Complete Guide to Start Spice Business in India | From Scratch

SPICE HISTORY AND STATISTICS

From various ages, spices have always been a crucial component of India’s external trade with foreign countries unlike Arabia, Sumeria, Mesopotamia, China, Egypt and, along with textiles and perfumes.

The giant history of spices includes in its place in each holy book. The Ramayana also in the writings dating back to the Roman Empire in the first century AD. The caravans of camels moved regularly from Calicut, Goa and the Orient. They even transport these spices to distant destinations such as Carthage, Alexandria, and Rome.

Today, Indian spices are available everywhere, but there was a time when people have to risk their existence to gain access to Indian spices. From the Indian point of view, it brought in traders and invaders alike – a century after century.

In the fiscal year 2022, the export value of spices from India amounted to over 300 billion rupees. Top 10 importers of spices in India between Apr-Oct 2022 were the China, US, Vietnam, Hong Kong, Thailand, UK, UAE, Malaysia, Bangladesh and Sri Lanka. The top 10 exported spices and spice products in terms of value were Mint products, Chilli, Spice Oils & Oleoresins, Turmeric, Cumin, Pepper, Curry powders/paste, Cardamom seeds, other spices (Tamarind, Asafoetida, and Cassia) and Garlic. The total export of various spices in 2022-23 stood at US$ 3.34 billion.

Consumption of spices in an Indian household is massive; hence the market is growing with the 160,669.3 Crores annually. When one can see so much potential in masala business which ensures good returns with low investment, then any individual can start a business even home-based spice making business is turn out profitable.

Indian spices exports have been able to record strident gains in value as well as volume wise. During 2021-22, a total of 11,44,610 tons of spices and spice products valued Rs.21,032.05 crore (US$2,825.23 Million) have been exported from the Country as against 10,28,060 tons valued Rs.17980. in 2020-21, registering an increase of 11% in volume and 14% in rupee terms and 1% in dollar terms of value.

HOW TO START SPICE BUSINESS IN INDIA

1.COSTING INVOLVED IN STARTING UP A SPICE BUSINESS?

The Indian spices market is projected to reach approximately USD 18 billion by 2023, with growth in the sector expects to be led by branded spices and spice mixes. India being the largest spice producing country producing 50 different types of spices people are looking for ready-made food, and spice powder makes their cooking more accessible. Hence the usage of the spice powder is increasing consistently and futuristic.

Powdered spices are convenient to use, and it saves time and physical efforts for preparing different delicious cuisine. Every commercial food industry like hotels, restaurants, catering business and many more are using powder spices on a daily basis.

Spice powder makes it an easy and profitable business to start, and one can start this business with small-scale investment.

Basic Investment : 50000 INR to 100000 INR

Area Required: 250 Sq yard

ProfitPercentage : 50% to 70%

Earning: Average Sale 100Kg /Day, 50000 to 150000 Per Month

Other additional expenses will include equipment maintenance, employee salaries and marketing costs.

2.Masala business profit margin 

If you’re new to the masala industry, you should become more familiar with the concept of profit margin. The amount of money a business earns after covering its costs (such as rent, employees’ salaries, and other costs) and collecting income from sales is known as its profit margin. Knowing your gross income (the total amount of money you collect during any given month) and your operating expenses is essential for calculating your personal profit margin (the amount of money spent on things like salaries or marketing). Once these numbers have been established, calculate your net profit by dividing the gross revenue by the operational costs. You can then use this number as a percentage to see where potential growth in your masala business’s income comes from. An increase in revenue, for instance, would result in an increase of $1500 a month ($15000 x 100 = $1500) if net profits were at 15%.

Remember that every situation will vary, even though this information helps plan your masala business venture’s future financial objectives. So always exercise caution when drawing conclusions from broad trends!

3.LICENSING REQUIREMENTS 

As spice powder is part of the food category hence, it has to satisfy a lot of regulations from state government such as follows,

1.Registration of firmshould be done depending upon the scale of business if its Pvt. Ltd. or partnership or single person company, the firm is registered accordingly.

GST registration is also essential to gain GST number, which is a must.

If it is SME, then companies can register themselves and get facilities and subsidies from the state government.

2. Obtain trade license, FSSAI and apply for Trademark, BIS certification and IEC. It is advisable to obtain AGMARK certification.

4.SPACE REQUIRED

No massive space is required when it comes to starting a business with spices, around 250 sq yard can be used for processing of pieces and other 250 sqyard is needed for the packaging of the spices. Check commercial space where basic amenities are available such as water, electricity, etc.

The state government have restriction to start the food business from home hence ensure that the location is obeying the law of the government decided.

Make sure the location is transportation friendly and easily accessible to the target market.

5.RAW MATERIALS REQUIRED 

The essential ingredients required in spice powder are ungrounded spices, and along with raw materials, you will need packaging materials which will act as protection of spice powder.

6.MACHINERY USAGE 

Grinding machine is necessary machinery required in spice business depending upon the scale of industries the equipment is used. Large scale industries use Impact Pulverizer machine while small scale industries use Double stage Pulverizer.

Other machinery such as spice grinder, weighing scale, packaging machine, compressor, roster are also required.

