How To Start A Lucrative Foodstuff Production Business in Nigeria: The Complete Guide

A foodstuff business is one of the most profitable businesses that you can invest in with a little capital in Nigeria and still expect a high monthly profit. This is because food is a fundamental human need without which no one can live.

According to reports, the global food demands will likely rise to 35% by the year 2030. Likewise, as the population of Nigeria is increasingly growing, the need for food is also increasing, and to meet up with this demand, more people are recently venturing into the sector. The food processing industry is a multi-billion dollar industry where raw ingredients are transformed into food for human consumption.

Food production and exportation is a global affair. The US export food worth over $72 million. They are followed by Germany, UK, China and France, the least of which export over $24 million worth of food.

The food production industry is prevalent in Nigeria, Africa. In 2018, food made up 1.951% of Nigeria’s exports. Processed food is now an essential part of almost every meal because it is used one way or the other in food preparation.

Venturing into a food production business can help you build a successful business that could someday grow into a conglomerate. All you would need to thrive in this business is the right guide and any amount of money you can afford for a start as your capital. However, your capital will still play a crucial role in determining the type of foodstuff business you can start. Follow this article step by step to be armed with the right information on how to start a foodstuff business.

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What is Foodstuff?

Foodstuffs refer to edible, processed and unprocessed food items that are consumed by humans. In Nigeria, popular foodstuffs sold readily in the market include rice, beans, yam, garri, maize, cooking oils, and green leafy vegetables, among others.

What is Foodstuff Production Business?

In broad terms, food production involves the processing of clean and harvested crops into marketable food products. The food production business consists in preparing, packaging and marketing edible food items in forms that keep them durable for long periods.

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Business Opportunities In Foodstuff Production Business

The food industry provides several business opportunities for investors and other professions alike, some of which are listed as follows;

1). Shop Leasing:

If you have decided that you want to go into this business full time, you would need a shop space, thereby providing good opportunities for property owners also to thrive. A good foodstuff shop in Nigeria could cost about N60,000 to N100,000 per annum, depending on the location and accessibility to the market.

2). Furniture Making/Bricklaying:

Every foodstuff shop needs to be set up with pieces of furniture such as tables, store shelves, chairs and possibly money drawers for storing cash. Essentially, you would need the services of a furniture maker or carpenter to install these items for you. Bricklayers also help with patchwork and groundwork where necessary.

3). Electrical System Installation:

Most standard shop owners set up their shop premises with good lighting systems. The reason is for them to easily navigate through the shop for items. The services of an electrician are therefore indispensable.

4). Painting:

Your business area could do with some colours to brighten it up. More so, painted rooms and shelves prevent the invasion of ants, termites and other insects. Hence, you need a painter.

5). Wholesale Marketing:

When you are fully set up, you would need to figure out a steady way of getting your food supplies. You could liaise with wholesale traders who would supply you with the items you want at cheaper rates and in the re-sellable ratio so that you can sell and gain profits.

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Facts And Benefits Of Starting A Foodstuff Production Business

You don’t necessarily need operational permits to do this business in Nigeria unless you are a food processing and packaging business dealer or a manufacturer. If you intend to engage in food processing, you must register with the National Agency for Food and Drug Administration and Control (NAFDAC), Corporate affairs commission and Standard Organization of Nigeria (SON).

