How To Start A Spice Manufacturing and Packaging Business

Spice processing and packaging are considered as a profitable business in India. Any individual can start a spice business as small, medium and large scale basis as per his or her investment capacity.

Even a home-based spice business is also profitable in India. Additionally, you can start with one or two variety of spice. As your business grows, you can shift to a full-fledged spice processing company.

Here in this article, we intend to explore how to start a home-based spice business in India with relevant information. Spices play an important role in enhancing the flavor and taste of processed foods. In addition, the medical industry is a major consumer of spices. Because spices have carminative stimulating and digestive properties.

Spice Business Market Opportunity

India produces almost all the known spices. The country is the largest exporter of this commodity. As the spice is a mass consumption item mostly used in culinary preparation or seasoning of food products, its internal demand is increasing quite steadily.

With changing lifestyle and especially with changes in food habits and the increase in income level, the use of powdered spices has increased. Of late, the market for ready-to-mix of spices has grown significantly.

Spices are fast-moving consumable items and have large potential. There has to be a wide-spread network of dealers or retailers backed up by advertisements in local media  The export market for Indian spices is also growing. Spices from India are going places, with exports on course to top $3 billion by 2016-17.

The Indian spices market is pegged at ₹40,000 crore annually, of which the branded segment makes up 15 percent. According to Technopak, national brands dominate the branded space market. And most prominent brands are Catch, Everest, Ramdev, among others.

Increasing urbanization paired with a rise in the number of working women has reduced the time of cooking. Consequently, home-makers have started demanding readymade spice mixes such as sabzi masala, garam masala, chicken masala, etc. This has augmented industry revenues.

The spice mixes and branded spices entail greater profit margins, as compared to straight and unbranded spices. We can conclude, initiating a small scale home-based spice business is a profitable investment opportunity for new entrepreneurs in India.

Home Based Spice Business – Different Products

Powdered spices are convenient to use and also saves time and energy for preparing different delicious dishes. Besides their everyday use in households, spices are used in significant quantities in processed foods and commercial foodservice businesses such as hotel, restaurant, etc.

Some of the popular and widely used spices are Turmeric, Chilli, Cumin, Coriander, Black Pepper, Cardamom, Cloves. Apart from these straight segments, Curry Masala, Sabji Masala, Sambar Masala, Chana Masala, Garam masala, Chicken masala, Meat masala are the popular blends in India.

Registration & License For Spice Business

Regardless you start a small scale or large scale spice business, you have to obtain these registrations and licenses.

  • Registration with ROC. For a micro or tiny scale operation, you can go with One Person Company registration.
  • Trade License from local Municipal authority.
  • Udyog Aadhar MSME Registration is optional. However, obtaining the registration will help you in getting subsidy and grants from Govt.
  • Food Operator License.
  • Compliance with FPO regulation is a must.
  • BIS certification. The following ISI specifications are available for ground spices.
    1. Black Whole and ground ISI-1798-1961
    2. Chilli powder ISI-2445-1963
    3. Coriander powder ISI-2444-1963
    4. Curry powder ISI-1909-1961
    5. Turmeric powder ISI-2446-1963
    6. Methods of sampling and test of Spices and condiment ISI-1997-1961
  • CFTRI, Mysore, has successfully developed the technical know-how. It is advisable to obtain AGMARK certification.

Related: Small Business Registration In India | Basic Guide

Spice Business Machinery & Raw Material

Land measuring around 150 sq.mtrs. is adequate with a built-up area of about 75 sq.mtrs. consisting of the main production area, packing section and go down. Spice grinding and processing generally demand simple machinery and equipment. You will need to install disintegrator, spice grinder, pouch sealing machine and weighing scale. In a fully-automatic operation, the entire system is interconnected with a bucket elevator and conveyor belt.

Additionally, you will need to provide the electricity up to 10 HP. Also, you must arrange an adequate amount of water. However, water is required in small quantity to clean ungrounded spices and for potable purposes.

The major raw materials are unground turmeric, black pepper red chilies, cumin, coriander, etc. Additionally, you will need to arrange the pouch as the main required packaging consumables. Also, you must procure corrugated cartoon for bulk packaging.

“Learning Resources”

The Complete Book on Spices & Condiments (with Cultivation, Processing & Uses) 

Handbook on Spices and Condiments (Cultivation, Processing, and Extraction)

Spice Manufacturing Process

The process of manufacture involves cleaning, drying, pulverizing, sieving and packaging of spices such as chili, pepper, turmeric, coriander, etc. either individually or in combination with other spices. The manufacturing process is very well established and does not involve technicalities.

First of all, clean the unground spices manually to remove impurities like mud and stones. And then, wash them with clean water. After drying them in sunlight, grade and grind them with the help of a grinding machine to convert them in powder form.

Generally, you can find various formulations for curry powder. However, the ingredients like red chili, black pepper, cloves, coriander seed, cumin seed, fenugreek seed, ginger, and turmeric are typically common. The proportion and the inclusion of spices in a particular mix depend on individual manufacturers.

Disintegrator is used in case of solid material like turmeric to obtain uniform mesh size. Spices in powder form are then weighed as per the contemplated packing quantities and packed in printed polyethylene bags and then these bags are sealed on an automatic sealing machine.

Start Exporting Spices

India is a big exporter of spices. The items include cumin, red chili, pepper, turmeric, green cardamom, etc. The United States of America, Vietnam, UAE, Thailand, and Malaysia are the biggest importers of Indian spice. As there is a big demand for Indian spices abroad, you must consider export potential if you have decided to enter the spice business.