How To Start Frozen Food Business?

The Indian frozen food business market valued at USD 1205 million in 2021 is expected to reach USD 1839 million by 2027. The frozen food business segment mainly comprises Ready To Eat foods, frozen fruits and vegetables, snacks, and non-vegetarian food products. Due to an increase in the working population, about 39% of young couples have admitted that they do not have time to cook which is recognized as the major market driver for the frozen food business. Additionally, proper refrigeration facilities in retail shops to store frozen food products is also one of the major market drivers of the frozen food business. The sudden outbreak of COVID-19 impacted the restaurant business and people shifted toward frozen foods. Now frozen foods have been accepted by people as they are convenient and easily available. Read on this blog and know how to start frozen food business.

Frozen Food Business Market Segmentation:

1) By Product:

Based on product type, frozen food business is classified as:

1. 1. Frozen Ready To Cook meals
   2. Frozen meat and seafood
   3. Frozen fruits and vegetables
   4. Frozen snacks
   5. Frozen dairy and dessert

2) By Distribution Channels:

Based on distribution channels, small scale frozen food business is segmented into:

1. 1. Supermarket
   2. Convenience stores
   3. Online channels
   4. B2B sales
   5. D2C sales

3) End Users:

By end users, frozen food business is categorized as:

1. 1. Foodservice providers (Hotels, Cafeterias, Restaurants)
   2. Households

Market Analysis Of Frozen Food Business:

1. 1. Frozen non-vegetarian products such as meat and seafood hold more than 80% of the frozen food market.
   2. The frozen vegetable segment holds the second largest market share.
   3. Frozen french fries and nuggets are the key products in the frozen snacks segment. Samosas, parathas, and kebabs are gaining more attention recently.
   4. In the frozen vegetable segment, peas are the most popular frozen processed vegetable having a 70% retail value share. Mixed green vegetables stand second having a 14% retail value share.
   5. North India accounts for 40 percent of the demand for frozen food.

Steps To Start Frozen Food Business:

1) Market Research:

Before knowing how to start frozen food business, it is important to do market research. It helps you identify market gaps, challenges, opportunities, demand, potential threats, competition intensity, future growth, etc. Market research provides deep insights on target audience and assists you in taking the right decisions.

2) Business Plan:

Create frozen food business plan and choose your target audience for best results. For the small scale frozen food business, the urban population is the main target market. The best target audience will be working women, bachelors, college students, quick-service restaurants, grocery stores, etc. After formulating a business plan, it is important to implement it under proper guidance.

3) Location:

To succeed in the frozen food business, it is important to choose a good location. As the target audience is the urban population, It is necessary to have a frozen food factory in the center of the city to reduce transportation costs. As frozen foods have to be carried under suitable temperatures, industries have to pay more attention in choosing nearby location to urban areas.

4) Obtain Licences and Permits:

FSSAI license is mandatory to start any food processing business including frozen food business. Verification of nutrition charts is also crucial as consumers are becoming more health-conscious and paying more attention to nutritional details recently. Industries should apply for a trademark to make consumers identify their brand in this competitive market.

5) Machinery and Raw Materials:

Frozen food business should procure freezers, delivery vans, and food processing equipments mandatorily. As the demand for products will be fluctuating, manufacturers should be careful while ordering raw materials. According to a recent survey, 83% of manufacturers faced trouble due to the unavailability of raw materials because of disruption in the supply chain during the pandemic. Companies should analyse the data forecast and place a reasonable volume of order to reduce losses.

6) First Production Run:

The First production run should be performed to check the quality of the product and ensure the manufacturing process is optimal. Any errors found in the manufacturing process should be treated immediately. It is extremely important to note down the time required to manufacture a single piece of estimate number of pieces manufactured per day. Companies can choose either batch production or mass production.

7) Marketing:

Marketing of products is the most important step and right strategies have to be developed to capture a large market share. The rise of e-commerce platforms and D2C marketing has made it easy for frozen food industries to reach their target audience effectively. Developing the products according to the latest market trends and consumer demands will grab the attention of consumers and will be easier to market the products by small scale frozen food business owners.

Frozen Food Business Has Massive Growth Potential in Future Due To These Reasons:

1. 1. An increase in the number of working women having no time to cook.
   2. The rise in the youth population
   3. Growth in the tendency to experiment with a variety of food options.
   4. An increase in the number of nuclear families.
   5. The growing practice of younger population staying away from home for education or job.
   6. Declining culinary skills
   7. Rising disposable income of Indians.
   8. Need for convenience foods.
   9. Acceptance of frozen foods by gen-z consumers.
   10. Expansion in the e-commerce business has increased the demand for frozen foods.