Meanwhile, these are some of the benefits of foodstuff business:

• Foodstuff is one of the indispensable items that man cannot live without.
• The human body requires food for the regular functioning of the body organs. Therefore, there is always a market for it.
• Throughout the market, there are hundreds of innovative strategies and resources that not only help a professional entrepreneur develop a profitable business, but also build thousands of jobs in the process.
• Nigeria’s food production industry is valued at over $10 billion.
• The industry in Nigeria provides an estimated minimum of 10 million direct jobs to the educated and uneducated alike.
• Foodstuff is continuously in demand.
• The foodstuff production business is one that can be done anywhere irrespective of location. Whether you operate in a city or rural area, you’d still make a good profit selling your foodstuffs.
• Although it is not a get-rich-quick scheme, the foodstuff business yields easy returns on investment. Within a few months of running this business, you’ll be happy with profit rates.
• It requires minimal capital to set up. With as little as 10 – 15k, you can set up a foodstuff business.
• You don’t need much marketing to sell in this business, especially if you own a shop within the market premises. Customers will always locate you where you are.
• The developing world spends about 60 to 80% of their annual income on food.
  30 to 40% of food is wasted annually worldwide.
• The USA, Germany, UK, China and France are the biggest producers of foodstuff in the world.
• Farmers all over the world produce food enough to feed about 10 billion people.
• The US is the largest exporters of food.
• Oyo, Edo, Cross River, Ondo and Ekiti states are some of the biggest producers of foodstuff in Nigeria.

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How To Start A Foodstuff Production Business in Nigeria: Step-By-Step Guide

1). Select The Type of Foodstuff Business You Want To Start:

The first step is to perform a feasibility analysis to determine the best food you want to deal in. By doing so, you can evaluate the most cost-effective and prospectively viable company to expand into that you can comfortably reach a vast audience.

2). Prepare A Business Plan:

It is imperative to create a business plan to help you manage the business effectively. Your marketing strategy would determine what kind of foodstuff to sell.

3). Register your company with the bodies required:

If you are going to manufacture and label your food products yourself, you would need to register your company with the following agencies: NAFDAC, SON, CAC, and the health ministry. More so, if you have a big and very visible manufacturer or distribution chain, you’d have to sign with certain bodies.

3). Prepare your Capital:

Your capital is a significant determinant factor that would always decide the form of food and food production you’d be concerned with. Many foods need more investment than others, and processing facilities may be a little pricey. Do your estimates carefully and accurately decide how much money you will need for the business to become operational.

4). Decide On A Business Location:

Your location has a vital role to play in the success of your foodstuff business. Granted that a foodstuff business can excel irrespective of location, your chosen area would determine the scale of your business. Whether you’d be launching your business in a city or village, you would require a busy environment.

5). Set Up Your Place Of Operation:

This is the final stage before you get your company started. It’s a necessary step to help you figure out whether to market different foodstuffs. You’ll need to get tables, chairs and other materials. Trays would also be required to sample some of the items you’ve got for sale. For food processing, you will need to purchase the right facilities and machinery.

6). Buy Your Foodstuff:

You can start your business now by purchasing the first package of foodstuffs after you set up your shop. It is advisable to make your purchases from local markets or directly from farmers because the products there are typically cheaper.

7). Market Your Products:

There are several ways you could market your foodstuffs, but among them, the most successful is to deliver to supermarkets, sell in schools, bus parks and many other public places through agents and distributors. However, you would need to build recognition through publicity and adverts.

First, you should tell your mates about your new company or print fliers and send them to prospective clients. You can also use various online and offline promotional strategies to help you attract specific clients.

Challenges Of Foodstuff Production Business in Nigeria

Some of the challenges of food production and packaging in Nigeria and many parts of Africa include:

• Lack of experience
• Fluctuating prices of foodstuffs.
• The unreliability of third party suppliers
• Low and unstable investment in agricultural research
• Financial problems
• Storage problems
• Challenges with farm inputs
• Infrastructural problems.
• Marketing problems
• Pests and rodents attack
• Risks of thieves
• Shortage of startup funds
• Insufficient processing machinery
• Poor transport network

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To Sum It Up

Thanks to its enormous customer demands and the capacity to develop a broad supply chain network, the food production and marketing sector in Nigeria can be a lucrative and competitive enterprise.

The foodstuff production business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide supply chain network. If you’re looking for a business to venture into, the foodstuff production business in Nigeria is a great option to explore.

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