How to start a spice processing business

How to start a spice processing business

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India is the home of spices. You can find every kind of spice in India. If you are an Indian, you must know that our food is incomplete without the pinch of spices in it. We don’t prefer to eat food where spice isn’t there unless required so. 

Everywhere we go, we ask for spicy food that directly means “the food which is full of different spices”. Food without spices is tasteless for us. If you see outside India, there is hardly any country that manufactures spices as we do. They import from us, that’s why our export spices are very high. 

Now, you must be wondering that is there any business of spices? So, the answer is Yes. The business of manufacturing spices and then selling them into the market has been there for centuries after centuries. 

spices

Each state or place in India is known for its different food which is made from different spices. In India, there is hardly any family that doesn’t consume spices in their daily food. So, there is no second thought on how wide this business can be. 

If you want to start this business and gain a huge profit, then read this blog till the end. You will find every little detail about this business in this blog. Let us start. 

What is spice processing?

Spice processing refers to the manufacturing of spices by people which includes cleaning, drying, roasting, grinding, grading, sieving, and packaging of spices. It is not one man’s job; it requires people to handle everything with care. If care and diligence would not be there, then it can impact the health of a human. 

As you know, spices are the main ingredients of our food in India without which it is tasteless. So, the processing of spices is an important job in India because it is known as the “hub of spices”. A lot of countries import spices from us. Our majority of export income comes from spices. 

The name of different spices processed is Turmeric, pepper, curry powders, spice oils, mint products, cumin, garlic, cardamom seeds, carom seeds, cloves, coriander, cinnamon, and many more. These are just a few names there are a lot of spices manufactured in India.

If you want to know about how to start a spice manufacturing business, then continue to read this blog. 

Is the spice processing business profitable?

Nonetheless, to say, it is one of the most profitable businesses in India. As you know, the demand for spices in India is very high. There probably no home that doesn’t use spices in food, which shows their demand in the country which is already highly populated. It is a basic food element. 

A large number of people consume spices daily and a large number of people manufacture spices in the country. If there are so many people who are consuming it, that means it will make an abundance of profit out of it. Besides, India is also known as the “Land of Spices” because it exports and produces a huge amount of spices. 

There are the following reasons which depict why it is a profitable business;

  • Due to its huge demand among Indians, it is the most profitable business. Every Indian household has spices, which adds to its demand. 
  • It doesn’t require a lot of investment, which makes it more open to start. A lot of people from every background can start this business.
  • It has high growth potential. Due to its constant demand and use, it has growth potential. This business will be only going to expand and not contract.
  • It has a huge income prospect. When do you know the demand for your product is high, what you will expect? A good income, right? That is why it has a huge income prospect. 

With these points, you have got an idea of how the presence of spices in our food plays an important role in this business. So, don’t hesitate to start this business instead prepare for starting it. For preparing, first, know how to process the spices in our next point. 

Process of manufacturing spices

If you are not aware of the steps of processing spices, then I am here to let you know the whole process. Manufacturing spices come in bits and pieces which we will see throughout these steps. 

So, let’s start with our steps of making spices;

1. Cleaning– First, step is cleaning. In this step, we clean the spices in the form of seeds and plants to further convert them into the end product. This process is mainly done to get rid of the dust and dirt from the spices. 

chilly


2. Drying– The second step is Drying. After cleaning the spices, it’s now time to dry them. It is being believed that the quality of our spices depends on how dried they are. You have seen your mother or grandmother drying the chili under the sun, that is the main reason for doing that. Now, there are advanced technologies to dry them besides the normal sunlight. 

3. Roasting– Then the third step comes which is Roasting. After drying the seeds, the process of roasting comes which gives aroma, a taste, and a good color to the spices. 

4. Grinding– The fourth step is grinding. In this step, we grind the spices to convert them into powder form. This is an important stage where spices are almost ready.

5. Grading– The fifth step is grading. It is the process where we add inclusions and proportion with raw materials. It is graded based on shape, density, size, etc. 

6. Sieving– The sixth step is sieving. In this process, we make sure that the spices have a uniform mesh size. This is the last step in the production of spices, here spices come into existence.

7. Packaging– Step seven is Packaging. Here we pack all the spices into a container according to the quantity required. 

8. Sealing– The last step is sealing. Here we seal each packet properly so that spices remain safe. Sealing is an important part because if we seal it loosely, it can result in the waste of a lot of spices. 

These are the eight steps of manufacturing spices, which need to be done to make spices. Each step is important in itself. This is how our beloved spices come into existence. You cannot forget to read this point because it is the most important thing when you are starting a spice processing business. So, if you are required to read it again, then read it and work on each step. 

