In case you have never realised this, the packaging of products is itself a form of value addition. So much value can be added during the packaging stage that the process itself can be the entirety of what a business does. Packaging foods for retail can be lucrative because it is the necessary process for turning products produced during manufacturing, processing and farming into actual grocery items. Also, importing and transporting food packed in bulk containers costs substantially less than transporting the same amount of product when it has been packaged into smaller (retail sized) containers. What follows is a guide for venturing into this line of business for those with mid-to-modest amounts of starting up capital.
Write a business plan
Like in all businesses ventures which you embark on, you are strongly advised to start with a business plan. This should guide all your future activities in establishing and operating your business. Business plans are also an excellent tool for communicating what you are trying to achieve to partners, potential investors and other stakeholders.
Choose your product
When selecting which foods to the source to package you have to consider several factors which include:
The market size
Before choosing a product to package you should conduct extensive market research on it. Measure its consumer appeal and the size of its existing market, if any. This last point is important because it is possible to find success packaging and selling a yet unknown product. However, you must remember that new products often require the kind of promotion which fledgeling small businesses do not have the resources for.
The perishability of the (unpacked) product
Perishable products carry more risk and can be more expensive to handle. For instance, the (yet unpacked) product may go bad while in your possession resulting in significant financial losses. Besides such products may leave you especially vulnerable to disturbances like strikes and protests. Sometimes these foods can also require special handling and facilities e.g. refrigeration or low humidity atmospheres.
Food products can have vastly different packaging needs. Sometimes the required packaging material can be very expensive or the packaging process itself can require equipment and machinery that is. All but the biggest operations will prefer products which only need simple, inexpensive packaging processes such as those which can be done manually.
The price of the final packaged goods over the original bulk consignment can differ depending on the product. Those products which offer the greatest profit margins when packed are more preferable. Profitability considerations can also favour those products which have more value per unit of weight (or volume) as these will cost less to store and transport.
How much capital you will need to start your packaging business will depend on (among other things) how large you want your operation to be, the kind and number of products which you want to package and the kind of machinery which you want to use if any. To raise the capital you can use your savings, seek investment or approach family and friends. Institutions like banks can be approached though many seem to agree that nowadays starting a business from scratch using money that accrues interest is a bad idea, especially if starting such a business requires that you quit your day job.
Find a facility
The facilities you use to conduct your packaging business activities should also be spacious enough to receive and safely store any yet unpackaged product. There must also be enough room to store the final packaged product while it is awaiting delivery. A facility which handles food requires a license from the local authority to operate and it has to pass a health inspection. This means that your chosen facility has to be impeccably clean, free from pests and running water is not an option.
After you have done your market research, you can start looking for suppliers. These can range from small businesses in Zimbabwe to bigger ones overseas. Examples of foods which can be sourced locally for packaging include dried kapenta, dried fish, mufushwa, soya mince, dried mopane worms, honey and all the various locally produced types beans and peas. From outside the country, you can import in bulk food products like parboiled rice and kinds of pasta such as spaghetti and macaroni.
Find a packaging material supplier
Suppliers of packaging material come in all sizes. Some are mere retailers of standard containers and packages while some manufacture and do the printing for their clients. The size and budget of your operation should determine which kind you go with. The smaller of these operations are more approachable and likely to require minimum order quantities which smaller businesses can manage.
Food is not only packaged for the final consumer. It also needs to be packaged for efficient storage, handling and transport.
This is the main packaging that is in contact with the actual food product. Products on store shelves are usually in their primary packaging and it usually prominently displays the product brand name and other useful information.
This is used to combine primary packaged products into larger packages for easier and more efficient handling. The larger boxes which usually hold products units are an example of this. The labelling on them is usually just for informational purposes rather than actual branding and promotion which is usually printed on primary packaging.
Secondary packages can, in turn, be combined and placed onto pallets for easier handling, storage and transportation. These pallets are designed to be easily moved by forklifts.
Comply with legal requirements
Food safety laws apply just as much to those businesses which do the packaging as they do to those which process the food. Not only can you be sued for selling food which makes people sick but you can also face criminal charges. If you intend to source the food you package from outside the country, you should pay special attention not only to the quality and ingredients of what you are bringing in but also the reputation of your prospective supplier.
Educate yourself on the laws which pertain to food production, its handling, sale and consumption. There are some ingredients which have been outlawed in the country but which can still be found in imported products. Because of this, you should have intimate knowledge of what exactly goes into what you resale under your own company’s name and brand especially if it comes from a source which is beyond the reach of Zimbabwean authorities.
Under the Food and food standards Act, it is illegal to sell, import or manufacture food that is adulterated, falsely described or unfit for human consumption. False labelling will get you in trouble; avoid the now popular ruses like claiming that your product is “Halaal”, “natural” or “homemade” if you know this is false.
Machinery and automation
The packaging of food involves processes like filling packages with predetermined weights or volumes of the product, sealing the containers, labelling them as appropriate and putting these primary packages into secondary ones. The whole process must be as fast and cost-efficient as possible. To achieve this and depending on your financial capabilities, machines can be used to either assist or completely replace humans at critical stages of the production chain.
Build a brand
As a packager, you have to build a recognizable brand. This involves designing the packaging and labelling on your products, coming up with the names, colours and logos. While smaller businesses may be tempted to do all of this on their own, it is far better to outsource the work to professionals.