Are you an entrepreneur looking to break into the food business? Have you ever thought of running a frozen food business in Nigeria? If so, you’ve come to the right place!
This article will show you how to start and run a successful frozen food business in Nigeria. We’ll cover everything from choosing the right suppliers to finding and assessing the right market. We’ll also look at some of the key success factors for running a profitable frozen food business and some of the challenges and pitfalls you may encounter along the way.
If you’re ready to start your new venture, let’s jump in!
What Are Frozen Foods?
Frozen foods are any type of food that has been preserved and stored at a temperature below the freezing point of water. Think of it as a way to keep food fresh for longer periods without it going bad or losing its nutritional value.
Among Nigeria’s most popular frozen foods are fish, chicken, turkey, prawns, and meat (including pork). Hence, the frozen food industry is a business that deals in the freezing, storing, and selling of frozen food products.
Start-Up Costs for a Frozen Food Business
When starting a frozen food business, there are several costs to consider. The upfront costs of launching a new business can be divided into two major components.
The first component is the start-up cost of getting your business running. This cost includes things like purchasing equipment, inventory, transportation, and any other costs associated with getting your operations up and running. Depending on what size operation you are running, these costs can range from anywhere from 200,000 – 2,000,000 naira.
The second component is related to the ongoing operating costs associated with keeping your business running on a daily basis. These include things such as labour costs, rent/utilities for your facility, advertising expenses, insurance, and any other recurring fees that occur in order to keep the business functioning in its best state. Again, depending on the size of your operation, these fees will vary greatly but could range from anything between 10,000-150,000 naira per month.
How To Run A Successful Frozen Food Business In Nigeria
Running a frozen food business in Nigeria can be a lucrative and rewarding venture. So, if you’re looking to break into the industry, here’s what you need to know in order to make a success out of it.
Research Your Market
If you’re planning to run a successful frozen food business in Nigeria, it’s absolutely essential that you research the market you’ll be entering, as well as any competitors that you might face.
Knowing what’s already out there is the first step to standing apart from the crowd, so put aside some time to research other frozen food businesses and products available and identify where your business can fit in. You should also consider possible obstacles or challenging areas of the market.
To ensure that your business is a success, ask yourself these questions:
- Have I researched my target audience?
- What needs do my potential customers have that my product can meet?
- What will differentiate my products from those of my competitors?
- Are there any seasonality or pricing trends in the frozen food industry?
- Are there certain foods that are more successful than others?
By answering these questions, you’ll have a better understanding of how to approach setting up your frozen food business and anticipate any potential issues further down the line.
Choose the right location
A good location for your store is essential for success. Find out about the population density in each area you are considering, as well as the average income of potential customers. You want to ensure that there is enough demand for frozen foods in the area and that people have enough money to buy your products.
Choosing the right location for your frozen food business is one of the key factors you need to consider to run a successful business. Here’s what you want to look for:
Easy and fast access to the cold room and equipment
You need convenient access for delivery personnel and maintenance workers who need to repair and refill the coolers or freezers, so your selection should be close to your business’s operational areas.
Highly populated environment or close to the market
As much as possible, locate your business in an area where there are many people in the vicinity. This way, you’re more likely to get customers who will purchase your frozen goods regularly. Being close to a busy market is a bonus too.
Regular power supply
Power supply issues are common in Nigeria, so it would be wise to choose a location that has a regular power supply available. This will help ensure that you can keep your products stored at all times.
Ease of waste disposal
The production process may require regular waste disposal, so make sure it is easy and convenient when you choose a place that can accommodate dumping easily.
Adequate means of Transportation
Having good roads and highways nearby can help speed up your delivery process and be cost-effective too. Choose a location that has good roads with easy access for larger vehicles like trucks when it comes time for stocking up or delivering goods regularly.
Obtain Necessary Licences & Permits
Before you can begin selling frozen food, you need to make sure you have all the right licences and permits needed. Generally speaking, the type of licence and permit you need will be determined by your business structure and the specific area where you plan to operate.
The steps involved may include the following:
- Register your business with the Corporate Affairs Commission (CAC). This process should take three weeks, though it could take longer.
- Get a Tax Identification Number (TIN) from the Federal Inland Revenue Service. This helps identify your business for purposes of taxation and other financial matters.
- Business premises must also be registered in order to obtain your operational licence from any relevant government agency or body in charge of overseeing frozen food businesses in Nigeria, such as the Standard Organization of Nigeria (SON) or food safety agency in Nigeria like NAFDAC or SONCAP if applicable to your type of product/service before you can begin operations.
