Professional Documents
Culture Documents
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Executive Summary
The global food and beverage retail industry has witnessed significant growth over the
last five years and is expected to continue its growth momentum, reaching approximately US
$5,776 billion in 2017 with a CAGR of 5%over the next five years. As per studies,
macroeconomic factors such as burgeoning GDP, increasing consumer spending and
changing lifestyle, taste, and preferences are expected to drive the industry over the forecast
period. Although inflation, supply chain management, and quality control of products are
some of the challenges being faced by the industry, rising demand for high quality food
retailing services due to higher income levels is likely to drive the Food and Beverage
market.
The overarching theme dominating the food and beverage industry is exploding
global demand and rapidly rising food prices. The breakneck economic growth of countries
such as China, India, Brazil and Vietnam gives billions of people the ability indulge in ways
previously enjoyed only by those in developed nations. A massive influx of consumers onto
the global food market has resulted in a rapid and sustained increase in food prices, stoking
global inflation. Although some members of the food and beverage industry (primarily
farmers and agribusinesses) benefit from higher prices, most corporations in the industry
have seen their cost of doing business increase, biting into profit margins.
Bangladeshs food and beverage industry is facing huge changes while going through
growth phase. The food and beverages industry is all companies involved in processing raw
food materials, packaging, and distributing them. This includes fresh, prepared foods as well
as packaged foods, and alcoholic and nonalcoholic beverages. Any product meant for human
consumption, aside from pharmaceuticals, passes through this industry. The Food and
Beverage industry is fragmented. The production in this industry is divided among a few
different companies, however, no single firm has large enough share of the market to be able
to influence the industry's direction or price levels.
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Table of Contents
Industry Background ................................................................................. 1
PESTLE Analysis Food Industry ......................................................... 10
PESTLE Analysis Beverage Industry .................................................. 21
Porters 5 Forces Model Food Industry ............................................... 29
Porters 5 Forces Model Beverage Industry ........................................ 35
Life Cycle Analysis Food Industry ...................................................... 41
Life Cycle Analysis Beverage Industry ............................................... 42
Recommendations ................................................................................... 44
Development Plan ................................................................................... 47
Human Resource Requirement & Plan ................................................... 49
Conclusion ............................................................................................... 54
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Industry Background
Food Industry of Bangladesh
The food processing industry in Bangladesh represents one of the major potential
sectors within the industrial segments in terms of contribution to value addition and
employment. The sector accounts for over 22% of all manufacturing production and employs
about 20% of labor forces. All food processing enterprises account for 2% of the national
GDP. The food processing sector includes processing of cereals, pulses & oilseeds, bakery
and confectionary, fruits and vegetables, dairy, carbonated beverages and noncarbonated
fruit juices, drinks, other beverage and various other food items.
Status of Exports of Food and Snacks Products
Bangladesh Food and Snacks has now 370 members who are engaged in
manufacturing, processing and exporting the products of this emerging sector. The export
trend is shown in Table 01 of attached documents. Now about 90 items of agroprocessed
products are being exported to 70 countries throughout the world. Major export markets of
agroprocessed products are Asia, Middle East and Africa. Major exported items are pickle,
drinks, juice, spices, rice, tea, party snacks (chanachur), nuts, mustard oil, chips, biscuits,
rose water, candy, puffed rice, potato flakes etc.
GDP impact
There is a huge opportunity to expand our national GDP through export
diversification of different agroprocessed products like:
i.
Export maize/corn to Egypt and Nigeria as the soil of our country is suitable
for large number of quality and tasty maize production.
ii.
The food processing subsectors such as vacuum fried fruit chips, real potato chips, spices
powder, bakery products, soft drink bottling, confectionary manufacture, frozen vegetables,
processed fish, grain products, meat, poultry and milk processing, tomato paste, canned
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Commodities
Frozen food
629.77
28.68
Frozen fish
63.55
5.00
Tea
2.62
5.00
Vegetables
128.83
20.00
44.52
5.00
Fruits
93.56
20.00
Spices
25.12
20.00
Dry food
48.64
12.00
Others agrocommodities
238.83
30.00
Food can fulfill one of the most important physiological needs of human being.
