Zimbabweans love peanut butter (dovi in shona, and idobi in Ndebele). Peanut butter in Zimbabwe is added to food like rice, relish, vegetables, bread and porridge. There is a high demand for peanut butter in Zimbabwe. This article will explain how to start a peanut butter manufacturing business in Zimbabwe. You should always carry out a feasibility study, market research and write a business plan before you venture into any business.Do not make the mistake of starting a peanut butter manufacturing business or any other business just because someone is doing it and he/she says it’s profitable. The purpose of this article is just to give you the basics of what you need to start a peanut butter manufacturing business in Zimbabwe. You should carry out your own research before you venture into this business.
What you need
Peanut Butter Milling/Grinding Machine
You need a machine to process/mill the peanut butter. Please note that you have to be very careful when buying a peanut butter milling/grinding machine in Zimbabwe, since some machines have a short lifespan, and just a few weeks after purchasing it, it may break down and you will have to repair it. You also have to use the peanut butter milling machine according to the instructions provided. This is very important, otherwise your peanut butter making machine will break down quickly. Before you buy your machine, ask for the terms of the sale, the guarantee, and whether they offer free repair of the machines, because at one point, it will certainly break down. It will be much better if you enquire from those who already have the peanut butter milling machine, so that they refer you to where they purchased their machines from.
You can get the peanut butter milling machine from large engineering companies like Tanroy Engineering (there are plenty of engineering companies in Zimbabwe). The other source is from the indigenous black people, for example if you go to Magaba in Harare, you will see people selling these machines.
The peanut butter milling machines have different capacities, so you have to put that into consideration when purchasing. For example one may have an output capacity of 10Kg/Hour, while others have 5Kg/hour. The size and number of the machines you should buy will also depend on your scale of production. The prices of the peanut butter milling machines range from $300-$1000 if you are buying from the indigenous people, and above US$600 if you are purchasing from the engineering companies in Zimbabwe. The prices depend on the output capacity and electric motor of the machine.
The groundnuts have to be roasted before you put them into the peanut butter milling machine. You will have to purchase a roaster, or use your microwave if you are doing it at a small scale. You can get the roaster from engineering companies or from the indigenous black people. It may be cheaper to buy unshelled groundnuts, and then shell them on your own. You will then need a groundnut sheller, which you can buy again from the engineering companies or from the indigenous black people in Zimbabwe. If you decide to buy shelled groundnuts, then there will be no need for you to buy the groundnut sheller.
You will also need to buy the containers for packing your peanut butter. Peanut butter is usually packed in 375 ml containers. Each container will cost you between $0.15 and $0.2. To make your peanut butter more marketable you will need branding. You will have to get a logo designed, and print the branding paper to wrap around the container, with information like the brand of the peanut butter (e.g Mama’s peanut butter), the volume of the peanut butter, ingredients, barcode etc.
Premises, Licencing and Labour
If you are producing peanut butter for your business at a large scale, you will have to find industrial premises for your peanut butter plant. The premises should have electricity supply since the peanut butter milling machines use electricity (though some machines are manually operated). You also have to get a business licence from the city council. The process of applying for the licence include first paying the administration fee at the city council offices, advertising your business in the daily newspaper, after which a health inspection team will come and take a look at your premises, and then you will be given a trading permit. If you operate without a licence, you will have a lot of trouble with the city council authorities, which will negatively affect your business.
You will need employees who will purchase the groundnuts, roast the groundnuts, operate the peanut butter milling machine, pack the peanut butter, and market your product. The number of employees you need will depend on the size of your business. Please note that you should train your employees so that they roast properly the groundnuts, process the peanut butter till it is smooth enough, and use the peanut butter milling machine properly.
