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Domenick Celentano

Foodpreneur's Corner - Advice to Woman Entrepreneur Launching Hot Sauce Business

By July 31, 2012

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I work with clients (I like to refer to them as 'foodpreneurs') every day helping them build sustainable food businesses and managing their brand path from the kitchen to the shelf to the consumers plate. Many of the questions I receive are similar from client to client.

The Foodpreneur's Corner

I decided it would be helpful for those of you starting a food business or for those early stage food companies that have some distribution and need to get to the next step to share some of these client (foodpreneur) experiences.

Our foodpreneur today is a woman food entrepreneur seeking to launch an ethnic hot sauce. She has some distribution with very positive consumer response so she wants to scale her business to regional specialty food stores. She is dealing with the following issues and is seeking my advice:

  • How to order packaging, specifically bottles, it quantities that provide a good price without sitting on too much inventory
  • How to design food packaging that gets the customer to stop and hopefully buy the product

These are questions that come to me repeatedly so I will share my answers and hope you find value in your food business.

Be Cautious of Ordering Large Quantities of Packaging

"I am checking into bottle companies that I can receive more bang for the buck as far as pricing 1,000 -10,000 in 5 oz and 10 oz. I already shipped an order to a customer and have another order coming up for 36 bottles."

The 1,000 -10,000 is a wide range so ask them for pricing breakouts within that range. Also be cautious on larger quantities of purchases here given the early stage of your company. You should forecast what you believe your product can sell on a weekly basis and consider you are launching into specialty retailers that naturally have smaller volumes.

So let's say you think you can sell 2 bottles per store per week every week for both sizes. That would be 208 units per year. If you purchased 10,000 bottles for each size you would need to sell to 96 stores to use up those bottles in one year.

Here is a table below to see the impact of food packaging inventory. Remember that inventory is your CASH parked in the warehouse where it may be better utilized for marketing and launching your products.

Size

Units

Weeks

Total Per Year

5oz

2

52

104

10 oz

2

52

104

208

Bottle Order

SKU

Sales for 1 Store

# Stores to

1000

2

2000

208

10

3000

2

6000

208

29

5000

2

10000

208

48

7500

2

15000

208

72

10000

2

20000

208

96

Packaging Design Without Your Brand Positioning is a Waste of Money

"I am also working on changing my label. Not really impressed. I need bright colors and name to stick out. I also came up with not only used as hot sauce but as for marinade.

Before you spend money on a label design, you should create a positioning statement. Package designs or web design without this foundation are very ineffective in today's competitive environment. I have worked with many clients who spent thousands of dollars only to have found the need to re-create the label again since it was ineffective at stopping the consumer so they can purchase the brand.

Positioning statements are a way to concisely communicate to web designers, people designing your packaging and your advertising what they need to do. Without this, they are flying blind and on your dime! The format is 5 easy to follow steps.

Step 1 - To [the target customer with a problem or need],

Step 2 - [your brand] is the [frame of reference],

Step 3 - -that is the [benefit oriented point of difference]

Step 4 - evidenced by [product features]

Step 5 - The Reason to buy [your brand] is [what?]

If you have questions on your food business or specialty food retail store drop me a line and maybe we can feature you in our next foodpreneur's corner.

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