5 Mistakes Every Frozen Food Business in Nigeria Must Avoid
Introduction
The Choice Foods was started in 2020 by two brothers who wanted to establish an ice cream parlor but later changed their minds when they realized that there was no market for such products in Ibadan at that time. They then decided to open a frozen food shop instead, to provide customers with convenience as well as quality products at affordable prices.
A Few months into the business, they had to shut down operations due to power inconsistency—something not so surprising if you live or do business in Nigeria. The owners of the firm even said that they had to sell their products at a loss because of the high cost of diesel for their generators. Sad, right?
For many people, starting a business is a dream come true. However, running a successful business can be difficult and frightening at times. The key to making such an investment worthwhile is to avoid the common blunders made by some entrepreneurs, who often wish they had spent their time elsewhere.
Today, I’ll share 5 mistakes every frozen food business in Nigeria must avoid if they want to grow and make more money.
What is a frozen food business?
Frozen food products are food items that are stored at very low temperatures for later consumption. The freezing process preserves the quality of the product by eliminating any harmful bacteria or viruses that may cause spoilage.
The most common types of food products that are frozen are fish, chicken and meat, but there are other types such as vegetables and fruits too. These products are usually sold in the markets, in grocery stores, or supermarkets in bulk packages which include bags of different types of products like fish fillets, ground beef patties, chicken breasts, etc.
The frozen food industry is a rapidly growing market, especially in Nigeria. It is quite lucrative, as the demand for fish and poultry items has increased considerably. Typically, these marketers possess large to medium cold room facilities to store their products. Small-scale stores that can’t afford cold rooms buy directly from the wholesalers and still rely on them for storage.
Major Requirements to operate a frozen food business
(1) Space
Like with every other business, you need to have a space. This will allow you to store all the necessary equipment such as generators, cold rooms, office, etc. You can buy or rent one depending on your budget.
(2) Cold room storage
The cold room is the most important part of the whole process. It’s where the food is stored at a low temperature and, therefore, where all the magic happens. They come in different sizes and capacities, so it is important to find out which one will suit your needs before buying it.
(3) Power
You’ll also need a power supply. This is pretty obvious; you can’t run your freezer without electricity. But it’s not quite that simple.
The first thing you need is a reliable source of electricity—so reliable that it won’t go out. You can’t get this from the utility company in Nigeria. You might want to consider a backup generator on site so that there’s something ready if the power fails for any reason.
(4) Product
You also need to decide on a product that you want to sell. A great place to start is with a few different types of fish and meats and then work your way through the list in order of least demanded to most demanded.
Other things you will need for your business are: water, apron, knives and cutlasses, buckets, etc.
5 Mistakes every frozen food business must avoid
(1) Bad location
Location is key in any business, but especially so with a frozen food operation. The location of your store should be accessible by foot and by car. It needs to have a good parking lot and good access for deliveries.
But the best location is one that is convenient to you, the employees, your supplier and the customers. Your customers and suppliers will go to where they can get or deliver their order quickly without having to drive through inaccessible roads. Your employees will want to work where they are comfortable and happy, rather than subjecting themselves to long hours away from home and family. And you as the owner will be more likely to keep working hard if you’re enjoying what you do every day.
A good location is also one that is close to the market, and if stable power is available, that might just be the best thing since sliced bread.
(2) Wrong cold storage selection
It is important to choose the right cold room when venturing into this kind of business. The quality of the equipment must be top-notch since it will be used to store your products, which are very delicate and require utmost care. It is not easy to find the right one because there are so many manufacturers on the market and they all claim they can give you the best service. You need to make sure that the cold room manufacturer is reliable and has enough experience in this field.
Do your homework first; one of the most important factors to consider when selecting a cold room manufacturer is the product’s quality. It’s important to look at their track record and past customers. Do they provide good customer service? Do they have an excellent reputation? If so, then this is an important sign that they are reliable and trustworthy.
Also assess the quality assurance process used by them. It is always important to check if there are any standards set by which their products must meet before they can be sold on their own premises or distributed across other dealerships. This way, customers will be assured of their safety and quality at all times.
This is exactly why you should consider a professional cold room manufacturer like Ofin Global HVAC/R Company—one of the best in the business. We design, manufacture, and install standard cold room facilities in line with international best practices. The best part is that it is cost-effective and comes with a warranty.
(3) Not having multiple backup power sources
We all know that relying on the utility company for power in Nigeria is not exactly the best option, so it’s understandable when people settle for diesel generators as a source of power. But you need to understand that the price of diesel is always dwindling. According to a report, the average price of diesel paid by consumers increased by 1.51% month-on-month and by 8.05% year-on-year in June 2021. Let’s not even talk about the numerous scarcities as a result of strike actions by petroleum workers or other labor unions.
Operating the cold room is highly power-consuming because you need to keep it on for a long period of time. You should consider having an alternative backup power source like solar and/or more than one generator.
(4) No training on storage technique
Don’t assume preserving a product in a cold room is as easy as putting it inside the cooling compartment. If you want to keep your product in good condition and extend the useful life of your cold storage facility, you must be familiar with a variety of storage techniques. You don’t want to sell contaminated products to your customers. That will make them not come back or refer anyone to you. Also, knowing the right temperature to store different food items is important in retaining the food’s quality and nutritional value.
It is important to train yourself and your employees on some of these techniques recommended by the food administrative agency, popularly referred to as NAFDAC in Nigeria. For more on this, see our article on Cold Storage Tips & Advice for Cold Room Businesses.
(5) No Insurance
One of the most important things you need to think about when starting this business is what kind of insurance you want to carry. A lot of people start their own business without ever thinking about it, but if you are going to be running a food business, then it’s essential to have some sort of protection in place.
It’s easy to get carried away with dreaming up ideas for your new venture and not realize that this could leave you vulnerable if something goes wrong. If anything happens, then you could lose everything and have no way of getting it back on track again.
There are many different kinds of insurance available, but they all offer different levels of protection depending on their level of cover and what’s included in each policy. Look into what types of risks are covered by the policy—does it cover fire damage, theft, workers’ compensation? You should also ask whether there are any exclusions for particular events.
Wrapping up
When investing into a business in a nascent market like Nigeria, the risks and uncertainties are high. Will it be successful? Is it too fragile at this point? Be alert on these 5 mistakes and avoid them at all costs and you will be able to maximize your business profit.
