Understanding the Succession Planning Process
The process by which you train and prepare employees to fill crucial roles within an organization is known as succession planning. This process ensures that the business continues its day-to-day operations as usual. This article will highlight the steps in the succession planning process.
No matter the type or size of your organization, succession planning is essential to continue to have your business run smoothly upon your departure. It’s important to identify your successor well in advance so that they may be properly trained for the role. This training may occur years in advance of the anticipated exit from the company. You may identify someone who needs to start at a lower position within the company and work their way up through the ranks to achieve a thorough training and knowledge base or you may have to cross-train them for several different roles.
Identify the Positions Needing Successors
Although succession planning usually refers to high-leadership roles in a company, it can apply to other roles as well. One of the first steps in this process is to recognize which roles within your company will need a successor if the current employee leaves. You’ll want to analyze which positions impact the revenue or growth of the company. This profit could be compromised if a successor is not put into place.
Informing Key Players
You’ll want to have a discussion with all the key players, those currently in a role identified as needing a successor and those who you would like to groom to take the role over. You should make sure that everyone is agreeable and on the same page. The current employee should be willing to train their successor so that a seamless transition can take place once the time comes. The person identified as the successor should be motivated to learn the role they will step into one day and a timeline should be established. Typically these identified successors feel an increase of pride and a greater investment in the company, according to The Balance website.
Internal vs. External Successors
Identifying an internal successor has multiple benefits. They know the company’s culture, have a sense of loyalty from currently working there and have been through the basic training program. In addition, they know colleagues internally and may also know some of the external clients as well. In cases where a suitable internal employee can’t be identified, an external one may have to be. This will entail more effort and time to be invested in finding and training a suitable candidate.
Succession Planning Benefit
Succession planning is a key necessity in running an efficient business. You want to have a plan for the future of the company, and identifying and training successors to step into key roles will ensure that your organization doesn’t miss a beat.
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Food Manufacturing Business Plans
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Food Processing Business Plan [Sample Template]
By: Author Tony Martins Ajaero
Home » Business Plans » Food Sector » Food Processing
Are you about starting a food processing company? If YES, here is a complete sample food processing business plan template & feasibility report you can use for FREE .
Okay, so we have considered all the requirements for starting a food processing business. We also took it further by analyzing and drafting a sample food processing marketing plan template backed up by actionable guerrilla marketing ideas for food processing businesses. So let’s proceed to the business planning section.
Why Start a Food Processing Business?
Loads of people around the world eat processed food in one form or the other hence the need to have food processing plants to be able to meet the needs of the market. As an aspiring entrepreneur, if you have the required startup capital, experience and skills, then you should consider starting your own food processing company.
It is important to point out that the food processing business can’t go out of fashion because people eat or drink processed food, vegetables and fruits in different forms on a daily basis. Depending on the scale you want to start, the startup capital for this type of business can range from moderate to high.
As a matter of fact, it is advisable to run a farm/plantation alongside your food processing plant if indeed you want to maximize profits in this business.
If you are sure that this type of business is what you want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your products amongst others.
The truth is that, it is one thing to have a fantastic idea cum business plan, but it is another thing for the business plan to translate to money (profits), that is why it is important to assemble a team of experts to work with if you want to be successful with your fruit processing plant business.
Below is a sample food processing plant business plan template that will help you successfully write yours with little or no stress.
A Sample Food Processing Plant Business Plan Template
1. industry overview.
The global food, fruit and vegetable processing industry is made up of companies that are engaged in the processing and packaging of food, fresh fruit and vegetables into canned, bottled, preserved, frozen, dried (except sun-dried) or otherwise processed or preserved food products for human consumption.
Players in this industry also blend salt, sugar, preservatives and other ingredients with food, fruits and vegetables to make consumer food products.
A recent report published by IBISWorld shows that the Global Food, Fruit and Vegetables Processing industry has experienced consistent demand over the five years to 2017, as economies of every size continue to consume processed food.
Demand has grown particularly fast in developing economies, as industrial growth has translated into greater urbanization, higher per capita income and expansion in the size of the middle class. As the global middle class has grown, it has demanded larger quantities of higher quality and more diverse food.
Over the five years to 2022, industry revenue is expected to expand. Industry demand is expected to increase as producers focus on nutritious ingredients and less invasive processing techniques to keep products as organic as possible.
The report further revealed that the production of processed food, fruits and vegetables occurs in all regions of the globe. In particular, low-tech food, food, fruit and vegetable processors, such as fruit driers, exist in almost every country in the world.
However, high-tech, large-scale fruit and vegetable processing operations are concentrated primarily in Europe and Asia.
These continents dominate the Global Food, Fruit and Vegetables Processing industry due to the fact that industry operations have been established in these areas for a very long time, enabling time for the development of major companies and advanced food processing technology.
Statistics has it that in the world, there are about 32,123 licensed and registered food, fruit and vegetable processing companies directly responsible for employing about 507,446 employees. The industry rakes in a whooping sum of $290 billion annually with an annual growth rate projected at -0.1 percent.
It is important to state that Kraft Heinz is the establishment with a lion share of the available market in this industry. If you are looking towards leveraging on the food processing industry to generate huge income, then one of your best bets is to start a food processing plant.
One thing is certain about starting your food processing business, if you are able to conduct your market research and feasibility studies, you are more likely not going to struggle to sell your products because there are consumers out there who are ready to buy from you.
2. Executive Summary
Daniel Alder® Food Processing Company is a licensed food processing company that will be based in the outskirt of Santa Fe, New Mexico – united states. We have done our detailed market research and feasibility studies and we were able to secure hundred hectares of land to start open our food processing plant.
We will be involved in cultivating different types of crops, processing and marketing processed food to the United States’ market and other countries of the world.
We are starting our food processing business because we want to leverage on the vast opportunities available in the food processing industry, to contribute our quota in growing the U.S. economy, to export processed food to other countries and over and above to make profit.
Daniel Alder® Food Processing Company is well positioned to become one of the leading food processing plants in the United States of America, which is why we have been able to source for the best hands and machines to run the company with.
We have put process and strategies in place that will help us employ best practices when it comes to food processing as required by the regulating bodies in the United States of America.
At Daniel Alder® Food Processing Company, our customer’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Daniel Alder® Food Processing Company is a private registered food processing company that is owned by Mr. Daniel Alder and his immediate family members. The company will be fully and single-handedly financed by Mr. Daniel Alder and his immediate family members at least for a period of time.
Before starting Daniel Alder® Food Processing Company, Mr. Daniel Alder worked with some of the leading food, fruit and food processing companies in the United States of America. He has over 20 years’ experience in the industry and a Degree in Food Science Technology from the Illinois Institute of Technology.
3. Our Products and Services
Daniel Alder® Food Processing Company is a standard food processing company that is committed to producing well processed and packaged food, fruits and vegetable products for both the United States’ and the global market. We are in the industry to make profits and we are going to do all we can to achieve our business goals. Here are some of our products;
- Canned food, fruits and vegetables
- Cheese and bacon production
- Hot sauce production
- Meal replacement product
- Pre-made salsa production
- Fruit and vegetable juices
- Ketchup and other tomato-based sauces
- Soup, stews and bouillon
- Dried and dehydrated fruits and vegetables (used as fruit flavors)
- Pickled products
- Jams and jellies
4. Our Mission and Vision Statement
- Our Vision is to become a household name – brand and to have our products in supermarkets not just across the United States of America but also on the global stage.
- Daniel Alder® Food Processing Company is a world class food processing company that is committed to cultivating and processing food, fruits and vegetables for both the United States’ market and the global market. We want our well – processed and well – packaged – food products to flood the nooks and crannies of the United States and other countries of the world.
Our Business Structure
Daniel Alder® Food Processing Company is a privately owned and managed food processing business that intends starting small in Santa Fe – New Mexico, but hopes to grow big in order to compete favorably with leading food processing companies in the industry both in the United States and on a global stage.
We are aware of the importance of building a solid business structure that can support the kind of world class business we want to own.
At Daniel Alder® Food Processing Company, we will ensure that we hire people that are qualified, hardworking, and creative, result driven, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Operating Officer
Food Processing Plant Manager
Human Resources and Admin Manager
- Accountant / Cashier
- Sales and Marketing Executive
- Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Responsible for increasing management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Responsible for creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization.
- Responsible for overseeing the smooth running of the food processing plant
- Part of the team that determines the quantity of products that are to be produced
- Map out strategy that will lead to efficiency amongst workers in the plant
- Responsible for training, evaluation and assessment of plant workers
- Ensures that the steady flow of fresh food, meat, milk, fruits and vegetables to the plant and easy flow of finished products (well – processed and well – packaged food, fruits and vegetable products) through wholesale distributors to the market
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Ensures that the plant meets the expected safety and health standard at all times
- Ensure compliance in the plant
- Providing advice on the management of plant activities across all sections
- Responsible for carrying out risk assessment in the plant
- Using IT systems and software to keep track of people and progress of the growth of the organization
- Represent the organization’s interest at various stakeholders’ meetings
- Ensures that organizations’ goals and desired result is achieved, the most efficient resources (manpower, equipment, tools and chemicals et al) are utilized and different interests involved are satisfied
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily office activities
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Sales and Marketing Manager
- Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Model demographic information and analyze the volumes of transactional data generated by customer
- Identifies development opportunities; follows up on development leads and contacts
- Writing winning proposal documents, negotiate fees and rates in line with organizations’ policy
- Responsible for handling business research, market surveys and feasibility studies
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develop, execute and evaluate new plans for expanding increase sales
- Create new markets cum businesses for the organization
- Empower and motivates the sales team to meet and surpass agreed targets
- Follow recipes and formulas to produce food products that have a very specific texture, color, flavor and clarity.
- Record test and production data for every product batch, including information regarding test results, temperature, time cycle and ingredients utilized.
- Use an agitator or paddle to blend and mix ingredients as called for in recipe instructions, or operate vats that mix and heat ingredients mechanically.
- Measure, weigh and select ingredients with the assistance of balance scales and English or metric measures.
- Observe, monitor and adjust thermometers and gauges throughout the production process to ensure that the mixing chamber temperature is kept within the correct temperature parameters.
- Start equipment and turn valve controls as needed to maintain product quality during production.
- Monitor and listen to equipment to detect audible or visual signs of malfunctions, including leaks and other failures. Report any malfunctions or quality issues immediately to supervisors.
- Clean and sterilize factory processing areas and food production vats daily.
- Handles any other duties as assigned by the manager
Front Desk/Customer’s Service Officer
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels / documents for the company
- Distribute mails in the organization
6. SWOT Analysis
Daniel Alder® Food Processing Company does not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis.
We know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a standard food processing company that will favorably compete with leading food, fruits and vegetable processing companies in the United States of America.
We engaged the services of a professional in the area of business consulting and structuring to assist our organization in building a well – structured food processing company that can favorably compete in the industry in the United States.
Part of what the business consultant did was to work with the management of our organization in conducting a SWOT analysis for Daniel Alder® Food Processing Company. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Daniel Alder® Food Processing Company;
Our strength as a food processing company is the fact that we have healthy relationships with loads of major players in the industry within and outside of the United States of America. We have some of the latest food processing equipment, commercial farming tools and equipment that will help us cultivate, process and package food, fruits and vegetable.
Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in the food, fruits and vegetable processing industry in the whole of Santa Fe – New Mexico in our payroll.
