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Selling Raw Foods in Nigeria, Everything You Must Know

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Nigeria, with a population of 223,804,632 in 2023, is a viable ground for business.

The food industry in Nigeria covers a wide spread of activities ranging from direct consumer purchases to purchases by industries involved in food processing.

According to the Food and Agricultural Organization, Nigeria in 2020 produced 5.5 million metric tons of rice. Nigeria is the highest producer of rice in Africa.

Also, Nigeria is a major producer of cassava, with a production rate of 20% of global production.

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The foodstuff business has to do with all activities involving the purchase and sale of food items at both wholesale and retail levels.

The foodstuff market is expected to experience a 3.4% growth in 2024. The food market is estimated to have an average volume per person of 186.60 kg in 2023.

The foodstuff business has high export potential. According to the National Bureau of Statistics, Nigeria, in 2022, exported over 598,200,000 billion Naira agricultural produce.

Foodstuff Ideas in Nigeria

Some best foodstuff ideas are:

  • Beans
  • Garri
  • Semo
  • Rice
  • Yam flour
  • Cocoyam
  • Red oil
  • Groundnut oil
  • Potato
  • Noodles

How Profitable is Foodstuff Business in Nigeria?

The high populace in Nigeria indicates that businesses can strive in their environment. The increasing population is an indication of the rising demand for food as human sustenance is on food.

The foodstuff business is profitable, involving bulk purchases directly from farms or distributors and selling in small quantities. This means higher profit for the business owner. Foodstuffs have a short life span; there are bought within a short time since there are daily consumables.

Waste products of foodstuff are purchased by persons who buy agricultural waste and as animal feed in goat farming, cow farming, ram farming, and poultry feeding.

At a business startup, an individual can make a profit of 20%, and the profit margin increases as the business grows.

Foodstuff Startup Process

  1. Conduct market survey

Making inquiries about the business you choose to be involved in is essential to experiencing success. This process involves accessing your competitors,  market research, identifying your target customers, and finally putting these analyses discovered into work.

  1. Get startup capital:

In Nigeria, an average of 100,000  to 1,000,000 naira is needed to start up a raw food-selling business. This amount depends on the business’s location, either in a rural or urban area.

Forms of capital

  • Family and friends: this is the easiest and most common means of funding businesses in Nigeria. When you approach them, it is important to state that the money needed is for support and not on borrowing terms.
  • Angel investors: These individuals support businesses at their initial startup stage. An angel investor can be an individual or group of individuals offering support. Such persons include Femi Kuti, Jason Njoku, and many more.
  • Business loans: microfinance banks, as well as commercial banks, offer loans to businesses at interest rates between 12% -22% with evidence of proof of income, good credit score, and collateral in the case of high loans. (Source: CreditNigeria)
  • Crowdfunding: These are platforms that provide capital and advisory services to enable businesses in Nigeria to strive in the present economy. Examples of crowdfunding platforms in Nigeria are Patreon, Kickstarter, CircleUp, and GoFundMe.
  • Bootstrapping: This is self-funding your business at its startup stage.
  • Grants: this is an option in Nigeria as money received is interest-free and non-refundable. Organizations such as Young Entrepreneur Empowerment Nigeria (AYEEN) and Tony Elumelu foundation entrepreneurship give grants to Nigerians.
  • Bank of Industry: In Nigeria, the Bank of Industry provides loans to thriving businesses making profits. Accessing a loan from the Bank of Industry requires business registration with the Corporate Affairs Commission (CAC), an operational business account, and a record of profit made over time.
  • Business incubator: business incubators such as 440NG and L5LAB provides startup training, network opportunities, and mentorship program to business owners.
  1. Rent a shop

Renting a store is important to preserve your food items and prevent spoilage. Several factors should be considered before renting a store.

  1. Consider the location: This is important to the success of the business. Consideration should be given to places where customers are likely to pass daily on foot and in transit. Busy areas tend to attract more customers.
  2. Shop rent: The amount demanded as rent payment should be considered as this is often part of the business startup capital. The rent fee should be at most 30% of startup capital.
  3. Shop space: The size of the shop determines the quantity of foodstuffs that can be purchased.
  4. Purchase foodstuffs in bulk.

It’s advisable to start with selected foodstuff items to ensure you get the best deals on purchases. Bulk purchase produces better after-sale profit margin.

It is important to search out foodstuff suppliers who can offer the cheapest wholesale prices at high quality. This will generate better profits.

  1. Stock your store with purchase

Proper storage is important at this stage as food properly stored last longer. Keep the shop floor always dry before stocking up with purchases. Double-count all items to ensure no loss of foodstuffs while in transit.

  1. Start sales.

Inform neighbors, friends, and family of the kickoff of your new business venture. Lowering prices is a good strategy for encouraging potential customers. For example, a basket of garri sold at 700 nairas can be sold at 650 to encourage more sales.

Customer satisfaction is essential. This is achieved through good customer service while making sales.

How to achieve success in the foodstuff business

Due to the presence of competitors, achieving success requires great effort. With the use of a good business strategy to beat down competitors, success can be achieved.

Some ways to achieve success are:

  • Search out a well-populated place means a large customer base with little or no competition.
  • Offer affordable prices: Make your products stand out by offering the best possible prices and discounts on purchases.
  • Collaborate with other food sellers: Collaborating with other food sellers enables you to be aware of business strategies such as marketing and pricing.
  • Create a business brand: A business brand grows popular as it draws your potential clients’ attention.
  • Link up with the best suppliers: working with suppliers that offer discount prices on purchases increases profit margin.
  • Reinvest profit: reinvesting profit increases the capital base of a business.

Steps on Capital Procurement for Foodstuff Business

  1. One-line pitch: It should be precise and get the attention of persons reading your proposal.
  2. Business Summary: This provides a description of the business and a clear definition of its objectives. Products can be listed briefly, with descriptions clearly stated. Example:
  • Business name.
  • Business location.
  • Business vision and mission statements.
  • A brief description of what the business is about.
  1. Management structure: This provides information on the leadership of the business. It contains information such as:
  • Who owns the business?
  • Who runs the business?
  • How many persons are involved in the management team?
  • A detailed description of the qualification of persons involved in the business.
  1. Service delivery: This involves providing information on the method of foodstuff delivery and making a list of the items to offer.
  2. Target market: This involves projecting who needs your products and stating your current market. You are required to highlight your prospective customers in the nearest future.
  3. Sales strategy: This section answers the question about your plans to reach the target audience. Strategies such as employing marketers, self-marketing, social media to advertise products and terms of delivery, and a website are some ways to reach your target audience.
  4. Financials: This is an important part of writing a business plan. Investors are interested in knowing the feasibility of the business. The future business expectation should be clearly stated when it is a startup. Previous years’ expenditures, revenue, and profit generation should be presented for existing businesses.

Conclusion

With the rise in demand for foodstuffs due to the increased population rate in Nigeria, the foodstuff business is viable. It has the potential to sustain oneself and family needs.

Capital as the main sustenance of a business is readily available in Nigerian society. Microfinance banks, commercial banks, and angel investors are some of the means through which individuals have access to startups and expand their businesses.

FAQs

  1. How profitable is the foodstuff business in Nigeria?

Selling foodstuffs in Nigeria is a profitable venture with a startup profit of up to 20% and increases as the business grows.

  1. How much is needed to start a foodstuff business?

With as low as 100,000 nairas, you can start a foodstuff business in Nigeria.

  1. How can success be achieved in the foodstuff business?

Success in foodstuff can be achieved by employing strategies such as good location, offering discount prices, and reinvesting business profit to increase capital.

 

 

 

 

 

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