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How to Start a Yogurt Manufacturing Business

How to Start a Yogurt Manufacturing Business

In recent years, the Yogurt market has experienced significant growth, driven by changing consumer preferences towards healthier food choices.  Yogurt is a dairy product that is made by fermenting milk with Yogurt cultures. During fermentation, the lactose in the milk is broken down into lactic acid, which acts on the milk proteins to give Yogurtits texture and distinctive taste. Yogurt is considered very beneficial for the stomach and digestive system due to the presence of probiotic bacteria. As more people become aware of its health benefits, it is becoming increasingly popular among children and youth. As a result, the yogurt market is expected to experience significant growth in the near future. So, starting a Yogurt manufacturing business can be lucrative, given the growing demand for nutritious and convenient dairy products. Here in this article, we will guide you on how to kickstart your Yogurt manufacturing business.

Market Scope Yogurt Business

The consumption of yogurt is increasing due to its perceived health benefits, leading to a growth in the global yogurt market. Additionally, yogurt promotes healthy gut bacteria, making it a popular choice for those looking to improve their digestive health. As a result, the demand for yogurt is rapidly increasing worldwide. According to industry reports, the Yogurt Market size is estimated at 105 billion USD in 2024, and is expected to reach 136 billion USD by 2029, growing at a CAGR of 5.16% during the forecast period (2024-2029). Additionally, the yogurt market is expected to continue expanding, driven by urbanization, changing lifestyles, and a rising awareness of the health benefits associated with yogurt consumption.  Also, the popularity of yogurt-based snacks, drinks, and desserts further expands the market scope, offering ample opportunities for new entrants.

Investment for Yogurt Manufacturing Business

Launching a yogurt manufacturing business requires a significant initial investment, which primarily includes expenses related to infrastructure setup, machinery procurement, raw material sourcing, manpower, marketing, and licensing fees.  Typically, a medium-scale setup may require an investment ranging from INR 10 lakhs to 50 lakhs, covering expenses related to infrastructure, machinery, raw materials, labor, marketing, and initial working capital. The exact investment amount may vary depending on the scale of operations and location. So, conducting a thorough feasibility study and preparing a detailed business plan can help estimate the precise investment needed.

License for Yogurt Manufacturing Business

To start a Yogurt Manufacturing Business, an entrepreneur needs to complete several registrations and obtain specific licenses. Firstly, the entrepreneur must register their business as a proprietorship or a one-person company. They also need to apply for PAN, bank current account and GST registrations. Additionally, a trade license or factory license may be required from the local authority. FSSAI registration is mandatory, and it is essential to register for trademark protection to establish and safeguard the brand. If the entrepreneur wants to take advantage of the schemes launched for the MSME sector, enterprise registration is also necessary.

Location and Space for Business

Selecting an appropriate location for the manufacturing unit is crucial for the success of the business. Factors such as proximity to raw material sources, availability of utilities like water and electricity, transportation facilities, and market accessibility should be considered while choosing the location. Generally, a medium-scale facility may require around 500 to 1000 square meters of space. This should include areas for production, storage of raw materials and finished products, administrative offices, employee amenities, and potentially a small laboratory for quality control. However, the space requirements for a yogurt manufacturing business can vary depending on the scale of operations and production capacity.

Raw Material for Yogurt Manufacturing

The primary raw material for yogurt production is milk, which can preferably be sourced from reliable dairy farms or suppliers. It is essential to ensure the quality and freshness of the milk to produce high-quality yogurt. Additionally, other ingredients such as cultures, stabilizers, flavors, and sweeteners may also be required based on the desired variety of yogurt to be manufactured. Ensuring the quality and consistency of milk is paramount to producing high-quality yogurt, So making strategic partnerships with trusted dairy suppliers essential for the smooth functioning of the business.

Machines for Yogurt Manufacturing

To establish a yogurt manufacturing business, several key machines are essential for efficient production. These include pasteurizers for heating and sterilizing milk, homogenizers for ensuring uniform texture, fermentation tanks for the incubation process, filling and sealing machines for packaging, refrigeration units for cooling, and various ancillary equipment for quality control and sanitation. These machines can be sourced from reputable suppliers and manufacturers from the local markets or online markets like Indiamart and Alibaba websites. It is advisable to invest in modern and energy-efficient equipment to optimize production processes and reduce operating costs. 

 Manufacturing Process of Yogurt

The process of manufacturing yogurt involves several steps. Initially,  purchases all the raw materials and cools the milk in the reception area to ensure that it doesn’t spoil. Then, the process of pasteurizing the milk begins, in which the milk is heated to a temperature of 80-90°C and then cooled to 40°C. Further, the milk undergoes homogenization, where the offline cream separator is used to remove fat from the milk.

An online homogenizer is attached to the pasteurization machine to bring homogeneity to the milk by breaking the lumps of fat. Then, the pasteurized milk is distributed into different tanks. After that, the milk is heated to 92°C and yogurt culture is added to it. The prepared yogurt is then sent to the packing section and then to the incubation room to thicken it. The yogurt is then kept in the blast room where the temperature is reduced from 45°C to 20°C. Finally, the yogurt is sent to the cold room for cooling and is stored at a temperature of 4°C before distribution.

Marketing Tips for Yogurt Business

Effective marketing plays a crucial role in creating brand awareness, attracting customers, and driving sales in the highly competitive yogurt market. Entrepreneurs can utilize a variety of marketing strategies to promote their yogurt products. First, they should focus on creating attractive and informative packaging that stands out on the shelves and effectively communicates the brand’s message. They should also establish a strong distribution network spanning supermarkets, grocery stores, health food stores, cafes, and online platforms to reach a wider audience. To engage with consumers and generate interest in the brand, they can organize tasting events, product demonstrations, and promotional campaigns. Finally, leveraging social media platforms, influencer partnerships, and online advertising can enhance brand visibility and help connect with target customers.

Profits from Business

The profitability of a yogurt manufacturing business depends on various factors such as production efficiency, pricing strategy, market demand, and operational costs. Typically, a yogurt business can earn a profit margin ranging from 20 to 30 percent. However, this figure can vary based on the location, operating costs, and pricing strategy of the business. With the increasing popularity of yogurt as a healthy food option, especially among health-conscious consumers, it is possible to earn up to 2000 rupees profit per day. By adopting the right approach and execution, entrepreneurs can achieve sustained profitability and long-term growth in the yogurt market.

How to Start a Yogurt Manufacturing Business on Small Scale

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