The Karnataka-based ice cream maker is refining its growth playbook to scale sustainably and break into India’s top tier

Bengaluru: In an industry often driven by rapid national rollouts and seasonal spikes, Dairy Day stands apart for choosing patience over pace, and depth over dominance.

Operating for nearly 24 years, the South India-based ice cream brand has built its identity around everyday indulgence rooted in familiarity and consistency. Today, Dairy Day is one of India’s largest candy and cone manufacturers and ranks among the top six ice cream brands nationally, producing around four lakh litres per day.

With the ₹1,000 crore revenue mark in sight, the company’s long-term vision is to create one of India’s most loved ice cream brands, powered by a strong regional foundation and calibrated expansion.

A Well-Churned Journey

Founded in 2002 by ice cream veterans M.N. Jaganath and A. Balaraju, Dairy Day began its journey from a modest 2,000 sq. ft. rented facility in Karnataka, built on a philosophy of goodness.

Joined soon after by seven colleagues across sales, operations, and manufacturing, the founding team of nine, fondly referred to as the “Navaratnas”, laid the foundation for what would become a multi-decade growth story.

“From the outset, the founders recognised the structural realities of the ice cream business. It is a frozen, impulse-driven category where logistics costs, distribution density, and proximity to consumers directly determine profitability,” said Saurabh Kasat, Director & Chief Financial Officer, Dairy Day Ice Creams, in an exclusive interview with IndiaRetailing.

In 2007, the company established its first owned manufacturing facility spanning 18,000 sq. ft., followed by ISO certification in 2008. A major inflection point came in 2013 with the commissioning of a large, modern manufacturing plant near Bengaluru, significantly improving capacity and operational efficiency.

In 2016, Motilal Oswal Private Equity invested ₹110 crore, enabling the company to accelerate growth and expand into new markets. A second manufacturing facility commissioned in 2017 doubled production capacity to two lakh litres per day.

In 2024, Kedaara Capital made a ₹1,200 crore majority investment, one of the largest transactions in India’s ice cream sector. The deal provided full exits to early investors and firmly positioned Dairy Day on a trajectory to become one of the country’s top three ice cream brands.

No Half Scoops: Full-Scale Ambition

The company began operations with a distribution network of just 100 retailers. Today, Dairy Day reaches over 80,000 retail outlets through a network of more than 500 distributors.

The brand strengthened its presence across Karnataka and Tamil Nadu before expanding into Andhra Pradesh, Telangana and Maharashtra in 2019, followed by select pockets of Odisha, Kerala and Madhya Pradesh in 2022.

Currently, nearly two-thirds of Dairy Day’s revenue comes from Karnataka and Tamil Nadu, with newer states delivering faster growth.

“We always believed that each state is a large market in itself and have never spread ourselves too thin. Depth before width has guided us for over two decades,” said Arvind Ramachandran, Vice President – Marketing, Dairy Day Ice Creams, explaining the company’s measured expansion strategy.

The brand continues to see significant headroom for growth within its existing footprint, particularly as ice cream consumption deepens in smaller towns and semi-urban markets.

“There is a lot of growth still available where we already operate,” Ramachandran said, adding that expansion beyond current states will remain measured and deliberate.

Quick commerce has also emerged as a strong growth driver, now contributing approximately 6–7% of total revenue. The brand is present across leading platforms such as Zepto, Blinkit, Instamart, Flipkart and BigBasket.

Despite experimenting with multiple retail formats, Dairy Day does not intend to pursue a franchise-led exclusive outlet model. “Distribution styles vary by state, but exclusive franchise outlets are not part of our long-term plan,” Kasat said.

A Product Portfolio Bursting With Flavours

Starting with just 25 stock keeping units, Dairy Day now retails over 250 SKUs and more than 30 flavours, making it one of the broadest portfolios in the category.

“Our product innovation is guided by three clear pillars: premiumisation, regionalisation and price-point relevance. We offer one of the largest assortments of single-serve SKUs in the industry, enabling us to cater to varying moods, occasions and affordability thresholds,” Ramachandran said.

This breadth has helped the brand achieve one of the highest Net Promoter Scores in the category.

Dairy Day operates a fleet of over 150 dedicated cold chain trucks, supported by transport management systems that provide real-time visibility.

Manufacturing capacity currently stands at approximately four lakh litres per day, supporting growth for the next 18 months, with further capacity expansion already planned.

The Inside Scoop: Looking ahead

Dairy Day is currently growing ahead of the industry, expanding at 12–15% annually. The company leads the ice cream market in Karnataka and ranks among the top three brands in Tamil Nadu, with nearly 15% market share across South India.

“With a projected compound annual growth rate (CAGR) of over 25%, the company expects to close FY26 at approximately ₹1,000 crore in revenue, well ahead of industry averages,” Kasat said.

Over the next two to three years, the company plans to double its retail footprint, driven by deeper penetration in Tier 2 and Tier 3 markets.

“We aim to deepen penetration in our stronghold markets, scale faster in Andhra Pradesh, Telangana and Maharashtra, and continue investing in general trade expansion, quick commerce and media-led demand generation,” Ramachandran said.

The brand is confidently charting its path towards becoming one of India’s top three ice cream companies over the next four years.