Project Proposal and Business Plan

Table of Contents

1. Background

2. Why Frozen Food – Key Benefits

3. Frozen Food - Global Scenario and Indian Context

4. Untapped Market and Proposed Project

5. Project Positioning and First Mover Advantage

6. Project Financials

7. Implementation Plan

1. Background

Food had been the basic need for human beings. The food habits of human beings

evolved over ages and accordingly the preferences, the way of processing, cooking and

consumption patterns get transformed steadily over the centuries across the globe. As a

part of steady transformation, demand for food in frozen conditions started growing

during the past few decades in the developed countries and recently in the developing

countries. Frozen foods have the advantage of being very close in taste and quality to

fresh foods as compared with other preserved or processed foods. Frozen foods are

ubiquitous in western supermarkets, and are increasingly a part of the food industry

worldwide including in India. Fruits and vegetables are usually frozen within hours of

being picked, and when thawed, they are very close to fresh in taste and texture. The

frozen meal is increasingly popular in time-starved western households. With rapid

urbanization and increased women work participation in India, huge potential for frozen

food requirements is building-up. In the late 1990s, the frozen food industry was

expanding both within the western markets and other countries. The industry's biggest

push was so-called home meal replacement, that is, whole frozen meals that took the

place of cooking from scratch. More consumers were willing to trade the convenience of a

frozen meal for the satisfaction of making their own meal from fresh foods. This meant

that the industry was challenged to come up with more elaborate frozen dishes, which

required more testing and experimentation to pull off than the relatively simple frozen

vegetables or waffles. This has expanded the range of frozen foods right from raw

materials such as vegetables, seafood, chicken, mutton, dairy to huge varieties of ready to

cook and ready to eat processed food items. In most cases, the raw food is specifically

cultivated or adapted for freezing and in case of processed and semi-processed food

products, the recipes must be tested and altered so that it freezes well.

2. Why Frozen Food – Key Benefits

As discussed in the foregoing, frozen food has distinct advantages, when compared to the conventional food.

2.1 The advantages include :

I. Preservation of freshness, nutritional values and natural taste

II. More hygienic, particularly in case of non-vegetarian food

III. Availability of customized products and choice of quantity

IV. Round the clock availability and quick preparation

V. Well suitable for urban lifestyles, due to increased women work participation ratio

VI. Availability of wide range of items and some of them are otherwise difficult to prepare at home in conventional way

VII. Economical when compared to outside eating, particularly in case of ready to cook and ready to eat varieties of frozen food

VIII. Suitable for travel, the modern varieties of frozen foods can be consumed, without cooking, heating just by thawing

IX. Time saving due to ease in preparation Frozen food provides a quick and easy way of helping people to improve their diets. It doesn’t require any chopping or peeling which suits today’s busy mums, it can often be prepared within minutes, and its excellent nutritional benefits, all combine to make frozen food the perfect solution to the modern day requirements.

X. Freezing is a natural process and does not usually require the use of any preservatives.

XI. Frozen food seals in freshness. Frozen vegetables, for example, are picked and frozen within hours of harvest, therefore locking in the vitamins and minerals, as well as the taste and texture.

XII. Thanks to freezing technology, people can enjoy all types of food throughout the year, regardless of the season at affordable prices.

XIII. Freezing food could kill or reduce many potentially harmful microbes, which cause food poisoning.

XIV. Frozen food tends to cost less than fresh, can be stored for much longer and offers brilliant flexibility for meal planning, thereby reducing wastage.

XV. Manufacturers are able to freeze food within minutes, which, compared to home freezing, gives a superior texture, taste and appearance, as well as retaining the nutritional value.

XVI. Frozen food is easy to keep and easy to use, and there is little waste, whereas two thirds of the population ditch anything up to 20 items of fresh and chilled food a month.

XVII. Frozen food gives consumers a quick and convenient way of fitting in a nutritious meal.

XVIII. Maintenance of uniformity in quality

2.2 Nutritional value and retention of flavour

Foods which are quick-frozen when they are at the peak of their flavour retain higher nutritional value and do not require any other method of preservation. In addition, they retain nutritional value because storage at temperatures below -18° C slows natural degradation processes to almost nil. Most commercially produced fruit and vegetables are frozen immediately after harvest when nutrient concentrations are at their highest. This is very important as concentrations of some vitamins can decrease by 50 percent within the first 7 days after harvest when stored at normal temperatures. Frozen foods have the advantage of being very close in taste and quality to fresh foods as compared with other preserved or processed foods. People often mistakenly believe that only fresh fruits and vegetables are of benefit and that processed produce does not provide the same levels of nutrients, due to losses during the processing procedures. In actual fact, some methods of food processing, such as freezing, can actually help preserve levels of nutrients in the food, as the nutrient concentrations are placed in ‘suspended animation’ whilst the product remains frozen. Studies have shown that vegetables stored at room temperature over 2-3 days may lose 50-70 percent of their folate content. Most vegetables and fruit that is to be frozen, is picked, packaged and frozen within 6 hours of so of being harvested. Many frozen vegetables have more of certain vitamins than the fresh ones that may have been harvested 5 or more days before you cook them.

