How to Start / Open A Cooking Oil Filtering Service Business in Kenya

Cooking Oil Filtering Service Business Plan (Kenya)



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carbon. This is as a result of not burning and breaking down easily when heated. Consequently the oil can be used over and over for a relatively long time when compared to common cooking oil which could be derived from vegetables, sunflowers, canola and other plants.

During deep frying vegetable oil (or any other which is petro carbon based) burns and evaporates at a comparatively faster rate. It also changes color and taste. The change in color and taste is partially because food particles, however small, remain in the oil and every time it’s heated the particles cook more releasing carbon which makes the oil dark and taste ‘smoky’. Exposure to air and water causes oxidation and hydrolytic reactions which contribute to the deterioration of the oil.

Continuous use of the oil makes the food taste as if cooked in smoke. Also the fatty oil sticks to the food even after draining making the food less appealing .The more the cooking oil is used the lower the smoking point becomes. This is the point when it starts smoking in the deep fryer negatively affecting the taste of food.

The above implies that the common cooking oil has to be changed or replenished after a short limited time. Hotels staff look at the color, smell or smoke and decide this is time to change the oil.

Constant replacing of oil increases the hotel’s expenses. It is in an effort to curb costs that some crafty entrepreneurs will use transformer oil or mix with the vegetable oil hoping to use for an extended time. But then transformer oil is not always available. Actually it’s in short supply. Again since the oil is not sold in the open market but in the black majority of those who would want to purchase are not aware where to get it from.

Then not everyone in the business is willing to use transformer oil because of legal, ethical, customer value and health reasons.

Cooking oil is a significant cost in restaurants .Preparing potato chips worth a sack could consume between 10 to 15 kilograms of cooking oil. Depending on the brand of oil this could be between Kshs. 1000 and Kshs. 3000 or 15% to 25% of production costs.

This situation is experienced across board despite the rating of the hotel. However higher rated hotels tend to reuse cooking oil fewer times. Some of the oil from the bigger hotels is resold to lower fast food restaurants through middle men. Same way some of the oil used by relatively big companies involved in deep frying (like those that pack crisps) is sold to fast food restaurants through brokers.

Cooking oil which has been used the maximum number of times is disposed through other garbage or sold to brokers who pass it on to people making soaps, animal feeds, biodiesel or recycling it in any other way. A liter of used oil is priced at between Kshs.20 and Kshs.80 depending on the broker.

The Solution

Now what if there was an ethical and healthy way to make the cooking oil ‘last longer’ without affecting the quality of food? That’s where cooking oil filtering comes in. A cooking oil filter removes impurities from cooking oil, making it cleaner and reusable a couple of more times. To accomplish this the oil is passed through a series of filters under high pressure.

A number of 4 and 5 star hotels have their own cooking oil filters. And very few of the fast food and walk in restaurants have them. (In a sample of 67 fast food restaurants and cafes in Nairobi, Machakos and Nakuru only 6 had filters of sorts.)

The reasons many of the hotels don’t have cooking oil filters is one because of lack of information that such filters exist. Two until 2010 no one was selling any advanced filters in Kenya, at least not in a big way. The filters are not marketed intensively thus uptake is low. Three cost barriers. Four skepticism about the effectiveness of the filters, and the associated cost savings. Some of the restaurant owners are doubtful even without trying the filters out.

Where to Purchase Cooking Oil Filter in Kenya

Cooking oil filters can be purchased from selected kitchen equipment suppliers. However its common to be told the filters are out of stock. A leading cooking oil filter brand in the world is VITO which is made in Germany. Locally it’s distributed by ASL, a division of Ramco Group who seem to be the only company actively promoting cooking oil filters. You are sure to get a filter there. (See suppliers’ contacts below). The device is portable. You plug it into an electrical socket then insert the filter into the deep fryer, switch on and within 5 to 20 minutes the oil is cleaned. Its advisable, though not compulsory, to filter the oil at high temporaries so that all of the dissolved fats from the cooking process are suspended and thus filtered.

Vito has a variety of filters priced according to sizes;

Vito30 for 5 to 10 liters fryers priced at Kshs. 162400

Vito 50 for 10 to 25 liters Kshs. 197200

Vito 80 for 25 to 50 liters Kshs. 238960

Prices are inclusive of VAT

Can a Cooking Oil Filtering Service become a feasible business?

This kind of service would involve going to a restaurant and filtering the dirty used cooking oil. The restaurant pays you for the filtering then reuse the now clean oil several more times before it becomes completely unusable.

