Nigeria is a huge country with a large population (est. 200m from the 2019 World Bank data). That’s a lot of people who definitely would buy and eat food and related products. That makes the food business a guaranteed money spinner in the country. So how would any budding entrepreneur get into this lucrative business?
There are many routes into this line of business in Nigeria. We are going to highlight some facts and routes into the food business in the country.
- Starting a Farm
Starting a farm is an exciting but challenging venture. You will need to settle land ownership or lease issues, security around the farm to prevent theft, employment of farm hands and workers, purchase of farm machinery and storage facilities. By setting up a farm you will essentially be in control of what crops /animals etc. you want to produce and how large you want to scale. This requires serious planning and investments. You can also decide to have direct sales outlets on the farm or closer to customers if you so choose.
- Wholesale of Fresh Farm Produce
You can get a leg in this sector by partnering with farms and farmers in the rural areas, buying the fresh farm produce in bulk and getting them to the customers in the urban centers. This segment implies you would need to invest in transportation and storage facilities to preserve the freshness of the products until it gets to the customers.
- Food Processing
Here we are focused on investing in food processing facilities to create food products for both consumption and industrial uses. Good examples are cassava processing into edible snacks, industrial starch, garri, and even animal feeds. Other examples include rice mills, yam flour (poundo yam) production, palm oil, maize processing etc. This is one of the hottest segments to be in now as they is huge demand for processed food in Nigeria. A good way to scope this market is to check out the shelves at big shops around the country. The shelves are filled with processed food items many of which are imported. There is a huge gap that can be covered by local food processors in the country
- Retail of Fresh Products
This segment is one of the most popular due to the low entry barriers and small scale of capital required to enter the business. This is what entails in most open air markets around the country where all that is needed to start is a stall or open space, table, some shelter and products to sell. It is also a great starting point to get an inroad in the food business
- Delivery and Distribution of Cooked Food
This segment has really grown rapidly in the last couple of years especially in urban populated centers of the country. The increasing use of the internet and related technologies in Nigeria has also contributed to the growth of the food delivery business. Now, we have fully online food production and delivery businesses all over the major cities in the country. This has also created growth opportunities for the logistics sector of the economy, especially bike delivery firms. You don’t even need a dedicated app or website to get the food production and delivery business off the ground. All you need now is the ready food product and an online presence, mostly social media to increase your reach.
Whatever segment you choose to enter in the food sector in Nigeria, it definitely would be worth it.