The namkeen food business is growing considerably. The huge demand for snacks shows a lot of scope in this line of business. Products like bhujia, chana-chur, and dal month are well known in India and overseas as well. Disposable income mixed with a fast-paced lifestyle have led to an extensive growth in this sector.
However, this business is quite challenging as you could experience ups and downs due to the changing consumer tastes and a number of branded and unbranded products in the market today. There are around 1,000 different kinds of snack items that are sold in India with the bigger names trying to make a beeline for a good share in the market. But, proper evaluation of market trends could get you the profits you’re looking for.
Reasons to Choose this Business
Today, there are a number of opportunities that are available to an entrepreneur. You also have a number of reasons to choose a namkeen business. Here are few to make a business like this your own.
- The food business is booming and growing at a faster rate.
- Profit margins are high.
- Demand increases during the festival season.
- There are many national and international giants that are searching for people to become part of this business.
- More and more food business opportunities are open to the ones who wish to be in this kind of business and anyone cashing on such a prospect always has a higher chance on being on the winning side.
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Should You Buy or Start Your Own?
Generally, it is the purchased snacks food retail that does better than the new startups. However, if you’re an entrepreneur who is committed to a highly unique value plan then you can go for the startup approach, but a thorough survey of the same must be done before you start off in order to know the ins and outs of the business.
Here is a list of some of the things you would need to know before you start your factory.
Namkeen Commercial Production
Namkeen products can be produced on a large scale as well as a small scale depending on your business format. There are a number of branded and fabricated equipments that are used in the production of namkeen snacks. However, in order to carry out uniformity in products, the commercial batch type machinery is essential.
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A List of Namkeen Equipment You Would Require
The namkeen you produce dictates the type of equipment you need. Some of the general ones that you would need are frying equipment, mixers, grinders, dough, and packaging equipment. If you’re planning a business on a larger scale then spray applicators for seasoning and batter applicators would be required. These applicators are used for accuracy and proper measurements, including consistency in the taste of the product.
Here is a list of the equipment needed:
- Dough Kneader
- Mixer
- Food Processing Equipment
- Batch fryer
- Namkeen Extruder
- Seasoning and Coating Applicators
- Spray Machines
- Product Handling
- Packaging
- Weighing
- Inspection Equipment
Location
An ideal location to start your factory would be close to the source of the raw material. The factory should have a large space for storage of items, equipment, and also proper and easy access to the road.
You could also setup the factory in close proximity to a market place, so that your products could reach the consumers faster and easily without too much hassle.
Setup Cost
The business startup cost for a namkeen business like Haldiram would require a minimum of Rs. 10 lakhs. This would include the cost of land, building, machinery, and other miscellaneous assets and expenses. Though you can apply for funds, a minimum of at least 17.5% is to be paid by you. Setting up a factory with a small space in an industrial area would cost you about Rs. 60,000 to Rs. 70,000 in terms of rent.
These are just estimates which could differ according to your business plan, machinery, and other costs.
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Funding
In order to setup your factory, you can arrange for funds through financial institutions or cooperative societies.
Registration
You would have to register your business as a limited liability company or a sole proprietorship company. Your company needs to conform to health and safety rules. A food handler’s card would be needed, which confirms that you have an understanding about food safety, health, and sanitation practices.
Your product should get a food and drug number and pass the standard organization certification as well. Another good option would be to have a licensed kitchen, since this would imply that you meet a commercial grade kitchen standard.
Packaging
Make your product stand out through its packaging, branding, and giving it an attractive name. Your product should be appealing in order to draw the attention of the consumers. Catchy taglines could also be another way to make your packaging attractive.
Marketing the Snack
Sell your namkeen products to grocery stores, departmental stores, and restaurants. Hire sales representatives to apply direct marketing techniques. Advertise your brand in newspapers, local publications, posters, billboards and print handbills.
Building a website is another tool you could use to trade and inform. A good search engine optimized website is a good way to go about. It should have high definition images and proper descriptions of your products. This could also be used to take orders. In that case, ensure that you add different payment options like Paypal and credit card to make it easy for your customers.
Emphasizing on the health benefits or how healthy your product is, considering the fact that people are becoming more and more health conscious by the day could be another way to get people to buy your products. For you to succeed in this business, produce high quality snacks with a very reasonable pricing since this would draw customers towards your product.
Hiring
Based on the size of your setup, you can decide on the number of people you would need to run your business. It is possible to manage with a few committed workers and employees, but if your business is growing considerably then you would need to hire additional workers. However, it’s important to make sure your staff are crossed trained in order to handle any temporary shortfalls. Your staff would include managers and workers to handle the equipment, accountants, etc.
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Simplicity
It’s better to specialize in a particular food category rather than going in for a long list of products. For example, if you specialize in something like bhujia, then let someone else handle other preparations. This will allow you to concentrate on one product, letting you work towards its success rather than having multiple products wherein your attention is distributed amongst too many things.
Market Potential Evaluation
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Evaluate the market. Try and see how many customers you’re able to get within a span of 30 minutes or an hour. Information like this is helpful and will also give you a better idea and understanding of your initiative.
Evaluating Competition
Evaluate the competition in your locality. You could use the internet to check out similar businesses in the area. Find out how other businesses have set themselves up. Learn, study, and gain adequate knowledge in order to get an idea of how things work so that you do not repeat mistakes that other businesses have already made.
Challenges Concerning the Namkeen Business
One of the major challenges in the namkeen business is the ever changing shift in consumer tastes and also health concerns. It is important to monitor the industry trends via trade organizations and the Snacks Food Association to know about the changing market conditions.
Market Estimates
The overall snack market, including sweetmeats is estimated at about Rs. 25,000 crore. While the branded salty snacks market is at 40% of the total market. The entire snack market is increasing at the rate of 7% with the branded ones increasing at 25% per year.
Conclusion
Taste, quality, and variation are the three important things to keep in mind when starting a namkeen business. You need to provide all the three to your customers in order to keep them happy and faithful. Since you’re entering a market that is already dominated by a number of unbranded and branded products, you should strive hard to stand out from the lot. Remember, customers are very loyal to the kind of namkeen they consume, so think about ways that would bring these customers to your business including ways to hold on to them for a longer time.
Being an entrepreneur, you must remember that your namkeen business requires good leadership skills and prompt decision making if you want to survive in the market. The amount of traffic you get would ultimately decide the profitability and revenues of your business. Hence, a proper business plan with a lot of evaluation is needed to reach success. Professional help is sometimes needed to ensure that your business is running well and on the right track. However, you have to be actively involved in every step to run a successful business.