Our weakness could be that we are a new food processing company in the United States, and perhaps it might take us sometime to attract big time customers in the industry especially exporters of processed food. We are aware of this and from our projection, we will overcome this weakness with time.
The opportunities that are available to us as a standard food processing company with a standard farm cannot be quantified, we know that there are loads of households, and businesses that can’t do without daily supply of processed food, fruits and vegetables. We are well positioned to take advantage of this opportunity.
While competition from fresh produce poses a threat, demand for industry staples will continue to grow across the global market.
Some of the threats and challenges that we are likely going to face when we start our own food processing company are global economic downturn, bad weather cum natural disasters, unfavorable government policies and the arrival of a competitor (a food processing plant) within same location where our target market exist.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with the food industry, you will notice that the different food consumption patterns have had varied effects in different countries. Food processing companies have introduced healthier and organic products to fight competition.
As a matter of fact, there are swings in the food industry, canned food, fruit and vegetable producers are more insulated from agricultural price swings and organic food sales have posed a significant competitive challenge to many industry players.
The food, fruits and vegetable processing industry has grown steadily over the last five years as food processing companies have adapted to the rapidly changing consumer preferences and lifestyle. As a matter of fact, investors/entrepreneurs who own big farms find it easier to open a food processing plants within their farms. With this, it is easier for them to maximize profits and of course stamp their feet in the industry.
8. Our Target Market
Naturally, the end consumers of processed food and also those who benefits from the business’ value chain is all encompassing; it is far – reaching. North America is the largest market for processed food, fruit and vegetable products Loads of households consume processed food, fruits and vegetables.
In essence, a food processing company should be able to sell their products to as many people as possible. In view of that, we have positioned our business to attract consumers not just in the United States of America alone but also other parts of the world.
We have conducted our market research and survey and we will ensure that we meet and surpass the expectations we set for the business. Below is a list of the people and business that we will market our processed and well packaged foods to;
- Groceries stores
- Carbonated drinks production companies
- Fast food eateries
- Processed food fruits and vegetable merchants
Our competitive advantage
A close study of the global food, fruits and vegetable processing industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.
We are aware of the competition and we are prepared to compete favorably with other food processing companies in Santa Fe – New Mexico and throughout the United States.
Daniel Alder® Food Processing Company is launching a standard food processing plant with a standard crop and cattle farm that will indeed become the preferred choice of residents of Santa Fe – New Mexico and every city where our products will be retailed.
Part of what is going to count as competitive advantage for us is our access to high quality inputs, attractive product presentation, economies of scale and of course the vast experience of our management team, we have people on board who understand how to grow a business from the scratch to becoming a national phenomenon.
So also, we have healthy relationships with loads of major players in the industry within and outside of the United States of America.
We have some of the latest food processing equipment, commercial crop farming tools and equipment that will help us cultivate and also process food. Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in Santa Fe – New Mexico on our payroll.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
Our sales and marketing team will be recruited based on their vast experience in the food processing industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall business goal of Daniel Alder® Food Processing Company.
Over and above, we have perfected our sale and marketing strategies first by networking with groceries stores, hotels, restaurants and other key stakeholders who are likely to become our customers. In summary, Daniel Alder® Food Processing Company will adopt the following strategies in marketing our processed and packaged food, fruits and vegetable;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the food, fruits and vegetable processing industry, households, hotels and restaurants et al.
- Advertise our products in food related magazines and websites
- List our business on yellow pages ads (local directory)
- Attend related food and fruits processing expos, seminars, and business fairs et al
- Open our company with a party so as to capture the attention of residents who are our first targets
- Engage in roadshows in targeted communities from time to time to sell our products
- Leverage on the internet to promote our business
- Engage in direct marketing
- Encourage the use of Word of mouth marketing (referrals)
- Join local chambers of commerce and industry with the aim of networking and marketing our products
Sources of Income
Daniel Alder® Food Processing Company is in the business for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the food, fruits and vegetable processing industry to achieve our objectives. Below are the sources we intend exploring to generate income;
10. Sales Forecast
One thing is certain when it comes to food processing and packaging business, if your products are well – packaged and branded and if your processing plant is centrally positioned and easily accessible, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Santa Fe – New Mexico and every city where our processed food products will be sold and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the global food, fruits and vegetable processing industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Daniel Alder® Food Processing Company, it is based on the location of our business and other factors as it relates to small and medium scale food processing startups in the United States;
- First Fiscal Year (FY1): $250,000
- Second Fiscal Year (FY2): $550,000
- Third Fiscal Year (FY3): $950,000
N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
11. Publicity and Advertising Strategy
Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready and willing to utilize every available means to advertise and promote the business. We intend growing our business which is why we have perfected plans to build our brand via every available means.
Below are the platforms we will leverage on to boost our food processing company and to promote and advertise our business;
- Place adverts on community based newspapers, radio and TV stations.
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Santa Fe – New Mexico
- Give out sample of our products to potential consumer to try out during road shows
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and trucks and ensure that all our staff members wear our branded shirt or cap at regular intervals.
12. Our Pricing Strategy
When it comes to pricing for processed food products, there are two sides to the coin. We are aware of the pricing trend in the industry which is why we have decided to produce various sizes of packaged food, sauce, fruits and vegetables.
In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months, our products are sold a little bit below the average prices of various food processing companies in the United States of America.
We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our brand.
- Payment Options
The payment policy adopted by Daniel Alder® Food Processing Company is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Daniel Alder® Food Processing Company will make available to her clients;
- Payment via bank transfer
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for the purchase of our processed food without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
When it comes to calculating the cost of starting a food processing business, there are some key factors that should serve as a guide.
The source of the fresh crop, fruits and vegetables (especially if the food processing plant is not going to own a crop or cattle farm) and the size of the business determines the total cost of setting up the business. Below are some of the basic areas we will spend our startup capital in setting up our food processing plant;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
- Marketing promotion expenses for the grand opening of the food processing plant in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant (including writing business plan) – $2,500.
- The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
- The cost for leasing a large farm land – $100,000
- The cost of constructing a standard food processing plant and crop and cattle farm facility with the right fencing – $300,000.
- Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500).
- The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The amount required for the purchase of the first set of fruit seedlings – $20,000
- The cost for acquiring the required working tools and equipment / machines – $100,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase and installation of CCTVs – $5,000
- The cost for building and hosting a website – $600
- The cost for our opening party – $8,000
- Miscellaneous – $5,000
Going by the report from detailed research and feasibility studies conducted, we will need an estimate of nine hundred and fifty thousand Dollars ($950,000) to start a standard food processing plant business with a commercial crop and cattle farm in the United States of America.
Generating Funds/Startup Capital for Daniel Alder® Food Processing Company
Daniel Alder® Food Processing Company is a family business that is solely owned and financed by Daniel Alder and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $250,000 (Personal savings $200,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $700,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Daniel Alder® Food Processing Company is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to retail a wide range of our well-processed and well-packaged food products a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Daniel Alder® Food Processing Company will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check : Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of land and building of standard food processing plant and crop and cattle farm: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed food, meat and milk processing machines/equipment, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – key players in the industry: In Progress
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Food Processing Business Plan
A food processing company offers the opportunity to improve the nutrition and health of its customers. So, if you are enthusiastic about it, you made the right choice. But starting a business is daunting if you don’t plan things beforehand.
Need help writing a business plan for your food processing business? You’re at the right place. Our food processing business plan template will help you get started.
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Download our Free Business Plan Template now and pave the way to success. Let’s turn your vision into an actionable strategy!
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How to Write a Food Processing Business Plan?
Writing a food processing business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:
1. Executive Summary
An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.
Here are a few key components to include in your executive summary:
Introduce your Business:
- This section may include the name of your food processing business, its location, when it was founded, the type of food processing business (E.g., meat processing, dairy processing, grain processing, snack food processing), etc.
Products and services:.
- For instance, you may include food manufacturing, ingredient supplies, or food safety & quality assurance as some of your USPs.
Marketing & Sales Strategies:
Financial highlights:, call to action:.
Ensure your executive summary is clear, concise, easy to understand, and jargon-free.
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2. Business Overview
The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:
- Meat processing
- Dairy processing
- Fruit and vegetable processing
- Grain processing
- Beverage processing
- Snack food processing
- Frozen food processing
- Specialty food processing
- Explain where your business is located and why you selected the place.
- Additionally, If you have received any awards or recognition for excellent work, describe them.
This section should provide a thorough understanding of your business, its history, and its plans. Keep this section engaging, precise, and to the point
3. Market Analysis
The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.
- For instance, retailers & wholesalers, food service providers, or food brands & private labels would be an ideal target audience for a food processing business.
Market size and growth potential:
- For example, the market size of the food processing business is projected to reach USD 235.67 billion by 2028, then Mention here how you will be a part of this projected growth.
- For instance, plant-based & alternative proteins have a booming market; explain how you plan on dealing with this potential growth opportunity.
Here are a few tips for writing the market analysis section of your food manufacturing business plan:
- Conduct market research, industry reports, and surveys to gather data.
- Provide specific and detailed information whenever possible.
- Illustrate your points with charts and graphs.
- Write your business plan keeping your target audience in mind.
4. Products And Services
The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:
Describe the food product range:
Mention the food processing products your business will offer. This list may include
- Frozen foods
- Baked goods
- Ready-to-eat meals
Describe your services:
Mention the food processing services your business will offer. This list may include
- Food manufacturing & processing
- Customization & private labeling
- Contract manufacturing
- Quality control and food safety
- Regulatory compliance assistance
- This may include, quality control testing, product sampling & analysis, supplier quality assurance, etc.
In short, this section of your food processing plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.
5. Sales And Marketing Strategies
Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:
Unique Selling Proposition (USP):
- For example, product innovation & customization, sustainable & ethical practices, or industry expertise & experience could be some of the great USPs for a food processing company.
Marketing strategies:, sales strategies:, customer retention:.
Overall, this section of your food processing business plan should focus on customer acquisition and retention.
Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your food processing business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.
6. Operations Plan
The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:
Staffing & Training:
Operational process:, equipment & machinery:.
- Explain how these technologies help you maintain quality standards and improve the efficiency of your business operations.
Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.
7. Management Team
The management team section provides an overview of your food processing business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.
- It should include, key executives(e.g. COO, CMO.), senior management, and other department managers (e.g. operations manager, supply chain manager.) involved in the food processing business operations, including their education, professional background, and any relevant experience in the industry.
Compensation plan:, advisors/consultants:.
- So, if you have any advisors or consultants, include them with their names and brief information consisting of roles and years of experience.
This section should describe the key personnel for your food processing services, highlighting how you have the perfect team to succeed.
8. Financial Plan
Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:
rofit & loss statement
Cash flow statement, balance sheet, break-even point.
- This exercise will help you understand how much revenue you need to generate to sustain or be profitable.
Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.
The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.
- Add a table of contents for the appendix section to help readers easily find specific information or sections.
- In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
- Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
- Include any legal documents such as permits, licenses, and contracts.
- Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.
Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.
Remember, the appendix section of your food processor business plan should only include relevant and important information supporting your plan’s main content.
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This sample food processing business plan will provide an idea for writing a successful food processing plan, including all the essential components of your business.
After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our food processing business plan pdf .
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Frequently asked questions, why do you need a food processing business plan.
A business plan is an essential tool for anyone looking to start or run a successful food processing business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.
Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your food processing company.
