From Volgograd to Moscow: How Small and Medium-Sized Businesses Sustain the Ice Cream Market

The stability of the number of market participants is one of its defining characteristics. Since the pre-pandemic period, the number of companies in the segment has remained at around 300, indicating a formed market structure and the absence of sharp fluctuations typical of more volatile sectors of the economy. At the same time, the economic performance of this area remains high: according to 2025 estimates, the average revenue of an SME in this field exceeds 160 million rubles. This level of profitability highlights the niche’s potential despite the relatively small number of players and confirms its attractiveness for entrepreneurs focused on sustainable development.

From the perspective of the business life cycle, ice cream manufacturers demonstrate above-average resilience. The average age of SMEs in this segment is about 9 years, while the comparable figure for the SME sector as a whole is 7.5 years. This suggests that companies that have managed to establish themselves in the ice cream market tend to show greater viability and adaptability to changing economic conditions. This is likely linked to the need for significant initial investment and technological infrastructure: the industry tends to attract entrepreneurs prepared for long-term strategy implementation and equipped with the necessary resources and expertise.

A key factor shaping operational activities is the pronounced seasonality of demand. Revenue traditionally peaks in July, when consumer activity reaches its maximum due to high temperatures and an increase in spontaneous purchases. The lowest indicators are observed in February and November, when demand for frozen desserts declines significantly. Such cyclicality requires careful financial planning, the creation of reserves, and optimization of production capacity in order to minimize the impact of off-season downturns on profitability.

The territorial distribution of producers spans 71 regions of the country, indicating the segment’s broad geographic presence. Moscow remains the leader in the number of enterprises, with 35 SMEs specializing in ice cream production. It is followed by St. Petersburg with 19 enterprises, then the Novosibirsk Region (10 SMEs) and Krasnodar Krai (7 SMEs). Four enterprises each are located in Petrozavodsk and Tolyatti. This regional structure reflects both population density and income levels in major urban agglomerations, as well as the presence of developed logistics and raw material infrastructure necessary for the stable operation of production lines.

Historically, the segment’s development began in 1993, when the first small or medium-sized enterprise focused on ice cream production was registered in the Volgograd Region. Since then, the industry has evolved from local mini-production facilities to technologically equipped factories capable of competing with large federal brands thanks to assortment flexibility, emphasis on local flavors, and rapid response to changes in consumer demand. Today, approximately 5,500 people are employed in the production of frozen desserts, underscoring the segment’s importance not only in terms of economic value added but also in providing employment.

Clearly, the resilience of the SME segment in ice cream manufacturing is driven by a combination of factors. First, there is relatively predictable consumer demand for a product that remains popular regardless of macroeconomic fluctuations. Second, the possibility of differentiation through local brands and unique recipes allows small enterprises to find their niche even in competition with major players. Third, advancements in freezing and packaging technologies that reduce costs and extend shelf life make the business more scalable and resilient to logistical risks.

At the same time, further development of the segment requires institutional support, including access to preferential lending, equipment modernization programs, and marketing tools for promoting regional brands. Given the capital-intensive nature of the industry and the need for continuous upgrades of the production base, such measures could help not only maintain current employment levels but also stimulate revenue growth and expand the geographic reach of Russian ice cream producers. Thus, the SME segment in ice cream manufacturing is not merely a significant part of the food industry but also an example of a sustainable entrepreneurial model capable of combining technological sophistication, seasonal adaptation, and a long-term development strategy.

Author: PhD in Economics, Associate Professor, Department of World Economy and World Finance, Financial University under the Government of the Russian Federation Natalia Ivanovna Chovgan.