Human beings cannot live without air for a single minute, but without food, they also cannot
survive. Food provides us with the necessary nutrition for our body. Its importance is
indispensable. Due to the differences in human cultures, geographic locations, environment,
climate etc. food items tend to change. Some might change in terms of ingredients (soybean
oil in Asia/Palm oil in other continents), some might change in terms of presentation (food
spread over banana leaves in India/on ceramic plates in other places), whereas some food
items may change in terms of cooking (ovens in the west, gas/wood stove in the east) and
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shelter
or
seating
or fast
food
restaurants (also
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known
as quick
service
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Of these, Pran and Mojo are the only local brands. Coca-Cola, with its three varieties,
namely, the cola-flavored Coca-Cola, the clear-flavored Sprite and the orange-flavored Fanta,
is the number one soft drink producer in Bangladesh, as well as all over the world. Closing in
on Coke is rival Pepsi. Pepsi is one of the oldest brands in Bangladesh. Pepsi first arrived in
Dhaka in 1976 with the cola-flavored Pepsi, the clear-flavored 7up, the orange-flavored
Mirinda and later introduced the mango-flavored Slice.
Types of Beverage:
Water
Despite the fact that most beverages, including juice, soft drinks, and carbonated
drinks, have some form of water in them; water itself is often not classified as a beverage,
and the word beverage has been recurrently defined as not referring to water. Essential to the
survival of all organisms, water has historically been an important and life-sustaining drink to
humans. Excluding fat, water composes approximately 70% of the human body by mass. It is
a crucial component of metabolic processes and serves as a solvent for many bodily solutes.
Health authorities have historically suggested at least eight glasses, eight fluid ounces each,
of water per day (64 fluid ounces, or 1.89liters), and the British Dietetic Association
recommends 1.8 litters. The United States Environmental Protection Agency has determined
that the average adult actually ingests 2.0 liters per day.
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E for Economic
Definition
Economic factors include all the determinants of an economy and its condition. The inflation
rate, the interest rates, the monetary or fiscal policies, the foreign exchange rates that affect
imports and exports, all these determine the direction in which an economy might move,
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S for Social
Definition
Social factors assess the mentality of the individuals or consumers in a given market.
These are also known as demographic factors. Social indicators like exchange rates, GDP and
inflation are critical to management. They can tell when it is a good time to borrow. These
factors help find out how an economy might react to certain changes. A major socio-cultural
factor influencing businesses and business decisions is changing consumer preferences. What
was popular and fashionable 20 years ago may not be popular today or 10 years down the
road. Different styles and priorities can undermine long successful products and services. For
example, a clothing company must constantly be aware of changing preferences when
creating new products or it will quickly become outdated. Changes in demographics are also
a significant factor in the business world. As populations age, for example, markets for
popular music and fashions may shrink while markets for luxury goods and health products
may increase. Additionally, changes in the proportion of genders and different racial,
religious and ethnic groups within a society may also have a significant impact on the way a
company does business.
