Biscuits Production Business Plan in Nigeria

Executive Summary

CrispyBite Foods Ltd. is a biscuits production and distribution business based in Lagos, Nigeria, specializing in high-quality, affordable biscuits for retail and wholesale markets. With Nigeria’s biscuit market valued at over $1 billion and driven by increasing demand for convenient snacks, CrispyBite aims to capitalize on this growth by producing a variety of biscuits using modern equipment and locally sourced ingredients. The company will target households, retailers, and institutions, aiming to become a leading biscuit brand in Southwest Nigeria within five years.

Objectives

• Achieve ₦80 million in annual revenue by the end of year two.
• Produce 500,000 packs of biscuits annually by year two.
• Capture 5% of the Lagos biscuit market within three years.
• Expand distribution to three additional states (Ogun, Oyo, Ondo) by year four.
• Maintain a 22% profit margin through efficient production and cost management.

Mission

CrispyBite Foods Ltd. is dedicated to producing affordable, high-quality biscuits that delight Nigerian consumers, support local agriculture, and promote sustainable food production practices.

Keys to Success

• Consistent production of high-quality, tasty biscuits.
• Strong partnerships with retailers and distributors.
• Efficient production processes to minimize costs.
• Robust marketing to build brand recognition.
• Compliance with NAFDAC and food safety standards.

Company Summary

CrispyBite Foods Ltd. is a biscuits manufacturing company operating a modern facility in Lagos. The company will produce a range of biscuits, including digestive, cream, and savory varieties, using automated production lines and locally sourced ingredients. CrispyBite aims to meet the growing demand for affordable snacks while supporting local farmers and ensuring product quality.

Official Website: www.crispybitefoods.com (Note: This is a hypothetical website for the purpose of this plan)

Address: Plot 10, Ikeja Industrial Estate, Lagos, Nigeria

Social Media Accounts:

• Twitter: @CrispyBiteNG
• Instagram: @crispybitefoods
• Facebook: CrispyBite Foods Ltd.
• LinkedIn: CrispyBite Foods Ltd.

Founder and Owner: Funke Adeyemi, a food processing expert with 10 years of experience in the FMCG sector. Funke has managed bakery operations and has strong connections with suppliers and distributors.

Company Ownership

CrispyBite Foods Ltd. is a privately owned limited liability company, with 70% ownership by Funke Adeyemi and 30% by two private investors.

Start-up Summary

The start-up phase requires ₦100,000,000 to cover equipment, facility setup, raw materials, and initial marketing. Funding will be secured through owner equity, a bank loan, and investor contributions.

Start-up Requirements

• Start-up Expenses:
  • Legal and registration fees: ₦700,000
  • NAFDAC certification and compliance: ₦1,500,000
  • Marketing and branding: ₦2,000,000
  • Facility lease (first year): ₦3,000,000
  • Office setup and utilities: ₦1,300,000
  • Website and software development: ₦1,000,000
  • Total Start-up Expenses: ₦9,500,000
• Start-up Assets:
  • Biscuit production equipment (mixers, ovens, packaging machines): ₦65,000,000
  • Initial raw materials (flour, sugar, oils): ₦15,000,000
  • Delivery vans (2 units): ₦8,000,000
  • Cash reserve for operations: ₦2,500,000
  • Total Start-up Assets: ₦90,500,000

Start-up Funding

• Owner’s equity (Funke Adeyemi): ₦35,000,000
• Bank loan: ₦50,000,000
• Investor contributions: ₦15,000,000
• Total Funding: ₦100,000,000

Liabilities and Capital

• Liabilities:
  • Bank loan: ₦50,000,000 (6-year term at 14% interest)
  • Accounts payable (suppliers): ₦3,000,000
  • Total Liabilities: ₦53,000,000
• Capital:
  • Owner’s equity: ₦35,000,000
  • Investor equity: ₦15,000,000
  • Total Capital: ₦50,000,000
• Total Liabilities and Capital: ₦103,000,000

Company Locations and Facilities

The main production facility and office will be located at Plot 10, Ikeja Industrial Estate, Lagos, a strategic hub for manufacturing and distribution. The facility includes a 2,500-square-meter factory for production and packaging, a 1,000-square-meter warehouse, and an administrative office.

Service Description

CrispyBite Foods Ltd. offers:

• Digestive Biscuits: Whole grain biscuits for health-conscious consumers.
• Cream Biscuits: Flavored cream-filled biscuits for children and families.
• Savory Biscuits: Salted and spiced biscuits for snack lovers.
• Bulk Supply: Large orders for wholesalers, supermarkets, and institutions.
• Private Labeling: Customized packaging for retailers and corporate clients.
• Delivery Services: Nationwide delivery through logistics partnerships.

