Preparing to transition from production to processing in 6 steps
Agricultural producers shifting into processing must follow a painstaking process that includes analyzing the industry, the target market and their personal abilities. Production and processing are 2 complementary but very different industries, so thorough preparation is the key to success.
1. Know the industry
As you know, agri-food is not the same as agriculture. When you begin considering this change, you will have to answer certain questions about the industry's features, market issues, main trends, and workforce, environmental, sanitary and regulatory challenges. You will also have to determine what the practices and operational standards are and identify the local, national and international leaders.
2. Analyze the market
Who is your target consumer? What is the price range? Who is your competition? What are the distribution channels?
The target market study is a crucial step for effectively estimating the potential sales of your new product in the short and medium term.
The market analysis helps you:
- measure potential and actual demand for your product
- determine the fair price of your product
- position your product in relation to the competition's (don't underestimate it)
- make decisions about your product's presentation
- determine which distribution channel to focus on
The results of the analysis affect marketing decisions as well as sale and production costs for your product.
Food fairs and gourmet events for the general public are an informative and effective way of gauging interest in your product, market trends and the competition's products.
3. Get training
A producer who is starting out in processing should expect to run into new managerial challenges. When you're developing the business plan, it's the perfect time to analyze your managerial abilities, strengths and weaknesses, and the training that will help your project succeed. A new project requires you to build new knowledge in technology, management, marketing and hygiene and safety. What are some worthwhile training programs? Who could support and assist you? What training is mandatory?
4. Develop the product
After the research step, you should begin testing to develop the ideal product that will appeal to consumers. The product's appearance and flavour are important, and quality must be consistent, even in large-scale production. The product must meet government standards and health and safety regulations. Specialized consultants must approve and validate the analysis of critical points in the manufacturing process.
5. Assess the spin-offs for your business
Starting out in processing requires you to take on an entirely new risk management approach. Consider the impact this decision will have on your entire business.
To help you reach a decision, consider the following:
- The owner's role, responsibility and available time
- Workforce needs
- Equipment needs
- Financial needs
6. Create a business plan
Creating a business plan will help you analyze and document the 5 previous steps because it encompasses the market study, the marketing plan, operational management and financial planning. After this step, you will be able to estimate more precisely the potential of your business project.
Don't forget about the business plan once the project begins. It should be updated regularly and tailored to your project's development.
In agri-food processing, manufacturers often form partnerships because of particularly extensive equipment and investment requirements.