Relation/Representation
Basically, socio-cultural factors are the larger-scale forces within cultures and
societies that affect the thoughts, feelings, and behaviors of individuals. In this case, this has
to do with business more. So, social or socio-cultural factors are things that affect lifestyle,
such as religion, family or wealth. These can change over time. Food developers need to be
aware of these changes to make foods that meet the needs of consumers. Food habits have
changed drastically for the last decade in Bangladesh, and people nowadays are having
varieties, which makes it tough for marketers to satisfy. Normally, for breakfast, people of
Bangladesh used to eat ruti and parathas, but nowadays it has changed into cereals and loafs
and breads of several kinds along with milk. For lunch and dinner, we eat traditional dishes,
mostly, agro-based food items. But due to having lots and lots of restaurants and dine-outs,
this trend has also changed. Nowadays, we tend to eat out and order foods from food-delivery
companies, like food panda, Hungrynaki,com, etc. Also, we can see many fast food chains
are getting popular at Bangladesh. Wimpy was one of the first international fast-food
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to
within
Relation/Representation
Today is the world of technology and innovation, as the consumers are more familiar with
new technology. Therefore, the fast food company has to use channels such as social media
websites to attract customers. Fast food companies mostly attract a young population, so
games and toys in meals are introduced to attract children and youth. The improvement and
innovation in inventory system and supply chain will make the business successful in an
international context. Technology touches every facet of our lives as it always has but
with the emergence of mobile devices and cloud computing making more of an impact than
ever, someone would be hard-pressed to go anywhere and not find a high-tech piece of
hardware or software around. These advances have made an impact everywhere, and one of
the places were seeing more and more technology is in the food and restaurant industry.
Between the arrivals of mobile devices on the table, online reservations, social media, and
new payment methods, technology has infiltrated the food and restaurant industry like never
before. Some of the advances will serve to improve the experience both for the industry
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Abbreviations
Technology has never been more intuitive than it is today, and its only getting better. It
allows restaurant patrons to find restaurants, rate them, and decide where they want to spend
their hard-earned money when they go out to eat. It allows restaurant owners to be more
efficient and effective in the areas they feel can be streamlined by hardware and software. But
if used in the wrong place and at the wrong time, it can do a restaurant great harm as it can
with any industry. With a better understanding of the technology, the industry has better
chance of thriving. And in tough times, those restaurants that are on the right side of the
equation have a better chance of surviving.
Hyperlink
http://www.businessdictionary.com/definition/technological-factors.html
http://www.free-management-ebooks.com/faqst/pestle-06.htm
http://thenextweb.com/insider/2012/09/22/how-technology-changing-restaurantindustry/#gref
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Abbreviations
FOOD safety has become an important topic in Bangladesh as consumers of the country have
become victim due to serious adulteration in food. This element focus on the problems arises
in public health due to the presence of chemical hazard in food supply chain and supports
require for food industry of Bangladesh in order to supply safe food to the end consumer.
From the evidence it may be sated that in Bangladesh food safety rules and regulation not
enough to deal with the problem. Now, the country is in difficult situation with chemical
hazard in food stuff. Bangladesh authorities should develop: (a) adequate infrastructures
including laboratory services for inspector; (b) as well as public awareness in order to
manage the situation. However, strengthening infrastructures should include getting adequate
trained personnel and expertise as well as tough enforcement.
Hyperlinks
http://pestleanalysis.com/pestle-analysis-business-environmental-analysis/
http://www.ifrj.upm.edu.my/20%20(01)%202013/7%20IFRJ%2020%20(01)%202013
%20Islam%20(356).pdf
https://www.gov.uk/government/publications/exporting-to-bangladesh/doing-businessin-bangladesh-bangladesh-trade-and-export-guide
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Relation/Representation
Industrial processes emit several thousands of inorganic and organic chemicals. Due to their
emission, agricultural commodities and thus also our food may become contaminated with
these compounds. It would not be feasible to monitor all the possible environmental
contaminants in our food. Therefore a simple and pragmatic scheme was developed, in order
to select these chemicals that are considered to be of prime importance. These criteria include
the following:
production volume, since probably the amount of chemicals emitted is related to the
total amount produced
pattern of usage or emission, since for example highly diffuse usage or emission
would affect a higher amount of commodities
possible fate in the environment, since some contaminants may accumulate in the
water, the soil or other environmental compartments
Persistence in the food chain, which is a key issue because of the problem of
bioaccumulation and toxicity consequently, a restricted overview of some important
organic and inorganic (heavy metals, nitrate) environmental contaminants should
consider. Some of them are nitrate, poly-aromatic hydrocarbons etc.
