Starting a New Food

Business
Gajanan Kalyane
How we will go…

 Basic Intention of starting a business

 Entrepreneur characteristics
 How to chose product
 Product Feasibility
 Prepare Business Plan
 Don’t rush try on pilot scale
 Arrange Funds
 Some basic about business finance
 What needs for product launch
Basic Intention of business

Business= Profit
Entrepreneur Characters
 Leadership Quality
 Initiative Attitude
 Innovative Approach
 People Skills
 Risk taking ability
 Passion
 Disciplined
 Food Products with 10-20 lakh Investment
  Project Profiles
1 Project Profile on Indian Snacks Production- Chakali/Khakara
2 Project Profile on Cake Shop
3 Project Profile on Small Scale Spices Unit
4 Project Profile on Cloud Kitchen
5 Project Profile on Organic Store Chain
6 Project Profile on QSR for Burger/Nuggets/Snacks
7 Project Profile on QSR Indian Breakfast- South Indian
8 Project Profile on Ice-cream and Milk Shakes Franchise Business
9 Project Profile on Tea outlets
11 Project Profile on Cold Pressed Oil/Lakadi Ghana Oil
12 Project Profile on Production of Fryums and Chips
13 Project Profile on Fruit Pulping Unit
14 Project Profile on Dairy Farm
15 Project Profile on A2 Milk Distribution
16 Project Profile on e-commerce of grocery
17 Project Profile on Peanut Chikki
18 Project Profile on Indian Sweets- Besan Chikki/ Laddu
19 Project Profile on Small Bakery Unit
20 Project Profile on Indian Restaurant/Dhaba
21 Project Profile on Nutri Bar
https://www.gourisgoodies.com/

https://www.idfreshfood.com/

http://yewaleamruttulya.com/

https://saiba-amruttulya-the-tea-sho
p.business.site/

https://www.malpanifoods.com/

http://www.sahilchakali.com/

https://veeba.in/retail-products/sauce
s/
Why Invest in Indian Food Sector
 Food is daily need (Humans will never stop
eating only form of food will change)
 Food Processing is sunrise sector
 Earlier it was neglected
 World Population is about around 8 Billion
 Indian Population is around 1.4 Billion
 Feeding this much population is role of food

industry
Indian Agriculture
 India has second largest arable land globally
after US

World 15,749,300
Rank Country Land km2 % Of World
1 United States 1,650,062 10.48%
2 India 1,451,810 9.22%
3 China 1,385,905 8.80%
4 Russia 1,174,284 7.46%
5 Brazil 586,036 3.72%
Resources Vs Opportunity
2nd (Resources of raw
material like milk, grains,
Arable Land World Ranking oil seeds, fruits and
vegetables, cattle, poultry,
fish etc.)

2nd (Opportunity to feed

about 1.4 billion mouths of
Population World Ranking diversified eating cultures
hence ample scope of
innovation and market)
Indian Resources Snapshot
 Largest producer of Milk in world
 2nd largest producer of food grain, fruits and

vegetables
 2nd largest fish producer in world
 2nd largest cattle population
 Largest meat exporter globally
What are growth drivers
 Increased Spending on Food Products (Indian’s Spend
around 28% of total spending on groceries)
 Growing nuclear families and working woman (Traditional
home preparations such as Spices, Dried Snacks, Pickles,
Vermicelli etc. is being replaced by packaged foods
 Increased Organized Retail, modern trade formats, e-
commerce, home delivery
 Rise in disposable income
 Investment in supply chain infrastructure, cold chain and
logistics
 Government Policies and Grants
 Level of processing is very less in India
Milk Processed and Unprocessed
Around 55-60% Milk
Handled Without processing

Middleman/Mil
Dairy Farmer k Collection Consumer
Middleman

Around 35-45% Milk is being

processed

Processing
Plant
Dairy Farmer Consumer
(Pasteurization
and Packaging)
How to chose a product
1. Know your customer

B2C
• RTE, Juices, Candies, Cookies, Milk and similar
FMCG products

B2B
• Pulps and concentrates, Frozen Fruits and
Vegetables, Dehydrated fruits and vegetables,
Corn Starch similar intermediate products
How to chose product
2. Study Product Categories

