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Pankaj Tyagi
| Updated: 16 Jun, 2021 | Category: FSSAI License

A Viable Approach to Set-up Food Manufacturing Business in India

A Viable Approach to Set-up Food Manufacturing Business in India

On a global scale, India has secured the sixth position in the food and grocery market and fifth position in the retail market. The food manufacturing business is thriving like never before and it is a good time a make an early investment. Food is one of those commodities that never encounter negative demand. As long as you stick around with mandatory regulations and satisfy the appetites of the large populace,

How to select an ideal business alternative from the Food Manufacturing sector?

The sheer size of the food manufacturing sector often confused most start-ups when it comes to selecting an ideal business[1] option. The tranches of this sector is practically endless owing to the sheer variety of food items that can be manufactured or processed. Fortunately, the list below can help you narrow down your options as it entails the most prominent heads.

  • Cereals, pulses, and beans processing. 
  • Ready to eat foods
  • Dry fruits and nuts
  • Baked goods
  • Snacks and namkeens
  • Frozen foods
  • Tinned goods
  • Ready to cook packages

Once you select the most desirable option from the list, the next step is to follow the given approach for founding your dream company.

Read our article:FSSAI License For the Restaurant: Know the Process

Key Parameters to be considered for establishing food manufacturing business

The section below will reflects the viable steps for setting up food manufacturing business.

viable steps for setting up food manufacturing business

Choose an Ideal Business Form

The next step is establishing a firm as per the guidelines of the law. You can select among an array of options such as partnership firm, private ltd. The company, LLP, etc. Remember, the said business forms come with different setup requirements and legal connotations. Being well-informed in this aspect can help you a lot during company formation.

Dig down to identify the potential market

Knowing your target customers and the market is the only way to trigger growth for a new company. This concept applies to all industries that generate incomes via products and services. Conducting extensive marketing research is a no-brainer for new start-ups in today’s competitive environment. Thus, marketing research is an important pre-establishment activity that you must carry out, preferably under the subject matter experts for a better outcome.

Here are some questions you should be asking yourself before initiating the market research.

  • Who is your potential market?
  • Who are your rivals?
  • What are the entry obstacles?
  • What is a demand proposition for your product?
  • What are the hottest trends in the industry?
  • What is the pricing for identical products?
  • What expenditures are required to produce particular food items?
  • What are viable sources of raw materials?
  • Is the existing distribution channel is enough to cater to your requirement?

Obtain mandatory registration including FSSAI License

It’s is impractical for any business in India to become functional without mandatory licenses. The same is true for food business operators as well. As per the Food Safety and Standards Act, 2006 (FSS Act), every food business establishment is mandated to get FSSAI registration. Every member in the supply chain of food is bound to obtain this license, regardless of their quantum of contribution.

At present, FSSAI, an apex government institution, bestows food licenses under three major heads, i.e. Basic registration, FSSAI State license, and Central FSSAI license. It’s worth noting that the annual turnover and scope of operation act as basic criteria for issuing the food license.  The registration fees have been maxed out at Rs 7500/ and the fees for the basic license is as low as Rs 100. The validity of a food license varies from one to five years.

Get the Trademark Registration

Although Trademark registration is not mandatory by any means, businesses should consider it to safeguard their intangible assets. The risk of infringing the IP assets will increase in tandem with the growth of your business.

The famous and non-protected brands are more prone to infringement than the ones under trademark protection. Apart from securing the IP assets, the trademark also ensures that your business’s reputation grows over time.

Getting a trademark registration isn’t going to be easy for newbies considering the array of conditions cited under the Trademark Act. Therefore, hiring a professional is the best way to overcome such obstacles.

Avail Water Testing & an Organic Testing Certificate

Water is a base for almost all food items being prepared or processed via different techniques. The food business operators who utilize water to produce their edible items should obtain a water testing certificate from a certified agency. Ascertaining the chemical composition of water helps the FBOs to keep unsafe water out of the production line.

There are water testing facilities and food inspection labs that let you comply with the underlying permissible limit. Having these certificates at your disposal not only shows your commitment to public health but also helps in building credibility over time.

Verify Your Nutrition Chart

Nowadays people are more concerned about the quality of the food available on the shelves. Tagging your product a legit nutritional chart will help your end-users ascertain the quality of items. The idea is to provide clarity and instill trust among the end-users about the product’s quality. Please note that affixing food items with a standard nutritional chart is mandatory under Food Safety and Standards (Packaging and Labeling) Regulations, 2011.

Location of the Organization

The location of the manufacturing unit plays a vital role in keeping the tap on increasing logistic costs. The increased cost of transportation and raw material will ultimately affect the final price of your product. This is something you should keep under control to maintain a competitive advantage. Thus, you need to look out for a location that is not too far away from the required resources.

Conclusion

Once you satisfied the aforesaid requisites, you can commence the manufacturing operation. All these requisites may seem daunting in the first place, but if you approach cautiously, then nothing can stop you from accomplishing your dream.

Read our article:Validity of FSSAI License: Everything you Need to Know

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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