Most important Organic environment contaminant in food chain is Dioxin and dioxin-like
compounds, or DLCs that are found throughout the environment, in soil, water, and air.
People are exposed to these unintentional environmental contaminants primarily through the
food supply, although at low levels, particularly by eating animal fat in meat, dairy products,
and fish. Numerous health effects have been linked to exposure to DLCs, including skin
damage, cancer, non-insulin-dependent diabetes in adults, neurological and immune system
impairments in infants, and endocrine system disruption. Many of these effects were
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Abbreviations
Prevention of food borne illness and improvements in food quality requires the development
and delivery of enhanced education on how to improve food safety and quality. This
component should target small-to-medium scale food business, as well as consumer
education about food safety, quality, and nutrition with a special focus on rural populations.
These actions will result in increased public awareness of food safety and hygiene issues and
how to prevent illness, with consumers being the major target. There should also be enhanced
support for consumer associations. Training activities and technical support materials should
also be developed for food businesses, and assistance in the introduction of food safety
management programs. The delivery of such activities should include training trainers and
technical units to provide guidance on implementation of Good Manufacturing Practices
(GMP), Good Hygienic Practices (GHP) and the introduction of the Hazard Analysis Critical
Control Point (HACCP) System for small-to-medium sized food enterprises.
Hyperlink
http://www.businessdictionary.com/definition/environmental-factors.html
http://www.ifrj.upm.edu.my/20%20(01)%202013/7%20IFRJ%2020%20(01)%202013
%20Islam%20(356).pdf
http://pestleanalysis.com/pestle-analysis-business-environmental-analysis/
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These regulations define which ingredients can and cannot be used in the product,
how the product is produced, where it is produced, as well as other laws concerned
with the quality and health effects of the product.
There are potential fines set by the government if companies do not meet a standard
of laws regarding manufacturing, production, and distribution.
Waste from firms' manufacturing plants must be taken care of in a responsible and
legal manner. If any of the waste management laws change, companies must update
their processes to abide by the law.
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Employees must be provided with at least the required minimum wage and
discrimination is not tolerated in the workplace
If any of these laws change, companies must change their operations and procedures to avoid
being fined or even worse, shut down.
http://www.adb.org/countries/bangladesh/economy
E for Economic
Definition
Economic factors include all the determinants of an economy and its condition. The inflation
rate, the interest rates, the monetary or fiscal policies, the foreign exchange rates that affect
imports and exports, all these determine the direction in which an economy might move,
therefore businesses analyze this factor based on their environment so as to build strategies
that fall in line with all the changes that are about to occur.
Relation/Representation
The economic environment is crucial to any industry in determining strategies and methods
of achieving success, and the soft drinks industry is no exception. The economic system of
Bangladesh is characterized by mixed economy in Bangladesh certain sectors of the economy
are left to private ownership and free market mechanism while other sectors have significant
state ownership and government planning.
Abbreviation
Despite political agitation early in 2015 that adversely affected transport services, exports,
and private investment, growth in Bangladesh held up well because of brisk domestic
demand, boosted by higher worker remittances, private sector wages, and public investment.
Inflation moderated in FY2015 much as forecast in ADO 2015 from 7.4% a year earlier,
reflecting large public stocks of food grains, normal weather, a supportive monetary policy,
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to
within
High costs for new technology can be an entry barrier to new competitors.
Marketing:
Technological advancement helps create new brands and product lines to meet
consumer preferences.
For decades, the beverage industry of Bangladesh has been a monopolistic market with Coca
Cola the only market leader. Thus, undertaking any strategic moves, offensive or defensive,
was unnecessary. However, as the competition grew, being offensive or defensive through
adopting new strategic moves became more and more crucial.In 1987 the Company made an
aggressive move to expand the market by installing a new H&K bottling line with an
installed capacity of 450 Bottles Per Minute (BPM) bottling capacity at Comilla. With this
move, the Company immediately gained the market leadership position from the Pepsi which
was the leader for more than 27 years. Long term planning and aggressive marketing
approach rewarded the Company with the market leadership position for the brands that
remains till date.It also takes defensive moves time to time by sending messages of retaliation
to its rivals by occasional price cut and offering frills. Such moves have become more and
more common especially during the festive seasons like Eid.
