How to start a food business?

How do I start a business selling food in jars or cans?

• I have a recipe for Chile Colorado. How do I start a business selling it in jars or cans. How much will it cost?

• Answer:

  Starting a food business is a formidable task. Expensive research must be done to derive a suitable recipe for commercial production. This is followed by tests that have to consider shelf life as well as the cost of the product. Quality has to be balanced against profits and the final decision is likely to be based on the market for which a food item is to be produced. To be a success, it is imperative that the food product be of high quality and fill a marketing niche. Entrepreneurs should follow these basic steps in developing new food products. Idea Stage: The idea stage involves "cloud nine" dreaming and making every effort to determine what product the consumer will purchase and continue to purchase. The following questions need to be answered: Does the product satisfy a consumer need? Will it return a profit? Will it be acceptable to consumers, wholesalers and retailers alike? Is it unique? Does it provide a new service to customers? Do you have the production technology to develop the product? Do you have the marketing skills to sell the product? What products will it replace or compete against? Development Stage: This stage involves creation of the new product. Simply being a good cook will not ensure good products for commercial marketing. Food scientists are needed to solve shelf life and safety problems. They address questions such as: Will bacteria, mold, yeasts or pathogens be a concern? Is the "browning reaction" (a chemical reaction between ingredients) a problem and, if so, can it be solved? Is light a factor in product or quality deterioration? Can texture or mouth-feel be improved? Is rancidity a problem? Taste Panel Stage: The taste panel stage should run concurrently with formula or recipe development. Using sensory evaluation test forms, an experienced panel should check quality parameters such as color, texture, appearance and flavor at various stages of product formulation to distinguish good from undesirable traits. Consumer Sampling Stage: The consumer sampling stage is often neglected by small food processors but can give valuable information about the product’s potential success. Entrepreneurs should consider displaying their new products in shopping malls and grocery stores. Shoppers would be given a sample to taste and a questionnaire about the new product to fill out on-site. This sampling can sometimes be done with the product available for sale during the sampling period if the store will cooperate. Actual sales after tasting reinforce the questionnaire. For instance, if 100 people say they will purchase but only five purchase the product, there may be some question about the truthfulness of the answers. Commercial demand for the product should be evaluated to determine if sufficient volume will be produced and sold to make the venture economically feasible. Shelf-Life Stage: The shelf-life stage is extremely important because a processor must know how long a new product will keep under a variety of temperatures and other environmental conditions. Shelf-life loss may be due to chemical or microbial (bacteria, mold and yeast) spoilage. Small firms normally have to contract with independent or consulting laboratories to have accelerated shelf life studies performed on new products. The studies are done by raising the temperature of the packaged product above normal storage conditions (110 to 120 °F). Although this is not as good as a prolonged shelf-life study at normal temperatures (75 to 80 °F), it does give some indication of product shelf life. Lot codes for recall and product liability are based on these studies. Packaging Stage: This stage is especially important because the package often sells a new product. Consumers want colorful, attractive, conveniently packaged forms. Packaging should not impart flavor to the product or react chemically with the food. It should be lightweight, economical and resistant to tearing. Production Stage: The production stage includes making plans for a production line to manufacture the product. Do not arrange a full-scale production line until after successfully test marketing a new product. Many entrepreneurs will have their products co-packed by an existing plant for test marketing. The production line should be set up according to a blueprint of its layout. Keep in mind drainage, ventilation, waste disposal, lighting, equipment size and flow, energy conservation, safety, sanitation, ease of cleaning, storage area, and compliance with government regulations. Processing controls must be established to ensure consistent quality during production as set forth by product standards (specifications). Likewise, quality control procedures must be developed to determine if the standards are being met during production and to know when to take corrective action to prevent economic losses due to deviations and to ensure product safety. Test Marketing Stage: The test marketing stage for small processors involves introducing their new product into a limited area, such as a large metropolitan city. It is important to select a site with a population made up of many ethnic groups and income levels. If the product fails, another product can be tried. If the product succeeds, it is distributed in stages to progressively larger areas (statewide, regional, national). Commercialization Stage: The commercialization is the final step in determining the success or failure of a new product. Most small food companies sell mainly to the institutional trade and if they sell to retail outlets, it is usually to privately owned stores or small chains. Larger chains will not take on a new food product unless the product is heavily advertised by the company. The buyer for a large chain must be convinced that the product is good and that advertising exists.