How to get funding for your food processing business?
There are several ways to get funding for your food processing business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:
- Bank loan – You may apply for a loan in government or private banks.
- Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
- Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
- Angel investors – Getting funds from angel investors is one of the most sought startup options.
Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.
Where to find business plan writers for your food processing business?
There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your food processing business plan and outline your vision as you have in your mind.
What is the easiest way to write your food processing business plan?
A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any food processing business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .
How do I write a good market analysis in a food processing business plan?
Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry.
We can categorize the process of writing a good market analysis section into the following steps:
- Stating the objective of your market analysis—e.g., investor funding.
- Industry study—market size, growth potential, market trends, etc.
- Identifying target market—based on user behavior and demographics.
- Analyzing direct and indirect competitors.
- Calculating market share—understanding TAM, SAM, and SOM.
- Knowing regulations and restrictions
- Organizing data and writing the first draft.
Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.
Can a good food processing business plan help me secure funding?
Indeed. A well-crafted food processing business plan will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.
So, if you have a profitable and investable business, a comprehensive business plan can certainly help you secure your business funding.
About the Author
Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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How To Write a Business Plan for Food Processing in 9 Steps: Checklist
By henry sheykin, resources on food processing.
- Financial Model
- Business Plan
- Value Proposition
- One-Page Business Plan
Are you considering starting a food processing business? With the rapid growth of the food industry in the US, it's an exciting time to enter this market. In fact, the food processing industry in the US is expected to reach $708.5 billion by 2027. Whether you're interested in processing meat, dairy, vegetables, or other food products, a well-crafted business plan is essential. In this blog post, we'll walk you through the nine steps to writing a business plan for food processing, providing you with a helpful checklist to get started.
Step 1: Conduct market research
Before diving into your business plan, it's crucial to thoroughly research the food processing market. This includes understanding current trends, consumer preferences, and potential gaps in the market that your business can fill. By gathering this valuable information, you'll be able to make informed decisions to stay ahead of the competition.
Step 2: Identify target market
Once you've conducted market research, it's time to identify your target market. Will you be focusing on retailers, restaurants, or food service providers? Consider their specific needs and preferences, and tailor your business plan accordingly to maximize your potential customer base.
Step 3: Analyze competition
Understanding your competition is essential for developing a successful food processing business plan. Research existing food processors in your area and analyze their strengths and weaknesses. This analysis will help you differentiate your business and identify opportunities for growth.
Step 4: Determine product offerings
Decide on the specific food products you'll be processing. Whether it's meat, dairy, or vegetables, choose a product that aligns with your expertise and the needs of your target market. Consider offering customized processing services to attract clients with unique requirements.
Step 5: Create a sales and marketing strategy
A solid sales and marketing strategy is key to attracting customers and building brand visibility. Define your pricing structure, distribution channels, and promotional tactics in your business plan. By clearly outlining your strategy, you'll be well-prepared to effectively market your products to potential buyers.
Step 6: Calculate start-up and operating costs
Understanding the financial aspects of your food processing business is essential for success. Calculate your start-up costs, including equipment, facility expenses, and initial inventory. Additionally, determine your ongoing operating costs to ensure your business remains sustainable.
Step 7: Secure funding
Once you have a clear understanding of your financial needs, it's time to secure funding for your business. Explore various funding options, such as loans, grants, or investors, and develop a comprehensive funding strategy to support your start-up and ongoing operations.
Step 8: Develop a production plan
In this step, you'll outline the details of your food processing operations. Consider factors such as sourcing ingredients, production capacity, quality control measures, and packaging requirements. A well-developed production plan will ensure that your business runs smoothly and efficiently.
Step 9: Establish a legal and regulatory compliance framework
Meeting legal and regulatory requirements is crucial for any food processing business. Research and understand the specific regulations that govern your industry, such as food safety and labeling guidelines. By establishing a compliance framework, you'll be able to operate legally and build trust with your customers.
By following these nine steps and completing our checklist, you'll be well on your way to writing a comprehensive business plan for your food processing venture. With careful planning and execution, your business can thrive in the fast-growing B2B food processing industry.
Conduct Market Research
Before starting a food processing business, it is essential to thoroughly conduct market research to gain insights into the industry, target market, and potential demand for your products. This step helps you understand the current trends, customer preferences, and competitor landscape, allowing you to make informed decisions to position your business for success.
To begin the market research process, start by collecting data from various sources such as industry reports, trade associations, government databases, and market research firms. Look for information regarding the size of the food processing industry, growth projections, and any legal or regulatory requirements specific to your niche.
Next, analyze your target market by identifying the demographics, psychographics, and buying behaviors of your potential customers. Determine the consumer preferences, dietary trends, and cultural factors that may affect their purchasing decisions. This will help you tailor your product offerings to meet their specific needs and preferences.
Tips for conducting market research:
- Attend trade shows and industry conferences to network with industry experts and gain valuable insights.
- Use online surveys or focus groups to gather opinions and feedback from potential customers.
- Explore social media platforms and online forums to understand what customers are saying about existing products and identify gaps in the market.
- Visit local stores, restaurants, and other food service providers to observe the products they offer and understand customer preferences in your area.
By conducting thorough market research, you will gain a clear understanding of the industry dynamics, customer needs, and competitive landscape. This knowledge will allow you to make informed decisions as you proceed with the remaining steps in developing your business plan for food processing.
Identify Target Market
Identifying your target market is a crucial step in the process of creating a successful food processing business. By understanding who your potential customers are, you can tailor your products and marketing strategies to meet their specific needs and preferences. Here are some important factors to consider when identifying your target market:
- Demographics: Research the demographic characteristics of your potential customers, such as age, gender, income level, and location. This information will help you determine which segments of the population are most likely to purchase your processed foods.
- Consumer Preferences: Study consumer trends and preferences in the food industry. Are there particular dietary preferences or health concerns that your target market prioritizes? Understanding these preferences will enable you to develop products that cater to their specific demands.
- Industry Insights: Gain a deep understanding of the B2B food processing industry and identify which sectors are most profitable and have the highest demand. Research the customer needs and pain points in these sectors, and position your business to provide solutions to these challenges.
- Market Size and Growth Potential: Assess the size of your target market and its growth potential. This information will help you evaluate the viability of your business idea and make strategic decisions regarding production capacity and expansion plans.
Tips for Identifying Your Target Market:
- Conduct surveys or focus groups to gather feedback directly from potential customers.
- Utilize market research tools and resources to gather data and insights into your target market.
- Stay updated on industry trends and emerging consumer demands through trade publications and industry events.
- Consider collaborating with industry experts or consultants who can provide valuable guidance and insights into your target market.
By thoroughly analyzing and identifying your target market, you can develop a clear roadmap for your food processing business. This understanding will not only help you tailor your products and services to meet customer needs but also enable you to effectively communicate and market your offerings.
When starting a food processing business, it's crucial to thoroughly analyze the competition in your market. Understanding the strengths and weaknesses of your competitors will help you position your business effectively and develop strategies to gain a competitive edge.
To analyze the competition, start by researching existing food processors in your target market. Look at their product offerings, pricing strategies, distribution channels, and customer base. Consider visiting their facilities or websites, studying their marketing materials, and even talking to their customers to gather valuable insights.
Here are some key points to consider when analyzing your competition:
- Identify the unique selling points of your competitors and determine how your business can differentiate itself.
- Evaluate the quality and packaging of their products to identify areas for improvement in your own offerings.
- Assess their pricing strategies to ensure that your pricing is competitive and aligned with market expectations.
- Study their distribution and supply chain management practices to optimize your own logistics and delivery processes.
- Research their customer base and identify potential gaps in the market that you can target.
By thoroughly analyzing your competition, you'll gain valuable insights that can inform your business strategy. This analysis will help you identify opportunities, refine your product offerings, and develop effective marketing and sales strategies to attract and retain customers in a competitive market.
Determine Product Offerings
When determining the product offerings for your food processing business, it's essential to carefully consider the market demand, target audience, and competition. This step is crucial as it will impact your company's success and profitability. Here are some key factors to consider when determining your product offerings:
- Market Demand: Conduct thorough market research to identify the current and future trends in the food industry. Understand the demand for different types of processed foods and analyze which products are in high demand.
- Target Audience: Identify your target market and their preferences. Consider their dietary preferences, cultural backgrounds, and specific needs. Tailor your product offerings to meet these requirements and cater to their tastes and preferences.
- Competitor Analysis: Analyze your competitors to determine their product offerings and identify any gaps in the market that you can fill. Differentiate your products from competitors by offering unique features, flavors, or packaging.
- Product Varieties: Decide on the range of products you will offer. Consider offering a mix of popular and niche products while ensuring they align with your production capabilities and resources.
- Product Development: If your target market demands specific products that are not currently available, consider developing new products to meet these demands. Use customer feedback and market research to refine and improve your products.
Tips for Determining Product Offerings:
- Stay updated with the latest food industry trends to identify emerging product opportunities.
- Conduct taste tests and gather feedback from potential customers to understand their preferences.
- Consider offering product variations to cater to different dietary restrictions, such as gluten-free or vegan options.
- Ensure your production capabilities align with the chosen products to guarantee consistent quality and timely delivery.
By carefully determining your product offerings, you can position your food processing business strategically in the market and meet the demands of your target audience. A well-defined product portfolio can enhance your competitiveness and drive customer loyalty, contributing to the long-term success of your business.
Create A Sales And Marketing Strategy
Creating a sales and marketing strategy is essential for effectively promoting your food processing business and attracting potential customers in the highly competitive market. A well-thought-out strategy will help you differentiate your products from competitors, reach your target audience, and ultimately increase sales revenue.
Here are some important steps to consider when developing your sales and marketing strategy:
- Define your target audience: Identify the specific group of customers you want to reach with your food processing products. Determine their demographic characteristics, preferences, and purchasing behavior to tailor your marketing efforts accordingly. This will ensure that your message resonates with your target market and drives better engagement.
- Position your brand: Clearly define your unique selling proposition (USP) that sets your food processing business apart from competitors. Highlight the key benefits and features of your products that appeal to your target audience. Develop a compelling brand story that communicates your value proposition to create a strong brand image in the market.
- Choose the right marketing channels: Select the most effective marketing channels to reach your target audience. This could include online platforms such as social media, websites, and email marketing, as well as offline strategies like trade shows, industry events, and print advertisements. Utilize multiple channels to maximize your reach and engage with potential customers through various touchpoints.
- Develop a content marketing strategy: Create high-quality, informative content that educates your target audience about the benefits and uses of your food processing products. This could take the form of blog posts, videos, recipes, or cooking tips. By positioning yourself as an industry expert and providing valuable information, you can build trust and credibility with your audience.
- Form strategic partnerships: Collaborate with complementary businesses, suppliers, or distributors to expand your reach and tap into new distribution channels. This can help you gain access to a wider customer base and increase your sales opportunities. Consider forming partnerships with restaurants, retailers, or local food organizations in your target market.
- Monitor and evaluate marketing performance: Regularly monitor key performance indicators (KPIs) such as website traffic, social media engagement, sales conversions, and customer feedback to assess the effectiveness of your marketing efforts. Use these insights to make data-driven decisions and refine your marketing strategies for better results.
- Invest in professional photography of your food processing products to create visually appealing marketing materials that entice potential customers.
- Offer samples or product demonstrations to allow potential clients to experience the quality and taste of your processed foods firsthand.
