Frozen food business in Nigeria is a very lucrative one to venture into whether you live in Lagos, Abuja, Port-Harcourt, Asaba, Onitsha, and any part of the country.
This business is one of the fastest moving businesses in Nigeria, as they’ve continuously been an increase in demand for frozen food in the urban area especially.
Due to the scarcity of fresh food mainly in urban areas, frozen food is very costly, as a kilo of frozen chicken could go for 1,500 naira and above in some places.
This business is becoming more and more popular in Nigeria not just because there’s always a high demand, but it is very profitable as you can make up to 500 naira profit per kilo of frozen food sold.
So, if you have in mind to start a frozen food business in Nigeria, there’s no better time than now. That is why we’ve come up with this post to show you exactly how to start a frozen food business in Nigeria and be successful.
In this post, we will cover the cost of starting the business, the materials needed to start, and of course how profitable frozen food business in Nigeria is.
If you’re ready to know all that, let’s get started then!
What are Frozen Foods?
Frozen foods refer to food items that are stored at a freezing temperature to preserve them from spoilage. These foods include chicken, fish, turkey, pork, beef, etc.
Frozen Food Business in Nigeria
Frozen food business refers to the trading of frozen foods. That is getting into the business, you’ll be responsible for the freezing, storage, marketing, and sales of frozen food items.
This business thrives especially in Nigeria because fresh foods like fish are readily available in the country due to the numerous rivers in the rural area. And in urban areas, there are lots of poultry that breed chickens that are later processed into frozen foods.
In Nigeria, the frozen food business can be approached in two ways. Firstly, you can be responsible for every activity of the business from the purchase of fresh (live) food items to processing, storage, and sales. This is more profitable but difficult for beginners especially.
The second approach involves just the purchase of frozen food items from processing companies, then storing and reselling them. This type is also profitable and is the most popular way people do this business in Nigeria, although it requires more capital.
How Much Do You Need to Start a Frozen Food Business in Nigeria
Frozen food business in Nigeria can be very profitable, but one question that a lot of people ask is – what is the cost of starting a frozen food business in Nigeria?
This business is a type that requires a lot of investment upfront as it requires a lot of expensive materials to start, thereby making the frozen food business capital-intensive.
To start a frozen food business, you’ll need a capital of at least 500,000 Naira, if you want to be responsible for storage and freezing. However, if you’ll be paying for a cold room and storage facility, you can start the business with 100K on the low end.
How Profitable is Frozen Food Business in Nigeria
Another common question asked by people looking to get into this business is – is frozen food business profitable in Nigeria?
Just like every other business, the more money you put in, the higher your return. Therefore, the probability of this business depends on the size of your business. Also, the expected profits of this business vary depending on location.
In areas where frozen foods are expensive, your profit margin could range from 20% to 50% per carton. However, in areas where it is less expensive, your profit margin could range from 15% to 40% per carton.
How to Start a Frozen Food Business in Nigeria
Now that you’ve known how much is needed to start a frozen food business in Nigeria, as well as the profit to expect, let’s see the steps required to start a successful frozen food business in Nigeria.
1. Do Your Market Research
Like every other business, you need to carry out in-depth market research before starting a frozen food business.
Here you’ll get to understand the business by making research on how the business works, what are the requirements to get started, and also what type of people or what area is best for the business.
In your market survey, you need to find out if there’s a legal law guiding the business, as well as the association to join as a frozen food seller (if any).
Keep in mind that your market research should be based on the place you live or where you want to start the business. Therefore, to achieve the best result, try to find and meet people in the business for detailed research.
2. Pick a Specific Approach (Niche)
Like I said earlier, there is more than one way to approach the business. You can either choose to handle everything from processing to sales or deal with sales only. Based on the result of your research, you need to pick the best approach for you.
Also, spreading across all niches from frozen chicken to fish and meat, you may have stunted growth. Therefore, start by focusing on one niche at a time. If chicken sells well in your area, go for it, and if it’s fish, start with just that.
3. Come Up with a Strategic Business Plan
The more composed and strategic you are towards a business the higher your chances of success. Before starting, you need to sit and draft a realistic business plan.
If step one is well carried out, this step would be easy, as all you need to do is outline your objectives and targets.
While drafting your plan, bear in mind that there’s competition in the business. If you carry out good market research, you should know what your competitors are lacking, and then find a way to leverage that opportunity in your plan.
4. Arrange for a Startup Fund
In your business plan, you must have outlined the capital needed to start. Now is the time to raise the money.
Like I said earlier, depending on your approach, the frozen food business in Nigeria could be capital intensive. You can source for your startup fund in many ways including personal savings, or loans from friends, family, and even banks.
5. Get All The Required Materials
With your startup fund now ready, the next thing is to get all the required equipment needed to start the business. From your market research, you should have the list already.
However, to make things easier, the following are some of the equipment needed to start a frozen food business in Nigeria.
- Deep freezer
- Cleaver and/or cutlass
6. Arrange for a Storage Facility
One of the most important things in this business is storage. After all, your job is to preserve food items for sale, which means you need a place to store them.
If you’re starting on a large scale, you would want to arrange for a big storage facility like a cold room. They cost a lot as you’ll need to account for the cost of a warehouse, and tons of freezing equipment.
Alternatively, you can pay for freezing and storage service in a bigger cold room. Here, you’ll be charged for storage per hour or on a daily basis. This is ideal for a small-scale frozen food business.
7. Source the Best Supplier
If you want to start on a large scale whether you’ll handle everything from processing to sales, the best place to source products would be farms (e.g poultry for chicken). And on a small scale, you’ll need to look for the best processor.
If your market research is well done, you should be able to know how to source the best supplier for you. In fact, if you meet with a seller while doing your research, they should recommend their suppliers which can start with, and then carry out more research on your own later.
8. Get a Shop
Frozen food business requires a shop. Not just because of the place to keep all your material and items, but also because you need to have a place that will be known for your business.
First, you need to study your environment if it is suitable for the business. If not, you need to look for a shop in an area good for a frozen food business.
To get the best location, you need to watch out for the following.
- How populated is the area?
- What type of people lives in the area?
- Is it a residential area or a commercial area?
Residential areas work well for this business because people that will be patronizing your business are mainly housewives, and also restaurants.
Security also matters when looking for a shop for your frozen food business, as you want to go with an area with a low criminal record.
9. Register with the Necessary Association
Based on your research, you should have known if there’s any association for frozen food sellers in your area. If there is, make sure you register, join the association and get the necessary licenses to start the business.
10. Get Started
Everything is set, what is left now is to get to work. At the start, you need to make sure not to keep much stock in hand as sales won’t be much for now.
You’ll need to print a banner to describe your business, and also advertise to people in your neighborhood to know that your business is up.
The frozen food business in Nigeria is a good business for young female entrepreneurs especially, as it is easy to start and less stressful. With this post, I believe you’ve known all the steps to take to start a successful frozen food business in Nigeria.