7.SPICE MANUFACTURING PROCESS

1.CLEANING 

It is a very initial process for spice making in which the ungrounded spices are clean manually by removing impurities like stone, dust, and dirt.

2.DRYING 

After cleaning and washing process display them in sunlight so that they dry, the quality of the spice powder will depend on the well-dried spice. If proper cleaning and washing do not take place, it will lead to the growth of bacteria, which will poison food.

3.ROASTING 

Once spices are dried, they are going through the roasting process, the roasting of the spices is essential because it will help to give the aroma, colour and good taste to spice powder.

4.GRINDING 

Grinding machine is used for pulverizing to convert the spices into powder form.

5.GRADING 

The grading is a process which is the basis of the inclusion and proportion of spices mix with their raw material used, also depends on the type of spices (flavour), size, shape, density, and colour.

6.SIEVING 

Make sure that spice powder has a uniform mesh size

7.PACKAGING OF SPICE

Seasoning and spices add massive flavour to your favourite dishes, but to work their magic, they must be fresh; hence correct packaging is mandatory.

Protect and preserve your spices and seasonings with stand up pouches with zip locks and such packaging bags will give you the flexibility to choose the best size, style, and features for your spices. Choose from options like gas release valves, tear notches, heavy-duty zipper tops, hang holes, pour spouts, and, as well as different styles that give you plenty of room to bring your brand to life.

Once spice is converted into powder form, then the spice powder weighted as per quantity that needs to pack. The spices are then wrapped in a polythene bag and sealed with the help of the sealing machine.

Spices Packaging will protect your spices from issues such as moisture, puncture, odour, and more. You are hence guaranteeing that your seasonings and spices make it safely from the warehouse to your customers’ taste buds.

CHALLENGES FACED BY SPICE MANUFACTURING COMPANIES IN INDIA:

1.WORKING LABOUR ISSUE 

The pungent odor of spices which gives sharp sensation is not suitable for health if exposed for a more extended period. Hence there is always a significant issue of discovering working labour in the Indian spice industry.

2.MARKET CREDIT 

The credit market risk with distributers or mediators in the spice industry is always at high, and hence this leads as a significant challenge.

3.PACKAGING LEAKAGE 

There are many small scale industries in India where still hand-made packaging is done due to budget constraint, which results in packaging leakage. If they plan to opt hi-tech types of machinery, then costing is increased; hence this has always been the point of concern.

4.EXPANSION IS DIFFICULT BECAUSE OF HI-TECH MACHINERIES

Each day innovation is introduced, to keep updated and in trend, companies have to adapt to each change. For SME’s, it is challenging to expand themselves due to the introduction of new technology and this act as a challenge for brands.

5.A LOT OF COMPETITION 

The spice industry faces intense competition since the concentration of suppliers is more Its competition is often at the regional level. There are also many small local companies often operating in a specific location, and as the demand for authentic organic spices increased the demand for maintaining the quality of the product raised.

SPICE BRANDING

Branding helps to develop a memorable impression on consumers and allow customers to know what to expect from your brand. It is a way of distinguishing yourself from the competitors and clarifying what it is you offer that makes you the better choice.

DesignerPeople have listed below elements of branding:

1.Brand Identity

In spice industry brand identity is the way audience recognize the brand which can be through brand logo, punch-lines, stationary identities such as business cards, envelop, letterheads and other associated visuals.

Everest punchline- Taste Mein Best Mummy aur Everest

2.Brand Image

The process of creating the idea of brand in the minds of customers as it also dictates what they expect from the brand. We all know its universal that saffron is premium spice hence it cannot be presented with budget environement.

 

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3.Brand positioning

Spice brands carry their own brand story along with value added elements such as home-made, no preservatives, on basis of taste or flavours and many more. It is very important to create competitive advantage and occupy the space in the minds of customers and branding does this effectively.

4.Brand personality

Brand personality is just like the personality of human beings. It is certain emotional or personal qualities that we associate with a particular brand.

5.Packaging Design

It takes 7 second for customers to make purchasing decision and hence Spice Packaging Design plays very crucial role in deciding. The colour, font style, text placement, content, tagline, and illustrations all together reflect the brand story. Packaging design agency are experts who ensure your packaging design acts as marketing tool.

 

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Source:https://www.getbrand.ru/portfolio/osobaya-kollekcziya-osoboe-udovolstvie/

 

Source: https://packagingoftheworld.com/2021/06/chernyshihinskoe-meat.html

 

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Source:https://www.regin.in/packaging-designs/farmers-harvest-masala—3082020

 

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6.Marketing collaterals

Posters, brochures, websites, banners every collection of media used to support the sales of service or product is considered in marketing collaterals.

DIGITAL MARKETING

The digital media platforms such as Facebook, Twitter, Instagram and LinkedIn are in trends for spice campaigning . In spice industry, the brand has become a pioneer in involving digital media and leveraging various activities, events and various festivals which are ongoing in our country to gain traction and keep users engaged with brand across all platforms.

One of the campaigns run by the brand, #BadshahKeSaath, has seen an impression of over 10 million individuals and has an engagement of over 1 million people. Hence this simply means that the right kind of investments at the right place can result in a fair growth for the brand.