- Consider partnering with influencers or bloggers in the food industry to promote your products and reach a wider audience.
- Stay updated with industry trends and incorporate them into your marketing strategy to stay ahead of the competition.
Calculate Start-Up And Operating Costs
Calculating the start-up and operating costs for your food processing business is crucial for understanding the financial feasibility and sustainability of your venture. By accurately estimating these costs, you can create a realistic budget and make informed decisions to ensure a successful operation.
1. Determine One-Time Start-Up Costs: Begin by identifying the one-time expenses required to launch your food processing business. This may include costs such as facility lease or purchase, equipment purchases, licensing and permits, initial inventory, website development, and branding.
2. Estimate Monthly Operating Costs: Next, estimate the ongoing monthly expenses involved in running your business. This should encompass items like rent or mortgage payments, utilities, insurance, salaries, marketing, transportation, raw materials, maintenance, and any other recurring expenses.
3. Consider Seasonal Fluctuations: Take into account any seasonal fluctuations that may affect your costs, such as an increase in raw material prices during certain months or an uptick in labor expenses during peak production periods. Plan your budget accordingly to accommodate these variations.
4. Include Contingency Reserves: It's always wise to allocate a portion of your budget as contingency reserves to account for unexpected expenses or emergencies. This will provide a safety net and ensure your business is equipped to handle unforeseen circumstances.
5. Seek Professional Advice: Consult with an accountant or financial advisor to assist you in accurately estimating your start-up and operating costs. Their expertise can prove invaluable in ensuring your calculations are comprehensive and accurate.
- Research industry benchmarks to gain a better understanding of typical costs associated with food processing businesses similar to yours.
- Consider the cost of compliance with food safety regulations and certifications, as they can significantly impact your operating expenses.
- Regularly review and update your cost calculations as your business grows and circumstances change.
Accurately calculating your start-up and operating costs will enable you to set appropriate pricing and determine your breakeven point. It will also provide valuable insights into the financial health and viability of your food processing business as you move forward on your entrepreneurial journey.
Securing funding is an essential step in starting a food processing business. Whether you are self-funding or seeking external investors, having sufficient capital is crucial to cover start-up costs and sustain operations until the business becomes profitable. Here are some important points to consider:
Tips for securing funding:
- Prepare a comprehensive business plan: A well-written business plan that outlines your vision, targets, market analysis, and financial projections will help convince potential investors and lenders of the viability of your food processing venture.
- Explore various funding options: Apart from traditional bank loans, consider other options such as grants, crowdfunding, venture capital, or partnerships. Each option has its own pros and cons, so choose the one that aligns best with your business goals.
- Seek professional guidance: If you are unsure about the funding process, it's advisable to consult with a financial advisor or a business consultant who can provide expertise and support throughout the funding journey.
- Prepare a compelling pitch: When presenting your business to potential investors, be clear, concise, and impactful. Highlight your unique selling points and explain how your food processing business will generate returns on their investment.
- Build a strong network: Building relationships with industry professionals, mentors, and other entrepreneurs can provide you with valuable connections and potential funding opportunities. Attend industry events, join trade associations, and engage in networking activities to expand your reach.
- Demonstrate financial responsibility: Investors and lenders want to ensure that their money is being entrusted to a responsible entrepreneur. Maintain accurate financial records, use efficient financial management systems, and demonstrate your ability to handle and repay borrowed funds.
Remember, securing funding may be a challenging process, but with thorough preparation, perseverance, and a compelling business proposition, you can increase your chances of obtaining the necessary capital to launch and grow your food processing business.
Develop A Production Plan
A production plan is essential for food processing businesses to ensure smooth and efficient operations. This plan outlines the manufacturing processes, equipment requirements, production schedules, and quality control measures necessary to produce high-quality food products consistently. Here are some important steps to consider when developing your production plan:
- 1. Define Your Production Process: Clearly outline each step of your production process, including receiving, storing, processing, packaging, and distribution of your food products. This will help you identify any potential bottlenecks or inefficiencies.
- 2. Assess Equipment Needs: Determine the equipment necessary for each stage of production and ensure it meets industry standards and regulations. Consider factors such as capacity, efficiency, maintenance requirements, and cost.
- 3. Establish Standard Operating Procedures (SOPs): Develop SOPs for each production task to ensure consistency, quality, and safety. SOPs should include detailed instructions, safety protocols, and quality control measures.
- 4. Create a Production Schedule: Determine the optimal production schedule based on demand, shelf-life of your products, and available resources. It should include information on production volumes, staff allocation, and maintenance schedules.
- 5. Implement Quality Assurance and Control Measures: Establish comprehensive quality control measures to ensure your products consistently meet or exceed industry standards. This includes testing raw materials, monitoring production processes, conducting regular inspections, and maintaining proper hygiene and sanitation practices.
- 6. Train and Manage Production Staff: Provide appropriate training to your production team to ensure they understand the production processes, safety protocols, and quality control measures. Regularly assess their performance and provide feedback to maintain high standards.
- Optimize your production plan by implementing lean management principles to identify and eliminate waste.
- Regularly review and update your production plan to adapt to changing market demands and technological advancements.
- Consider implementing automation and technology solutions to improve efficiency and reduce human error.
- Establish strong relationships with suppliers to ensure a consistent supply of high-quality raw materials.
By developing a comprehensive production plan, you can enhance the efficiency and effectiveness of your food processing operations, ensuring the consistent delivery of high-quality products to your customers.
Establish A Legal And Regulatory Compliance Framework
Ensuring compliance with legal and regulatory requirements is crucial for any food processing business. Failing to do so can result in fines, penalties, and even the closure of your operation. To establish a strong legal and regulatory compliance framework, follow these key steps:
- Familiarize yourself with local, state, and federal regulations: Research and understand the laws and regulations that govern food processing in your area. This includes food safety regulations, labeling requirements, permits, licenses, and sanitary practices. Consult with regulatory agencies and industry associations to stay updated on any changes or new requirements.
- Develop standard operating procedures (SOPs): Create detailed SOPs for every aspect of your food processing operation, including receiving ingredients, storage, processing, packaging, and shipping. These SOPs should outline best practices that comply with regulatory guidelines and ensure food safety.
- Implement a food safety management system: Establish a robust food safety management system, such as Hazard Analysis and Critical Control Points (HACCP), to identify and control potential hazards in your production processes. This system should include regular monitoring, testing, and documentation to demonstrate compliance.
- Invest in employee training: Train your employees on food safety practices, proper handling of equipment, personal hygiene, and any specific regulations relevant to their roles. Regularly reinforce training through refresher courses to ensure ongoing compliance.
- Ensure proper labeling and packaging: Familiarize yourself with labeling requirements for your food products, including ingredient lists, nutrition facts, allergen declarations, and any specific claims or statements required by law. Make sure your packaging materials meet safety and hygiene standards.
- Establish supplier and vendor agreements: When working with suppliers and vendors, ensure they also adhere to legal and regulatory requirements. Include language in your agreements that stipulates compliance with food safety standards and inspections.
- Maintain comprehensive records: Keep detailed records of all processes, from ingredient sourcing to production, packaging, and distribution. These records will be essential for demonstrating compliance during inspections or audits.
- Stay up to date with new regulations and industry trends by joining trade associations, attending seminars, and subscribing to relevant publications.
- Consider partnering with a food safety consultant or hiring an internal expert to ensure ongoing compliance and help navigate complex regulations.
- Regularly review and update your legal and regulatory compliance framework to reflect changes in the industry or any new requirements imposed by authorities.
In conclusion, successfully starting and running a food processing business requires careful planning and execution. By following the nine steps outlined in this checklist, aspiring food processors can develop a solid business plan that addresses key aspects such as market research, competitive analysis, product offerings, sales and marketing strategy, financial considerations, funding, production planning, and legal compliance. With the right strategies in place, B2B food processors can position themselves as critical players in the ever-expanding food industry.
To recap, conducting thorough market research helps food processors understand their target market and competition, while determining product offerings enables them to specialize and provide customized services. Creating a comprehensive sales and marketing strategy is crucial for reaching and acquiring customers, and calculating start-up and operating costs ensures financial preparedness. Securing funding and developing a production plan are necessary steps to establish a sustainable operation, and establishing legal and regulatory compliance guarantees adherence to industry standards.
By following this checklist and considering the unique demands of the B2B food processing model, entrepreneurs can confidently navigate the complexities of the industry and build a thriving business that meets consumer demands and drives growth.
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List of 57 Profitable Food Processing Business Ideas
Do you want to start a business in the food processing industry? Are you searching for profitable food processing business ideas? If yes, find here a list of the best and easy-to-start business ideas in the food and agro-processing segment.
In India, the food sector has high growth and profit potential. Also, you can find a lot of opportunities here. The Indian food and grocery market is the world’s sixth-largest in terms of volume. And the food processing industry accounts for 32% of the country’s total food market.
Initiating a food business is easy to start. And as the population density is high in our country, you will find always a market for your product. Also, financial institutions including banks provide different types of loans and subsidies to food entrepreneurs.
List of 57 Food Processing Business Ideas
Bakery is one of the most profitable food processing business opportunities in India. One can initiate by having own or rented space. Selecting the right product and proper marketing strategy are the major deciding factor in getting success in the bakery business. According to the demand and financial aspects you will need to choose the specific products for your bakery business. Read More…
2. Banana Wafer Making
Banana wafers are under-ripe bananas that are cut into slices dipped in syrup solution, dried under the sun or in the oven, fried, and eaten as a snack food or dessert. These can be sold both in the local and export markets. You can initiate this business on a small-scale basis. Read More…
3. Beaten Rice Manufacturing
Beaten rice manufacturing is comparatively an easy business to start in small towns or village areas. It needs small capital investment towards infrastructure and machinery. The raw material is also available locally
4. Biscuit Making
The Biscuit-making business is very lucrative. You can initiate the business on a small-scale basis. Biscuit making is a conventional activity and an entrepreneur can initiate this business with low startup capital also. Despite the advent of modern, large-capacity, and automatic biscuit-making plants, a large section of people still prefers fresh biscuits from the local bakery as they are cheap and offer many varieties.
5. Bread Production
Quality bread provides fiber and carbohydrates in a convenient, low-fat form that is portable and delicious. Good bread never goes out of style. The bread production industry has several diversified opportunities. Fresh quality bread is always in demand in both urban and suburban areas. The bread production process is also not complex.
6. Cashew Nut Processing
The manufacturing activities involve in cashew nut processing are cell cooking, cutting, cashew kernel drying, peeling, grading, and packing. Cashew nut processing can be initiated on a small scale and also as an export-oriented plant. Simple machinery is required. Read More…
7. Cheesecake Making
Ingredients required for cheesecake production are cheese, sugar, strawberries, wheat flour, egg, maize, vegetable oil, starch, salt, preservatives, color, and essence. Cheesecake is also very versatile. It works well with a wide variety of flavors ranging from lemon and chocolate to pumpkin. Cheesecake-making business can be started on a small-scale basis.
8. Chocolate Making
The production process of chocolate may vary according to the different qualities of chocolate. Also according to the availability of raw material, you can decide the taste and ingredients for chocolate production. Chocolate making is one of the most profitable food processing businesses.
9. Coconut Milk Powder Production
Coconut milk powder has the good market potential not only in India but also in various other countries. Actually, coconut milk powder has the advantage of long shelf life, fewer storage places required, and lower cost of bulk packing. Coconut milk powder is one of the most trending food processing business opportunities for new entrepreneurs.
