaller fat globules making their surface area much larger. Because of
this, a small amount of fat may now be enough to produce the desired results when much larger
fats are added into the mix. Ultra High Pressure Homogenization makes the production of low
fat ice cream without altering the final products quality.

Marketing Innovations
Collaboration with other brands

Recently, some ice cream brands (Selecta) has partnered with several brands of
chocolates and cookies in order to produce ice cream products with these treats as additional
ingredients. Among the most common of these collaborations are shown in the images below.
Selecta was able to partner with Reese’s Hershey’s and Oreo in order to capture not only the

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ice cream market but the markets of these sweet treats as well.

Figure 5. Selecta’s collaboration with several chocolate brands

Edible Packaging

Lately, environmental advocates are campaigning for a more sustainable lifestyle and
this entails the elimination of as much wastes as possible. Among the wastes that need to be
eliminated are the packaging materials of consumer products especially plastics which
threatens our oceans. In order to keep up with this trend and promote a more sustainable
lifestyle, researchers are looking into edible packaging which will minimize if not fully eliminate
wastes.

The most common edible ice cream packaging is the ice cream cone. Recently
researchers from Harvard University, invented Wikicells, which are made up of edible food
membranes. Among the first applications of these wikicells is ice cream packed inside a
bagasse container. The product resembles the famous Japanese dessert, Mochi.

Figure 6. Ice Cream containing wikicells

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All photos are taken from google images

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