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How To Start Potato Chips Manufacturing Business

Do you want to start a profitable potato chip manufacturing business with low capital investment? Find here potato chips making a business project plan guide.

Potato chips are very popular items globally. Probably, these are the world’s most popular snacks these days. Apart from salty, spicy, or flavored, consumers prefer fresh quality chips. The business is comparatively easy to start. However, you will need to provide space, infrastructure costs, and working capital expenses.

If you want to start a large-scale commercial unit, then you can’t initiate the unit at home. However, you can start a small-scale unit at home with less startup investment. The product has already a good market demand. Therefore, potato chip manufacturing is a lucrative opportunity for small business owners.

Is Potato Chips Manufacturing Business Profitable?

Chips are very popular amongst all age groups. Generally, it comes in different colors, tastes, flavors, and sizes. The industry is itself very large. The product has a major market share in the processed food industry. Basically, the easy availability, freshness, and competitive price are the main factors for it.

Over the years, the potato chips and the crisp market has witnessed substantial growth, turning it into a multibillion-dollar market. Changing lifestyles and long working hours have reduced the tendency of consumers to have elaborate meals. Thus, smaller packages that are portable, convenient are in high demand. Potato chips, which have conventionally been an affordable snack, are popular among all age groups, especially the young population.

This is a key factor driving the global potato chips and crisps market. A rise in the demand for packaged food, urbanization, increasing disposable incomes of consumers, and growth in the economy of developing nations are collectively boosting the growth of the potato chips and crisps market.

Steps to Start Potato Chips Making Manufacturing Business

Create a Business Plan

In initiating this business, you must have a project report in your hand. Generally, a business plan includes business objectives, mission, vision, executive summary, investment, marketing plan, product promotion, etc.

However, it is advisable you do some market research. Identify the specific types of chips that are most popular in your locality. Try to identify the major potato chips companies in the market. Check their marketing and sales promotion strategies. These all will help you in putting the right thoughts to craft your own business plan.

Business Compliance

Potato chips are the food items. Therefore, the business demands specific licenses and permissions from the Govt. authorities. However, it hugely depends on the location where you are initiating the business. In addition, you will need to register your business. For a small-scale unit, you can start on a proprietorship basis.

In India, you will need to obtain permission from The Food Safety and Standards Authority of India (FSSAI). Additionally, compliances under the FPO and PFA Act are mandatory. Additionally, you will need to maintain the quality standards as specified by BIS are IS 2397:1988.

Also, you must obtain a GST registration number to run the potato chips manufacturing company.

Potato Chips Factory Cost

In India, Central Potato Research Institute (CPRI) here has developed a low-cost technology for making potato chips. The cost of the chip manufacturing semi-automatic processing plant is Rupees 15 lakh. And it is very much affordable for small entrepreneurs. In addition, the business is also perfect for women entrepreneurs.

Apart from the machinery, you will need to invest in infrastructure, utility, procuring raw materials, staffing, distribution, and marketing. Generally, a 500 Sq Ft space is sufficient for small-scale potato chips making units.

Potato Chips Manufacturing Machine

The requirement of different types of machines depends on the unit size and production output. However, here, we have compiled a list of major required machines.

  • Potato washing and peeling machine
  • Slicing machine
  • Dewatering machine
  • Batch fryer
  • Spice coating machine
  • Sealing machine with inert gas flushing unit
  • Stainless steel working tools
  • Weighing scales, dispensers, and fillers
  • Plastic trays
  • Laboratory equipment

Raw Materials

The major required raw material is good quality potato. There are specific potato varieties that produce high-quality chips with a larger yield. Other essential raw materials are oil, salt, spices, and preservatives.

Additionally, you will need to procure the packaging consumables. Generally, metalized polyester –
polyethylene pouches are used as basic packaging items. In addition, you will need to provide the outer cartons for bulk packaging.

Potato Chips Manufacturing Process

The manufacturing process is very simple. It involves visual inspection and sorting of damaged potatoes and washing them in water. Then they are peeled and trimmed before slicing or cutting them to the required size. Then they are once again washed and dried.

Next, they are then fried and either salt or other spices/flavors are mixed homogenously. After cooling them, pack the chips in pouches or plastic bags.