10. Coconut Oil Manufacturing
Coconut oil is used as an important cooking medium. Apart from this coconut oil has various industrial applications. It is used in the manufacture of toilet soaps, laundry soaps, surface active agents and detergents, hair tonics, hair oils, cosmetics, etc. Location is one of the most important factors in starting coconut oil manufacturing.
India is the highest producer of coconuts in the world. The total cultivated area is over 1.94 million hectares. Around 90% of the coconut growing area is situated in the four southern states of India, with Kerala occupying about 50% of the coconut cultivated area in India. The location of your manufacturing unit should be nearby the area where raw materials can be procured easily.
11. Condensed Milk Production
Sweetens condensed milk has a good market opportunity both in the domestic and export sectors. The only main raw material is good-quality milk. condensed milk production is one of the most profitable food processing businesses any individual can initiate with substantial capital investment.
12. Custard Powder Production
In starting custard powder production, the required raw materials are corn flour, arrowroot starch, food colors, and essence. The easy availability of raw materials made this business lucrative and profitable. A small-scale unit can also be established with some simple machinery.
13. Dalia Production
The increasing demand for nutritional and ready-to-eat food has increased the market potential of Dalia. Dalia manufacturing business can be initiated on a small-scale basis with simple machinery. The production process is simple. Dalia production does not imply major licensing issues.
14. Dal Milling
Dal milling is actually the processing of different pulses. According to the availability of raw materials, you can select different various products. Commonly two types of conventional processing methods are used. Such as wet milling and dry milling. Dal milling is capital-intensive and energy-sapping in nature. Read More…
15. Energy Drink Production
Energy drink is a very popular option nowadays to relieve stress. Currently, energy drink production is one of the most profitable and trending food processing businesses. Initiating an energy drink manufacturing business is cost-intensive and requires a strong product promotion strategy.
16. Flour Production
Flour is produced by milling food grains. different varieties types of flour are used to prepare different foods. These are Wheat flour, brown flour, whole wheat flour, wholemeal flour, etc. The production process is simple. This business can be initiated on a small-scale basis with simple machinery.
17. French Fry Making
Good quality potatoes are generally used to make french fries. French fries are becoming very popular in the Indian market. Apart from the domestic demand, the product has an export opportunity also. French fry-making business can be initiated on a small-scale basis.
18. Fruit Juice production
Fruit juice is one of the ready-to-serve items. Another popular product is squash. These are very popular throughout the year, especially in summer. The fruit juice production business can be initiated on a small-scale basis. The product should be selected according to the availability of raw materials.
19. Ginger Garlic Paste Processing
Ginger and Garlic Paste is mainly used as a condiment in various food preparation and also serves as a carminative and gastric stimulant in many medicinal preparations. As instant mixes and spices are becoming more popular the demand for ginger garlic paste is also increasing. The production process is simple and the product has an immense market opportunity for export also. Read More…
20. Ginger Oil Production
The main application of ginger oil is in confectionery beverages and baked products. India is the largest producer of ginger. Ginger oil production is one of the most profitable food processing businesses that can be started on a small-scale basis also.
21. Grape Wine Making
Grape wine making is actually fermenting the grape juice. The major raw material required for the processing and making of grape wine is grapes. Grape wine making is capital intensive and it requires proper operational and marketing strategy.
22. Groundnut Oil Processing
Groundnut oil processing is one of the most profitable food processing businesses considering the required capital investment. The oil that is obtained from groundnuts/peanuts is very healthy and suitable for the best human consumption. The manufacturing unit can be established on a small-scale basis. Read More…
23. Hing Making
Hing is used in India in culinary preparations for flavoring purposes. Pure asafoetida is generally not preferred for use in view of the high concentration. It is, therefore, sold in compounded form. Hing has good market potential not only in the domestic market but also in the export market. The main raw material is generally imported from Afghanistan or Iran.
24. Honey Processing
Honey processing is actually removing wax and other foreign unwanted particles from honey. You can establish the processing unit in two ways. Either by the manual system or by electrically driven. The production process is simple. Additionally, you can initiate the business on a small-scale and home-based basis.
25. Ice Block Manufacturing
Ice block-making businesses can be established on a small-scale basis. Actually, ice blocks are essential for the transportation and preservation of fish. According to the local demand for ice blocks, the unit should be established as far as production output is concerned.
26. Ice Cream Cone Making
Any individual can initiate the ice cream cone-making business on a home-based and small-scale basis. Ice cream cones of many varieties of flavors and in different forms are served around the year and demand is going up year after year. The most popular mode of serving is in cones as it is neat & clean, easy to store and there is no disposal needed. With the continuous increase in the sale of ice creams, demand for cones is increasing. Read More…
27. Ice Cream Making
You can start an ice cream-making business on a small-scale basis with low startup capital investment. Ice cream making is a wonderful small business idea that any individual can explore to make handsome money out of it.
Basically, ice cream is a frozen blend of a sweetened cream mixture and air, with added flavorings. A wide variety of ingredients are allowed in ice cream, but the minimum amounts of milk fat, milk solids (protein + lactose + minerals), and air should be maintained in ice cream making. Read More…
28. Iodized Salt Production
Iodized salt is a white crystalline powder salt fortified by Iodine. Iodine deficiency disorder can be easily avoided by consuming a sufficient amount of salt fortified with Iodine. Iodized Salt consumption is directly related to population growth. You can start an iodized salt production business on a small-scale basis also. Read More…
29. Jackfruit Processing
The primary economic product of jackfruits is the fruit. People consume it both when immature and when they mature. However, you can’t keep the sweet pulp of the fruit for a long time because of its highly perishable nature. Hence, every year there a huge post-harvest loss occurs during the peak time. Read More…
30. Jam Jelly Making
Jam jelly-making business is profitable and can be initiated on a small scale with low capital investment. With proper planning and strategy, the jam jelly-making business can be initiated home-based also. Different allowances and grants from the Government sector are also available.
Most kinds of fruit and some vegetables are used to make a wide variety of jam and jelly. Fruit jam contains rich fruit pulp and is available in mango, apple, mixed fruit, pineapple, and orange flavors. Jelly is a clear, bright mixture made from fruit juice, sugar, and sometimes pectin. Jelly and jam are used as the bread spread and as a filling for some cakes and cookies.
31. Lemonade Making
Lemonade is actually a lemon-flavored very popular soft drink. You need the principal raw materials like sugar, citric acid, flavor & essence, food color, and sodium benzoate. Lemonade-making is a capital and management-intensive business.
32. Fruit Bar Making
Mango and pineapple fruit bars are very popular. You must initiate the unit according to the availability of raw materials. The fruit bar-making process is simple. You can initiate a small-scale unit by installing simple machinery as a home-based also.
33. Fruit Juice Production
Starting a fruit juice production company is a profitable and lucrative venture. However, the business demands careful planning and substantial capital investment. Fresh fruit juice is a popular item in the beverage industry compared to other packaged drinks. Read More…
34. Meat Processing
Meat processing technology comprises the steps and procedures in the manufacture of processed meat products. All processed meat products have been in one way or physically and/or chemically treated. Meat processing is capital intensive. However, you need a proper distribution and marketing strategy before initiating.
Microbreweries produce a small amount of craft beer than large-scale corporate breweries and are independently owned. The market of microbreweries is immensely developing. However, you need different licenses and permissions in initiating the microbrewery business.
Learn More: How to Start a Microbrewery Business
36. Noodles Making
Generally, two types of noodles are popular. One is normal and the other is instant. The process is quite simple and requires not much skilled labor. The boom in the food service sector including the fast-food chain has widened the demand potential for Noodles. Read More…
37. Packaged Drinking Water Production
Increasing awareness of health and the scarcity of getting pure drinking water have made an immense market demand for packaged drinking water. Nowadays people prefer to have packaged drinking water not only outside but also in-house. In initiating packaged drinking water business, it is important to check the PH balance of the water where you want to establish the unit.
38. Palm Oil Processing
The main raw material is palm fruits. Palm oil is used as edible oil. Apart from that, there is a demand for commercial industrial use. Palm oil processing is profitable and capital-intensive. All types of palm oil processing units differ in the level of mechanization of each unit operation and the interconnecting materials transfer mechanisms.
39. Paneer & Cheese Production
Basically, cheese and paneer are value-added dairy items. Basically, paneer is fresh cheese. It is also known as cottage cheese. Actually, paneer is an unaged, acid-set, non-melting farmer cheese or curd cheese. However, packaged paneer ensures good quality and longer shelf life than loose paneer. Read More…
40. Papad Making
Any individual can initiate the papad-making business on a small-scale and home-based basis also. Papad making is one of the most profitable food processing businesses considering the low startup capital investment. Papad is a thin wafer-like product served as fried or roasted. Read More…
41. Pasta Making
The artificial drying process allows the pasta to be produced at an industrial level and therefore to be distributed. The drying process is the final main step of industrial pasta production, and it is fundamental to greatly prolong the shelf life of the product. The manufacturing process is not complex and the demand is increasing.
42. Pickles Making
Pickles are the most popular items in Indian recipes. Besides, the domestic market pickles have an export potential also. Actually, you can produce different types of quality pickles. However, you must select the product according to the availability of the raw materials. The production process is simple. And you need simple machinery and equipment.
43. Potato Chips Making
Sliced, thin, and fried potato chips are very popular ready-to-eat snacks item. Potato is one of the easily available vegetables also. The potato chips manufacturing process is simple and involves simple machinery. Additionally, you can initiate the potato chip-making business on a small-scale basis also. With the ongoing growth of the population and rising urbanization, particularly among young people, packaged food such as packaged potato chips have very bright growth prospects. Read More…
44. Potato Powder Making
Potato powder is increasingly being used in a variety of food preparations like snack foods, soups, curries, and other dishes as a thickening agent. However, potato powder manufacturing is capital-intensive. In this business, you will need to obtain FPO and Pollution Control Board permission to run the unit.
45. Rice Bran oil Production
The Commerce Ministry recently allowed bulk exports of rice bran oil and removed quantitative restrictions on outbound shipments of organic edible oils. Rice bran oil is a premium edible oil with limited consumption in India. Rice bran oil production is capital intensive. However, you must establish an export-oriented unit to get much better profitability.
46. Rice Mill
India is the second-largest producer of paddy in the world. Rice is the staple food of the majority population. The mini rice mill consists of a paddy cleaner, sheller, separator, and polisher. Mini rice mill is one of the most profitable food processing businesses.
47. Scented Supari Making
Basically, supari is a mouth freshener. People in all age groups chew supari on a regular basis. However, raw supari is not a consumable item. It requires proper processing and packaging to make it human consumable. Read More…
48. Soya chunks Processing
First of all, any individual can initiate the soya chunks processing on a small-scale basis. The major raw materials are soybean meals and peanut meals. The Soya chunks production process involves milling, mixing, extruding, and cutting. This is one of the most profitable food processing businesses one can start with moderate capital investment.
49. Soy Sauce Production
The major raw materials, that are needed for soy sauce production are soybeans, wheat, and salt. Also, you can obtain different types of manufacturing processes to produce different types of soy sauce. You can start soy sauce production on a small-scale basis also.