2.3 Preservation

Frozen food is food preserved by the process of freezing. Freezing food is a common method of food preservation which slows both food decay and, by turning water to ice, makes it unavailable for bacterial growth and slows down most chemical reactions. Freezing only slows the deterioration of food and while it may stop the growth of micro-organisms, it does not necessarily kill them. Many enzyme reactions are only slowed by freezing.

3. Frozen Food - Global Scenario and Indian Context

3.1 The people across the globe have started recognizing the above key advantages of frozen food and changing their preferences towards frozen food over conventional food. The frozen food industry has expanded rapidly because of the labor-saving and space-saving advantages of frozen foods and because the freezing process generally involves less loss of taste, flavor, and appearance than do other methods. Researchers say that fresh vegetables which have been imported from a distant country may also have fewer nutrients. Globally, particularly in developed countries, the acceptance and consumption of frozen food was already established, when compared to developing countries like India.

3.2 (a para on Indian retail market, fast growing organised retail market and its potential)

As in the case of retail market, due to increase in real income levels & purchase power, rapid urbanization, with increased women work participation, Indian middle class is looking forward to easy, quick, convenient and nutritious food to meet their changing requirements of busy life styles. The frozen food in its’ multiple forms viz. raw, semi-processed and fully processed (ready to cook and ready to eat) could effectively address most of the above requirements and concerns due to its’ distant advantages over the conventional food. The conditions of increased health consciousness, preference to the hygienic food and changing food habits also propel the people to look for alternative to conventional food. Again frozen food is emerging as the only alternate, because the manufacturer/processors of frozen food take care of all such requirements including strict end-to-end quality control in selection, process, preservation, transportation and vending to the end users, thru’ proven technologies and conforming world-class standards. Owing to inflation and other factors, in the recent past, there has been steep increase in prices of food materials in the Indian market with very frequent fluctuations in prices. Frozen food, due to its’ distinct advantages such as bulk procurement, contract farming, prevention of decay, higher shelf life and uniform distribution, is greatly helping in stabilizing food prices. Due to globalization, Indians are getting exposed to international exotic food.

4.0 Untapped Indian Market, Proposed Project and Salient Features

Untapped Demand

4.1 With increasing demand, though there is huge potential for frozen food in the Indian market, it is largely untapped due to non-realization of its’ market strength. Though there is a captive demand for the frozen food from the high end segment of people, many of the players in the market not able to tap the same, due to dispersed focus and giving priority to the products with mass demand. The space allocation for frozen food items in the currant retail stores is very limited. Due to the above factors, the current retail formats do not offer the complete range of frozen food available in the market to the consumers as such the consumers are not aware of the products, varieties and range of frozen food items and their distinct advantages.

Proposed Project

4.2. Currently there are no exclusive and dedicated retail outlets for frozen food in India. Exclusive retail outlets for frozen food, will fill the unoccupied space and will meet the acute demand-supply gap in the Indian frozen food market. Fully dedicated space for frozen food would not only meet the space requirements but also give more visibility to the consumers. With the complete range of products available under one roof, for the first time, the Indian market is going to witness and experience the real world of frozen food. Exclusive outlets would only be able to cater the complete needs of the all stake holders of the frozen food industry, including producers, processors and consumers, with focused approach due to its’ novel concept. The proposed project would initially comprise 4 to 6 exclusive frozen food outlets in the high-end markets of Hyderabad. The chain of such exclusive outlets would be expanded to other parts of Hyderabad and later to other cities of India to have a pan Indian footprint.

4.3 Salient Features

The proposed outlets, which will be first of its’ kind in the country, will not only have the complete range of frozen food products from domestic and international sources, but also have superior consumer friendly environment, essentially based on value for money principle. The proposed exclusive outlets will have high standard quality products with accurate weighing and transparent billing. The pricing will be uniform and competitive. The outlets will be maintained in highest hygienic conditions with world-class standards of shopping convenience. Other facilities that would be offered to consumers include online shopping with payment gateway systems, acceptance of all credit/debit cards, ………………………, home delivery and making available national and international recipe books.

Project Financials

Revenue Streams :

Expenditure:

Capital

O&M