Price Range:

• 100g pack: ₦100–₦150
• 250g pack: ₦250–₦400
• 500g pack: ₦500–₦800
• Bulk supply (per carton of 50 packs): ₦5,000–₦8,000
• Delivery fees: ₦5,000–₦15,000 (based on distance and quantity)

Competitive Comparison

Competitors include large brands like Munchee and local producers in Lagos. CrispyBite differentiates through:

• High-quality, locally sourced ingredients.
• Affordable pricing for mass-market appeal.
• Eco-friendly packaging options.
• Fast and reliable distribution networks.

Sales Literature

CrispyBite will develop:

• Product catalogs showcasing biscuit varieties and packaging.
• Flyers for distribution at supermarkets and trade fairs.
• A professional website with product details and online ordering.
• Social media content highlighting taste, quality, and affordability.

Fulfillment

Biscuits will be produced using automated mixers, ovens, and packaging machines. Raw materials like flour, sugar, and oils will be sourced from local suppliers to ensure freshness. Quality control checks will ensure compliance with NAFDAC standards. Distribution will be managed through in-house vans and partnerships with logistics firms like GIG Logistics.

Technology

• Production Equipment: Automated mixers, ovens, and packaging lines.
• Quality Control Systems: Testing for taste, texture, and safety.
• Inventory Management Software: Tracks raw materials and finished products.
• Online Ordering Platform: Website and mobile app for order placement and tracking.

Future Services

• Expand product line to include gluten-free and sugar-free biscuits.
• Offer subscription-based delivery for retailers and households.
• Develop a mobile app for real-time order tracking.
• Introduce premium gift packs for festive seasons.

Market Analysis Summary

Nigeria’s biscuit market, valued at over $1 billion, is driven by a population of over 200 million and increasing demand for convenient snacks. Lagos, Nigeria’s commercial hub, offers a strategic base for CrispyBite to capture market share in the Southwest and beyond.

Market Segmentation

• Households: Families seeking affordable, tasty snacks.
• Retailers: Supermarkets and local stores requiring consistent supply.
• Institutions: Schools, offices, and hospitals needing bulk supplies.
• Wholesalers: Distributors serving regional markets.

Target Market Segment Strategy

• Households: Partner with supermarkets and online platforms for retail sales.
• Retailers: Offer competitive pricing and private labeling.
• Institutions: Secure long-term contracts with bulk discounts.
• Wholesalers: Provide reliable supply and fast delivery.

Market Trends

• Growing demand for affordable, packaged snacks.
• Increasing preference for locally produced biscuits due to import restrictions.
• Shift toward health-conscious options like digestive biscuits.
• Rising use of online platforms for snack purchases.

Market Growth

The biscuit market is projected to grow at a CAGR of 5.5% through 2030, driven by population growth, urbanization, and rising disposable incomes.

Market Needs

• Affordable, high-quality biscuits for cost-conscious consumers.
• Reliable supply for retailers and institutions.
• Hygienic packaging to ensure product safety.
• Fast and dependable delivery services.

Service Business Analysis

The biscuit industry includes large multinational brands and local producers. Local brands are gaining traction due to affordability and import restrictions. CrispyBite will compete through quality production, competitive pricing, and efficient distribution.

Business Participants

• Major Players: Munchee, Beloxxi, OK Foods.
• Local Producers: Small-scale biscuit manufacturers in Lagos.
• Distributors: Retail chains like Shoprite and local wholesalers.

Competition and Buying Patterns

Consumers prioritize price, taste, and availability. Retailers and institutions prefer reliable suppliers with consistent quality, while households buy from supermarkets or local stores. CrispyBite will offer competitive pricing and hygienic packaging to attract both segments.

Strategy and Implementation Summary

CrispyBite will focus on quality production, strategic partnerships, and aggressive marketing to build brand recognition and market share.

Strategy Pyramid

1. Core Strategy: Deliver affordable, high-quality biscuits.
2. Tactics: Partner with retailers and wholesalers, optimize logistics.
3. Programs: Launch loyalty programs and health-focused marketing.

Sales Strategy

• Direct sales team to target institutions and wholesalers.
• Online platform for retail and subscription-based sales.
• Promotions during festive seasons to boost household sales.

Promotion Strategy

• Social media campaigns highlighting biscuit taste and affordability.
• Sponsorship of community events and food festivals.
• Trade show participation to attract distributors.
• Partnerships with food influencers to promote products.

Value Proposition

CrispyBite offers affordable, high-quality biscuits made with local ingredients, reliable delivery, and eco-friendly packaging, supporting consumer satisfaction and local agriculture.