1. Fruits and vegetable products-

Jam/Jellies/Pickles/Sauces/Pulp/Frozen Fruits
2. Bakery Products- (Bread/Buns/Cookies/Rusk/Cakes)
3. Confectionary (Hard Boiled Candies/Fruit Based Candies, Bubble
Gums, Chocolates etc.)
4. Wafers and Fryums (Potato Wafers, Banana Wafers)
5. Spices and Its Blends (Ready spice mixes, gravies, ground spices etc.)
6. Cereal Products (Atta, Flours, Multigrain Flours, Popcorns, Puffs,
Noodles, Roasted and baked snacks etc.)
7. Juices and RTD: Fruit Juices, vegetable Juices, carbonated soft drinks,
vitamin water, energy drinks, sport drinks
8. Milk and Milk Products: Market Milk, Curd, Lassi, Flavoured Milk,
Sweets
9. RTE/RTC: Frozen Ready to eat Products, Retort Ready to Eat Products
How to chose product
4. Study Competitors

 Search whether similar product available in

market
 Their Packaging
 Pricing
 Where they are selling
 Current market demand or growth
 Consumer awareness
Some More Emerging categories
 Functional Foods: Protein Bars, Fortified Atta,
Weight Loss Products, Baby Foods etc.
How to chose product
3. Define Product

1. Write Down What Exact Product or Product

Mix you want to Manufacture
2. List all raw materials required for
production
3. Prepare process flow chart
4. Study what type of packaging required
5. How many variants you want to launch (In
terms of flavour/colour/shape
6. List all machineries required for production
7. List all SKUs
Check Feasibility
 Raw Material Availability
◦ E.g. Pulping Plant near mango growing region
 Marketing Feasibility
◦ Select target market (Regional, National (Domestic),
Overseas (Export)
◦ Need of market
◦ Demand supply gap
◦ Major Competitors
◦ Current Selling prices
Check Feasibility
 Technical Feasibility
◦ What plant and machinery required for production
◦ Whether plant and machinery available in locally or
needs to be imported
◦ Whether product is technically feasible
◦ Whether technology is already commercialized
◦ Decide on production capacity
Check Feasibility
 Financial Viability
◦ Work out of preliminary cost of project
◦ Means of Finance
◦ Work out cost of production
◦ Work out financial projections
Cost of Project
Sr.No. COST OF PROJECT Rs.(lakhs)
     
1 Land development and repairing 10.00
     
2 Building (Civil & Structural Work) 300.00
     
3 Machinery & Equipments 339.83
     
4 Furniture & Fixtures 5.00
     
5 QC Lab 15.00
     
6 Computer, UPS 3.00
     
7 Preliminary & Preoperative Expenses 26.51
     
9 Interest during construction 69.91
     
Means of Finance

Sr.
No. MEANS OF FINANCE Rs.(lacs)
     
1 Promoters Contribution 25% 197.26
     
2 Term Loan From Bank 391.79
     
3   Government Grant-in-aid or subsidy 200.00 

  Total Means of Finance 789.06

Government Grants/Subsidy
 MoFPI (Ministry of Food Processing Industry)
 NABARD (National Bank for Agriculture and

Rural Development)
 SFAC (Small Farmers Agribusiness

Consortium)
 MSME (Ministry of Micro, Small & Medium

Enterprises)
 State/Central Agriculture Ministries
Product Cost
Direct Cost
(Variable
Cost)

Indirect Cost
(Fixed Cost)
Direct Cost
 Cost of Ingredients
 Cost of Packaging Material
 Cost of Manpower
 Cost of Utilities
 Cost of Consumables
 Cost of Quality/Lab
Indirect Cost
 Salary of Staff (Production, Quality, Account, Sales,
Purchase, Store, Admin, HR)
 Transportation Cost (Transport Cost of RM, PM,
FG)
 Sales and Marketing Cost (Advertisement,
promotions, Schemes, Travel cost of sales
employees, Incentives/Commissions etc.)
 Storage Cost
 Admin Cost
 Cost of Capital/Equity
 Interest on Loan
 Instant Flavored Oats (Product Costing)
  Exercise
  Batch Size (Kg) 1     
Sr. Amount Rs./K
No. Raw Material % in Kg g  
Cut Oats( Instant
1 oats ) 20.00 0.200 85 17.00
2Rolled Oats 25.00 0.250 85 21.25
3DRY Fruits 12.00 0.120 550 66.00
4Multigrains 15.00 0.150 100 15.00
5Butter 2.00 0.020 370 7.40
6Sugar 19.00 0.190 34 6.46
7Honey 2.00 0.020 190 3.80
8Fruit Powder 5.00 0.050 200 10.00
 Product Costing-II

