Milk&Honey Café: A break-even analysis of durian gelato production
Publication Type
Case
Publication Date
8-2025
Abstract
Milk&Honey Café is an ice cream café in Singapore known for serving artisanal gelato, especially localised flavours like Mao Shan Wang (MSW) durian that is often referred to as the ‘King of Fruits’ in Southeast Asia. Since its opening in 2012, the café business has grown steadily, expanding from the flagship store to include two additional clubhouse outlets. Edwin Lim and his co-founders had plans for further expansion, but the COVID-19 pandemic thwarted them.
A social media marketing campaign launched in late 2024 led to a surge in demand for the MSW premium flavour. Faced with higher demand than capacity, Edwin would have to increase gelato production. He must first perform a bottleneck analysis of the current process to identify the step that is constraining production. Thereafter, to meet the new demand, he needs to consider investing in more machines or larger ones, and possibly hiring more workers.
With a clearer picture of the actual demand, he faces the question: Would the investment in additional manpower and/or machinery be justified? How long will it take the business to recoup these costs and start turning a profit? He knew a break-even analysis would be necessary to get the answers.
This case describes simple operation scenarios in a small manufacturing facility that seeks to optimise production efficiency. Upon completion of the case, students will be able to conduct bottleneck analysis for a production process, perform capacity planning to determine the type of investments that can increase production capacity, and conduct break-even analysis to facilitate annual operating plan/budget balancing.
Keyword(s)
demand analysis, operating projections, budgeting cycle, resource management, growth strategy, marketing plans, break-even analysis, durian gelato, cost management, small business operations
Discipline
Operations and Supply Chain Management
Research Areas
Operations Management
Data Source
Field Research
Industry
Restaurants and food service industry
Geographic Coverage
Singapore
Temporal Coverage
2025
Education Level
Postgraduate; Undergraduate
Publisher
Singapore Management University
Case ID
SMU-25-0024
Additional URL
https://ccx-shop.smu.edu.sg/products/milk-honey-cafe-a-break-even-analysis-of-durian-gelato-production?variant=43325045932074
Comments
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