Bob McClure was looking to expand his family pickle company. He found commercial space in a tofu plant that shared the same commercial space. The fermentation of soybeans into tofu resulted in healthy bacteria in the air. He fermented his first batch of pickles, which were then scrapped.
There are many lessons to learn in every business venture. Each industry has its own legal and unique challenges. But what about the food industry? It is in its own league. It is difficult to find the right information, misinformation, or even the right kind of information. There are also more legal risks and a volatile supply chain, which can be affected by weather, as well as healthy airborne bacteria.
The barrier to entry for jewelry enthusiasts who are looking to market their handmade embroidered bracelets from your home is very low. Your product is unlikely to make anyone sick. Safety is always a concern when it comes to food. The food industry is closely regulated and monitored by national and regional governments. However, the producers and merchants have to follow the rules and ensure quality. If you’re still not sure, check out our How to Make Money Online guide.
As if that weren’t enough, managing a food business requires a careful inventory dance to avoid spoilage or waste. This can be costly and could cause a loss of revenue.
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You’re welcome, brave entrepreneur, if your business idea is too great not. We are here to help you succeed and sell products online . I’ve sifted through the sea of information and consulted experts to make sure you don’t have to. This post will cover production, shipping, and how to sell an item online for free.
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- 1 Finding your niche in food: How to make and market food
- 2 Produced vs. Curated
- 3 Sourcing ingredients
- 4 Produce food: commercial kitchens, home-based business, and manufacturing facilities
- 5 Packaging, branding, labeling
- 6 What is the cost of starting a food business?
- 7 How to price food products
Finding your niche in food: How to make and market food
Many times, the best online businesses ideas were born from passions or hobbies. It’s a great place to begin if you can make jam from strawberries grown in your backyard. You are familiar with the process and have already tried the recipes.
Bob McClure and Joe McClure grew up picking pickles with their grandma Lala. It was this family recipe that inspired McClure’s Pickles. They were both psychology majors and actors, but they had no idea what business or manufacturing was. However, their family recipe was the foundation.
Test the viability of an idea you already have. Is there a market? How can you differentiate your product from a market saturated with similar products? Is there a niche or sub-audience that isn’t being tapped? Consider whether your product can be easily sold online and shipped. Also, think about legalities (e.g., with liquor), shelf life and refrigeration. These are some of the things you should be aware of.
Trends in food
You can find current food trends if you don’t have a product concept. One source says mocktails, plant-based protein, and kombucha beer will be among the hottest foods in 2020. You can back up these claims by doing your own research. Take a look at Google Trends and search volume to see the competition.
The McClures were the first to market a premium pickled product. Pickling has seen a revival a decade later. Bob is happy for the new competition. He says, “Yes, there is competition. But it’s the right kind of competition if it brings awareness to highly-specialized, quality-driven entrepreneurial goods.” It helps us improve our whole category.
We can help you manage your online order system so that you can continue cooking without having to compromise what is important.
Ideas for food businesses
Be inspired by 13 profitable food business ideas for 2021
Is your idea a good fit for a niche? Check out these other ideas:
- Custom, novelty
- Small batch, gourmet, and artisanal.
- There are no restrictions on diets: Gluten free, allergen-free, nut-free, etc.
- Fair trade, organic, and natural certified organic
- Ethical, religious, vegan, vegetarian, and kosher.
Jodi Bager started JK Gourmet to help with her ulcerative colitis. Her audience includes people who also have colitis or other forms of bowel diseases. Healthy snack options are available without the harmful ingredients that can trigger her condition. Jodi states that we also cater to the needs of the growing paleo community. “We’re appealing more than ever to a wider audience.”
Ideas for beginners
Consider starting a food-business that is easy for beginners. These businesses require a low investment and minimal equipment. There are fewer shipping restrictions and legal restrictions. Charlie Cabdish, 13, makes and sells candied nuts from the comfort of his home. He can still manage the business from his home kitchen, between school work and basketball practice, almost three years after it was launched.
You might also like these other product ideas
- Snacks in packages
- Pickled and canned products
- Dry herbs
- Baked good ingredient kits
- Raw ingredients (flours, etc.)
- Curated resale
- Tea and coffee
Get more information: How to Start a Cafe.
Produced vs. Curated
This article is applicable to businesses that produce their own food.
Skip to Pricing if you are looking to curate food products, such as in an online gourmet marketplace. You might also like Redefining local: Small-Batch Produces Work Together to Disrupt the Grocery Industry and our profile at Shopify merchant Many Kitchens.
Glenford Jameson, a food lawyer, stresses the importance to do your research when you source your ingredients. He advises that you trace the supply chain to ensure that packaging claims are consistent with what is inside, and that you work with reliable companies.
These are some helpful resources
- FDA food ingredients and packaging guide with allergen and food additive information (US).
- Ingredient supplier guide by Food Processing magazine (US)
- Australian Food Composition Database
- Functional Foods and Natural Health Products Database Canada
Sometimes, our suppliers offer suggestions based upon something that is new to the market. It’s a partnership.
