Here is the best guide on how to start a Bread Bakery Business in Nigeria including the bread bakery business plan and feasibility study on how you can run it successfully and profitably.
Bread is considered the second most consumed snack, and third most popular food staple in most parts of the world. It is widely consumed across the continents by almost all citizens, ethnics and religions groups.
According to Statista, revenue in the Bread market amounts to US$0.50tn in 2024. The market is expected to grow annually by 6.37% (CAGR 2024-2028). In the Bread market, volume is expected to amount to 216.70bn kg by 2028. The average volume per person in the Bread market is expected to amount to 24.8kg in 2024, this is expected to grow by 3.8% in 2025.
Going by this report, you can already see why bread bakery business in Nigeria is a good venture because of our large population. This is also why Water Business is a profitable venture in Nigeria.
Freshly baked bread smells nice and tastes nicer. It is one of the best breakfast for most homes, usually served with hot tea, pap or custard, almost everyday. This means that starting a bread bakery business anywhere in the world is going to be a viable business.
The best and easiest product to sell is the product that is in high demand in the market and bread happens to be one of such products. It is estimated that about 10 million loaves of bread are consumed in Lagos alone everyday.
Therefore, if you are thinking of a business to invest into right now, I want you to consider starting your own bread bakery business.
It is not difficult to setup a bread bakery business in Nigeria if you have the financial capacity and are able to meet NAFDAC’s requirements. This article aims to guide you through launching a bread bakery business across the country. First, let’s look at the profit potential and the risks associated with the bread bakery industry. Understanding these factors is key to embarking on this entrepreneurial journey effectively.
How Profitable Is Bread Bakery Business In Nigeria
With good business planning, and management, bread bakery business in Nigeria can yield good profits for its producers.
Risks Involves In Bread Bakery Business In Nigeria
Like most business on earth, there are some of the risks involved which you’d do well to be aware of. And being aware of these risks will help you plan properly on how to completely avoid or minimize them. It will also help you to properly plan your income and expenditure. Below are some of the popular risks in the business.
|Local Bread Bakers at work
1. Your Bread Could Get Burnt
Moment of carelessness by your workers could get you bread burnt easily which may result to high loss of money.
Install a smoke detector at all location of your bakery, because in our case all our night shift workers once fell asleep making about 5 flour bags of baked bread burn to ashes we were lucky the building didn’t burn down. So don’t over look little mistakes from workers otherwise it will come back to hunt you.
This is one of the major risks every baker must be aware of because of the potential danger it carries. But it’s a risk that could be avoided if you take proper precaution.
Because of the competition in the business and effort to attract more retailers, most bakers offers to accept back bread if it developed mold. Some retailers are so careless and ineffective in sells that they keep those bread unsold for long time only to return it when it develops mold.
When this happens, you are the final person to bear the cost and if it happens in large number, you may be out of business.
3. Price Fluctuations
Prices of baking raw materials is the most unpredictable as baking flour can change within days unannounced. When this happens, you buy flour at higher cost and still sell your bread the same price you used to sell because bread is a very sensitive commodity, you can’t increase the price arbitrary.
4. Police Harassment
Because bread is a ready made fast food, Police may stop your supply vehicle on the road even when you did’t do a thing and demand that you give them some breads. Though you are not under obligation to give but if you don’t, they may try to victimize you in other ways.
By the time you do that to and fro, imagine how many loaves of bread you would have lost? Road safety, LASTMA, and other agencies are equally there.
Internal and external theft by your staffs, people who may come into the premises, touts on the roads, and others may reduce your profit in the business.
Types of Bread Bakery Business In Nigeria
Depending on the scale you want, a bread bakery business in Nigeria may be setup to produce few scores of bread, or even thousands of loaves daily. Bakeries are therefore categorized into two broad types: retail bakeries and commercial bakeries.
Most bakery can be classified under the retail bakery category. These types of bakery produce to serve/sell to their customers directly. There are different retail bakeries you can choose to do as your preferred business. Below are some of them
- Traditional bakeries: These are bakeries that produce mainly flour-based staple types of baked goods like bread. They are more focused on meeting basic needs. Bread business can be very lucrative because you can bake different types of bread. In fact, the world of bread making is there for you to explore. You can bake coconut bread, chocolate bread, banana bread, etc.
- Home bakery: One big thing that technology has done for us is that you don’t have to have a big physical presence to make massive sales online. So starting a home bakery business from the comfort of your kitchen and selling your products online is one way you could start a bakery business because you don’t have to spend so much to acquire space or rent a facility.
- Bakery Café: Besides baked goods, these kinds of outlets offer additional things like coffee and tea. So you could set up such an outlet in a commercial environment like a campus or anywhere that your feasibility study approves of.