Get the Necessary Equipment and Storage Options
In order to run a successful frozen food business in Nigeria, you’ll need the right equipment and storage options. Here are some of the necessary things you should have:
Freezers
A good quality freezer is essential for selling frozen food. Not only will it keep your products fresh and safe, but it’ll also help increase sales as customers will be more likely to purchase food that has been stored properly. Look for freezers that utilize the latest technology, such as adjustable temperature settings, low energy consumption, and digital controllers.
Cold room (If your business is Large scale)
One of the most important requirements is a cold room. A cold room is a chamber designed to maintain a constant low temperature and is essential for ensuring proper storage of all frozen food products. Your cold room should be large enough to accommodate the amount of food you intend to stock, plus an allowance for future expansion.
Protective Clothing
If you plan on selling frozen foods in Nigeria, it’s important to wear protective clothing while handling them to prevent contamination. This includes aprons, gloves, and hats. These items help protect both you and your customers from hazardous bacteria like Salmonella and E. coli that can be found in raw frozen foods.
Storage Containers
When storing your products, always use clean and safe containers that have been approved for food storage. Choose containers made of durable plastics or stainless steel, as these are less likely to break down over time, preventing any contamination from occurring. Additionally, label all containers clearly to avoid confusion when restocking or restocking shelves.
Running Water System
To ensure optimal hygiene when handling the food, you’ll need access to running water and appropriate drainage facilities. You can also install water storage tanks for backup and emergency water supply in case of power outages or shortages in the public water supply system.
Waste Bin
A waste bin within easy reach is necessary for disposing of packaging materials and waste produced during daily activities within the shop or store premises. This bin should be large enough to accommodate all of the waste generated and positioned where it won’t cause a nuisance or health hazard.
Quality Wooden or Stainless Steel Tables, Buckets, and Chairs
You’ll need quality wooden or stainless steel tables, buckets, chairs, etc., for use when preparing and cutting frozen food, making sure that everything is kept spotless at all times!
Standard Weighing Scale
You’ll need to get a standard weighing scale used in both online and offline retail that you can use to measure the accurate weight of the products you’re selling. This will be important for your clients and customers.
Manual/Electric Cutting Machine
You’ll also need either a manual cutting machine or an electric cutting machine, depending on the type of frozen food product you’re selling. The manual machines work with wood and can easily cut through frozen food items like fish, chicken, and turkey. Electric machines, on the other hand, offer better speed and precision when cutting meat or bones.
Panel Truck or Wheelbarrow
It’s also important to have a panel truck or wheelbarrow to carry heavy loads of frozen food items for delivery purposes if required. This ensures that frozen foods are delivered in good condition to customers and clients.
Hand Gloves, Apron, Plastic or Rubber Shoes, and (Personal Protective Equipment)
It is important to have hand gloves, an apron made of waterproof material as well as plastic or rubber shoes when handling frozen food items, as this will help reduce contact with cold temperatures, which may affect your hands and feet negatively if not properly.
By investing in these key pieces of equipment and storage options for your frozen food business in Nigeria, you’ll be well on your way to running a successful operation!
Find and Choose A Supplier
Once you’ve decided on the type of frozen food products that you want to sell, the next step is to find a supplier. This can be a tricky step as you don’t want to end up with low-quality product offerings or, worse yet, end up dealing with a company that isn’t reliable or has been accused of unethical practices.
There are several things that you should look out for when finding a supplier to ensure you get the best quality product :
Quality:
The most important thing is to make sure that your supplier offers high-quality products. If possible, it is best to visit the supplier in person (as opposed to relying on digital images or video calls). This will give you an opportunity to assess the cleanliness of the facility and ensure that they have established proper storage and preparation procedures.
Prices:
It will also be important for you to shop around and compare prices across different suppliers. You don’t want to settle for a supplier just because they offer rock-bottom prices, as this usually means low-quality goods. Ensure you look at all factors, such as prices, quality, availability, and delivery times, before committing to a particular supplier.
Reviews:
Lastly, it’s always a good idea to read reviews from other customers who have used the same supplier in the past. This will give you an idea of how efficient and reliable they are. Luckily, we live in an age where there are plenty of online review platforms, so it won’t take much effort for you.
Advertise & Market Your Business
When it comes to running a successful frozen foods business in Nigeria, you need to make sure your products are reaching the right customer. To do this, you’ll need a solid strategy for promoting your business. Below are some strategies that can help:
Use Social Media
Make use of popular social media platforms such as Facebook, Instagram, and Twitter to advertise your products and create an online presence for your business. You can post pictures of your products, attract customers with giveaways and discounts and keep them updated on new arrivals or promotions.
