How To Start Frozen Foods Business In Nigeria Or Africa: Complete Guide

How To Start A Lucrative Frozen Foods Business In Nigeria Or Africa: The Complete Guide | Image: Iseowo

The frozen foods business is a very profitable venture in many parts of the world, mainly due to growth in population and demand for convenience foods. The business is far from being saturated because not many people are engaged in it. Frozen foods venture has to do with the sale of fish, turkey, prawns, chicken, gizzards and certain vegetables for consumption.

The global market for frozen foods was valued at the tune of USD 291.3 billion in 2019 and is expected to rise at a CAGR of 5.14% during the forecast period to reach USD 282.50 billion by 2023. The rising value of Ready-to-Eat (RTE) foods products stems as a result of hectic lifestyles among working-class individuals on a global level. Moreover, the progressive spending on shelf-stable foods among consumers is predicted to expand the market for frozen foods soon. International trade of these items has gained popularity as a result of rising demand, complemented by improved transportation facilities. China, Russia, the United States, Chile and Norway had the highest export value of frozen foods in 2019.

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Nigeria’s frozen foods market size is projected to grow during the 2020-2026 forecast period. The ready-to-eat (RTE) section is expected to gain a more significant market share in terms of revenue over the coming years, as they are convenient to make and involve less time and efforts. Subsequently, the market for frozen fruits and vegetable is anticipated to increase due to the dynamic lifestyle of people and rising demand for a healthy source of nutrition. The frozen foods market is a potential market in every part of Nigeria but it is more convenient to start up in riverine areas such as the Niger Delta region and in other major towns and cities like Lagos, Abuja, Ibadan, etc.

However, the nation heavily relies on imports to meet its consumption rate rather than local production. Reports have it that Nigeria requires about 1.5 million tonnes of fish annually and is expected to meet FAO’s recommended minimum fish consumption rate of 12.5 kilograms per head yearly to satisfy basic protein needs. Imports just on fish alone are nothing short of 400,000 tonnes to bridge the fish supply-demand gap. There is, therefore, a massive deficit in the Nigerian RTE sector. A close look at policies supporting the production of sustainable crops to boost livestock rearing, by the government can quickly remedy this problem.

Notwithstanding, the frozen foods business is one business that can increase within the shortest possible time. The target market is always available: the sophisticated, stress- immune elites and ceremonies such birthday parties, weddings, naming ceremony, convocation, festivals, which are recurrent events will always keep the frozen foods investor in business. Therefore, if you are looking to start up your own frozen foods business, this article will provide you with the step-by-step guide.

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What Are Frozen Foods?

Frozen foods are food items stored and preserved in cooling temperatures around -18 ℃ with the intent of commercializing them. The most common list of frozen foods in Nigeria includes fish, chicken, turkey, beef, prawns, meat (pork), etc. Frozen foods are known to be more convenient, safer to use and more hygienic, in terms of freedom from bacteria and foods pathogens.

 

What Is A Frozen Foods Business?

A frozen foods business involves selling pre-packaged and preserved foods items in Nigeria. It is a business of freezing, storing and trading frozen foods items. Technically, freezing up food items increases the value and shelf life of most perishable goods.

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Business Opportunities Associated With Frozen Foods Business In Nigeria And Across The World

1). Selling Frozen Foods:

Frozen goods such as chicken, turkey, gizzard and fish remain ready in demand always. It is a business for all kinds of businesspersons, whether large or small-scale. Most local small-scale retailers of frozen foods with small capital hawk their frozen foods about and still make a living off it. Ion the other hand, if you wish to go large-scale, there is very little need for adverts with the right marketing strategies in place.

2). Distribution And Delivery Services:

Large-scale dealers in frozen foods depend heavily on distributors to deliver their goods to eateries, hotels, restaurants as well as customers who cannot make it to the factory either because of distance challenges or because they prefer home delivery. This creates job opportunity for distributors.

3). Sale Of Equipment For Frozen Foods Business:

The frozen foods business depends heavily on certain equipment to keep the foods healthy. They include generators, coolers, fan/aeration cooling systems, water holders, refrigerators, etc. This makes the market for equipment providers constantly relevant.

4). Technical Services:

The frozen foods vendor undoubtedly requires the services of handy repairmen like electricians and generator mechanics, who will help to tackle mechanical faults, repair faulty equipment and maintain them. Sometimes, they may just be needed for general maintenance and servicing of equipment units to ensure overall functionality.

 

Facts And Benefits Of Frozen Foods Business

  • A busy and boisterous location is always best to set up a frozen food business.
  • The start-up cost is not too exorbitant; a fair amount between 300 and 500k is enough to start a large-scale frozen food business.
  • Frozen foods are readily utilized in the preparation of different types of delicacies such as rice and many other local and foreign delicacies.
  • It is employed in the preparation of various types of soup such as egusi, bitter leaf, vegetable soup and stew; therefore, it remains a regular household staple.
  • The frozen foods business provides consumers with ease and convenience in foods preparation.
  • It has a high-profit index margin.
  • It can be combined with other essential foods commodities such as beans, rice, spices etc.
  • Anybody can venture into the frozen foods business as it does not require a special certificate or degree to start.
  • The raw materials for the business are easily obtained.
  • China, Russia, the United States, Chile and Norway are the highest exporters of frozen foods worldwide.

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How To Start A Frozen Foods Business In Nigeria: A Step-By-Step Guide

1). Develop A Good Business Plan:

Every business should start with a business plan. A good frozen food business plan should include a feasibility study and market survey of the market behaviour of the residents of the chosen area. It should also include the business methodology, budget, strategies, etc.

2). Source For Business Capital:

The start-up capital depends largely on the scale of the business. There are several ways to generate funds for business, including loans from the government, microfinance banks, grants, etc. A fair range of ₦300,000 – ₦500,000 is enough to start up this venture. However, one could start a small-scale frozen foods business with much lesser capital.

3). Get A Suitable Location:

It is very vital when you set up your frozen foods company. It can be your property or a leased store but the place should be open and available. It is not necessary that it must be a market place, just a good store along with the market or on the road and you’re going to get many buyers. A hidden or secluded area is likely to not succeed in this business.

4). Register And Validate Your Business:

Register the business with the Corporate Affairs Commission, NAFDAC, Standard Organization of Nigeria (SON), and Federal Ministries of Health to verify the authenticity of the business and health compliance status.

5). Get The Necessary Equipment:

Generators, coolers, fan/aeration cooling systems, water holders, and refrigerators, among others, are some of the equipment needed. It would help if you already have two deep freezers to keep the food items chilled always.

5). Stock Up:

The type of frozen foods to stock depends on your business scope and, more importantly, the preferred choices of the people in the area. Frozen chicken is one of the frozen foods that sell better than others, followed by turkey, fish etc. Croaker fish is preferred to other fishes. This may differ with different markets, but it is best to understand the chosen market before deciding.

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6). Create Your Customers:

A large-scale frozen food business can do with an advertisement, especially on the internet. It is important to create a social media presence for the business in order to get customers from far places.

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Challenges Of Starting A Frozen Foods Business In Nigeria

  • Epileptic power supply issues prevalent in the country
  • High cost of purchasing equipment
  • Low shelf-life of frozen foods
  • High cost of maintenance
  • The competitive nature of the business
  • Waste management disposal issues
  • Marketing problems
  • High cost of maintaining and repairing equipment
  • Poor road network
  • Challenges with distribution channels

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To Sum It Up

The frozen foods 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 network. If you’re looking for a lucrative business to venture into, the frozen foods business in Nigeria is a great option to explore.

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