Business Idea 1 of 52 - Flavoured Coated Peanuts (by MrEbis)
1. The Idea
To begin our series, we start with one industry that will always remain, irrespective of the state of the economy: The Food industry. There is a common saying in Nigeria that goes like this; Man must ‘Wack’ (i.e. Man must eat). Food is highly important and it’s among the three (3) basic needs, along with clothing and shelter. In times of scarcity, the hardest hit businesses are the luxury ones. It is often said that it is hard to go wrong in food business, unless of-course you fail in food quality, hygiene, service delivery and presentation, then you should not even be in that business in the first place.
I present to you the first business start up idea in this series.
Different flavoured Coated Peanut snack
While you may not be so interested in this very business idea, you could still read through and get a feel of my thoughts, which may be useful to you in some other way
If you have stayed in Nigeria for a while, and also depending on your location, you may have come across this snack. It is probably the highest selling brand of coated peanuts being in Nigeria. Something happened recently and I had to describe this product to a friend and one funny way they could remember it was the amount of air that was used in packing it compared with the coated peanuts inside. The amount of air inside the pack is intentionally added to ensure that the packaged food product stay fresh and good for as long as possible.
However, this post is not about the Burger branded coated peanut, this is about something new that can be created like it.
One can introduce a brand new coated peanut product with different flavours such as, chocolate, Strawberry flavoured coated peanut, etc. To spice it up one could add some pepper (chilli). So this is the product we kick of this series with. An indigenous (made in Nigeria) well packed and branded flavoured peppered (not-peppered) coated peanut.
Production
Here is a thread on Naira land on how to make coated peanut
http://www.nairaland.com/1369104/peanut-burger
Another link found
http://www.rosyomeje.com/2016/09/how-to-prepare-peanut-or-groundnut-burger-snack.html
Peanut coating machine as seen on alibaba.com
https://www.alibaba.com/showroom/peanut-coating-machine.html
There are some videos on YouTube on how to prepare this snack as well.
https://www.youtube.com/watch?v=Zw4nyPlE4Hg&t=8s
From the video, you can see how the Pot-like device is attached to a base and made to spin. You could show this to an engineer or a technically savvy person who will guide you on how best to locally construct your own peanut coating device. You will need a welder, a DC motor, the Pot among other things.
https://www.youtube.com/watch?v=CUqtGUv970c
You should not go into this or any business if you are not ready to work, as it would also require your commitment and patience.
2. Why??? Is there a market for this?
There is a very large market for this, depending on the scale one desires and is able to operate. This is a good part to this idea, because it can provide small and medium scale employment with a relatively moderate initial capital and could be a large employer of labour if the operations are carried out in a large scale (Capital intensive).
The existing popular ‘burger’ brand of coated peanut appears to be manufactured outside Nigeria and is being sold in different parts of the World. Last Google search showed a manufacturer in Accra Ghana.
In recent times, there seems to be a scarcity of this product, which could be as a result of the previous importers having challenges due to the economic situation in Nigeria or the manufacturers could be preferring to send it to the US or UK where they could have a more favourable market. There is also a French inscription on the pack, meaning it is highly possible it is being sold in some other French speaking Countries. Or, probably they are having fewer retailers buy the product to sell. Another possibility is that the distribution may not be fully covering the whole of the country.
As a result of this, there is now a sort of chance that can be taken advantage of by a new-coated peanut product.
An example of a product not like the peanut but equally stepping up in popularity among Nigerians is the Mini-me chin-chin.
There was a year Nigerian female Singer Tiwa Savage took a break from her music career, and Chidinma (miss kedike) and Omawunmi as well were not really pushing out massive releases, A new female act emerged to fill the perceived vacuum. Her name is Yemi Alade (looking for my Johny). Same thoughts are applicable here and in other innovative pursuits. There are products in Nigeria that are not so popular or not doing so well, mainly because they are imported and their prices have in recent times doubled (fall in the naira value). This makes room for new made in Nigeria products (alternatives) or substitutes.
This article suggests that there is probably a market for a substitute coated peanut product which could be given extra attractiveness by producing different flavours, packing it in well printed and transparent packaging so that the customers can see through. This can effectively compete with the more popular brands if there is sufficient thoughts and effort given to the product with a good competitive advantage.