Abbreviations
Every sector is bent on leveraging technology to gain better productivity. Technology has
completely changed supply chain policies and supplier relationships, which have led to better
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Abbreviations
Soft Drinks Industry like other developing and developed countries is getting much
popularity in Bangladesh. The number of firms operating in this industry is getting increased.
The market is also increasing in a greater portion. Today most of the people in both urban and
rural areas are taking soft drinks in a large amount. Most of the manufacturers of the soft
drinks in Bangladesh hold only the license of manufacturing the products under the brand
names or franchisee. Most of the manufacturers have the production plant of concentrate and
syrup and bottling plant of their own. Most of the company does not need to outsource the
bottling. But most of the manufacturers outsource the Raw materials e.g. Sugar,
Carbohydrate, flavor and also the Can. Food safety regulations apply to each stage of food
and beverage production, from processing and manufacture to distribution.
Hyperlinks
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Relation/Representation
Fast moving consumer goods (FMCG) are experiencing a successive growth in our country
and goods like beverages are in a flourishing state. Everyday thousands and thousands pieces
of beverage products are being consumed. And to meet the demand and diversified taste,
local as well as foreign companies are immerging and investing in this venture. Many local
companies and foreign franchises have developed an extreme competitive environment in the
beverage market. The beverage market is basically a compilation of wide range of mineral
products with certain attributed affixed with it. The major product categories that are the core
determinants of our market are enlisted below:
Carbonated Soft Drink (CSD): These ranges of products are generally called refreshing
drinks. The concept was developed many decades before by a pharmacist in United States of
America. Initially it was consumed under the prescription of doctors but later as time passed
the concept was refined to make it a product for general consumption any time. Water is
being process with various flavors along with carbon-dioxide (CO2) to obtain a tasty flavored
fizzy drink that provides refreshment. Carbon-dioxide is being used to obtain the fuzziness
that provides refreshment to human body.
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The Porter's Five Forces tool is a simple but powerful tool for understanding where power
lies in a business situation. This is useful, because it can help a new entrant to understand
both the strength of the current competitive position, and the strength of a position a new
entrant is considering to move into.
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Importance of Supplier: the supplier plays a vital role in this industry. Their role
cannot be easily replaced or substituted by any other system or organization. This
makes them irreplaceable and gives them greater power over their buyers.
Threat of forward integration: The suppliers can also pose a threat of forward
integration. The suppliers can choose to not sell their products through a middle man,
rather sell it by themselves. For examples, with the growth of cities and towns farmers
from nearby village can sell their product directly at the local markets. Again the
middleman can opt to open their own outlet and sell directly to customers rather than
to local vendors.
Taking all these factors in consideration, we can say that suppliers bargaining power is high
in this industry. Firms willing to invest in this industry must consider this and take measures
accordingly.
Bargaining Power of Buyer
The bargaining power of buyers is the ability of customers to put the firm under pressure,
which also affects the customer's sensitivity to price changes. Firms can take measures to
reduce buyer power, such as implementing a loyalty program.The presence of powerful
buyers reduces the profit potential in an industry. Buyers increase competition within an
industry by forcing down prices, bargaining for improved quality or more services, and
playing competitors against each other. The result is diminished industry profitability.
Food industry of Bangladesh is extremely competitive with many competitors offering
varieties of services. Since the competition is high hence the number of buyers is also high.
Bargaining power of buyers of Bangladeshs Food industry will vary on different factors.