Best Frozen Food Business Ideas:

1. 1. Frozen pizza base
   2. Frozen parathas
   3. Poultry products such as chicken nuggets, chicken wings, and fillets.
   4. Frozen french fries
   5. Frozen meals
   6. Frozen samosa
   7. Frozen cutlets
   8. Frozen snacks and bakery products
   9. Fish chips
   10. Frozen sweets
   11. Frozen seafood
   12. Frozen kebabs

Cost of Starting Frozen Food Business:

Investment required to start the frozen food manufacturing business depends on;

1. 1. Type of product you have chosen
   2. Production capacity
   3. Location
   4. For export or for the domestic market
   5. Level of industrial automation

 

A small scale frozen food business requires a minimum investment of INR 50 lakh (Excluding land and infrastructure cost)

Export Opportunity For Frozen Foods Business:

India is known for exporting food products as there is a huge demand for Indian food items in other countries. Companies should get registered first and apply for an import export code and No-Objection certificate. Food products should contain the necessary information to make products acceptable in the international market. Frozen fruits and vegetables are the most exported frozen food products from India. United States, Brazil, Singapore, Japan, and middle east countries are the major importers of Indian food products. As India exports its food products to more than 80 countries, it has opened a plethora of opportunities for exporters. Agricultural and Processed Food Products Export Development Authority (APEDA) helps to export agricultural products. Due to huge export opportunity, frozen food business is considered as one of the most profitable manufacturing business ideas in India.

Documents Required To Export Food Products:

1. 1. Import-export license
   2. FSSAI license
   3. Product approval certificate
   4. Permit from the Ministry of Agriculture to export frozen fruits and vegetables
   5. Permit from the Ministry of Animal Husbandry to export frozen meat and poultry products.

Labeling Requirements For The Export Of Frozen Food Business:

Importance of NOC in Exporting Frozen Food Products:

It is mandatory to obtain NOC (No Objection Certificate) to export frozen food products. Without NOC, no person can export frozen food items. The documents required to apply for the No Objection Certificate are:

1. 1. Country of origin certificate
   2. Import-export code
   3. FSSAI license
   4. Bill of entry
   5. End-use declaration
   6. Food samples should have a good shelf life

Frozen Food Packaging:

Frozen food packaging requires special attention as the foods have to be stored under freezing temperatures. Packaging materials have to be chosen wisely to withstand low-temperature conditions. Some of the most popular frozen food packaging materials are metal cans, cardboard, wax coated paper, glass, aluminum, etc. Polyethylene (PE) shrink film is used widely as it can withstand temperatures upto -40 degrees. Packaging of food products not only provides protection but also helps consumers to identify your brand.

Types of Frozen Food Packaging:

1) Primary Packaging:

In primary packaging, food will be in direct contact with the packaging material. The durability of packaging material should be good and must not become brittle at freezing temperatures and crack. Aluminum foil is the most popular primary packaging material for frozen foods.

2) Secondary Packaging:

Secondary packaging will be visible to consumers and hence it should contain the company name, logo, nutrition chart, etc. It should be air-tight to prevent air and moisture. Secondary packaging should be visually attractive to grab the attention of consumers

3) Tertiary Packaging:

Tertiary packaging is the third level of packaging and It plays an important role in bulk transportation of frozen food products. Corrugated boxes are used widely for tertiary packaging. It is mainly used in warehouses for shipping and is mostly not seen by consumers.

Top Players in the Indian Frozen Frozen Food Business:

a) Frozen Indian meals and curries:

1. 1. Sumeru
   2. Delicious
   3. Godrej
   4. Yummiez
   5. Suguna
   6. Venkys

b) Frozen snacks:

1. 1. McCains
   2. HyFun
   3. Safal
   4. ITC
   5. Amul

c) Frozen non-veg snacks:

1. 1. Meatzza
   2. Suguna
   3. Fresh catch
   4. Venky’s
   5. ITC
   6. ROC
   7. Buffet

Are You Interested To Start Frozen Food Business?

If you are looking to start a frozen food business, register in SolutionBuggy and get all the services ranging from product conceptualization to complete industry setup. SolutionBuggy being India’s leading consulting platform in the food industry has completed more than 600 projects successfully. Our team of frozen food consultants having vast experience in the food industry helps you thrive amid various market challenges and seize the opportunity. We have an excellent track record of servicing food industries by playing a vital role in their magnificent growth.