It is a call for as many who can, to consider this and carryout their own research and verifications.
3. The Business model Canvas
The following business model canvas will give a broad picture of aspects to consider in creating a business around the coated peanut production. Could be adapted and interpreted by the intended business person, whether small time side hustler, small and medium scale enterprise operator. This may not be all encompassing but presents a start point, which could be improved upon.
-The value proposition
Provision of healthy snacks that could be very handy for consumers in those periods when they either just need something to snack on or really need something light to eat before they have a proper meal.
-Customer segment
There is hardly a defined customer segment for this product as it can cut across a wide spectrum of customers. The lower class, mid and upper classes could be a prospective customer. This is however important because it will play a part in how the product is packaged and the type of marketing strategy to employ. The good product branding (design and packaging) will influence how customers perceive the product and place value on it.
To further paint a picture of the customer segment
Drivers and commuters who patronise roadside snack retailers
Could be included in kids’ lunch packs (schools & Churches)
Those who normally buy the ‘Burger’ branded coated peanut.
-Customer Channels
Direct sales
Online Sales
Marketers, distributors and retailers
Customer service centres
-Customer Relationship
Mass – as it relates to the general mass of end consumers. This depends on the scale and volume of units produced and pushed to market.
Mass/Direct – There could be direct relationship as it relates to dealings with retailers and distributors that play the middlemen role of delivering your product to the end consumers.
-Key Activities
Manufacturing and Production
Marketing and Sales promotion
Logistics
Financial accounting
Research and Development (New varieties & process improvements)
-Key Resources
Financial (Start-Up &Working capital)
Field sales force & Customer service reps
Business developers
Quality control personnel
Legal consultants
Logistics and Operations manager
-Key Partners
Bank and other Investors
Government regulatory agencies(NAFDAC)
- Cost structure
Financial (Start-Up &Working capital)
Marketing and promotions
Salary and commissions
Registrations, legal (copyrights) and other licences
-Revenue streams
- Sale of product
4. Competition
There are substitute products in the market that could serve as stern competition to the New flavoured coated peanut, some of them are
There is a coated peanut product (selling for 10 naira a piece)
The Mini-me chin chin
Gala (all the various types)
Coconut crunchy (something like that)
In summary other food snacks sold in traffic (alternatives to this product)
As of today, there are no strong barriers to enter this market, so it will be open for new competitors to arise and hustle for market share. With a population of over 170 million people, I would imagine that there is big room for all as long as you come to the market with a good competitive advantage and well worked market strategy and if you think globally, there are markets outside Nigeria to serve.
5. Risk
Government policies and its effects on the prices of materials used. E.g flour, production equipment. It will be good to look more into this and how it affects the business
This is may not be appropriate as a main hustle business as the profit margin might not be enough for some people to live on.
Competing against a stronger already brand will not be an easy task as they could easily diversify and start producing their own version of your own product variety.
The bigger brands could penetrate in their marketingto reach the local environment you may be serving.
Cash crunch and low spending power of the buying population (Recession)
6. Financial estimates
The scale one decides to start with would largely determine the cost of operating this business.
But with as little as approximately 15, 000 naira, one can start on a small scale.
Small scale
Pots and other utensils
Production materials (food items) - Flour, egg, milk, flavouring, sugar etc.
On a bigger scale,
You will need more money, and also need to design some forms of automated device that will help in production (spinning the flour mixture)
Automation should not scare you, as there are people in Nigeria that can design and manufacture the device you will need.
A well designed and printed wrap (well branded packaging)
Distribution network (personal vans or 3PL)
End notes
The goal is to point some people in this direction in whatever scale they can afford so that we can at least help the unemployment situation we find ourselves today. Same thoughts and processes can be applied in other sectors of the food industry. Where there is a scarcity of one product, there is an opportunity for another one.
The problem has never been the problem, but the way we perceive (our perception of) the problems we face.
Remember having the idea is just the beginning; there is a whole lot more work to be done.
Thanks for joining me in this journey. If you have any thoughts, comments, ideas, feel free to share… I am open to learning of other ways I can be of help, or be better. Or if you have an idea and you don't mind sharing, get in touch. mrebis1@gmail.com
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Stay blessed, and best wishes till we you meet again next week….
Hint on Idea 2 - We will be doing something about our environment.
