And You’ve got one. Maybe you want to bo3le Grandma’s grape jelly or manufacture your awesome BBQ sauce. It’s delicious and friends & family love it…
But you don’t know where to start.
NavigaDng the industry can be overwhelming. There’s lots to learn – and it’s not as simple as making your product in your house and selling it.
Before we dive into the ni3y-‐gri3y, it’s important to cover the basics of the industry – the 14 things you need to know before you start bo3ling your legendary sauce or pedaling your macaroons.
It starts with an idea…
I’ve been in the specialty food business for almost ten years. From cookies, to energy bars, and now gourmet mustard, it’s been the hardest thing I’ve ever done. And I want you to know it won’t be a cake-‐walk for you either.
Why is it so tough?
There are so many moving parts, legaleeze, health inspecDons, and decision. It’s just like running any business. You work incredibly long hours to make your product. Then, aOer slaving over the hot oven, you’ve got to do the books, make sales calls, schedule store demos, making point-‐or-‐sale materials, etc. Say hello to 60-‐70 hour weeks.
It’s the hardest thing you’ll ever do
AOer making the same product over and over again for several years, you start to get sick of it. I know several food producers who don’t even eat their own product.
This makes it tough to stay passionate.
I’ve found the best way to stay passionate is to always be tesDng – new flavors, new store displays, new labels, new sales techniques, etc. If you keep your company stale, you’ll lose passion. Make sure to keep yourself on your toes.
It’s tough to stay passionate
Yep – I’m sure you can make delicious food, I’ve had my fair share from across the country. But your specialty food company goes far beyond making something people want to eat tons of.
Just like any business, you need to know your numbers.
AccounDng is tough – and a pain in the bu3. I don’t like to do it any more than you do, but it’s a necessary if you want to make some money. From finding the right suppliers to cosDng out your recipes and determining the best distribuDon channel, it’s all got to be figured out. And on a monthly – if not weekly – basis. Grab your calculator and get ready.
You need to know your numbers
You’ve got a stellar product. And you’ve got compeDDon. Every product in your four-‐foot secDon in the grocery store is a compeDtor – even the naDonal brands who you will never be able to beat in price. But, they will copy you.
Take the opportunity to smile.
New products will be launched that look just like yours – same flavors, different recipe. But you’ve done your research, so you’ll squash them like a bug. Being imitated is not a bad thing. It just means you need to keep on doing what you’re doing and not worry about your compeDDon. You’ll be out-‐selling them in no Dme anyway!
Other companies will copy you
Just like other companies are going to copy your company, resist the urge to do the same. Thinking about making your Aunt’s spaghe[ sauce? Check the grocery store, first.
If there’s tons of something, there’s less room for innovaDon.
Look at food trends. Ask around. Do something different. When I sat in on a meeDng with Alan Newman, the co-‐founder of Magic Hat Brewing, he said “We looked at what everyone else was doing and we did the exact opposite.” With that, how can you be different in your industry. Being different makes everything easier.
Try to revoluDonize the industry
Don’t take the opinion of a four-‐year old seriously. I’ve had them cry when they’ve tasted my products. But, I have been hurt by people who flat-‐out don’t like my product. They may not tell me, but I can see it in their body language.
Look at distaste for your products as an opportunity.
Whenever someone doesn’t like your product, ask them why – especially when you’re tesDng out a new product line. It’s invaluable. And remember, don’t make what you want to make, make what your customers want to buy.
People will dislike your product
These people are my favorite, for obvious reasons. And hopefully you have a lot of them (if not, you’ve got to change something). Here’s a Dp to harness your ecstaDc customers.
Ask for tesDmonials.
TesDmonials are social proof. They not only help on your website, but they help in person. Take what your passionate customers have said and use it in your sales pitch. Maybe your neighbor uses your marinade in his awesome steak recipe. Let your other customers know! It helps for them to imagine using your product.
People will love your product
I wouldn’t have go3en anywhere if it wasn’t for the help of every one of my family members. My parents helped sell, package, distribute, label, and create new flavors. My sister taste-‐tested, and my brother kept my companies in healthy financial shape.
Family is an asset.
They want to see you succeed. When they ask if there’s anything they can do, hop at the opportunity. You’re an entrepreneur. That means you’re doing a million things already. Wouldn’t it be great if you had one less? Oh, and you don’t have to pay them much (but you do have to pay them back – maybe free product?)
Your family is your best free help
I know I’m not. And that’s why something is always changing at my company: display, packaging, financial reports, website, ecommerce shop, recipes, research, etc.
Lesson? Embrace change.
You’re going to have to make a lot of changes when you start your company. Whether it’s tweaking your process to get approved by the food lab, finding a new ingredient that makes your cost of goods go down, or adapDng to a new retailer’s needs, it’s always something.
You’ll never be saDsfied with anything
Are you young and sDll in high school? Or, are you reDred and looking for something new to occupy your Dme? Either way, in the food biz, age means nothing. I started my first food company at the ripe age of 15 years old.
You can start whenever you want – you only live once.
You are your own person. Whether you’re 16 or 60, there’s always Dme to do what you love. Yes, there may be a learning curve, but it’s easy to get over the iniDal hump. So, what are you waiDng for? Get out there and just do it.
Age Has No Limit
Think specialty food is the road to millions? It might be but you won’t get there for several years. On every unit, you’ll be making several pennies, up to a couple of bucks if you sell direct to your consumer. The food business is all about volume – how many units can you sell?
So, what’s a realisDc number?
That’s totally up to you. For me, I started my company when I had no other obligaDons. And even though I’d work for 50-‐60 hours a week, my company didn’t grow too fast. Make yourself a goal, whether it’s $2,000 or $20,000 and do everything to work towards it.
It’s not all about the money
We’re all in this together. If your company makes a couple thousand bucks a year or you have a small commercial kitchen, we have the same pain, the same struggle, and the same successes.
It’s great to be able to reach out when you need it.
We all share resources, funny stories from tasDng events, and how we were able to solve problems. From the smiles to the tears, we’re one huge community. You’ll see online communiDes, statewide chapters, and even a naDonal organizaDon. There’s always someone able to lend a hand.
The food community is awesome
If there’s one thing I’ve learned in my ten years owning a specialty food company, it’s this: cash is king. You need it to operate your company, pay bills, get glass jars, build websites, ship samples out, etc.
Remember #3 about knowing your numbers?
Be conscious of whether or not you’re burning through cash like crazy. My first few producDon runs cost me thousands of dollars and my cash was always Ded up in inventory. Lesson learned? Keep a watchful eye on your bank account.
Hold on to your cash – it comes in handy
When you get into a couple of retailers, one of the best ways to get your name out there is to do a store demo. They usually last a couple hours and people taste (and hopefully, buy) your product.
So, what’s so bad about demos?
Your Dme is precious. You may have to run back and make more product, go to another store for a delivery – or heck, pick up the kids form soccer pracDce. Time is money, and when you sell a handful of units at a three hour demo, it can be a li3le discouraging. But remember, you’re ge[ng your product out there for people to taste. It’s going to be necessary for the first few years to sacrifice those Saturdays for demo days.
Store demos are a necessary evil
Gredio is a web-‐app to quickly calculate your food product cost and manage your ingredient inventory to make sure your next producDon goes
off without a hitch.