FOOD PROCESSING BUSINESS PLAN GUIDE
Food processing is the subjecting of raw ingredients under physical and chemical procedures that leave edible items as products.
Starting a food processing business comes easy if you align your passion with public needs.
Anyone familiar with Maslow’s hierarchy of needs would know the position held by Food; nothing happens without food. No wonder the food processing industry churned in over $53.9 billion in 2014 in Australia alone, and India expects to have realized $480 billion from the industry by 2020.
People seldom employ much effort into food preparation; they would rather pay for processed food. They often consider the volume of energy and time that would be consumed by culinary activities.
Since there is an alternative that is easily seen to be more effective in the sense that time and energy are vastly saved, likely, the idea of patronizing processed food would never lie far from the minds of members of society.
Busy schedules have made it imperative for individuals to patronize the market of processed foods. For this reason, the market of food processing is one that is undergoing constant expansion, raking in good returns for entrepreneurs trading in the niche.
Lucrative Niches in the Food Processing Industry
The list below highlights some great aspects to focus your small scale food processing business; you can also consider more than one area if you have the means to.
From the wealthy to the average homes across the globe, tea and bread is a common breakfast; perhaps because of the fiber and energy content. Being at the other end manufacturing bread or cookies would mean so much good for your entrepreneurial story.
Provided you have got a sufficient supply of corn, then you are in a great position to go into this aspect of food processing. Being a great source of carbohydrates, as well as a major diet given to babies, it’s a favorable market to venture into.
This section can be considered in two directions;
i) Juice Making: The fruits can be squeezed using specialized machines and their content extracted in liquid form. Containing all the vital flavor and nutrients of the fruit, the juice can be packaged and sold.
ii) Fruit Wafers: Some of the fruits like banana can be sliced and dried after coating them in a honey-like paste, then the resultant tasty product launched into the market; and you might want to ask which market has a phobia for a tasty diet.
iii) Making of fruit bars
4) Processed Ginger, Garlic, and Onions
You can consider sealing dried onions; not much equipment is needed. It is another business route to turn the garlic and ginger into a paste and package them. The rush for spices has induced a boost in this market. Oil can also be extracted from ginger, and this oil has large medicinal values.
5) Processed Tomatoes
Tomato can be dried and put in a packaged form that would serve the need of users for culinary activities when the need arises. By soaking the tomato in hot water, the freshness of the ordinary tomato becomes roughly equivalent.
6) Making of Beverages and Confectioneries
Think of transforming cocoa into other useful products, think of sweeteners, and chocolates.
7) Processing Meat
There are ways of doing this. But one very popular method is to dry the meat with spices, then chopped into small pieces that fit a small can; it is traditionally called ‘Kilishi’ in Nigeria.
8) Processing of Milk
Some parts of the country and the world are blessed with livestock and cows that are rich in the supply of milk. This is an indicator of the potentials of milk processing and manufacture. Only a few, easily affordable specialized equipment would suffice to start the technical part of the milk business.
9) Rice Processing
The eastern part of the country is rich in rice cultivation. A rice mill can therefore easily thrive if established. Once the necessary machinery is put in place, then what is left is great gains.
10) Popcorn Making
This business is a popular business that requires minimal startup funds. Just a good number of corn, and a heating device to pop the grains into the attractive white edibles.
11) Plantain and Potato Processing
It is common in markets to find plantain and potato chips. Well executed and modified processing and packaging can see you into the azure pastures of food processing.
Steps to Starting Your Food Processing Business
Factors that are Considered when one Goes into Food Processing Business
1) Decide on the Specific Product(s)
There is a wide spectrum of foods that are categorized under ‘processed’, this is obviously seen from the above list. You would have to decide which of the niche(s) you fall in terms of. This is the first step in starting a business of processed foods.
2) A Food Processing Business Plan based on Market Research
Feasibility studies must be conducted to find out which products entice consumers more. A business plan should be made that would entail the dimensions in which you intend to run your business, what tactics you intend to employ in your manufacturing process. Then registration of the business, then its structure.
As regards the business structure, there are some basic configurations the business can assume:
a) Sole Proprietorship
You can also decide to go into a franchise with established food processing firms. The business plan must be as detailed as possible, and it should sufficiently include information on staffing.
3) Incorporate Insurance Plans and Business Regulations
It is a great policy to make adequate provisions for insurance in your business, this is so that in case any work-related injuries are sustained by any worker within your firm, there would be adequate aid.
4) Safety Measures to Protect your Products
It must be ensured that your products have nothing on them that can raise questions or cause any health issues to consumers. Good preservatives should be used, and the products should satisfy the conditions put by special health agencies.
5) Branding, Packing, and Labeling
Professional and registered businesses are recognized by their brands. Your products must be well packaged and clearly labeled before launched into the market. This is a food market; it’s a market in which people are skeptical as to hygiene and professionalism, they are afraid of the conditions surrounding the processing of the food they are paying for.
6) Advertisement, Promotion, and Marketing
Without these business lags behind the time. Thanks to social media now that has made it a trivial affair to boost awareness about a product; we have got Facebook, Linked In, etc.