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Type of product: The types of product that sellers sell are mostly undifferentiated and
standardized reducing buyers switching cost. But however, as there are limited
number of buyers, switching is not always a good option. Especially in Bangladesh,
forming a good relation with new supplier takes a long time and can be difficult at
times. Apart from that most sellers decide on a few benchmark prices below which
they will not sell their products. These factors lower the buyers power significantly.
Backward Integration: buyers pose a threat of integration. If the buyers can gain
access to the sellers method and knowledge of supply chain system then they can cut
the suppliers and invest in producing their own raw material. This can ensure good
qualiry product at a much cheaper price. It can also become one of the core
competencies of the firm. For example the superstore Shopno decided to cut off
their middle man and get their raw materials directly from the farmers. If more stores
decide to follow this method then is will become a threat for the suppliers.
Considering all these, we can say that bargaining power of buyer is moderate. But in terms of
restaurant business their power is high as people with different choices are willing to pay
extra for customized services from restaurants.
Competitive Rivalry
Competitive Rivalry is one of Porters five forces used to determine the intensity of
competition in an industry. For most industries, intensity of competitive rivalry is the major
determinant of the competitiveness of the industry. Industry rivalry usually takes the form of
jockeying for position using various tactics. This rivalry tends to increase in intensity when
companies either feel competitive pressure or see an opportunity to improve their position.
The food industry of Bangladesh is extremely competitive. There are almost over 1000
restaurants and food shop in one single area of Dhaka city that provides different type of
foods. Some offer specialized foods and this sets them apart from their customers.
Restaurants in different areas also target different customer sets. There are several factors that
play an important role in affecting the industry rivalry
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Industry Growth: The growth of Bangladeshs food industry has slowed somewhat.
Though the population is increasing and people have more buying power than before
the number of competitor is also increasing. This creates a lot of pressure on the new
entrants to do something different to capture more market share and pressurizes the
old firms to improve their service to retain their market share. All these factors
increase competition.
Low Switching Cost: Switching cost of buyer is comparatively low in this industry.
as there are numerous rivals in the industry. Buyers can easily switch to a different
service provider that will fulfill their needs. Food industry is also very sensitive to
price. Customers are often looking for good quality product and service at a lesser
price. This forces the firms to lower their price and also at the same they must come
up ways to differentiate themselves from their competitors.
Taking all these factors in consideration, rivalry is very intense in this industry. Firms
wanting to invest must come up with creative ideas to stand out from their rivals.
Threat of Substitute
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives. For example, tap water might be
considered a substitute for Coke, whereas Pepsi is a competitor's similar product. Increased
marketing for drinking tap water might "shrink the pie" for both Coke and Pepsi, whereas
increased Pepsi advertising would likely "grow the pie" (increase consumption of all soft
drinks), albeit while giving Pepsi a larger slice at Coke's expense.
In case of industries, threat of substitutes occurs when companies within one industry are
forced to compete with industries producing substitute products or services.Substitutes limit
an industrys potential returns by placing a ceiling on the prices that firms within that
industry can charge to make a profit. As the price-performance alternative offered by
substitutes becomes more attractive, it becomes even more difficult for those firms to make a
profit. Demand for substitutes can also reduce the demand for industry products and services.
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Capital Requirement: The capital required to enter this market is very less. The return
on investment rate is also high. New entrants can enter the market with small capital
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The Porter's Five Forces tool is a simple but powerful tool for understanding where power
lies in a business situation. This is useful, because it can help a new entrant to understand
both the strength of the current competitive position, and the strength of a position a new
entrant is considering to move into.
Five Force Analysis assumes that there are
five important
forces
that determine
It is a very useful tool for business strategists. It is based on the observation that profit
margins vary between industries, which can be explained by the structure of an industry.
The Five Forces primary purpose is to determine the attractiveness of an industry. However,
the analysis also provides a starting point for formulating strategy and understanding the
competitive landscape in which a company operates.
