I work with hundreds of food entrepreneurs to take their idea and turn it into a profitable business. So, ever wonder what a Foodpreneur client session is like? Here is a summary from a client who is ready to procure packaging and planning how to distribute your product.
Shelf Life Issues
You should consider doing simple shelf life testing in order to select the appropriate packaging with the type of barrier protection necessary. There are Water Vapor barriers and Oxygen barriers. So Google “food shelf life testing laboratories” in your area and get shelf life testing prices.
The tests you should consider:
- shelf life
- water activity rate
- ingredient interactions that can create product quality problems.
Ask your food lab to What are the other test that will help me spec out packaging to improve shelf life.
Licenses for Food Distribution
Clients routinely ask me about licenses and certifications needed to start their food business. The answer is always “it depends…”. It all depends on the state you are planning to locate your production.
- You have a business license and each state varies with these licenses.
- The California Department of Public Health, Food and Drug Branch Processed Food Registration (CDPH) page says this "The Food and Drug Branch (FDB) regulates the manufacture, processing, storage and distribution of food products in California. California law requires that businesses obtain an FDB license, certificate or registration for these activities. "
- You MAY be considered a distributor HOWEVER, the California Department of Public Health, Food and Drug site is pretty confusing.
- Since this varies by state, I have not found a single site location that provides this information in one spot. So you should check with your state department of health, department of commerce or if you come up dry, go to your state web site and search for food business licenses, food business certification, etc.
If you are starting a food business you are not thinking of yourself as a distributor. Typically we think of distributors as third parties such as KeHe and ??? who are intermediaries between you and retailers. However your state may look at distribution as any transportation you perform to deliver your product.
If you are using a copacker, I would ask them for guidance. Otherwise call the department responsible to get guidance.
In many states, you are not allowed to produce products in your home kitchen for resale. These states require you have a dedicated production facility or use a licensed shared kitchen. My client is in California.
- Since you are in California, you can run as a cottage food operation. This article gives you an example of how to proceed in your state: As of Jan. 1, a new state law allows people who make food at home to sell it to restaurants and grocery stores.> .
Taking orders, picking and packing them and shipping to the customer is an entire process in and of itself. For startups shipping low quantities to many small retailers, you may want to consider a fulfillment service.
Getting Fulfillment Quotes
- You want to get costs from smaller fulfillment houses related to Inbound and Outbound charges. I am providing some details and these will vary… however fulfillment and 3rd Party Logistics (3PL) companies essentially have Inbound and Outbound services.
- When requesting pricing be general as to overall Inbound and Outbound costs… let them articulate the line item charges… vs. articulating the detailed examples below:
- Inbound Costs - Typical
- Cost of storage - monthly
- Receiving costs
- Outbound Costs - Typical
- Shipping Costs
- Assembly or Pick N Pack
- Shipping Containers/Packing Materials
- Inbound Costs - Typical
Fulfillment Issues for Startups
- The NY Times Small Business Section just did an article on this very subject… although it was ecommerce focused, it still pertains: Selling on the Web and Seeking Reliable Shipping
UPS has a Customer Service number… it would pay to call them to see if they have any 3PL services for small businesses: UPS Customer Solutions'
Other Fulfillment Options
Web Based fulfillment services. I did a quick search and you will probably find more shipmyorders.com. This Business Week slide show "How to Choose a Fulfillment Centers" highlights other options similar to what is outlined above.
You need UPC codes and it is a simple process.
GS1 US handles assignment of the UPC Company Prefix. The site is easy to navigate. Let me know if you need any help:gs1us.org - get started
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