How to Start Coconut powder making business 2022

Overview

Ever noticed a coconut vendor slicing the coconuts while you are casually sipping on its juice by the side of the road, of how can that diced coconut be processed into something you can use for your hair, in desserts, in that Thai cuisine you were trying to experiment with or even in your cosmetic products?

Well, that giant green ball of a fruit is capable of exactly doing that. India is the 3rd largest producer of coconut aka copra with Kerala, tamilnadu, Andhra Pradesh, Karnataka, Odisha and Maharashtra being the major producing units.

A coconut yields numerous end product like the coconut oil accounting for 75% of the coconut product market share followed by coconut water with 20.3% and last but growing use of coconut in coconut powder/ flour

And since the GenZ and youth population are in the realisation stage of the numerous health benefits, availability and applications of coconut powder, that’s exactly you are going to cater to.

Sometimes money does grow on trees after all

Market potential and uses

A coconut powder is made from dried coconut solids ground into a very fine powder which is light and airy and is an intermediary product for baking

The market for a coconut powder is vast because of the growing health and baking needs of the consumers. Moreover its benefits in terms of the following has also expanded its markets :

Gluten free
High fibre level
Containing Lauric acid
Promotes healthy digestion
Contains proteins
Low in carbohydrates

The potential for coconut powder can be defined in terms of its types and uses

On the basis of types of coconut powder

Desiccated coconut powder
Coconut milk powder
Coconut skimmed milk powder
Spray dried coconut milk powder
Low fat coconut powder

On the basis of uses of coconut powder

Used in baking cakes, biscuits and cookies
Used in Asian cuisine
Used as a topping
Used as replacement for wheat flour
Used in beverages like smoothies and milkshakes

Licenses required

The licenses required to run a coconut powder making business is

FSSAI certificate
GST registration
Factory license
Trade license
MSME registration

Investment required

The investment required to run this business would be between ₹ 15 lakhs-₹ 20 lakhs

Profits made

The profits made from this coconut powder making business are ₹ 8 lakhs per year

Target consumers

The target consumers for this coconut powder making business are as follows

Bakeries: The bakeries require coconut powder for making coconut flavoured biscuits and cookies and also use as a replacement for wheat flour in baking cakes for health conscious consumers
Cafés : These make use of coconut powder for the purpose of innovating flavoured health-friendly smoothies and milkshake and as an element in croissants, puffs, desserts etc
Restaurants: The restaurants make use of coconut powder especially those dealing in Asian cuisine as an important ingredient in making curries, rice, platters etc to meet the Multi-cuisine needs of consumers
Cupcake/dessert shops: These make use of coconut powder for the purpose of producing seasonal coconut flavoured cupcakes, muffins etc and also use it as a topping
Retail and supermarket arenas: These make use of coconut powder packets, sachets, bottles to meet the seasonal baking needs of the households.

Area required

The are required to set up this coconut powder making business unit is 1500sq ft – 2000 sq ft

Raw materials required

The raw materials required to run this business is

Coconuts
Milk
Sugar
Coconut husk
Boxes
Packets

Machinery required

The machinery required to run this coconut powder making business would be:

Cabinet type hot air dryer with blower
Disintegrator 12” size with 10 HP motor
Vibratory sifting machine with GI wire mesh and 2 HP motors
Platform weighing machine
Polythene sealing machine

Manpower required

The manpower required to set up your business would be

1-supervisor
1-chemist
1-production manager
2-skilled workers
10-skilled workers

Moreover ample training to these workers in terms of the following must also be provided with

Equipment usage
Machine handling
Safety and precautions

Business model and growth

The business model of a coconut powder making business can be defined using these 4 variants

Value proposition: The value which this business is likely to get to you is

Largely available raw materials ensuring quality and benefit of bulk purchase
Specific target audience ensuring only focused marketing strategy

Target consumers:

The target consumers for this business are as follows

Bakeries
Coffee houses
Cupcake shops
Hotels and restaurants
Retail stores
Supermarket chains

Competitor review: The competition to your coconut powder making business is not aggressive so few key competitors are

Cocomi
Caribbean
Fiesta
Renuka
Cocos
Qbb

Marketing strategy:

The marketing strategy that can be implemented for your coconut powder making business are

Print media: blogs and articles justifying your manufacturing and extraction process and research claims
Sales promotion: bulk and trade discounts, cash discounts

Growth

The coconut powder making business has witnessed and has the potential for the following growth prospects

Firstly, the coconut products majorly including the coconut powder is expected to grow at a CAGR of 17.8 % by 2025
More than ever now the baking experiments among the GenZ and millennials have been increasing because of westernisation and horizon expansion desires

Profit margin

The profit margin which this coconut powder making business is likely to yield to you is 10%-20%

Suggestions

Why don’t you look at that recipe of baking yummy coconut cookies while we give you a closure as to why you should be taking up this business opportunity

- Firstly, with an increasing health awareness, diet and physique consciousness among the consumers and benefits of low fat, gluten free from coconut powder are likely to yield massive sales
- Secondly, because of Indian being the 3rd largest producer of coconuts your business can also generate some foreign demand because of the quality benefits that will come along in your coconut powder
- Lastly, the profit margin and rate of return of this business is very reasonable.