India is a major producer and exporter of Spices, thus starting a spices business in India is a very profitable business option. Spice business is a type of business that ensures the owner with good returns with low investment. Also, anyone can start this business; even home-based spice business is very profitable.
Scope of Spices Business in India
All sorts of Spice powder is a must in all types of Indian cuisines. You’ll find one or more type of spice as a crucial ingredient in every recipe in India. Spices help bring aroma, colour and good taste to the food. Common types of spices used in India are Turmeric powder, chilli powder, coriander powder, cumin powder, etc. and whole spices such as cardamom, pepper, cumin, bay leaf, cinnamon, and many more. Therefore, setting up a business in the spices sector is likely to succeed.
Now, when you have decided to start your business, the first step is to know the scope of earning profit in that business, the current trends, and the demand for the product you are going to manufacture. This is the basic step; imagine a situation where you are producing some product ‘X’ and nobody buys it, how disappointing that situation would be. You don’t want to face a situation like that, do you? Don’t worry, I believe these statics would be able to ease your mind and assure you that spice business can become a profitable option for you.
Potential of Spices Manufacturing Sector
India is the world’s largest producer and exporter of Spices; therefore it is known as the ‘Land of Spices’. As per statistics, an estimate of 5.8 million tones of spices was exported from India in the year 2012-13, with chilli and garlic being the top exported spice. The United States of America and China were amongst the top importers of these spices in terms of values. Additionally, as per the data, the value of export to both countries was Rs. 2115 crore and Rs. 2019 crore respectively. Today, the current market needs are also generating enough opportunities for the Spice Industry.
Furthermore, the Indian Government has constituted the Spices Board in the year 1987 to develop and promote Indian Spices in the global markets. The Spices Board functions under the Ministry of Commerce and Industry, Government of India. Registered spice exporters holding the Spice House Certificate or Brand Registration with the Spice Board or Organic Certificate are provided subsidies for sending spices abroad.
Licenses and Registrations Required to Start Spices Business in India
Regardless of the fact that your business is small-scale or large-scale, you have to get these registrations and licenses;
· Registration with the Registrar of Firms {ROF}. Also, it is recommended to establish your business as a One Person Company at the initial stage.
· Getting a Trade License from your local Municipal Authority is a must.
· Getting Udyog Aadhar, MSME Registration is optional. However, getting one will make you eligible for availing subsidies under various schemes by the government.
· Food business license / FSSAI license
· You would need IEC or Import Export Code if you are planning to work with the global market
· It is a must to comply with all the FPO Regulations
· Also, you would need to get the BIS Certification. The ISI Specifications that are available for ground spices are as follows;
· Chilli powder: ISI 2445-1963
· Black whole and ground ISI-1798-1961
· Coriander powder ISI-2444-1963
· Curry powder ISI-1909-1961
· Turmeric powder ISI-2446-1963
· Methods of sampling and test of spices and condiments ISI-1997-1961
· Additionally, you are advised to get the Agmark Certification
Other Necessities to Start Spices Business
Apart from getting registrations and licenses, you would also need other basic things such as raw materials, machinery and equipment, and a plan. Also, you would need to decide the location of your spices business.
Selecting the Location for Setting up your Business
It is advised for spices powder making industries to set up their business in a building that is around 500 sq ft, where you can divide the whole space into sections. One section should be for processing of pieces and allocate the second partition for the packing of spices.
Furthermore, you should choose a commercial area where basic facilities such as water and electricity supply are available in adequate amount. Also, you can set up home-based spices business, you just have to ensure that you have sufficient space.
Procuring Raw Materials
The basic and the most important material for incorporating your spice industry are raw materials; ungrounded spice. You can start by purchasing the following items in wholesale;
- Chilly
- Coriander
- Corrugated cartons
- Cumin
- Fennel seeds
- Methi leaves
- Mustard
- Pepper
- Permitted food colour and preservative
- Poppyseed
- Turmeric
- Permitted or food-grade Packing materials
Also, Read: Startup India Registration Process – The Complete Guide.
Getting Required Machinery
You would need to have the proper machinery and other equipment to be able to process the raw spices and transform them into powdered spices. Carefully choose machines that include the latest technologies and other specifications as per your requirements. List of some of the equips that you would require are as follows;
- Grinding machine
- Impact pulverizer
- Double stage pulverizer
- Hammermill
- Spice mill
- Pounding machine
Additionally, the machinery needed especially for spice powder making are the following;
- Compressor
- Disintegrator
- Heat sealing machine
- Packaging machine
- Roster
- Sieves
- Spice grinder
- Weighing scale
Procedure for Producing Spices Powder
Step 1: Cleaning
This is the first and most important stage is cleaning the spices, otherwise, it can lead to being the source of numerous diseases. First, big physical impurities such as stones, dust, and dirt can be cleaned manually by employing various methods for getting rid of the impurity.
Step 2: Drying
After cleaning the whole spices it is dried. Generally, it is sun-dried, but artificial methods can also be used to speed up the process. The quality of the powdered spice depends on how well the spices were dried. There are two types of drying process based upon the climatic conditions;
- Drying during the dry season
- Drying during the wet season
Step 3: Roasting
Then the spices are roasted after drying to infuse the aroma, colour and good taste to the powdered spice.
Step 4: Pulverizing / Grinding
Pulverizing or Grinding machines are used to grind the raw, whole spices into the powdered form.
Step 5: Grading
The grading is done based on the inclusions and proportion of spices mix with their raw materials. Also, it is graded on the basis of the size, flavour of spice, shape, density, and colour of the spice.
Step 6: Sieving
The powdered spices are sieved to ensure that all the spices have a uniform mesh size.
Step 7: Packaging
After all these steps, the spices are sent for packaging. The powdered spices are weighed and packed as per the quantity that needs to be packed.
Step 8: Sealing
It is very important to seal each packet properly. Sealing is a very important step; improper sealing can result in wastage of the spice mix, as it can get easily affected by moisture, dust or may get infected with pests.
Deciding where to Sell the Spices: Hitting the Target Market for getting Maximum Profit
When you have manufactured your product, now you need to sell it to earn profits. This is the last step, but the most important step; otherwise how you would you fulfil the initial purpose of incorporating a company: gaining profits? You can start by looking for options to sell your product. Carefully do this process, a type of market option you choose can determine how you would gain. In the initial stage you can try these options before hitting bigger market places like the malls, grocery stores, etc.;
- Local market {Retail}: You can opt to sell your products at a small scale / retail sale in the local markets, in the farmer’s market, in local cooking schools, and in food shows.
- Wholesale: You can sell your spice products to the local wholesale market, also known as the market yard. Selling to a wholesaler can be a better option because you just have to sell your items at one place and then you can move on to producing more stuff.
- Online: You can also choose to sell your products online and earn without going anywhere. Online marketing can be of two types;
- B2B Websites: Websites like Alibaba, Indiamart, etc. provides you with an option to sell your products in bulk orders. Through these websites, you don’t need to directly contact with the customer, the website does it all for you and they help you sell your items.
- B2C Websites: These are websites where you can sell your product directly to the customer.
- Export: You also can sell your items abroad. You just have to get the necessary licenses and registrations and start exporting.
Takeaway
Starting a spices business is a very profitable option as India has an abundance of Spices. Also, there is a lot of scopes because the demand for spices in India will never go down. Furthermore, to earn profits you can sell your product in retail, wholesale or on the websites available online as per your preference and ease.