50. Spice Powder Making
Spice grinding and packaging is one of the most profitable food processing business ideas in India. Also, you can initiate the business on a small and medium scale. Spice is an essential item and is considered a tastemaker. Apart from individual spice powders like chilly, cumin, and turmeric; special quality mixed spice powder processing is more profitable. Some of the most popular items are meat masala, curry powder, chat masala, etc. Read More…
51. Sugar Candy Manufacturing
Sugar candy is generally considered hard-boiled sugar confectionery. There are so many popular flavors for sugar candy like orange, pineapple, mango, mint, strawberry, etc. Sugar candy manufacturing is one of the most popular food processing business ideas.
52. Sunflower Oil Processing
For sunflower oil processing the main raw material is sunflower seed. Refining sunflower oil goes through a long way of purification. It consists of the following stages: mechanical cleaning, hydration, neutralization, bleaching, freezing, deodorization, and nitriding. Sunflower oil processing is capital intensive and profitable food processing business. Read More…
53. Tamarind Paste Making
Tamarind paste has many culinary uses including a flavoring for chutneys, curries, and the traditional sharbat syrup drink. The tamarind sweet chutney is popular in India and Pakistan as a dressing for many snacks. Basically, tamarind pulp contains 20% moisture, 6% fiber, and 67 % carbohydrates. Read More…
54. Tomato Processing
Tomato is a widely available item and processed tomato products are also very popular. The most popular products are tomato sauce, puree, juice, ketchup, etc. In initiating tomato processing you can also produce tomato pulp for other small-scale industries. The production process is not complex. Only you need simple machinery and equipment.
55. Tutti Frutti Making
Tutti frutti is a concentrated processed food product. Basically, you can produce it from raw papaya with attractive color, sugar, and preservatives. Additionally, several other food processing industries like cake, bakery bread, etc. use this product regularly. The product has also a very good retail opportunity. Read More…
56. Vermicelli Production
Basically, vermicelli is a pasta product. Also, it is popular as spaghetti. And the people in the Indian subcontinent consume it in different cooked food items. Some of the major popular recipes are Upma, khichadi, payasam barfis, halwa, Puliyogare, Curd Samia, etc. Read More…
57. Vinegar Manufacturing
Vinegar is a good preservative. Generally, it contains 5% acetic acid. Compliances under the FPO and PFA Act are mandatory for vinegar manufacturing. Commercial-scale vinegar manufacturing requires sound technical knowledge.
Rupak is the founder of MUVSI. He is a small business consultant by profession. His mission is to make people know how to make money and understand personal finance for a better living.
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- Business Plans - Volume 03
- Food Processor Business Plan
12659 San Ablo Blvd. Santa Fe, New Mexico
This business plan is for a food processor within the specialty foods industry who will be using various marketing strategies to reposition their product and become a reknowned manufacturer of high quality foods. The following plan will outline the products history, competition, potential new markets, and promotional opportunities.
Situational analysis, strategic plan, tactical plan.
Rio Grande Foods is a food processor in the specialty foods industry (SIC 2033) and sells its products on a wholesale basis to brokers, distributors, and retailers. The present product mix is one product wide and the line is two products deep. The product is Rio Grande Salsa Picante, which can be found in a 16 oz. Paragon jar in both mild and medium heat levels. The salsa is a richtextured, home style salsa which sustains the individual flavors of the all-natural ingredients. The ingredients are as follows: diced tomatoes, garlic, cilantro, onions, jalapeno peppers, salt, and a trace of organic vinegar.
Rio Grande Foods utilizes a co-packer for processing purposes. A co-packer is a company that has the facilities to process foods for public consumption. In order to be an acceptable and legitimate co-packer, the company must be certified by the Food and Drug Administration and the New Mexico Department of Health. Rio Grande Foods' co-packer is C & D Mexican Foods. Taking marginal costs and operating expenses into consideration along with primary competition prices, Rio Grande Salsa Picante's wholesale cost is $2.25. The company's primary competition has its product priced at $2.50 on the wholesale level. Rio Grande Salsa Picante can be found at three different concept stores - grade "A" grocery stores, specialty food stores, and gift shops. Rio Grande Foods utilizes mostly push strategy efforts through the use of guerrilla warfare tactics. The type of sale promotions utilized are trade oriented in the form of credit terms, discount offers, and occasional volume discounts. Consumer oriented sales promotions will be through the print media, such as point of purchase recipes and some couponing (premiums). Rio Grande Foods mission is to earn a position in consumers minds as a manufacturer of high quality Mexican foods in the specialty foods industry. The company will do this by producing products that have an authentic texture and flavor by using the highest quality ingredients possible. Objectives are to be positioned in the specialty foods market throughout New Mexico by 1998 with sales volume increasing 9% on an annual basis. These figures will be based on the number of case units sold annually (12/16 oz. Pack). The company has a .03% market share at the present time and has goals of attaining a .0316% hold on the market by the end of the third quarter in 1995.
Business and Product Service Description
Rio Grande Foods is in the processed foods industry. The Standard Identification Classification code for this industry is 2033. More specifically, Rio Grande Foods is in the specialty foods industry procession and wholesaling Mexican salsa picante. Specialty products are foods, beverages or confections meant for human use that are of the highest grade, style and/or quality in their category. The specialty food nature derives from a combination of some or all of the following qualities: their uniqueness, exotic origin, particular processing, design, limited supply, unusual application or use, extraordinary packaging or channel of distribution has been growing strong since the 1950's and is now beginning to stabilize the rate of growth. This specialty foods segment is small compared to the highly commercialized market in which Pace foods and Old El Paso venture. Being that this is a relatively small industry the composition of it consists of several small independent processors and wholesalers. Even though the niche of the specialty foods industry is small, it was worth $30 billion in 1993. The condiment segment itself is worth $13 billion. Rio Grande Foods' products are aimed at middle aged consumers with high disposable incomes. However, prices are much lower than most competitors that other income brackets can afford to purchase a specialty Mexican salsa. Rio Grande Foods has had great success thus far in its start up period. The high quality and fancy packaging go hand in hand with the authentic flavor of Mexican salsa picante. The availability of two heat levels allow for access into other consumers tastes. Larger product mixes of other companies are forcing Rio Grande Foods to develop other products in the future.
Mission and Objectives
Rio Grande Foods' mission is to earn a position in consumers minds as a manufacturer of high quality foods in the specialty foods industry. This will be done by producing food products that have an authentic texture and flavor by using only the highest quality ingredients. Objectives are to be positioned in the specialty foods market throughout New Mexico by 1988 with sales volume increasing 9% on an annual basis. These figures will be based on the number of case units sold annually (12/16 oz. Pack).
Rio Grande Salsa Picante is a rich-textured, home style salsa which sustains the individual flavors of 100% all-natural ingredients. The ingredients consist of diced tomatoes, garlic, cilantro, onions, jalapeno peppers, salt, and a trace of vinegar. They combine to yield a product that has no fat, 2 grams of carbohydrates, 2% vitamin A, and 10% vitamin C. Rio Grande Salsa Picante has no artificial preservatives, fillers, oil, water, or sugars. This is what distinguishes it from other brands and qualifies it as a specialty food. The packaging is also very attractive. It has a very "classy" and conservative look at the same time. The trademark is a ristra of chiles and the name Rio Grande written in a vibrant red. The background is a chipped stucco wall that exposes bricks. It helps amplify the authenticity of the product.
Market potential for the condiment segment is very high. The two highest ranking condiments are Mexican salsa and ketchup, first and second respectively. Since Mexican salsa is out selling ketchup it is apparent that there is a lot of room for growth within this segment. Recently, there has been some growth within minority ethnic populations and sales are expected to increase in the specialty food industry as a whole. The Hispanic population has seen a 38% increase since 1980 along with a 71% income increase. Also, several cooks have developed recipes which contain Mexican salsa, for example, chile con queso and salad dressings.
The current market size of Rio Grande Foods is held within Santa Fe, NM. The customer base on the wholesale level is made up of 10 companies for a total of 16 retail store locations. All of these accounts handle a vast variety of specialty foods. The market size is expected to grow steadily.
Demand Trend for Product
Mexican salsa picante has reached a point of saturation in the southern part of the United States. A shake out is presently occurring, large wealthy processors are riding out losses for long periods at a time by offering sales promotions and price savings. They are trying to keep customers from buying the competitions brands so that their competitors might go out of business. However, this is going on in the high volume commercial market. In the specialty foods industry, prices are not going down, the product mixes are going up per company. All sorts of varieties are beginning to appear. J. Jose's has a Mexican salsa, a salsa verde, chile con queso, spices, candies, hot sauces (Tabasco style), mayonnaise, tartar sauce, and gift boxes. End consumers like to be different and daring. Mexican fruit salsa is the latest in the market, with variations such as peach, strawberry, pineapple, and other strange and exciting flavors. Rio Grande Foods plans to diversify its product line offerings so that it might be able to increase revenues and consumer interest.
Current Market Segments
Rio Grande Foods' is only supplying retail stores in three categories. They are grade A grocery stores, specialty food stores, and gift shops. An example of a grade A grocery store is J.E.B. Marketplace in Santa Fe, NM. These are the larger grocery stores that large grocery chains, such as J.E.B. open in locations near large upper income locations. They carry all of the highly commercialized grocery and general merchandise, but they also carry some specialty food items. About 24% of their total merchandise is specialty food items. These stores are normally close to several small populations with access from several different locations. Specialty food stores are generally small in size yet very fancy or unique in design. They are located in or near wealthy neighborhoods. They only carry specialty food products. The average cost for a 16 oz of Mexican salsa at these stores is $3.75. An example of a specialty food store would be Farm To Market on Taylor Hwy. in Santa Fe, NM. Products found in these stores' gift shops are normally products that are indigenous to the city or state in which it is located. The reason for this is that the majority of the customers are tourists. They are located near tourist attractions in cities or in major malls. An example of a tourist gift shop is Toddies in Franklin Mall located in downtown Santa Fe, NM. All of these stores have one thing in common, they all attract specialty food enthusiasts.
Market Segment Currently Targeted
The market segment currently targeted are individuals that fall into the following categories:
- 35-44 years old
- home rented (not owned)
- income of $50,000 and over
- dual income household
Of the people who will fit in above, these are the top ten lifestyles ranked by index:
Rio Grande Foods' immediate competitor is J. Jose's. J. Jose's has a product mix of 11 products with an average depth of 3. They have Mexican salsa (red), salsa verde, chile con queso, mayonnaise, tartar sauces, Tabasco style hot sauce, spices candies, olives, mustard, and chips. Other competitors are New Canyon Farms, Don Jovencio's, Rio Diablo, Truly Texas, Guiltless Gourmet, and Rose's. These all process specialty salsa in the same market segments, however, they are priced slightly higher.
Different Advantage(s) by Segment
Rio Grande Foods has an overall lower cost throughout the channels. On the wholesale Rio Grande Salsa Picante is priced lower, thus allowing the retailer to still meet their pricing margins and at the same time the product has a lower retail price. Rio Grande Salsa has a fancy package in a competitive container. The label also reveal nutritional facts about the product unlike the competitor's products.
Members of the targeted market enjoy Rio Grande Salsa Picante on an occasional basis. A consumer can expect to pay anywhere from $1.99 to $3.50 for a 16 oz. jar of Rio Grande Salsa Picante. The consumer is beginning to be inventive by using salsa on almost anything that has cheese, vegetables, or meats, along with several other dishes.
