QUESTION ON Starting a Salad Dressing, Marinade Business
My brother and I want to go into business from home at first. We have this salad dressing/ marinade that we want to sell. I checked supermarkets and compared and we think that ours is better. How do we start?
– Elke, California
Congratulations on creating your own food business. There are usually two options when you create your own product: license the product to a manufacturer and you get royalties; or create the product and market it yourself. The first option is easier and less costly, but less profit as well. Rewards for the second option can be tremendous if the product proves popular, but costs can be very high.
There are a number of questions that you need to ask yourself:
- Do you have the resources to manufacture, package and market your products?
- How will you finance your project?
- Other than checking the supermarkets and comparing the quality of each brand of salad dressing and marinade to your own formula, have you conducted further studies about how are you going to manufacture and package your end products?
- How are you going to package them?
- How much volume do you plan to produce?
- How will you distribute it? Will you sell it in the big chain grocery stores, or specialty grocery stores like Trader Joe’s?
- How will you advertise?
- How will people know that your product is better than the others?
- Are you prepared to handle liabilities, such as customers suffering from food poisoning due to your salad dressing?
One important factor to consider is how you are going to manufacture your food product. You mentioned that you want to start your business from your home at first. However, many states prohibit selling food products prepared from home kitchens. Many states require that food preparation be done in a kitchen that is separate from the home kitchen (e.g. commercial kitchen). Some states allow the preparation of food items from homes, but with significant restrictions.
Texas, for example, allows the manufacturing of food products from home, but with a lot of restrictions. Items that can be prepared and sold from home include non-refrigerated items such as breads, jams, fruit pies, etc. Food products must also be sold directly to consumers and there is an income restriction from the sale of the products.
Food is one commodity that is highly regulated, as it affects the health of the consumers. It is important to check with your state whether salad dressing or marinade is an item that you can prepare from home.
The distribution of your food product will be a huge challenge as well. It is not easy to get into the food distributors’ roster, which can help you put your salad dressing and marinade into supermarkets.
I suggest that you start the project by writing a business plan that you can use as a guide in pushing through with the business. Business plans are not just for use when seeking investors or applying for a bank loan. Think of it as the roadmap of your business, not only will it give you guidance; it will keep your assumptions grounded and expectations more in tune with reality. The business plan will help you see what you will need to start the business from nothing to reality. Check out our list of free business plans.
I also suggest reading the story of Amy’s Kitchen, a frozen food business that also started from home, to get some inspiration of how they did it.
You may also wish to check out some books:
- Cooking Up a Business: Lessons from Food Lovers Who Turned Their Passion into a Career — and How You C an, Too
- Starting Out: The Essential Guide to Cooking on Your Own
- The 2009-2014 World Outlook for Mayonnaise, Salad Dressings, and Sandwich Spreads
- From Kitchen to Market – Sell Your Specialty Food: Market, Distribute, and Profit from Your Kitchen Creation
- Getting Your Specialty Food Product Onto Store Shelves: The Ultimate Wholesale How-To Guide For Artisan Food Companies
Hope that the above resources help. Good luck.
Nach M Maravilla
Article originally published in October 2006. Updated February 19, 2012
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