Take Advantage of Word-of-Mouth Advertising
The power of word-of-mouth advertising should not be underestimated. Ask existing customers to spread the word about your business and incentivize them by offering discounts or giveaways for referrals. This is a great way to reach potential customers that might not have otherwise heard of your business.
Start an Email List
Build an email list with direct contact details of current and potential customers so you can keep them up-to-date with promotions and news on new arrivals or services you offer. You can collect emails through sign-up forms on social media platforms or via QR codes printed on promotional materials like flyers or brochures.
Focus On Quality
Your customers will come back if they’re satisfied with the quality of your frozen food products. Focus on delivering high quality at all times and make sure customer feedback is always taken into consideration, so you know the areas where you need to improve the product quality.
Benefits of Running a Frozen Food Business
When it comes to running a frozen food business in Nigeria, there are plenty of benefits to consider. Here are 6 of the benefits you can achieve with this business:
- High-Profit Margins: By selling frozen food products at retail prices, you can earn a higher profit margin than selling other items. Frozen foods generally require little preparation and offer longer shelf lives than many other products.
- Reduced Food Waste: When working with frozen foods, you have the benefit of reducing food waste, as it has a longer shelf life compared to fresh produce and other grocery items. This means that more of your inventory will stay intact simply because it won’t go bad as quickly.
- Time Savings: A major advantage of having a frozen food business is that it requires less preparation time than cooking with fresh food products. You can easily thaw out the product, heat it up in the microwave or oven, and serve it!
- Year-round Availability: A great benefit of selling frozen goods is that you can sell products year-round as opposed to seasonal trends with fresh produce or canned goods. Customers will be able to come in and purchase items regardless of the season, which ensures your store stays profitable.
- Lower Inventory Costs: You don’t need large amounts of fridge space since all products are pre-frozen and ready for sale once they reach your store or warehouse facility! This allows smaller businesses access to becoming profitable without needing large amounts of equipment or inventory space, to begin with!
- Increased Selection: Selling frozen foods gives you access to more selection options.
Challenges of Running a Frozen Food Business in Nigeria
Running a frozen food business in Nigeria can be a rewarding and profitable venture. However, there are several challenges that come along with it. Here’s a look at some of the challenges you should be aware of before running a business in frozen foods:
Food Spoilage
One of the main challenges of running a frozen food business in Nigeria is food spoilage. Frozen foods need to be kept chilled at all times and stored properly to ensure the quality and freshness of the food. If any part of the supply chain is compromised or there are interruptions, then the food could spoil, leading to significant losses for your business.
Cold Room Breakdown
The cold rooms used to store frozen foods can break down due to various reasons, such as malfunctioning equipment, power surges or overloads, improper maintenance, or inadequate insulation. This puts your inventory of frozen goods at risk and could lead to significant losses if not dealt with quickly.
Unstable Power Supply
Unstable power from PHCN is another challenge to consider when running a frozen foods business in Nigeria. Without a consistent power supply, operations may come to a halt as the cold rooms could become too warm and thus cause all kinds of problems, such as food spoilage, reduced shelf life, etc.
Hygiene
The handling and storage of goods must also adhere to strict hygiene standards in order to prevent contamination which can lead to serious health issues if not managed properly. It is important that you adhere strictly to hygiene standards throughout your operation, as any breach could cost your business dearly in terms of fines and/or a bad reputation.
Improper staffing
If you aren’t careful about selecting qualified staff to work in your store, they could make mistakes and cause more harm than good. Ensure that all employees have been trained, so they can understand how to handle the food appropriately.
Poor transportation
Transporting frozen goods across state lines or even within states can be problematic if the vehicles used are not well-equipped with insulated containers or other appropriate technologies for keeping cargo cold during transport. Make sure that any delivery vehicles used are up-to-date and adhere to all necessary regulations when transporting goods between locations.
Conclusion
Setting up a successful frozen foods business in Nigeria is no easy feat. To be successful, you will need to have the right business plan, source quality ingredients, develop the right price and promotion strategies, and stay up-to-date with the latest trends in the industry. Additionally, it’s important to focus on maintaining high standards of hygiene and food safety, as well as providing excellent customer service.
Ultimately, by following these tips, you can run a successful frozen food business in Nigeria that is both profitable and rewarding. With the right preparation and dedication, you can build a business that will become a thriving success.