Start A Food Processing Business In Nigeria
The agricultural sector is the largest contributor to Nigeria’s economy. It donates about 24% to the GDP (Gross Domestic Product) of the nation.
Food processing, a sub-sector of agriculture, is a rapidly progressive division. It has been, and will continue to be a rewarding enterprise.
If you want to venture into the food processing business, and you don’t know how, this article is specially for you.
Let’s dive right in!
What is food processing?
Food processing is the transformation of agricultural products into food. It converts raw food into consumables.
Activities such as cooking, mincing, mixing, canning, fermentation, liquefaction, pasteurization, and emulsification are utilized in food processing.
Types of processed foods include:
- Drinks: Zobo, Kunu, yoghurt, fruit drinks etc.
- Fried foods: Chips(potato, plantain), Chin Chin, Akara, Puff Puff etc.
- Oil products: Palm oil, coconut oil, groundnut oil.
- Farm produce: Garri, beans etc
- Meat products: Bacon, sausage, ham etc.
- Savory snacks: Cake, sausage rolls, etc.
- Flour products: Wheat flour, wholemeal flour, brown flour etc.
The food processing business is majorly categorized into three. They are
- Small scale: This doesn’t require heavy machinery, and can easily be performed in a normal kitchen setting. Small scale products can be easily processed, and they don’t require much time. An example is the Akara or Puff Puff.
- Medium scale: Medium scale products aren’t easily processed, and machinery might be needed. The bakery business is an example.
- Large scale: It requires heavy machinery, large capital investment, and a high man power demand. Products are most times distributed to an international market.
Utilizing our step-by-step procedure, you can start your own food processing business.
Pick a niche:
Every business has areas of specialization, and the food processing business isn’t left out. If you’re confused about which particular niche to pick, here’s a guide.
When picking a niche;
Identify your passion: Choose an area you’re actually interested in. It can be making fruit drinks, or processing farm produce. Whatever it might be, ensure you want to do it.
Identify problems you can solve in your niche market.
Determine profitability of niche market.
Having a niche means that your target audience is smaller, but because you can easily meet their needs, the level of your impact is stronger.
Carry-out adequate research: The next step is to gather relevant information.
Prior to any form of planning, it is important you have sufficient knowledge on the business. From the product itself, to the target market, and competitors.
Do not rush this phase, rather, dedicate time in carrying out proper research.
We also suggest soliciting advice from individuals or bodies who have had years of expertise in your niche of interest.
Select a desired location:
Picking a location is an essential step. One that shouldn’t be carelessly done.
As a medium, or large scale business owner, it is important you take the following into consideration when selecting a location:
Access to water and electricity:
A readily available market nearby:
Good connectivity: You want to be able to easily transport products and raw materials to and from the location.
Environmental factors: Handling of liquid and solid waste should be taken into account.
Draft out a business plan: A business plan is a formal document that contains the goals of a business, and how they can be executed.
It outlines your goals, making them appear less formidable and more achievable.
The following are enlisted in a business plan:
- Description of the business.
- Mission and vision statements.
- Competitor analysis.
- Market analysis.
- Marketing strategies.
- Operation strategies.
- Product and service description.
- Pricing and revenue.
Register your business and get the necessary permits: This shows you are authentic, and builds credibility in your business. Contact persons who might have gone through this process before, and ask for guidance.
Source for funds: You need a start-up capital. This is the initial capital needed to kick-start your business.
If you already have funds, that’s great! But if you don’t, there’s no need to panic.
Loans can be acquired from individuals such as family members, friends, or acquaintances. Corporate bodies like banks, savings and loans associations, and insurance companies can also be of tremendous help.
Purchase required machinery: This might include mixers, deep freezers, oven, deep fryers etc.
Hire staff: Hire a team of workers who will be responsible for handling various tasks.
A small scale food processing business might not require staff, but medium and large scale businesses certainly do.
Find a supplier: The supply of products depends on the scale of business. In small scale, products can easily be obtained from a local market but in medium, or large scale, a farmer is the optimal choice.
We suggest having two or more trusted suppliers to avoid delay, or setbacks.
Ensure that supply coincides with the production process, such that production isn’t halted due to inadequate supply.
Market and distribute your products: Don’t be in a hurry to distribute into market immediately after production.
Test run your product with a selected number of people. If it’s good to go, then kudos! You can advance to the next step, distribution.
Make a list of wholesalers and retailers you can distribute your products to. This includes individuals, and retail outlets like supermarkets and malls.
With the advent of the internet, you can comfortably advertise your product online. This would not only increase sales, but create an online presence and boost credibility.
A good Online Marketplace to add your business is https://spronet.ng
Spronet.ng affords businesses the ability to connect with other businesses, buyers, suppliers and distributors for free, while helping them advertise their goods and services around the internet.
Learn more from our article on what we do on Spronet.ng here What We Do At Spronet.ng – Spronet Blog
There you have it! Steps to starting the food processing business of your dreams.