Comparison of Competitive Players
This year Rio Grande Foods saw sales increase by 200% by the end of the second quarter as it began establishing and broadening its customer base. In terms of volume, sales increased from 1993 sales of 82 cases to 1994 third quarter sales of 244 cases. In terms of market share, some difficulty is encountered because of the fragmented and small specialty Mexican salsa market. In the specialty Mexican salsa market, the market leaders J. Jose's and New Haven Farms who hold 34% and 27% respectively when the 23.8% allocated below will show how small the specialty food market is compared to the entire Mexican salsa market as a whole.
The category titled other does not only consist of specialty food processors in the specialty food industry, but countless other small private label companies selling in mom and pop convenience stores, grocery stores, and even to friends.
Comparison of Competitor's Resources/Willingness
After having viewed the breakdown of market share and Rio Grande Foods' sales volume, it is plain to see that this company is only a pebble in a quarry when compared to J. Jose's. Jose's has a larger flow of capital and has a higher inventory turnover rate compared to Rio Grande Foods. Rio Grande Foods has a lot of growing up to do before it even becomes a contended or an actual threat to Jose's. Jose's has a large product mix with great adequate depth in each line. They have consumer recognition due to the large amount of shelve space they occupy in the stores. Jose's know the tricks of the trade in production, distribution, and direct marketing, because they have been in the game longer than Rio Grande Foods. There is a new contender in the market that could pose a threat for Rio Grande Foods in the future. The name of the Mexican salsa is Chili's. Chili's utilizes the same 16 oz. container as Rio Grande Foods and has a mild, medium, and hot Mexican salsa picante. They are small players like Rio Grande foods with potential to grow and increase market share.
Additional Segments to Target
Rio Grande Foods would also do very well to expand into other large metropolitan cities, such as Albuquerque, Las Cruces, Roswell, etc.. Other very strong cities where the National Association for the Specialty Food Trade, Inc. is headquartered in New York along with the entire east cost region of the United States. Mexican salsa has just begun to make its mark in this region. Specialty food stores can be found all over in these areas. The larger the city in most cases the larger the standard of living thus yielding higher incomes. Being that Rio Grande Salsa Picante is from Santa Fe, NM, people of these eastern regions would be very excited to try an authentic Mexican salsa like Rio Grande.
A primary competitorin the un-targeted segments would be J. Jose's. Jose's is the leader of Mexican salsa in the specialty foods market. They have surplus resources to venture and test other potential markets. Being that Rio Grande Foods is fighting as a guerrilla, it has to put all of its resources into one attack and only one. It does not have the resources to fight a flanking battle. The assets that Rio Grande Foods does have are creativity and enthusiasm. Another restaurant that might pose a threat in the future is Chili's. It is based in Santa Fe, NM and is competing in the current segment of Rio Grande Foods. It is important that Rio Grande Foods eats up all of the available market share possible before Chili's does, because it can not afford another competitor.
Impact of economic trends.
Food processors and retail food store operators approach 1995 with some concern. While inflation is expected to remain under control, processors and retailers are concerned about the pace of domestic and international recovery and the expected growth of non-traditional retail outlets. Processors of brand name products will strive to stem the flow of less costly generic goods while retailers will attempt to offset the effects of new, non-traditional competition. Adjusted for inflation, the value of shipments of the food and beverage sector is forecasted to rise about 1 percent in 1995. Processors are also concerned about NAFTA, it has brought great export opportunities and will continue to bring opportunity in the future years. However, some processors fear backlash, which would have adverse effect on 1995 U.S. export sales. Processors are also concerned about the rate of recovery worldwide. For 1995, the value of processed foods and beverage exports is forecasted to rise about 5% to more than $25 billion. Over the next five years, the processed food and beverage industries are likely to grow slowly; adjusted for inflation, the value of aggregate industry shipments is forecasted to grow 1% a year. The industry growth in the beginning of the year will not be large, but will improve as the U.S. and international economies improve.
Impact of Social/Cultural Trends
Aside from the presently targeted consumers for a specialty Mexican salsa like Rio Grande Salsa Picante, other ethnic markets are beginning to emerge in the 1990's. For example, the Hispanic population in the United States has increased by 38% since 1980. But not only is the population growing, so is their annual income. More and more Hispanics are seeking an education past high school, which has led to a 71% increase in their income. At the present time, Rio Grande Salsa Picante is appealing to the Hispanic market, in terms of flavor and authenticity. The only problem is that the portion of this population that can afford to purchase specialty items has remained very small. Now, in the 90's it is beginning to reach a point where the Hispanic purchasing power cannot continue going on without notice by small and large processors.
Impact of Political/Legal Trends
As specialty food and retailers know, many consumers are reading food labels. Interest in the nutrition label and claims such as "no cholesterol" are examples of this phenomenon. So, just around the corner is another marketing tool for specialty food processors. It is known as organic labeling. In 1995, the Department of Agriculture (USDA) is expected to finalize its rules on organic food production, processing and labeling. This federal program will go side-by-side with state organic certification programs, which may contain additional or more restrictive that the federal program. However, the state programs must be approved by USDA, the state labeling must be consistent with federal labeling. Labeling cannot say that the particular state's products are of superior quality, and the state may not discriminate against out of state foods that bear the USDA label. A food which contains at least 95% ingredients which meet the farm-to-table requirements may use an organic claim, such as," 100% organic". It may also bear the USDA shield to show that the product meets USDA standards for organic production, and also bear the logo of the certifying agent. This is something that Rio Grande Foods can concern itself with in the future, it is not something that is mandatory. Rio Grande Foods needs to allocate all of its capital resources to what it is trying to accomplish in the marketplace. This organic logo is just another point of purchase tool that Rio Grande Salsa Picante has already used. The latest law that has been already ratified since May 1993 is the Nutrition Labeling and Education Act. This law was developed and ratified by the Food and Drug Administration (FDA) as the consumer market demanded. This law simply requires food products for public consumption to reveal nutritional facts on the package itself. Rio Grande Foods has already complied with this required law. The reason Rio Grande Foods did not have to comply with the law immediately is because there is a low volume item exemption. If a processor does not have volumes sales that generate $60,000 or more on an annual basis or sell 600,000 individual units, it is not required to comply.
Impact of Related Technology
In the grade A grocery stores like J.E.B. Marketplace mentioned above, Efficient Consumer Response is beginning to be utilized by large grocery store suppliers. This service is being used by processors and distributors alike. This service is offered by the Uniform Code Council (U.C.C.), which is located in Dayton, Ohio. This is the same company that makes the service of Uniform Product Code symbols (U.P.C.) on most retail items these days. The Efficient Consumer Response service allows processors to be directly in touch with their customers, be it distributors or retailers. The information they receive is scan movement information, this means that each time a related product of the processor is sold at a particular retail location, they are made aware of it electronically. This scan/product movement allows processors to operate on the efficient Just In Time method. Present primary competitors are not using this service, however, it is a thing of the future. Pace Foods is already utilizing this service. The reason they are is because they move such high volumes of product and their processing material requirement planning depends on it. Rio Grande Foods is only utilizing the U.P.C. symbols for efficient retail handling of the products. It also allows the retailers to know if the product is moving good enough to make them a profit with the shelf space Rio Grande Salsa Picante is occupying.
Capabilities and responsibilities.
Rio Grande Foods is a very small company in the start up stages of a business venture. The product itself is in the growth stage at the present time. Rio Grande foods will continue to look for an additional customer base outside of Santa Fe, NM and will aim for larger and wealthier markets such as the ones mentioned above in the opportunities section. Rio Grande Foods has a lot of potential in terms of growth if it can successfully launch a product that is unique into the specialty foods market. Customers are already testifying that it is truly an authentic experience and they are asking for a list of other products the company has to offer. Rio Grande Foods is led by a young, creative and talented management team. The primary product has surprisingly gotten off the ground in a market which was said to be super saturated by the Wall Street Journal in 1993. The credit goes to the quality of the product and the management team which consisted of one individual and later expanded to two in the summer of 1994.
Rio Grande Foods is very committed to maintaining their mission statement of authenticity. The company will not put a product on the market just to have a diverse product mix. If the products that they try to develop do not abide by the mission statement they will be discontinued. Management works hard to maintain the authentic reputation from the stationery their presentations are presented on to the products themselves. Management knows that without profits the company will no longer exist, but profit is not the only reason for the company's existence. Management puts employee and customer satisfaction above everything else. They feel that if the consumer is happy so are the employees, because they are directly related. If the consumer is happy, profits will take care of themselves.
THREATS AND OPPORTUNITIES
- Consumer preference of non-traditional salsa, such as the fruit salsa discussed above over authentic salsa picante like Rio Grande brand
- Target market becomes more interested in Tabasco style hot sauces
- Constant entry of new competitors with more capital may win any potential market share
- Food processing plant may be brought out by a large successful processor who is ready to handle its own production
- The economy stumbles and the Hispanic population is unable to flourish the way it has been into the specialty foods market
- Communicating wrong message to consumers about the product/company
- Company is unable to keep up with changing factors in the targeted segments
- Sales are not good enough to sustain growth
- Consumers of other types of salsa and sauces prefer a more authentic experience
- Growth in consumer awareness is directly related to word of mouth advertising
- The growth segment of the products life cycle will show consumers that Rio Grande Salsa
- Picante is preferred over the others
- Changes in market segmentation will be a new path for new markets (restaurants)
- Current targeted consumers become brand loyal to Rio Grande Salsa Picante
- Increased product diversity can make the company more noticeable for its brand name and quality
- A more diversified product mix can open the doors to new consumer segments and markets
- Rio Grande Foods product will set a new standard for specialty Mexican salsa
- Rio Grande Foods' can prosper while large competitors rival amongst themselves
- Ability to stay ahead of the competition by complying with new packaging and product laws even though it is not required to do so
STRENGTHS AND WEAKNESSES
- Young motivated, creative, and educated management
- High quality product
- Lower wholesale cost due to cost savings on packaging: three color label
- High volume jar and lid make for lower costs, and low miscellaneous expenses
- Financed only through family equity
- Good relationship with co-packer (C&D Mexican Foods)
- Competitive packaging
- Located near larger consumer markets, such as Albuquerque, Las Cruces, and Santa Fe
- Appropriate packaging for the specialty food market
- Experienced independent sales representative
- Nutritional facts table
- Development of new recipes
- Member of the National association for the Specialty Food Trade, Inc. (NASFT)
- Aware of primary competitor (J. Jose)
- Limited time to allocate 100% effort by management
- One product-product mix
- Small distribution established
- Low inventory turnover rate
- Limited consumer awareness
- Small budget for print media (direct marketing)
Assumptions for threat and opportunity statements.
- Consumers will continue to purchase traditional authentic salsa picante
- Tabasco style hot sauces already have their own share of the "hot sauce market" as a whole, but there is plenty of room for both styles of salsa
- Rio Grande Foods will have to continue with Guerrilla warfare tactics in order to stay ahead of the big player's advertising campaigns
- Food processing plant co-packer is committed to several large private label companies that will not allow it to sell out
- Rio Grande Foods will not lose its focus and communicate the wrong message to its consumers
- Sales will pick up in the future when the product line becomes more diversified with product categories that are not nearly as competitive as the Mexican salsa product category
Objectives of marketing plan.