You must ensure that the proper certification is obtained by your supplier if you intend to label your product organic. Establishing a relationship with your supplier increases trust and gives them a stake in your company. Jodi says that sometimes suppliers will make suggestions based upon something new on the market. It’s a partnership.
- If you’re just starting out, and only producing small batches of ingredients, it might be cost-effective to shop at consumer warehouse clubs like Sam’s Club or Costco.
- Make connections. In certain industries, suppliers can be found through word-of-mouth and personal introductions. Soul Chocolate founders made connections in the industry to connect with local cacao farmers.
- You can also look for a broker or distributor that works directly with farmers for commodities such as cacao beans and coffee beans.
- Join other small-batch producers in order to buy bulk wholesale ingredients together.
Produce food: commercial kitchens, home-based business, and manufacturing facilities
McClure’s Pickles began as a family tradition in McClure’s kitchen. However, McClures continued to improve their production setup until eventually they settled in the factory space of 20,000 square feet where they now operate. Bob says that when we first started out we rented a large kitchen with a stove. We would then call our friends and offer to buy them pizza and beer if we made pickles together.
There are many options available for production when you launch your business.
Food selling from your home
You can legally produce and sell some food items right in your home kitchen. However, you should carefully review the regulations. The FDA in the USA requires that your home-based business be registered as a facility. You must obtain the necessary license in order to sell food at home in your area.
You can rent co-op or shared kitchen space at many facilities, which you can either rent hourly or monthly depending on your production requirements. There are many benefits to this arrangement, including reduced costs and paperwork since the facilities are already licensed as commercial space. There are many regional directories that provide shared kitchen space.
Your own commercial space
You can be completely autonomous and start from scratch. However, it is important to check with the local food governing agency to make sure your facility properly registered meets code. This is not the best option for entrepreneurs but it could be a goal for the future. Jodi says, “We started small in the kitchen of our home and then grew from that.” “We didn’t move out until our house was full, and we knew that we had enough money to support the move.”
It’s amazing how meticulously a USDA-inspected facility is managed.
Partner with an existing manufacturer
This is a great option for entrepreneurs who want to be hands-on and more involved in the business than production. This is a great choice for newbies to the industry, since manufacturers should be familiar with food safety regulations. A manufacturing directory such as Maker’s Row can help you find a food manufacturer.
Bull & Cleaver founder Daniel Patricio says, “We partnered with someone that had a USDA inspected facility so we could ship across America sooner without food safety concerns.” It is amazing how much effort goes into running a USDA-inspected plant.
Packaging, branding, labeling
Ecommerce can be difficult for food because customers cannot access the best decision-making information–taste. Branding is crucial because customers cannot taste your product. Packaging design, copy, website, product page and photography all need to be integrated to tell your story. Customers can imagine what your product tastes like. Bob says, “Before tasting the product, it has to appeal to you.” “We chose our name, our identity, everything from the label to the feel and text, so that it connotes handmade, family, and urban.
TIP Because packaging is so important in this industry, consider hiring a designer to help you with your needs.
Each country has its own labeling requirements. These may include information about best-before dates, nutrition information, allergen warnings and country of origin. You should check the labeling requirements of your destination country if you plan on shipping your product overseas, particularly to retailers.
These are some helpful resources
- FDA food labeling and ingredients information (US).
- FDA Food Labeling Ebook (US).
- FTC Fair Packaging and Labelling Act, USA
- CFIA food labels requirements (Canada)
- Directory of Canadian food packaging manufacturers (Canada)
- US food packaging manufacturers directory (US).
What is the cost of starting a food business?
The costs of starting a food business vary widely due to the many models mentioned above. Your initial costs for opening a restaurant or physical store could range from to $200,000. There are several ways to start a restaurant or food store with lower startup costs.
Home-based producers with small batches have lower overheads and can eventually expand to commercial space. You can start small without expensive staffing or leases. With just a few hundred dollars, you can cover ingredients, packaging, marketing, and website costs. If your living space is doubled as your business space, you may be eligible to deduct some of your utility and housing costs.
When calculating startup costs, you should consider whether it is possible to operate your business from your home. Although production facilities can be costly, many co-ops offer shared kitchens for entrepreneurs at a fraction of the cost of a dedicated space. The Kitchen Collective in Hamilton, Ontario offers memberships starting at $200 per month or $16 an hour.
How to price food products
In my interviews over the last year with merchants, I discovered one thing: Pricing is difficult, regardless of product. There is no single pricing strategy that works for everyone. Keep an eye on your costs and adjust until you find the right price.
Daniel recommends that you sacrifice profit to get your product before customers. He says that cost savings will eventually come over time.
Price your product if you believe in its value. McClure stands behind its pricing, Bob states. He says that McClure’s is not the most expensive product on the market. “We have to be able to compete on something truly unique or you will just become another commodity.” It’s then a race for the bottom.