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Ingredients required for spice processing

Can you think of spices without raw material? I guess, No. So, it is important to know that the ingredients are the raw material of processing spices. Ingredients add a different texture to spices. Let’s discuss some of the ingredients required while processing the spices;

  • Chilly
  • Coriander
  • Corrugated cartons
  • Cumin
  • Fennel seeds
  • Mustard
  • Poppyseed
  • Methi leaves
  • Turmeric
  • Food color
  • Packing materials

All these ingredients are used in making spices. That’s why they form an important part. So, if you are planning to start this business make sure you have all these ingredients in the bag. It is also an important aspect of this business. 


What are the registration and license required for the spice processing business?

For starting and running any business, registration and license play an important role. They are an important aspect of a business that decides the legality of your business. If you are planning to start a spice processing business, make sure that you register yourself and take a valid license for the same. 

Here we will talk about different registration and licenses you will require to run this business properly without any legal interference. So, let’s learn about the following registrations and licenses;

  • Registration of the Business Entity– Before doing anything, you must choose a form of business entity in which you would like to run your business activities. Once you have chosen the form of business such as proprietorship, partnership, company, LLP, etc, you would now register it under the valid act that persists in rules and regulation. 

  • Trade license– After the registration of the business entity comes the trade license. By its name, you have may get an idea of what it’s exactly meant for. When you are running a business and trading your goods or services, you are required to take permission for the same. You will take the permission of local authorities to run your business in the local area in the form of a trade license. If in any case, anyone comes to question the trade of your business, you can show them the trade license. 

  • GST Registration– It is becoming one of the important registrations these days. As you know, since the rollout of GST in our Country it has become mandatory to register yourself under GST if you are falling under its limit as prescribed by the Govt Of India. Also, it helps your business to give recognition by having a GST Number. So, if you are falling under the prescribed limits, make sure to take a GST registration. 

  • MSME Registration– The full form of MSME is Micro, Small, and Medium Enterprises. If you are just starting and your business is comparatively small or micro-enterprises, then you are liable to register your business under the MSME and take the benefits or subsidy for the same. It will help you to take the facilities from the state government. 

  • FSSAI– As you know, when you are running a business that includes the consumption of food by people directly, you must take the license granted by the Food Safety and Standards Authority of India. Starting a spice manufacturing business is fall under the FSSAI because spice is also a food element. So, FSSAI is compulsory for every food business. 

  • Import Export Code (IEC)– This is another important license you must possess when you are dealing with the import and export of goods or services. It is compulsory to have an IEC code when you are importing and exporting goods or services.

    Without the IEC code, you cannot import or export anything from or to any country. So, if you are planning to start a business where you probably going to export or import, then make sure you take the IEC code for the same. 

I hope you are clear with all the registration and licenses you are required to possess to run this business properly under every circumstance. With this registration and licenses, no one will put a finger on the legality of your business. So, be registered and take licenses. 

Scope of spice processing business

India is known for its diverse spices. There is the production of so many different spices in different states in India. Not only the people of India but people around the world trade spices from India. India exports the largest commodities of spices to the world. 

Now, are you still want to know about the scope of this business? Let me tell. The scope of the spice processing business in India is very wide. Every other home in India uses spices and India’s population as of now is 139 crores, you can assume the kind of scope this business has. There is an ocean of opportunities present in this area. One must be able to grab all such with their perseverance. 

If you see around, there is a rise in food catering businesses. Every other shop in your colony would be offering different delicacies. And if I am not wrong, every delicacy requires a pinch of spices in them. Can you imagine food without spices? I cannot for sure and so do you. We Indian love the pinch of spices in every food we eat. 

So, to cater to our craving for spices people are working tirelessly to process as many spices as they can because that’s what we want. More and more of it. If you are planning to start a spice manufacturing business, you will be going to have a lot of profit and a great income. Don’t think of the scope, grab the opportunities in front of you.

If you are not aware, let me tell you that the Government of India has constituted a board of spices in the year 1987, just to promote the Indian spices at the global markets. By now, you have amplified the significances of this business and how wide it is and can become in near future with the rising food habits of people. Also, people love to have food rich in spices. So, don’t hold back and start your business at the earliest. 

Where can we sell the processed spices?

Now, when you have planned to manufacture the spices after seeing their scope, it’s time when you will eager to know where you can sell them. Because processing is just one part of the job, the main part is to sell where you will earn an income. 

You can talk about selling only after you have done with its processing. This step determines your amount of profit from this business. So, you look for options for selling your processed spices. Let me help you here by giving you few options where you can sell these spices and earn a profit. Following are the options you can choose to sell your spices;

  • Wholesale– You can choose this option, where you have to sell your spices to a wholesaler who further can sell them to people. You will sell it to a wholesaler and he will give you the money for it.

    You would not require to tap customers for making sales, he will make sales and you will enjoy your income. This is the simplest option you can have where you can go to produce more spices because you don’t have to choose to market your spices. 