The company's objectives are to earn a position in the marketplace as a manufacturer of high quality Mexican food products in the specialty foods industry. Committed to supplying grade "A" grocery stores, specialty food stores, and gift shops, on a wholesale basis only, throughout Texas by 1998. At the same time the company wants to diversify its product mix steadily with products of the same quality standards as Rio Grande Salsa Picante. Sales for 1 year from 1994 up to the present have increased by 300%. The reason for the big surge is because it wasn't until the beginning of 1994 that the company started to push its products. Revenues were $2,200 in 1993, they have grown to $6,600 by the end of the third quarterin 1994. However, the company needs to reach revenues of $7,500 before it can break even. The company is sure to do this by the third quarter of 1995 if it can meet its goal of a 9% increase in sales per year up to 1998, once account growth stabilizes by the end of the second quarter in 1995. By the third quarter in 1995 with all goals met, market share should be .0316% up from .03% at the end of the third quarter in 1994. The company is planning on accomplishing its goals by doing what is written in the mission/objective statement, which is to position the company and the product in the client and consumers mind as a processor of high quality products and nothing less. Packaging will assist in the positioning of the product by revealing nutritional facts and by reinforcing the idea of authenticity.
The national marketplace for the condiment segment of the specialty foods industry is worth $ 13 billion. Rio Grande Foods has just begun its hike in terms of growth. It has only tapped into the Santa Fe, NM market at the present time. The beginning of 1994 marked the beginning of the company's intial effort to establish its customer base, at which time it saw an increase of 200% by the second quarter and 300% by the end of the third. When growth begins to stabilize the company expects growth of 9% per annum. The company will continue to target the high income educated individuals originally discussed in the "Market Segment Currently Targeted" section of this plan. Any promotional efforts will be prepared and implemented with that type of individual in mind. Rio Grande Foods will also have to remember the flourishing Hispanic market in the near future who will be very capable of purchasing specialty foods. In order to achieve the company's print media marketing objectives, sales will have to be in the $7,500 plus (+) category overall. The company will have to keep enlarging its customer base and must also maintain a 9% annual growth rate once growth has been stabilized. Other important factors to consider are consumer taste/preferences and trends.
The target market that the company will need to satisfy is one that is looking for specialty food items. Products are considered specialty food items because of their unusually high product quality due to ingredients and not for unusual packaging. The consumer in the specialty food industry is just as concerned about value as the consumer in the highly commercialized industry. The specialty foods consumer is not simply interested in spending his/her money on more expensive food products to make a fashion status statement. This is why Rio Grande Salsa Picante can be found a few cents cheaper, to a few dollars cheaper in some cases, in the market place. The company wants to be perceived as a "quality leader" in the specialty foods industry.
Current Product Fit per Segment - The current products of Rio Grande Foods satisfies the very active, health conscious consumers in the specialty food industry, because of the better quality products that can be found in terms of ingredients. This consumer pays more for a specialty food item only because the quality of the ingredients justify the higher price. The nutritional factors are also very important to them and that is why Rio Grande Foods has nutritional facts on its packaging. Required Product Additions/Modifications - In order for the company to stay in operation it will have to increase its distribution to cities outside of Santa Fe, NM to increase the inventory turn over rate. It will also need to increase its product mix to a more diverse mix so that it can please a lot more consumers and to increase point of purchase visibility/awareness.
Additional Product Strategies - Utilize all of the company's strengths to make itself a strong preference to consumers and position itself as a "quality leader." To assist in accomplishing its goals the company will utilize a push strategy to get retailers to carry their product. Credit terms of 2/10 Net 30 are offered and occasional volume discounts will be offered.
Due to the nature of the product (Mexican salsa) and the specialty food industry itself, volume per store delivery is low. To elaborate, a delivery destination outside a 5 mile radius of the company is not cost effective if done by a company truck. Therefore, the company utilizes a parcel delivery company to distribute its products. United Parcel Services (UPS) is the company utilized for all deliveries to specialty food stores and gift shops. When orders need to be filled and product distributed, a phone call is all it takes to get a delivery truck over to the company to pick up the product. A $5.00 pick-up fee is charged per visit and the cost per package varies from $4.85 on up depending on the destination. Distribution to the higher volume grade "A" grocery stores are handled by the company itself. Not only is it cost effective, but it also helps increase product freshness and all merchandising activities as well. Quality and dependability is important in large stores, such as J.E.B Market Place, because without it the company risks loosing customers and eventually loosing the account. The reason UPS delivery is accepted in the other two segments is because those stores are not as competitive and busy as grade "A" grocery stores. They have someone to unpack and stock low volume items every day.
Additional/Modified Distribution per Segment - The only thing that can be improved is the number of accounts being serviced at the present time. The reason for this is not only to improve sales and profits, however, it is a factor that will assist in the process. If distribution could be increased to the point where there was a shipment every day, an account could be set up with UPS. This would eliminate the $5.00 pick up fee they have on sporadic pick up calls.
Distribution for Efficiency/Effectiveness - A larger customer base and a higher consumer awareness over other products will be needed to gain sales, market share, and to reduce marginal costs. Increased sales will increase inventory turnover rates, which means higher volume manufacturing will bring fixed manufacturing costs down. This will make the net profit margin larger if all expenses remain fixed. This will allow the company to allocate more funds to promotional efforts and product development.
Pricing Fit per Segment - The company is trying to position itself as a processor of highly valuable products in the specialty foods industry. It wants to be a "quality leader" and at the same time a "price leader". On the following page a breakdown of the company's specialty foods pricing practices can be seen on Table 1 in the appendices. The price will adjust through the years up to 1998 to compensate for an average inflation rate of 4%, this can also be seen at the bottom of Table 1. Table 1.5, is a pricing schedule that has been developed to show the average competitor's pricing practices for comparison. After comparing the two tables, the differences can be seen in the wholesale cost per unit and the cost of goods sold. Most competitors are using not so fresh ingredients while maintaining a higher wholesale cost. Rio Grande Foods is trying to do the opposite within a relevant range so that the company is making a suitable profit that is consistent with corporate objectives.
Required Pricing Modifications per Segment - The company needs to reduce the cost of goods sold through increased volumes and not through cheaper ingredients. Also, more funds need to be allocated to point of purchase advertisements, such as recipe books. Recipe books will present new ways to use Rio Grande Salsa Picante, which will increase the rate of consumption - increasing turn over.
Refined Messages - The niche of Rio Grande Foods is accented by its products' packaging that represents authenticity from the name to the graphic trade mark and label scheme complete with nutritional facts. There is also plenty of clear glass that allows for easy view of the sauces authentic texture and appearance. It "tells" the consumer that there is no need to eat out or to make they're own salsa, that home style texture and flavor can now be found in a jar at a valuable price that is not only good for my pocket book, but also for my health.
Optimal Promotional Mix - Targeting the consumer at his/her favorite events and bringing that appeal to them in the form of pure eating satisfaction at a price that will not be taking advantage of them. Formulating a memorable slogan that will remind the consumer of authenticity, value, quality, and satisfaction.
Tactical Product Objectives
Rio Grande Foods will continue to grow with the original product, because it has proven to be satisfactory since the beginning. The packaging and the ingredients help the company as it tries to reach its positioning objectives. Being that Rio Grande Foods is fighting guerrilla warfare tactics, it cannot not afford to launch another product because all of its resources are pushing the Mexican salsa in 1995.
Tactical objectives for channel distribution.
In 1995, Rio Grande Foods will continue to satisfy its current accounts while continuing to increase its consumer base/distribution. The company will keep servicing its present accounts the same reliable way it has been from the beginning. It will try to increase consumer awareness at the present stores by increasing shelf space. Some success has been seen at the J.E.B. grade "A" grocery stores where shelf space went from four-facings/two cases to eight-facings/four cases. The company will have to continue pushing the product through the marketing channels on a wholesale basis to the targeted segments. There is a great need to prove to the retail customers that the product does move and that it could do even better with increased exposure on the shelf.
Tactical objectives for physical distribution.
For 1995, the company will continue to service the grade "A" grocery stores through direct store delivery (DSD) methods. The specialty food stores and gift shops will continue to be supplied via UPS. The objective is to have a broad enough distribution to establish an account with UPS so that the $5.00 pick up fee can be eliminated, thus making distribution more cost effective. The company will have to continue pushing the product as explained above so that it can reach a level where an account with UPS can be established. If the company can establish approximately 35 separate accounts this goal can be met. The accounts will have to be staggered carefully for delivery according to demand so that a daily pick up will be possible.
Tactical Pricing Objectives
For 1995, the price on a wholesale basis will remain the same as it was in 1994 ($2.25/unit - $27.00/case). However, there will be price increases in the future years as seen in the situational analysis on table 2. The only thing the company hopes to do is increase volume so that the cost of goods sold can go down allowing more funds to be allocated to the promotional margin. These funds can be used to meet the marketing objectives.
Tactical objectives for advertising.
In 1995, advertising will equal $300.00 due to the low amount of money available. These funds will be used to make consumers notice Rio Grande brand salsa picante in the market place. Funds will be spent on print media only. The company must continue with steady growth of sales so that the margin allocated to advertising can generate the required funds to meet objectives.
Tactical objectives for sales promotions.
The company will continue approaching new customers on the retail level in hopes of meeting growth objectives so that all other factors discussed will fall into place. The company will do this by setting up appointments for presentations to grocery buyers. It is important to only target those consumers listed in its target segments - grade "A" grocery stores, specialty food stores, and gift shops. The company will also continue to sell itself and its product to its present customers in hopes of increasing shelf-facings and shelf-space in the same manner. The company will have to begin compiling a list of potential customers that can be screened for accuracy. Once the list has been narrowed down, the company can begin setting appointments on an efficient schedule so that it is not in conflict with other company operations.
The company will use allocated promotional funds to conduct samplings and to produce point of purchase advertisements, such as recipes, Samplings can be held on the weekends inside some of the busier stores, between 9:00 a.m. to 11:00 a.m. in the mornings and 4:00 p.m. to 9:00 p.m. in the evenings. At the same time the company can distribute recipes that require Rio Grande Salsa Picante as one of the ingredients. These new food ideas will help stimulate a more frequent use of the product thus increasing consumer consumption while causing the same effect all the way up to higher volume production runs. These recipes can also be used as a point of purchase marketing tool. They have proven more successful at the privately owned specialty food stores and gift shops, because the employees have more time to discuss the products and ideas to customers. This helps to answer any questions and make the customer aware of the recipes. This promotion proved to be successful at Toddie's in downtown Santa Fe, NM, where the recipes were placed on hooks directly below the product for better visibility to the consumer. The company will also offer occasional business to business promotional allowances to retailers in terms of lower wholesale costs. In order for these sales promotions to be feasible, the company will have to maintain sales growth as mentioned above.
On table 2, the cost of goods sold will be dropping steadily if growth of 9% per annum can be sustained after account growth has stabilized at the end of the second quarter in 1995 with revenues of $7,500. From that point onto 1998, the 4% inflation rate is taken into consideration along with the 9% annual growth rate, the result is what is seen on Table 2 in the appendices. The expenses margin will remain at 30% because as other expenses are reduced, the advertising margin will grow accordingly. These extra funds will help the company become more recognized through the use of print media as it tries to establish itself in the specialty foods industry as a "price" and "quality leader".
Rio grande foods fiscal year 1994-95.
Average Competitor's Price Fiscal Year 1994-95
Operational Budgets 1995-1998
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