Whether such a service can become a feasible business will depend on a number of factors:

a)Availability of a big enough number of hotels willing to buy your service at a price to cover your costs, pay you and still remain with profits.

b)Clear demonstration of money a restaurants will save costs by using the filtering service. The restaurants will consider the savings in terms of how much you are charging them to clean the oil. How many more times they will use the oil after you have cleaned it. All this against the cost of purchasing new cooking oil.

c)Lack of cheaper and more efficient filtering alternatives – Some restaurants without oil filtering gadgets do it manually using a sieve or pieces of clothes. The purpose of such filtering is mainly to remove the large of the food particles. This is not as efficient as any of a filtering machine. But again people innovate when there is a problem. Though we have not seen any there is a possibility some restaurants could have found an equally good way round the short life of cooking oil.

Target Market

The main target for this kind of business would be small and medium sized fast foods and restaurants. These consume between 5 liters and 20 liters in a day. They reuse oil 4 to 10 times before changing. The amount of oil a restaurant uses and reuses is tied the size, how busy it is customer base /class and internal standards.

Filtering extends the life of the oil. Filtered oil will be reusable 3 to 5 times depending on the standards of the hotel. This would mean savings of about 20% to 40 %.

Using Kshs. 120 as the price of one liter of oil that would mean savings of between Kshs. 24 and Kshs. 48 per liter. And using Kshs. 200 as the price of one liter then it adds up to savings of Kshs. 40 to Kshs.80 per liter. An amount, even as a percentage, attractive to any restaurant; the savings could be enough to pay one worker or say purchase a sack of potato.

Therefore any logical restaurateur would, keeping everything constant, opt for your cooking oil filtering service. But it does not always work that way. There are people who are reluctant to purchase a service despite obvious benefits, free demonstrations and fair charges.

If a restaurant decides to purchase your service the main challenge will be how much you charge. Using the above figures if we assume by filtering the restaurant will save Kshs.50 per liter then you need to charge less than Kshs.50 per liter otherwise it won’t make sense to the business owner. (We insist the above are hypothetical figures . the exact cost of a liter of oil will differ from café to café, brand to brand and supplier to supplier but more or less falls within the ranges.)

Your Costs

So if you charge say Kshs. 25 or Kshs.30 will it be a sustainable business? Let’s look at your costs

The cooking oil filtering machine is a one off cost. You incur no significant expenses to maintain it. After filtering you just need clean it thoroughly. (The Vito comes with a 2 year warranty).

If you live far from the restaurant then you will incur transport costs. That will be the only major cost.

Cooking oil filtering machines use electricity but a very minimal and manageable amount. Then again you will be using the restaurants electricity.

So whatever you charge should be a figure that covers your transport cost, time and pays you for your investment.

To break even you will need to sign a number of restaurants located within the same radius or within a reasonable distance. This will also give you the flexibility of charging not necessarily per liter but per session. Say Kshs.150 whether cleaning 5 liters or 10 liters. This makes it attractive to the restaurants without significantly reducing your profits since your costs are spread over several clients.

Signing up several customers will not happen in a day; it will be gradual process as you build trust and establish yourself in the business. Meanwhile you need to be able to survive and satisfy customers, however few, until the break even point. You need to have money to keep you running.

Also note that hotels will not necessarily filter oil everyday. How often will depend on how fast their oil gets dirty, what is their threshold of dirty and how busy a restaurant is. It’s not a must that a hotel cleanses ten liters everyday. It could be thrice or so per week.

Wherever you are establishing make sure there is a threshold of restaurants big enough to break even. Branding and aggressive marketing will help. New customers need to have faith you. Have a coat, business cards and a professional but friendly image. This is the kind of business where if you are a pioneer and with the right marketing you will succeed and wade off any competition.

Marketing

Marketing will help win more customers. Start by selecting a location with a high density of cafeterias involved in deep frying and who are more likely to purchase your service. Though very low end hotels could also purchase cooking oil filtering service they form less likely customers.

This is because they are not very particular about standards thus don’t mind reusing the oil to the maximum. Very high end hotels are likely to have their own filtering systems but they remain potential customers. Mid sized hotels and fast foods have the highest potential.

For a cooking oil filter service it would be good to have a brand of sorts... Kitchen Oil Filter services – We help you save money and make customers happy. You could combine the filtering service with a related service like fryer cleaning and repair. This way you are selling an all rounded service thus customers will prefer to purchase from you rather than invest in their own filters.

Branding helps build trust which translates to more customers across the board. You need to prepare marketing material explaining clearly what oil filtering is about, how much savings are likely to be made and so forth. Where possible, talk to the owners or managers. Make follow ups. Offer to do one or two demonstrations. Let them experience the service.

You could also have branded coats, motorcycle. If you are not running the service train your employee and insist on certain standards. Also you need to decide on the reward method; settle on a method that guarantees you certain returns since you may not be able to know exactly how many restaurants have been served or liters filtered in a day.