  • Retail market– This option is a very common option, where you can directly sell to customers without having any middlemen. You can choose to sell in the local markets, food markets, trade markets, etc. You can also open your shop and sell the processed spices there. 

  • Export– You know about this, don’t you? You can export your manufactured spices to the world and earn a lot of profit and income. You just need to get the IEC code and you will be ready to export to the world. You already know about the gains from export. So, it can be a great option for you to choose.

  • Online– You can choose this option, too. Where you start your online store for spices and sell them to different states and their people. This would be a comfortable and also profitable option for you. There is already a lot of store online, who are earning great. So, be one among them and exhibit the best results. 

These are all the options you can choose and earn a great income. There is no lacking of anything in this field, you just need to be more vigilant in every area and soak the profits. 

How to start a spice processing business


Simple steps to follow for starting a spice processing business

Now, when we have majorly talked about everything we should know before starting a spice processing business. Let’s now focus on the steps we can follow to make it come into existence. I have made a list of steps, which I am going to write down below for your consideration;

1. Learn about various spices you 

might come from a farmer’s family or you might not. If you are coming from a farmer’s family, you must know the different spices. But if you are not from a farmer’s family you may have very little knowledge about the various spices. So, in that case, it would be great if you learn about the various spices present in our country. It would help you to process the spices properly.

Also, knowing about different spice products will help you to choose which will give you more benefit. Because each different spice has its consumer demand. So, to have a large consumer base learn about the spice gives you more consumers.

2. Choose the spice you want to process and sell

In the previous step, we have learned about the spices you can process. In this step, we will talk about the spices you can choose from them to process. As you know, each spice has its benefit and own consumer demand, so to decide which will be your spice product, its identity and recognition will play a main role.

Like, the most common spices which people use daily are chili, turmeric, black pepper, cloves, cardamom, carom seeds, etc. If you are planning to manufacture these, then your business will have a continuous sale. So, choose your spice product wisely because it will decide your customer base. 

3. Write down a business plan

A business plan is a draft conclusion of everything you want to add and plan in your business. If you want to run your business with a planned process, then create a business plan. A business plan will include everything like the name of your business, a product of spice which you will be going to manufacture, equipment for processing, investment to be made, the place to opt for starting a spice processing business, etc.

The business plan has all the answers to these questions. So, writing down all the things which your business would require and have can solve your unnecessary problems which create chaos. A business plan will help you settle down with that chaos. 

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4. Calculate the investment

This is one of the important points, where you have to seriously spend time. Your business plan depends on the kind of investment you are going to put. As you know, this business would not require a lot of investment and would comparatively ask for less investment, but there are things which require the attention of money.

You must spend money on buying types of equipment for processing the spices without which you cannot manufacture the spices. Also, you would require the raw material for processing spices, which are also an important part. Further, if you need to buy any space outside your home for regulating this business, then also you would need a good investment. So, planning all these things you have to calculate the final amount your business would need.

5. Take registration and license

As we have talked about before, the requirement of having registration and license. It is one of the important steps in making your business come into existence. While working on the existence of your business, you have to decide the registration you would require. Here I am sharing the name of a few of the registration and license you would need;

1. Registration of business entity. It is important to register your business entity under a valid act of registration. 

2. GST registration. If you fall under the prescribed limits under GST Act, then your business is liable to be registered under the same. 

3. Trade license. Trade license is necessary for doing trade in the market without any legal interference. 

4. FSSAI (Food Safety and Standards Authority of India). This license is one of the important things when you are dealing with food.

5. MSME registration. This is also important when you want to use the benefit of government subsidy and facility.

6. IEC code. IEC code is important when you are planning to export your spices to different countries, without IEC you cannot export.

These are some of the important registration and licenses. 

6. Purchasing raw material 

Raw materials are the eminent part of any business, without raw material how you will process the things you want to produce? So, buying raw material is the foremost job to do when you are starting a spice processing business. To run this business, you would need a different kind of underground spices. Now, I am going to name the few raw materials which you will need;

  • Coriander
  • Chilly
  • Cumin
  • Methi leaves
  • Fennel seeds
  • Poppyseed
  • Pepper
  • Corrugated cartons
  • Mustard
  • Food color
  • Packing materials
  • Containers

These are the important aspects of this business; you need to be ready with these things when you are starting your business. 

7. Buying required equipment

This is another important point, where you have to purchase the equipment required to make spices. Without this equipment, you cannot process the spices you want. You need proper machinery and equipment to make your work simple and easy. Also, while buying the equipment or machinery do focus on the advanced quality and technology because it will make your product more effective. Let’s discuss the machines you will need;

  • Spice grinder
  • Weighing scale
  • Disintegrator
  • Pulverizer
  • Hammermill
  • Pounding machine
  • Compressor
  • Packaging machine
  • Sieves
  • Roster

These are the important pieces of equipment for your spice processing business. 

