How to get started with the food processing business?

. 6 min read
How to get started with the food processing business?

The food industry is currently on a surge as the Indians love to feast. India generates most of its revenue from agricultural and food production. India is an agrarian economy and is known for manufacturing a wide variety of organic food products and is considered to be the 6th largest country for grocery and food markets. The food processing business in India today has emerged as one of the leading industries.

Food processing business mainly refers to various operations and techniques through which the raw food materials are transformed into food items suitable for cooking consumption and storage. It consists of various processes like the basic preparation of the raw food and then transforming it into a fit for consumption. The food market is currently witnessing a change in its consumption pattern with the growing income of consumers.

Why should you invest in a food processing business?

The main reason you need to invest in food processing is that it ensures quick and profitable growth. If you are thinking about starting a food manufacturing business, then first, you should learn how profitable it can be. India has a huge population, out of which the majority of people belong to the urban middle class. The changing food habits, consumption patterns, low production costs, and food preferences have significantly contributed to the Boom in the food processing industry.

Automated machines filling oil in to the plastic bottles on conveyer

How to start a food processing business?

Starting a food processing business has its benefits as well as challenges. The Indian government has come up with several new policies and schemes for helping out the entrepreneurs in setting up their food processing units. To start a food processing business, you need to have an FSSAI license. However, here are some of the steps that you need to follow to start a food processing business in India:

1. Choose your location- Deciding on the factory location is extremely crucial before you plan to launch it. It is always advisable to look out for a feasible location and has easily accessible resources like raw materials, manpower transportation facilities, electricity sources, and others. An ideal location can only be derived from these factors and the raw material’s availability in a particular location. Also, you must consider the perishable nature of the food items and the duration. These two things must be taken into consideration for maintaining a good and quality product throughout the year.

2. Choose a specific niche- Focus on a specific niche or type of food production. However, this should be something that you are familiar with making. For instance, you can make food seasonings and other organic mixes. So sticking to this particular niche would be profitable for you as you have a prior idea of what type of raw materials and things are required to create seasonings and mixes.

3. Market analysis and research- For starting a food manufacturing business, you need first to understand the market and choose the right product that you can manufacture without any hassle. While selecting the product, you should keep in mind the viability or availability of the product in the market. Research on the industrial and economic outcomes of the current units of food processing. By this, you can determine your competitors, market size, and current trends.

4. Know all about the food business licenses- For initiating a genuine food manufacturing business, you need to know about all the mandatory licenses. Get connected with the State Departments of Public Health and ask the prerequisites for starting a food manufacturing business. You might be required to obtain the food enterprise license, the FSSAI license, and other business permits for running a retail food business.

5. Get funding- Every other business needs proper funding and capital for running its operations. If you don't have enough capital, you can go for crowdfunding or go for a business loan. Also, funds vary as per the nature and size of the business. It is always recommendable to have shareholders and investors who can contribute to your food business’s funding.

6. Choose suppliers- As a restauranteur or a food manufacturing unit owner, you need to work with various suppliers. This would include right from the furnishing of the POS system, kitchen utensils to, of course, food materials. Start with creating the wish list of your suppliers, get connected with them, scope out your long-term and short-term budget, and then choose your partners. Make sure that the suppliers are not charging more as it can minimise your margins. Ensure that you negotiate well. Start looking for wholesalers online or directly visiting the wholesale retailer store, the local farmer markets, and so on. A trusted wholesale supplier can help you provide quality products, thus ensuring a successful food processing business.

7. Hire employees- For starting your food manufacturing business, you would require good manpower. For scaling this business, you need to hire various designations, including cooks, factory workers, cleaners, marketing, sales manager, and HR managers. Ensure that you are hiring the right staff who can manage their job well. Also, you need backup employees in case any of your staff is ill. Hire those candidates who have sufficient experience and a good track record in their field. An efficient team of workers can help you in maintaining your brand image.

8. Advertise your business well- Before you start with your food processing unit, ensure that you are marketing it well. Apart from offline marketing, you can also go for the digital marketing option. Start building a great website that is easy to navigate and has all the key information about your business. Also, announce it on social media as people are constantly exposed to it. By posting relevant news and high-quality photos of your food processing business, you can ace the game of marketing.

Food Processing Business Ideas

If you have low capital or you are a bit tight on your budget, then you can find some cost-effective food processing business ideas that can help you earn a great ROI. Some of them are:

  1. Biscuits- The biscuit-making business is something that you can initiate on a small-scale basis. Indians love to sip their cup of tea with biscuits or cookies, which is why it is a lucrative market. Many people still prefer freshly baked biscuits from the local bakeries because of their taste and quality.
  2. Chocolate- Chocolate is also an amazing ingredient used as a raw ingredient in various food items. Thus, a chocolate-making business can also be a profitable one that would fall under your budget. Various other food processing units require raw chocolate for various dessert-making processes.
  3. Bread production- Bread being a staple food item, always remains in high demand. Fresh quality bread is always in demand in both Suburban and urban areas, and therefore, the bread production business also offers a great business opportunity.
  4. Flour production- You can also produce various kinds of flour, including wheat flour, whole wheat flour, brown flour, wholemeal flour, etc. The production process is also simple and can be initiated on a small-scale basis with just a few simple machines.
Bread buns on the conveyer

Start with your food manufacturing business today

There are various other food processing business ideas, including fruit juice production, condensed milk, coconut milk powder, cheesecake, cashew nut, groundnut oil, honey, ice cream, jam, lemonade, meat processing, noodles, and several other options. The list is never-ending. However, it is up to you and your budget what type of food processing business idea you want to opt for.

Also Read:

1) How to start your tea manufacturing and marketing business?
2) How to start a pharmaceutical manufacturing company?
3) How to become a business broker & start business broker services?
4) How to Become A Successful SME Owner?

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Q. What kind of food processing business is profitable?

Ans. Food product making that can be started on a small scale and is in great demand can be a profitable business.

Q. Can I start a food business with zero investment?

Ans. Yes, by getting pre-approved loans or through crowdfunding.

Q. Do I need to be qualified enough to get into the food processing business?

Ans. Yes, you need to be at least 10+2 qualified.