The employee needs to be motivated so that he or she works to acquire clients. You can gauge the market and ask your employee to give you a certain standard amount everyday and keep anything above the set amount. You can brand in such a way that orders come through you. You could also offer the employee a small retainer and commissions. Test the market yourself and decide the most beneficial method to reward your employee.

Should you invest in this kind of business?

Cooking oil filters can solve a big problem experienced by restaurants that means there is a business opportunity. However the reality of the market is that even where there is solution to a problem customers do not necessarily embrace it enthusiastically.

It takes time for customers to understand and trust your service. For a cooking oil filter service barriers to adoption can be broken by a practical demonstration or free trial coupled with figures to illustrate possible savings.

Feasibility of the business will depend on the number of restaurants you are able to sign up, how much you charge and how you manage your costs.

Success of Cooking Oil Filtering business will depend on:

Location – number of restaurants in the area. Fast foods are the best because over 70% of their business has to do with deep frying.

Marketing Efforts – How many restaurants you are able to sign up. You need to sign up a number big enough to cover your costs.

Employee – How honest they are. How motivated they are.

Invest in the business only if you can get all the above right. Otherwise don’t.

Although a restaurant owner is more likely to understand how cooking oil filtering works with a demonstration, you can prepare explanatory and promotion material even before you purchase the filter. Then approach restaurants in the area and try to sell the idea. Even if majority might ask for a demonstration, this way you are able to gauge the market before committing your money. From the outside the market always looks attractive but it’s not until you hit the ground do you get a true feel of customers attitudes.

The barriers to entry in the business are low. The major hindrance is lack of information and capital. But at less than Kshs.200, 000 there will be a good number of entrepreneurs who can afford it. There will be always the threat of competition coming in, but in this kind of service business personal relationships with your clients and marketing efforts will help you ward off competition. With time Restaurants could also purchase their own filters.

Exit can be by selling the filter at a lower price. With the many number of restaurants there will sure e to be one who can purchase the machine, though payment is most likely to be in installments.

Licenses

County government license – This is the standard county business trade license. Whether you have a permanent premises or not its advisable to get the license to avoid any run ins with the county officials. The license will also validate. The fee could range between Kshs. 4000 and Kshs.10, 000 depending on the county

Medical Certificate – This is issued to anyone dealing / cooking food to ensure they don’t have

communicable diseases which they can pass on to consumers. You can acquire this from public hospitals at Kshs. 500 to Kshs.1000 again depending on the county Process of startin

VITO Cooking Oil Filter Suppliers

ASL Limited Hospitality Division – Distributors of VITO

0727 228876

0733 922929 [email protected] Other Equipment Suppliers

 

Nairobi Kitchen Care

 

Main Branch

 

 

P.O.BOX 49938, 00100 NRB

 

 

 

 

Main Mombasa Road, Allbid

 

 

Kenya

 

 

 

 

 

House. Opp ASL

 

 

Ph. (+254) (0) 706 991 469

 

 

 

 

 

 

 

Mob. 254(0)727 246 209

 

 

 

 

Town Branch

 

 

[email protected]

 

 

 

 

 

Luthuli Avenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kitchen Professionals

 

Airport South Rd, Near TNT,

 

 

P.O.Box: 66609-00800

 

 

 

Limited

 

Nairobi

 

 

Westlands, Nairobi

 

 

 

 

 

 

 

 

Tel: +254-202100662

 

 

 

 

 

 

 

 

Mobile: +254-717445591,

 

 

 

 

 

 

 

+254-735445599, +254-

 

 

 

 

 

 

 

 

724445599+254-202667449

 

 

 

 

Kenbelt Industrial Park, off

 

 

P.O.Box: 29-00606 Sarit

 

 

Sheffield Steel Systems Ltd

 

Mombasa Rd, Nairobi

 

 

Centre

 

 

 

 

 

 

 

 

Tel: +254-202095883

 

 

 

Meaf Consultants

 

Sameer Business Park, Block

 

 

254 20 357 9028, 254 737 117

 

 

 

 

D1, 2nd Floor

 

 

257, +254 734 688 983

 

 

 

 

 

Off Mombasa Road, Along

 

 

www.meafconsultants.co.ke

 

 

 

 

Enterprise Road

 

 

[email protected]

 

 

Cute Kitchen

 

Tom Mboya Street , opp fire

 

 

0711 850 850

 

 

 

 

 

station , next to Family bank

 

 

 

 

 

 

 

Kitchen Appliances Ltd

 

Commonwealth house,

 

 

0726 949449

 

 

 

 

 

Ground Floor, Moi Avenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kitchen Pride

 

Bombay House, Tom Mboya

 

 

 

 

 

 

 

 

 

Street

 

 

 

 

 

 

 

Wlibhai Karim and co

 

Kathlawa Hse, Ground Floor –

 

 

020

2222808

 

 

 

 

 

Biashara street

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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