8. Start the manufacturing process

The process of manufacturing spices takes time, so you need to give proper time and energy to the process. You need to learn the process which comes in different steps. The process is the important and main part of this business, without which this business has no means. Let me tell you how the process of making spices goes;

1. In the cleaning process, here the spices are cleaned where we get them off from dust and impurities. 

2. In the drying process, here we dry the cleaned spices under the sunlight to make them better

3. Roasting process, here the dried spices are roasted to inculcate color, taste, and aroma to powdered spice.

4. Grinding process, here we grind the spices to convert them into powder form.

5. Grading process, here we graded the spices to give them flavor, size, shape, and density.

6. Sieving process, here we sieved the spices to assure that spices have a mesh size.

7. Packaging process, here we pack all the processed spices in the containers and boxes. 

8. Sealing process, here we seal all the containers and boxes tightly so that nothing gets out of the box or gets affected by moisture and dust.

This the whole process of making spices, which requires time and effort.

9. Sell the spices

When you have done with making spices it’s now time to sell them into the market. At this point, you also have to decide where you will sell your processed spices. In simple terms, you will decide on a marketplace for your business to earn a profit and good income. To maintain a customer base, you have to decide on a place where you can target more customers. Let’s look out some market places where you can sell your spices;

1. At the wholesale market– A wholesale market can be a good and easy way to sell your spices to one person, from where it goes to a large number of people. 

2. At the local market– Choosing a local market for selling your spices can be a good option. In this option, you will make direct sales to customers.

3. Opening an online store– Choosing to sell online would be a good option at this time, where most people are online and prefer to buy online. 

4. Exporting spices- Choosing to export your spices would be a profitable option for you, especially when the demand for spices is huge around the world. 

These are the options you can choose while starting a spice processing business

10. Hire people, if needed

You know sometimes the work gets exhausted and your job becomes tiring. If you have people who can help you get your work done smoothly, then no one can stop your business from flourishing. So, if you are feeling a need for few helping hands, then don’t hesitate to hire some people for helping. Having some people around who can help you anytime, make your business go in the long term. 

So, these are the steps you must follow to make your business come into existence. I hope these steps will help you lower the stress of starting a business. 

Is targeting the market through marketing tools important?

Yes. Marketing plays an important role in the recognition of a business. So, if you know few tools of marketing which can help you target a large audience then it would help your business more recognition. Also, if you don’t know anything about marketing and how everything goes on the market. Then, you can easily contact Traffic Tail for handling your business marketing. 

So, now the point is how you can market your spice processing business to target the right audience. I am jotting down few points which can be marketing tools for your business;

  • Creating a website– Creating a website helps you reach the audience who are online, who are dealing online. You can put all the details about your business on your website to generate the required traffic. 
  • Advertising– You can do advertising of your business both online and offline. Through advertising, you can tell people what you do and what benefits they can have from your business.
  • Words of mouth– This is the most common tool of marketing. You can tell people like your friends, relatives, neighbors, family, etc about your business. 

website

All these marketing tools will help your business to get the right recognition and audience, which it deserves. 

Conclusion

After reading this whole blog, you will come to points where you will decide that continuing with this business idea would help you earn a lot of profit. And that is the whole motive of any business, to earn recognition and profit along with it.

Also, it doesn’t require you to invest much in this business which is another positive aspect of this business. So, all and all you can go for this business anytime and the main thing is you would not regret your decision.

Frequently asked questions

Q1. What is spice processing?

Spice processing refers to the manufacturing of spices by people which includes cleaning, drying, roasting, grinding, grading, sieving, and packaging of spices. You have seen this business at so many places but didn’t know that it can turn into a profitable business. 

Q2. What is the future growth potential of a spice processing business?

It has great growth potential. As you know, the demand for spices is very high in our country and also India is the country where spices are made in high demand. Also, our country exports the most spices to the world which shows how much this business can grow. 

Q3. What are the raw materials for processing spices?

There are different types of raw material required for processing the spices, out of which I am sharing a few of the name;

  • Coriander
  • Chilly
  • Cumin
  • Methi leaves
  • Fennel seeds
  • Poppyseed
  • Pepper
  • Corrugated cartons
  • Mustard
  • Food color
  • Packing materials
  • Containers

Q4. What are the steps of manufacturing spices?

There are different steps involved in processing the spices, which I am going to write down below;

  • Cleaning
  • Drying
  • Roasting
  • Grinding
  • Grading
  • Sieving
  • Packaging
  • Sealing

Q5. What are the steps to start a spice processing business?

There are the following steps to start a spices processing business;

  • Learn about different spices
  • Choose the spice you want to process
  • Write down a business plan
  • Calculate the Investment 
  • Take registration and licenses
  • Purchase the raw material
  • Buy required Equipment
  • Start the manufacturing process
  • Sell the processed spices
  • Hire the people

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