- Specialised Bakeries: These are bakery businesses that are centered on a specific type of baked products such as cakes. They cater for all types of cakes. One benefit of these is that over time you earn your place and become the go-to for such products/services.
- Pastry Shop: Pastry shops basically produce all kinds of snacks such as doughnut, meat pie, egg roll, puff puff, sausage roll, chicken pie etc. so depending on what your intentions are and your budget too, this could be your first step to becoming a major bakery business man or woman.
These type of bakeries bake in large commercial quantity and sell to distributors who in turn sell to the final retailers/consumers. A good example is the manufacturers of the major sausage rolls brands that are sold on the streets/roads.
What You Need To Setup Your Own Bread Bakery Business In Nigeria
1. Get Training
To become a professional baker, you need training in bakery and food processing. Some people get their training by getting attached to a bakery to learn all the skills of baking from first hands experience. If you are fortunate to have worked in Bread Bakery, that will make things lot more easier as you must have learned the skill while working.
Look for a professional trainee who will train you in the art of bread making. Your success in this business depends on how much you know; do not trade knowledge for anything.
2. Prepare Your Business Plan
As they say: He who fails to plan, plan to fail. You need to have business plan that will guide you along the way. Do not assume you have everything in your head, lack of proper clearly written out business plan can make a business crumble within a short time.
You can prepare it yourself or hire us to prepare a professional bread bakery business plan for you, especially if you want to get a bank loan, or need to pitch the idea to investors or partners.
3. Source For Finance
Bread Bakery business is a capital intensive business especially if you are starting it big. You have to start big or medium if you hope to be producing quality bread that will attract good patronage. And starting big requires some good amount of money. The required capital for you will be decided from the business plan’s financial tables.
Once you have the required capital to invest in this business, you are halfway done. Make sure you budget 7/12 months working expenses; time you will require to gain ground before the profit starts flowing in. At this point you’ve started following your business plan.
4. Choose Location
This is important but not critical. While location in the city and busy towns allows retailers to come in and buy without having to travel distance, you can make up to this with good marketing and supply mechanism. If your product is good, well branded, and marketed effectively, people will find you no matter where you are.
So, weigh the situation carefully and look for suitable location that you think will be good for your business. Property cost higher in the major cities but well worth your business.
Note: People sometimes buy products based on the address. I personally have rejected some products because of where the factory is located. It may not be obvious but believe me it happens.
5. Build Your Factory
Here you need to engage the services of a consultant too. Your factory have to be properly planned and built in order to meet NAFDAC approval requirement.
Bakery Equipment You Need To Acquire
1. Baking Oven
You need to go for the industrial baking oven if you can afford it. That is what professional baker who makes bread in commercial quantity use. It cost much but well worth the price and will make your work lot more easier.
2. Flour Mixer
Mixer is the device that mix the flour and other ingredient into pastry ready for baking. There are local mixers and there are standard electronic mixers. Go for the one that is suitable according to the standard of bakery you are setting up.
3. Slicing Machine
This is important if you intends to slice your bread. Sliced bread is the most popular and most respect in Nigerian market. Therefore, slicing machine is compulsory if you are baking in Nigeria or any other country like that.
4. Baking Pans
Some heavy ovens do come with baking pans but that may not be suitable to the size you wants to make. You need to buy or design baking pans according to your specification, I mean specification according to what is obtainable in the market.
5. Bread Wrapper Supply
You a well branded bread wrapper in constant supply. Make arrangement for this in advance before production commences.
6. KVA Generator
You’d always need a standby generator, very big one for that matter. Your production is sensitive and you can’t afford to joke with it.
7. Supply Truck
Then a supply truck to help in your marketing. There no way you will be able to market effectively if you don’t have at least one supply vehicle.
Get NAFDAC Approval For Your Bread Bakery Business In Nigeria
It is important that you register your business with the CAC. Bread bakery business in Nigeria is regulated by NAFDAC, hence you also need its licence.
Apart from registration with CAC and NAFDAC, you will need to register with relevant association for bread bakery business in Nigeria known as the Association of Master Bread Bakers (AMBB) in your local government area.
Also, a thorough inspection of your location will be carried out by the Association of Master Bread Bakers and The National Agency for Food and Drug Administration and Control (NAFDAC).
Usually, the inspection and approval of NAFDAC take between 6 months to one year but the Association of Master Bread Bakers is continuous for as long as the bakery exists.
Additionally, you’ll need to provide the details of your suppliers to NAFDAC and AMBB because they want to ensure you are using standard equipment for your productions. Remember to research if there are other regulations aside from the ones mentioned here. This will mostly depend on your location.