Food Processing Industry: A Big Opportunity for Smaller Entrepreneurs in India

food industry
How to Establish Food Industry in India & What are all Subsidies Available by the Government.

In terms of production, consumption, export and growth prospects, the Indian food processing industry is one of the largest in the world. With the emergence of new markets and innovations, the sector has widened its reach. Mass scale production of ready-to-eat food, drinks, processed and frozen fruits and vegetables, marine and meat products, etc., has been able to meet the growing worldwide demand for food. Establishing post-harvest infrastructure in the form of cold storage facilities, food parks, packaging centres, value-added centres and irradiation facilities has helped preserve food for rising worldwide food demand.

While billions of people in the country continue to celebrate festival after festival, the food industry is on a high. Fueled by what can be considered a perfect ingredient for any industry — high disposable incomes — the food sector has witnessed a marked change in patterns of consumption, especially in food terms. The current size of the Indian food industry is around $40 billion and is expected to grow by 27% – 30% and will need double-fold growth over the next 3 years, taking into account today’s rising demand trend.

In addition to this, there are other motivating factors for setting up food industry in India such as vast source of raw material, switch from conventional food grain farming to horticulture, India’s vast population out of which much of the urban middle class is shifting their food habits significantly, low cost of production, shifts in consumption patterns, implementation of food parks and attractive fiscal incentives by the government.

The generic steps of establishing industry in this sector can be summarized as below:

Market Research: Knowing the market potential for a particular product or for whatever product is available in the market. Market research is a useful tool for reducing risks and achieving success. In order to understand the environment around the food processing industry in the present scenario, financial and competitive research must be performed by food consultant having an expert level understanding of the business idea. Extensive secondary market research needs to be done in order to measure the business, pricing, and trends.

Business Conceptualization: Based on market research results, the company has to select an idea based on multiple factors including core competence & interest levels. The decision has to be on a rational basis.

Establishing Business Entity: Business structuring is a very important decision at the beginning of the business. There are different types of businesses entities that can be set up in India, such as Private Limited Company, Public Limited Company, Partnership and Limited Liability Partnership (LLP).

Therefore, agreeing on the right business structure is important.

Location Analysis: Ideally, one has to locate the project or factory close to the raw materials site, but there are other considerations to keep in mind as well. The government usually provides corporate subsidies and tax exemptions to different states/locations. And, this is achieved by location analysis which takes into account all the variables, including tax and government incentives, the availability of manpower, electricity, water, land price, etc.

Business Plan Formulation: 
The business plan must be formulated as it is a very useful road map to determine where you are and where you want to be. A properly crafted business plan developed by a food industry consultant would serve the blueprint of narrative and financial worksheets for your upcoming manufacturing business ideas.

Fund Raising: 
There is a need for funds depending on the type and scale of the company, so you need to find the most suitable way to raise it. There are also a number of special schemes for central and state government supporting organizations for the same

Company Registration: 
After the right business entity has been determined, the company must be registered with the appropriate authority by filing the necessary incorporation forms. Also, the tax registrations that are required are PAN, GSTIN, Excise & Customs Registration and Service Tax.

Registration with appropriate food authorities: 
Food and Food Safety Licenses from FSSAI and you can obtain the same fulfilling all criteria and some assistance from the leading food safety consultants in the market trade License to make sure that you are not committing illegal business practices with your unit. Registrations under Shops & Establishment Act and under Factories Act Industrial License under Industrial (Development & Regulation) Act, 1951 Licenses under the Essential Commodities Act, 1955 to make sure that the good quality products are manufactured and sold.
Registrations under the Food Safety and Standards Act, 2006 and under Standard and Weight Measure Act. Other registrations with Central and State government keeping in mind the exact business model under food processing industry like MSME, MakeInIndia etc.. for getting benefits a subsidiaries

Intellectual Property Rights Registration: To protect the brand name, trademark, copyright, and design or watermark registration IPR registrations are necessary.

Infrastructure Planning and Setup: You need proper infrastructure support such as; land, construction, water, electricity, transportation, etc. Mecha-structural Settings the machinery & automation support for the manufacture of food products must be assessed, selected and installed.

The specifications can vary from a normal food processing unit to set up a beverage company. Specifications in terms of raw materials, licenses and certifications can be slightly different so you can seek help from the marketplace’s best beverage consultants to assist them with the method.

Human Resource Planning: Manpower is required in various areas such as manufacturing (workers), supervision (technicians), and administration, finance, advertising, and misc. So you would need a Human Resource team to procure the same.

Business Strategy execution: 
Now it’s time to implement whatever you’ve put forward. Like the plan for Administration, HR, Advertising & Sales. That is how you get started with your food production system, but make sure that you assess that decision that affects you and move with your guide or mentor.

Government Schemes & benefits: Coming to the government’s assistance and subsidiaries, one can conveniently go online and read more about and benefit from the government’s various schemes and programs.  Schemes such as Pradhan Mantri Kisan SAMPADA Yojna (PMKSY), the establishment of mega-food parks, large-scale cold chain systems, the development and expansion of food processing and preservation capacities, agro-processing clusters, etc…

The government has also created regulatory bodies like National Horticulture Board (NHB), National Horticulture Mission(NHM), Agriculture and Processed Food Products Export Development Authority (APEDA) and Ministry of Micro, Small and Medium Enterprise etc for helping the unit owners with every possible assistance. To know more you can visit https://mofpi.nic.in/Schemes/related-schemes-other-agencies and educate yourself on the various government-run schemes and benefits.

The growth of Food processing industry is inevitable. The mantra to capture growth is the right strategy & flawless execution. We at SolutionBuggy intend to empower MSMEs with knowledge & skill sets to be more efficient and productive in a global environment.

 

SolutionBuggy

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About the Author: Arjun N

Founder of SolutionBuggy who has about 11+ years of experience in manufacturing industries. An entrepreneur with astute sales and marketing skills.
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