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Bangladesh has a highly dynamic beverage industry on which all the major
international players such as Coca Cola, Pepsi Cola, Euro Cola, RC Cola, Pran Cola and
Mojo Cola are present, together with a series of local carbonated soft drink brands. Moreover,
the country is also experiencing considerable growth in the flat soft drinks segment that
includes, for example, fruit juices and mineral water. But, research has shown that People
crave soft drinks because they contain two stimulantssugar and caffeine. Also, the water in
soft drinks hydrates. Soft drinks contain considerable amounts of sugar, which is a form of
carbohydrate. Consumption of excess sugar releases a hormone called dopamine, which
induces pleasure in the brain. Caffeine, another key ingredient, stimulates the nervous system,
and helps you to stay awake or restores alertness. With its slightly bitter taste, caffeines also
used to enhance the flavor of carbonated soft drinks.
Carbonated beverage entered into our market in the later part of 1980. At that time
there were only few companies in Bangladesh. But by the change of time and western culture
influences its become very popular in Bangladesh. By year 2000 more than 12 Beverage
Company operating business in Bangladesh and most of them are foreign companies. In
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Recommendations
People of Bangladesh are nowadays currently having a drastic change in their food habits.
Food industry is one of the most important and dynamic industry of a nation. It is also very
competitive. The structure of food industry is continually changing and evolving as food
suppliers, manufacturers, and retailers adjust to meet the needs of consumers, who are
increasingly demanding a wider variety of higher quality products. Having firsthand
knowledge of consumer preferences and purchase habits, food retailers are positioned to
transmit this information upstream to other segments of the supply chain. In the quest to meet
consumer demands for variety, affordability, safety, and quality, the food retail sector is
constantly evolving and generating innovative sale formats.
Major population is now working, so it is very much difficult for them to cook regularly and
maintain a proper healthy diet. The need for packaged food is growing rapidly. As a result
people now no longer travel to restaurants like KFC, Pizza Hut, etc. They can easily store the
food at home and use whenever needed.
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Food processing in Bangladesh has traditionally been small scale, with domestic or family
business using common processing knowledge for the conservation and handling of raw
agricultural commodities to make them usable as food and feed.
Although commercial scale food-processing, using modern technology, especially for wheat
and rice milling, mustard seed crushing and very limited bread and cookie manufacturing
appeared during the 1960s, the growth of this sector did not gain momentum in terms of
operational scale and quality until the 1980s. Recently, the defining characteristics of the
industry have been the processing of increasingly diverse products to meet the changing
demands of the Bangladesh population.
The major food processing sub-sectors in Bangladesh include dairy, edible oil, sugar, rice,
wheat, fruit and vegetable, tea, poultry/beef, pulses and spices and fish processing industries.
Induced by the vigorous growth of the diverse middle class population of Bangladesh. In its
25006 Economic Census, reported that there were approximately 246 medium-sized food
processing industries employing 19 percent of the industrial manufacturing workforce in
Bangladesh or 8 percent of the total manufacturing labor force. The food industry employs
2.45 percent of the country's total labor force and its share in the GDP was 2.01 percent in
2010. There are also numerous small scale factories and domestic units engaged in food
processing throughout the country. According to some industry analysts, the food processing
sector in Bangladesh is a 4.5 billion US Dollar industry. In 2010, Bangladesh exported over
$700 million worth of processed food and beverages, over 60 percent of them were shrimp
and fish products.
Food processing in Bangladesh has traditionally been small scale, with domestic or family
business using common processing knowledge for the conservation and handling of raw
agricultural commodities to make them usable as food and feed. Although commercial scale
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5,000,000,0
4,960,502,6
15,000,000,0
50,000,00
10,535,00
25,634,95
17,343,90
Development Plan
*Pre operating cost includes project implementation cost such as installation, startup,
commissioning, project engineering, project management etc and capitalized interest during
construction.
