Milk&Honey Café: A Break-Even Analysis of Durian Gelato Production

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.

Inspection copies and teaching notes are available for university faculty. To receive an inspection copy and teaching note, please email cmpshop@smu.edu.sg with your registered faculty email ID and a link to your contact information on the faculty directory at your university as verification. An inspection copy and teaching note will then be sent to your faculty email account.

Download information

SMU Faculty/Staff can download the case & teaching note on iNet with your SMU login ID & Password via the following links:

·      The Case (SMU-25-0024)

·      Teaching Note (SMU-25-0024TN)

For purchase of the case and supplementary materials via The Case Centre, please access the following links:

·      The Case (SMU-25-0024)

·      Teaching Note (SMU-25-0024)

For purchase of the case and supplementary materials via Harvard Business Publishing, please access the following links:

·      The Case (SMU-25-0024)

·      Teaching Note (SMU-25-0024)