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Jul, 2017

The business opportunity in Millet based snacks

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Millets are grains like Jowar, Bajra, Ragi etc. that are grown in abundance in India.

Consumption of the millets has been practiced since the beginning of the ancient civilizations of the world. Generally, millets are small-grained, annual, warm-weather cereals belonging to grass family. They are highly tolerant of extreme weather conditions such as drought and are more nutritious among staple cereals, such as rice and wheat.

It is a cheaper and local alternative for healthy foods like Oats and Quinoa. It also promotes Make in India movement. It can be used to make various snacks and eatable items like pasta, fryums, vermicelli, chips, biscuits etc.

Types of Millets:

Millets are indigenous to many parts of the world.  There are a variety of millets available in India. Such as:

  1. Jowar also known as Sorghum millet.
  2. Bajra also known as Pearl millet.
  3. Kangni also known as Foxtail millet.
  4. Mandua / Ragi also known as finger millet.
  5. Kutki also known as Little millet.
  6. Kodra also known as Kodo millet.
  7. Barri also known as Proso millet.

The most widely grown millet is pearl millet, which is an important crop in India and parts of Africa. Finger millet, proso millet, and foxtail millet are also important crop species.

Market:

Due to changing food habits, there was a huge decline in the cultivation and demand of millets. But now with the rising levels of diseases and lazy lifestyle in the country, more and more people are getting attracted towards a healthy lifestyle and healthy eating. Hence, the demand of millets is again on a rise.

In India, out of the total net sown area of 141.0 MHA, rainfed area accounts for 85.0 MHA spread over 177 districts. This constitutes approximately 60 percent of the total farming area in the country. Rainfed agriculture contributes 44% of the total food grain production of the country and produces 75% of pulses and more than 90% of sorghum, millet and groundnut from arid and semiarid regions. Even after half a century of neglect, the rain fed regions provide livelihood to nearly 50% of the total rural work force and sustain 60% of cattle population of the country.

Prone to diabetes, skewed lipid profile and various lifestyle diseases, residents of the city are switching over to a high-fiber nutritious diet. There are the ubiquitous oats but it is not indigenous. The search for a local grain that would fit well into our daily recipes has led people right back to millet – a small seeded grass grown as cereal – which used to be a staple in Indian kitchens half a century ago. You could say that millet is fast emerging as the new oats. In India, popular millets are ragi (finger millet), jowar (sorghum) and bajra (pearl millet). There are also a whole group of minor millets like foxtail millet and proso millet.

Advantages of millet based products:

  1. High in fiber, Protein and rich in micro nutrients.
  2. It is low in fat and gluten free.
  3. Requires very less water to grow. It can cultivate in a place where there is low rainfall.
  4. Does not require synthetic fertilizers to grow.
  5. Does not require insecticides as it is pest free.
  6. Millets can grow even on poorest of soils.
  7. Nutritional value is very high as compared to rice and wheat.
  8. A cheap and domestic alternative of Oats and Quinoa.
  9. It is the best choice for a drought and malnutrition hit region.
  10. Ready to harvest in as little time as 60-90 days and has long storage life

Types of Millet based products:

There are various products available in the market containing different kinds of millets. Such as,

  1. Khakhra made from various kinds of grain / millet flours.
  2. Chips / Wafers.
  3. Instant mix for Idli, Dosa, Upma, vermicelli etc. made from millets) by MTR.
  4. Millets mixed Oats by Quaker Oats.
  5. Millet / Multigrain breads & buns.
  6. Pasta
  7. Biscuits
  8. Cakes
  9. Pizza base
  10. Vermicelli
  11. Laddoos
  12. Energy bars
  13. Fryums
  14. Rawa / Semolina
  15. Millet / Multigrain Atta

Licenses required:

  1. Registration under Shop establishment act (known as Gumatsa in Maharashtra)
  2. GST
  3. Udyog Aadhar MSME online registration
  4. FSSAI License.
  5. Trademark Registration (If you want to sell the snacks / products under your own Brand)
  6. FDA license.

Marketing

Marketing plays a very important role in business development. The company should come up with a proper marketing strategy. It can be done through various platforms like Social Media, Google ads, Company’s Website, Hoarding, fliers, etc.

The business can also be promoted near gyms, fitness centers, schools etc. as it will attract more customers who prefer healthy food and snacks.

Branding

Branding is the use of a name, term, symbol or design to give a product a unique identity in the marketplace. It also plays a very important role in the development of business and selling of the product. The product must be attractive looking with all the benefits stated prominently on the package.

The manufacturers must also get the brand name and logo trademarked if they decide to sell the product under their own brand. It gives them exclusive rights to the brand name, logo, design and avoids unauthorized use of the name.

Other ways of stepping into the market of millet based products

If the entrepreneur does not want to invest a high amount of capital in the business, they can even:

  1. Become a distributor.
  2. Open a franchise of the manufacturing company
  3. Set up a retail shop focusing on selling millet based products.
  4. Start an online business / food website which is mainly focused on selling healthy and millet based products or become an online seller on any of the popular e-commerce platforms like Amazon etc..

Many companies are manufacturing millet based instant breakfast mixes like Idli, Dosa, vermicelli, Rawa Idli etc. The entrepreneur can take up distributorship of those products and supply it to retailers. It reduces the capital investment.

Entrepreneur’s qualification

  • The entrepreneur must have the knowledge about millets and its nutritious factors before stepping into the business.
  • They must do the required research about the market, manufacturing process of different kind of snacks using various kinds of millets.
  • They must have the knowledge of how and from where to source the millets. (It would be cost-effective to source it directly from the farmers.)
  • The entrepreneur must target the right kind of market to make the business profitable. Millet based product should be majorly targeted at the health-conscious customers as they are keen on finding healthy yet tasty alternative.

Investment & Finance

The entrepreneur will have to invest some capital in the business in order to start it. It may vary depending on the nature of the business (Manufacturing or distributorship) and size of the business (whether it is a large-scale business or small-scale business)

One can even get finance through various sources like nationalized banks, private banks and financial institutions. You can even contact us at info@udyogcredit.com, if you require help with financing.

A snapshot of the typical formal financing terms and conditions is given below:

  Contribution by Bank Contribution by Entrepreneur
Capital Investment 75% 25%
Working Capital Gap (Raw Materials+Debtors-Creditors) 75% 25%
Tenure of Loan 5-7 years
Moratorium 6 months to 1 year
Can be funded by SCB, Co-Operative Banks
One can also enjoy the Mudra Yojana Scheme & Standup Scheme launched by the Government of India

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