Projected Turnover:
Macaroni price per packet
65
10000
650000
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10,30,600
20
65
=22902/10000
=2.3 years
Payback Period:
Payback Period= Investment/CashFlow per year = 26crores/3.46
We plan to target sales in the first year to be Tk 650000. And in every year this target sales is
likely to increase with increasing population, demand, popularity and other factors relating to
the demand for instant macaroni. Thus, considering these factors, we expect the cash flow to
increase by a rising percentage every year. In accordance to our income statement
assumptions, we expect the payback period to be around 7 years.
Analysis:
Successfully implementing instant Macaroni in Bangladesh Food Industry requires spending
significantly on land, Machines, equipment, which consumes the largest portion of the initial
capital. Furthermore, it requires incurring several other costs, which includes pre operation
costs, human resource requirement costs, initial production costs, etc. Along with these costs,
it is also essential to allocate enough money for advertising, marketing and distribution of the
product to efficiently penetrate the market. Thus, by working out all the necessary expenses,
we project the initial investment will be around 26crore. However, this instant food sector of
the industry is promising enough to consider this investment.
To help realize whether the business would be lucrative, we calculated the break-even point
(BEP). BEP is the point at which total cost and total revenue are equal: there is no net loss or
gain, and until one has "broken even." According to the projected profits and expenses, the
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Job Title
1
2
3
4
5
6
7
8
Plant Manager
Secretary
Financial Manager
Accountant-clerk
Cashier
Salesman/Purchaser
Store keeper
Technical & Production
Manager
Quality Control Officer
Production Supervisor
9
10
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Required number of
persons
01
01
01
02
02
01
02
01
02
01
Shift Leader
Mechanic
Electrician
Operator
Production Worker
Cleaner
driver
Guard
Total
02
02
02
07
15
02
02
04
50
Training of Employees
The production supervisor, 2 quality controllers, 2 shift leaders, 2 mechanics and 2
electricians will be given 3 weeks on - the - job training on production and quality control,
and equipment maintenance by an advanced technician of the equipment supplier during the
construction and commissioning. In addition, 7 production operators will be given two weeks
on - the - job training on operation of equipment by the in - house skilled technical personnel.
Salary and Bonus
Apart from a basic salary our employees will also get bonuses. Bonus will be gives during
festivals. Apart from that, bonuses will also be given out on a one-time basis to reward
employees for their high performance. They might be given to either an individual employee
or a group of employees. Bonuses will be awarded when an employee meets objectives set
for attendance, production, sales, cost savings, quality, or performance.
Benefits: This will consist of any supplement to wages and salaries. The benefits that we will
provide our employees are as follows:
Health Plans: We shall provide free medical check-ups twice a year for all our
employee and their family members.
Life Insurance: Those who have worked more than 3 years. Life insurance benefit will
be provided to our employees so that they can have a secure future.
Holidays or sick leaves: We shall provide sick leaves to our employees depending on
the circumstances. Apart from that they will get holiday leaves for religious festivals.
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Target Market:
The main market segment of Insta Mac is basically the kids and the working peoples of
the current urban society. In more detail it also includes target markets of middle class
and upper middle class. Our product will be available at different reputable departmental
stores and area wise big departmental store as well. This product will make sure that
people consuming it gets a proper and balanced diet and all the nutrition facts they could
have had from a proper meal.
Nutrition Value of Macaroni:
Nutrition Facts
Serving Size 1 serving (252 g)
Per Serving% Daily Value*
Calories 207
Calories from Fat 56
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Conclusion
The food processing industry in Bangladesh represents one of the major potential
sectors within the industrial segments in terms of contribution to value addition and
employment. The sector accounts for over 22% of all manufacturing production and employs
about 20% of labor forces. All food processing enterprises account for 2% of the national
GDP. The food processing sector includes processing of cereals, pulses & oilseeds, bakery
and confectionary, fruits and vegetables, dairy, carbonated beverages and noncarbonated
fruit juices, drinks, other beverage and various other food items. In this competitive world, it
is necessary to stay ahead of the competition and for this awareness of the industry is
mandatory.
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