Sales Forecast

• Year 1: ₦50,000,000 (333,333 packs at ₦150 average price)
• Year 2: ₦80,000,000 (533,333 packs)
• Year 3: ₦120,000,000 (800,000 packs)

Management Summary

The management team, led by Funke Adeyemi, oversees production, sales, and distribution. Key roles include a production manager, sales manager, and accountant.

Personnel Plan

• Production Manager: ₦2,400,000/year
• Sales Manager: ₦1,800,000/year
• Accountant: ₦1,200,000/year
• 6 Production Workers: ₦3,600,000/year (total)
• 2 Delivery Drivers: ₦1,200,000/year (total)
• Total Payroll: ₦10,200,000/year

Management Team

• Funke Adeyemi (CEO): 10 years in FMCG and food processing.
• Emeka Okoye (Production Manager): 8 years in bakery operations.
• Chioma Nwosu (Sales Manager): 6 years in B2B sales.

Management Team Gaps

• Need a marketing specialist with digital expertise.
• Require a quality control expert to ensure consistent product standards.

Financial Plan

The financial plan focuses on achieving profitability within 18 months through efficient production and strong sales growth.

Important Assumptions

• Stable supply of raw materials like flour and sugar.
• Annual market growth of 5.5%.
• Access to reliable power or backup generators.
• Loan repayment at 14% interest over 6 years.

Break-even Analysis

• Monthly fixed costs: ₦3,000,000
• Average price per pack: ₦150
• Variable cost per pack: ₦75
• Break-even units: 40,000 packs/month
• Break-even revenue: ₦6,000,000/month

Key Financial Indicators

• Gross margin: 50%
• Net profit margin: 22% (target by year 2)
• Sales growth: 60% year-over-year for first three years

Projected Profit and Loss

• Year 1:
  • Revenue: ₦50,000,000
  • Cost of Goods Sold: ₦25,000,000
  • Operating Expenses: ₦18,000,000
  • Net Profit: ₦7,000,000
• Year 2:
  • Revenue: ₦80,000,000
  • Cost of Goods Sold: ₦40,000,000
  • Operating Expenses: ₦22,000,000
  • Net Profit: ₦18,000,000
• Year 3:
  • Revenue: ₦120,000,000
  • Cost of Goods Sold: ₦60,000,000
  • Operating Expenses: ₦27,000,000
  • Net Profit: ₦33,000,000

Projected Cash Flow

• Year 1:
  • Cash Inflow: ₦50,000,000 (sales) + ₦100,000,000 (funding)
  • Cash Outflow: ₦90,500,000 (expenses + loan repayment)
  • Net Cash Flow: ₦59,500,000
• Year 2:
  • Cash Inflow: ₦80,000,000
  • Cash Outflow: ₦65,000,000
  • Net Cash Flow: ₦15,000,000
• Year 3:
  • Cash Inflow: ₦120,000,000
  • Cash Outflow: ₦87,000,000
  • Net Cash Flow: ₦33,000,000

Projected Balance Sheet

• Year 1:
  • Assets: ₦100,000,000 (cash, equipment, inventory)
  • Liabilities: ₦53,000,000 (loan, payables)
  • Equity: ₦47,000,000
• Year 2:
  • Assets: ₦115,000,000
  • Liabilities: ₦45,000,000
  • Equity: ₦70,000,000
• Year 3:
  • Assets: ₦140,000,000
  • Liabilities: ₦37,000,000
  • Equity: ₦103,000,000

Business Ratios

• Gross Margin: 50%
• Return on Investment: 15% (Year 1), 26% (Year 2), 32% (Year 3)
• Debt-to-Equity Ratio: 1.13 (Year 1), 0.64 (Year 2), 0.36 (Year 3)
• Current Ratio: 1.6 (Year 1), 2.0 (Year 2), 2.5 (Year 3)

Key Notes

• Regulatory Compliance: Adherence to NAFDAC standards for food safety is critical to maintain consumer trust.
• Supplier Partnerships: Long-term contracts with local suppliers for raw materials to ensure cost stability.
• Market Volatility: Fluctuations in ingredient prices may impact production costs.
• Sustainability Focus: Use of eco-friendly packaging to align with consumer trends and enhance brand appeal.

Summary and Conclusion

CrispyBite Foods Ltd. is strategically positioned to thrive in Nigeria’s growing biscuit market by producing high-quality, affordable biscuits using local ingredients. With a modern production facility, strong distribution networks, and a focus on regulatory compliance, the company aims to capture significant market share in Lagos and expand regionally. The experienced management team, robust financial projections, and commitment to sustainability ensure CrispyBite’s potential to become a leading biscuit brand in Nigeria within five years.