      Per Kg/Cost
Number of Packets in 1Kg
  (50gm/packet) 20.00 
1RM Costing Per Packet 7.35 146.910
2Cup Costing 1.60 32.000
3Foil Costing 0.70 14.000
4Label Costing 1.50 30.000
5Secondary Packaging Costing 1.80 36.000
6Tertiary Packaging 2.00 40.000
7Processing and Labour 3.00 60.000
8Product Costing 17.95 358.910
9Margin @20% 21.53 430.692
10Transport 2.50 50.000
11Ex Factory 24.03 480.692
12SS Margin 6% 25.48 509.534
13Distributor Margin 12% 28.53 570.678
How to finalize capacity
 Check Market Demand/How much you can
sale
 Check whether product is seasonal or round

the year
 Check process time
 Cost of Machinery for selected capacity and

Investment in Fixed Capital

Capacity Finalization & Sales Projections

2021- 2022-
      2020-21
22 23
Lits per
Assumptions :
Capacity of Juice Line Hr 2,000 2,000 2,000

  No of Hr/Day   10 10 10

  Capacity per day   20,000 20,000 20,000

  Utilization   50% 60% 70%
  Total Utilization per day   10000 12000 14000
  Months   9 12 12
  Days   20 22 22
1800000. 316800 369600
  Total lits per Year   00 0.00 0.00
  Rs/kg        
A. Sales          
Juice Sales 35.00   630.00 1108.80 1293.60
 Prepare Implementation Schedule
Feb-19 Mar-19 April 2019. May-19 June 2019. Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Finalization of layout & Cost
Estimation
Preparation of detailed
architectural drawing
Filing application to
Authority , approval, fire
safety and co-ordination
Applying for electricity
connection - construction
power & regular power,
water connection
Start of Civil Construction on
Site
Civil Construction upto
Plinth
Installation of Door and
Other Fixtures
Finalizing spec for
machineries
Machinery Order Placing
Installation of Utilities
Installation of Process
Machineries
Trial Runs
Commercial Production
Statutory Approvals and
Permissions
Selection of site
 Plant Location
◦ Raw material based industries should be located near
crop production region (Sugar, Pulping Plants)
◦ Processed products like Biscuits, Noodles etc. should be
located near to Market
◦ Availability of water (Assess requirement of water for
production)
◦ Availability of Electricity
◦ Availability of skilled manpower
◦ Access to state and national highways or transportation
Statutory Permission for Starting
Business
 FSSAI License (Food Safety)
 Register Entity (Proprietor/Partnership/Pvt. Ltd.
 Udyogadhaar (MSME Registration)
 NA for land use (Change of land use)
 MPCB (Consent to Establish and Consent to Operate)
 Shop Act
 Building Plan Approval
 Fire NoC
 Registration under factories act
 Registration under PF and labour act and minimum

wages act
 GST Registration
Don’t miss these things
 Develop product in lab
 Arrange pilot scale trials
 Launch MVP (Minimum Viable Product)
 Get market feedback before investing in

Fixed Capital
 Cost of Packaging material design, its MOQ,

cost of lab, cost of operation till break even

point
 Recommendation

Start business with 0% investment in

Machinery
While Launching Product
 Ensure Product Quality in all aspects
 Ensure Transportation Time and Damage
 Ensure Shelf Life
 Terms of supply
 Taxation on product
 Payment Terms
What we learned
 How to select product
 Types of market
 How to define product
 How to develop product
 How to study feasibility
 How to select site/plant location
 How to work out product cost
 How to estimate project cost
 How to raise finance
 How to start business with 0% capital cost
I will be more happy to see
your product in Market