This will be one of the factors which will determine the profitability of your peanut butter business. Are you able to get affordable groundnuts? Where are you planning to get your groundnuts from? Do they have good quality? You need big groundnuts in order to make good quality peanut butter. You can get the shelled groundnuts from market places like Mbare Musika in Harare. If you are going to make peanut butter at a large scale in Zimbabwe, it will be better for you to buy your groundnuts directly from the farmers, so that you increase the profitability by removing the middle man. Buying groundnuts from market places like Mbare Musika is more expensive, and will reduce your profitability.
Major local sources of groundnuts in Zimbabwe are Murehwa, Mutoko and Buhera. So you can make arrangements with farmers to buy the groundnuts in bulky. It is also cheaper buying groundnuts from the rural areas using barter trade. You can have agents who will go to the rural areas with stuff like uniforms, shoes, groceries, clothes, and stationery to exchange with groundnuts. The groundnuts you buy can be shelled or unshelled. If you buy unshelled ones, you will have to shell them using a groundnut sheller.
Groundnuts are seasonal, and their prices fluctuates throughout the year, as the price is determined by supply and demand. In Zimbabwe, groundnuts will be in high supply after the harvesting period, between May and August, and the prices will range from $0.5 to $0.8 per litre/Kg of shelled ground nuts, which is from $10-$16 per 20litres/Kgs. From September to April, the groundnuts will be in low supply and high demand, thus the prices will increase and will range from $0.80 to $1.25 per litre/KG of shelled ground nuts, which is between $16-$25 per 20 litres/Kg. At market places like Mbare Musika, they use 20 litre buckets to sell the groundnuts, and it is roughly equal to 20Kg. Each 20 litres of shelled groundnuts will produce 28 to 34 bottles (375ml) of peanut butter, depending on the quality of the groundnuts.
Groundnuts in Zimbabwe can also be purchased from companies which import them from Zambia and Malawi. The prices are from $700 to $800 per tonne, though the prices will also vary throughout the year, depending on supply and demand. Imported groundnuts are usually of lower quality, and this is also reflected in the price which is cheaper than local groundnuts.
The amount of capital you need will depend on the size of the peanut butter manufacturing business you want to start ($500-$1000 for a small home based peanut butter manufacturing business, > $4000 for a medium sized peanut butter manufacturing business). You may want to get a business loan from the banks, though the chances of getting one in Zimbabwe when you are starting a business are low. Banks prefer giving loans to businesses which are already operating. Consider using your personal savings, applying for a personal loan from a bank, and crowd funding from your friends and relatives. You may also seek investors and partners. A well detailed business plan will help you in securing funding from investors and banks.
Where are you going to sell your peanut butter? What is your target market? How are you going to price the peanut butter? How are you going to market your peanut butter? Peanut butter in Zimbabwe is usually sold in 375ml bottles. Each 375ml bottle costs from $1-$1.50. If you are making peanut butter at a small scale, eg at your house, you may market it by placing a ‘Peanut Butter for sale’ sign at your gate. The price of this type of peanut butter is $1 and it does not need to be branded. You may supply your peanut butter at wholesale prices to vendors in your local neighbourhood, and in market places like Mbare Musika. This type of peanut butter also is not usually branded, and you will be supplying to the vendors at a price of $0.80 to $0.90 per bottle, and they will then sell the peanut butter at $1 per bottle.
If you want to be really profitable in your peanut butter business, you will have produce peanut butter at a large scale, and target the wholesalers and the supermarkets. You will have to brand your peanut butter, and obtain a barcode for your peanut butter. You will not be able to supply your peanut butter to the supermarkets and wholesalers without a barcode. There are companies which provide barcodes for your products in Zimbabwe, and you can find them by googling. Supermarkets sell peanut butter at an average price of $1.50 per 375ml bottle. You will be supplying to them at a price of $1 to $1.30 per 375ml bottle. It is very important that you carry out your own market research before you venture into this business.
Comment below with any questions you have concerning peanut butter manufacturing business in Zimbabwe. Are you already in this business? If so comment and tell us your experiences. Share with us what you think about the peanut butter manufacturing business in Zimbabwe.