It must be ensured that there are well-formed channels by which these products can reach the average retailers and final consumers; necessary for the growth of the food processing business.
Here is a sample business plan for starting a food processing company.
FOOD PROCESSING BUSINESS PLAN EXAMPLE
Food processing is a multi-billion dollar industry that has increasingly become attractive to investors. There are tremendous potentials for any investor willing to venture into this area of business.
If you are one of such investors, you will find this food processing business plan sample a great tool to use in writing your own plan. The success of any business starts with the plan.
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But before putting together a great plan, you must understand the business you are venturing into. It is based on this knowledge that you will put in place a plan of action.
While having a plan is necessary for success, this is not enough in itself. You need to fully follow or implement these plans for your business to really grow.
- Executive Summary
Foodie® is a licensed food processing business that will be located in Boise, Illinois. We produce a variety of health-friendly food products as well as contribute to the prosperity of the agricultural industry. By reducing food spoilage through the extension of the shelf life of agricultural products, farmers get a better deal for their farm produce.
We process a variety of products that include canned fruit, fruit sauces, ketchup, French fries, granola, energy bars, precooked foods, sausage, cured meat, milk (pasteurized, and homogenized), and BBQ sauce. Others include margarine, mayonnaise, corn syrup, rice syrup, and chocolate. These products will be processed using the most hygienic and health-friendly procedures.
- Our Products and Services
In addition to being a food processing business, we also provide training and advisory services to our clients and smaller food processing businesses. Our processed products include chocolate, sausage, milk, BBQ sauce, canned fruit, ketchup, French fries, granola, fruit sauces, corn syrup, rice syrup, cured meat, mayonnaise, margarine, energy bars, and precooked foods.
- Vision Statement
At Foodie® we are not in business to just make up the numbers. We are driven by a passion to establish a thriving food processing business that will compete with established brands. Within a 10-year period and with the right effort, we intend to be reckoned among the top 20 food processing brands in America. This is achievable and we are dedicated to bringing this to fruition.
- Mission Statement
To set up a flourishing brand, we need to provide our customers with quality products. Our desire is to be known as a brand synonymous with quality. All our products will undergo the most stringent internal checks. We have a fully equipped world-class quality control department that will monitor all production procedures. This is to ensure that it passes minimum regulatory standards.
To finance our food processing business, we are applying for a loan facility of $2,500,000.00. This credit comes with a monthly interest rate of 3% after which the principal sum will be payable in 8 years. 60% of these funds will be used in purchasing the necessary equipment while 40% will go into running costs for a period of 4 years.
- SWOT Analysis
An in-depth analysis of our capacity to deliver has been done. We deliberately sought to find out this aspect of our operations because we want to take off on a solid footing.
An independent business consulting firm was contracted to get the job done. The results reveal the following;
The organizational structure at Foodie® is such that guarantees stability and growth. This is because the management team is led by seasoned business people who have successfully led major companies through challenging times. They have a deep understanding of what needs to be done to guarantee success.
This is a strength we will be leveraging to guide our business to the path of profitability and growth.
In being frank to ourselves, we have identified our weakness to be the small size of our operations. This limits our reach significantly and makes us less competitive when compared with major food processing companies.
However, we consider this weakness to be only temporary. We are strategizing on adopting highly effective growth strategies to eventually over these challenges.
We have tremendous opportunities before us. Some of these include increasing our production capacity. There are many more food categories we intend to add to our food processing operations. We will target those with the highest demand among consumers.
In the long term (20 years), we envision our business going into the export of our processed food products to different markets across the world.
Threats are commonplace for businesses. We have identified our likely threats to be stiff competition from major food processing companies.
Drought is also a threat we are likely to be faced with. Lately, major changes in climatic conditions have affected agricultural production. This can hurt our business too.
- Sales Projection
Sales are largely driven by the intensity and impact of marketing activities. We are adopting a robust marketing strategy to drive sales.
In achieving this, we have projected our sales over a 3-year period. This has shown positive signs as summarized in the chart below;
- First Financial Year $450,000.00
- Second Financial Year $790,000.00
- Third Financial Year $1,500,000.00
- Competitive Advantage
To achieve our target, we need to have an advantage over similar businesses. A deep understanding of the food processing industry is one area we have a tremendous advantage in. We have a collection of industry veterans in our management team as well as the workforce.
Also, our marketing team is made up of some of the best minds in the industry. This gives us a huge advantage to advance our food processing business.
- Marketing Strategies
Marketing is central to achieving our growth targets. We understand this and have committed enormous resources to put together a team of seasoned professionals who will handle all marketing activities.
We are also working closely with major companies that control the main distribution channels. These will enable our processed food products to get across to a wide consumer base.
- Target Market
Every human needs survival food. This makes our business indispensable. Through value addition, we can increase the shelf life of food products as well as reach a wider segment of the market without fear of food spoilage.
Our target market consists of busy professionals and parents, singles, and many others who have little time to prepare food.
There you have it! Our food processing business plan sample includes some of the most important parts that should never be ignored when writing a plan.
By finding out about your business, you can provide more detailed content to each of these sections. The main purpose is to have a plan that adequately reflects what needs to be done in growing your food processing business.