How to start a business for packaged food products

Written by catherine capozzi
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How to start a business for packaged food products
(Ryan McVay/Photodisc/Getty Images)

Packaged foods are big business due to the products' price and convenience. Packaged food giants like Kraft and General Mills earn large profits even in times of a recession, as outlined by Matthew Boyle in a article. The long shelf life of these foods can help entrepreneurs in this field manage inventory with more ease than fresh foods. However, those who venture into the packaged foods industry should have a clear picture of their business plan before going out to sell granola bars.

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  1. 1

    Assess your business goals: Pick your targeted demographic and sales method. Examples include selling packaged candy products at high school football games, or targeting middle-aged couples looking for healthy weight loss snacks to buy online. Envision the end goal of your business and design your plans with your market demographic in mind. For example, choose brightly packaged sweets for children or pick health bars that tout their nutrients for athletes.

  2. 2

    Determine which products to sell. Choose between packaged meats, candies, crackers, cookies, chips or even TV dinners. Determine which companies produce these items and contact them for wholesale information.

    Or, make your own products to package and sell. Get all necessary licenses and permits. Gain capital from banks for machinery, staff and manufacturing equipment. If your business packages the food as well, assess how to keep the products fresh and sanitary while maintaining taste. Pick which companies to buy raw materials from, like flour, eggs and fruit. Choose packaging, make nutrition labels and get a warehouse to package and store products.

  3. 3

    Plan your pricing model. Though popular packaged foods sell for more than the cost of production, the intense competition in this industry mitigates some of the revenue. Smaller companies must produce their items at a higher cost, but their niche industry enables them to sell their products for more money. Anticipate selling a high volume of inexpensive popular foods with small profit margins. Or, sell fewer, lesser-known yet more expensive packaged foods with a wider profit margin.

  4. 4

    Choose your method of distribution. Pick a brick-and-mortar operation and anticipate spending money on rent, hired help and additional overhead. Reach a wider audience and sell your packaged goods directly to customers online: Hire a web designer and create a website capable of e-commerce.

    Otherwise, distribute your created packaged foods to retailers like grocery stores.

  5. 5

    Advertise your food products. Offer free samples, make commercials, post flyers and pay advertising costs to post banners on social media sites like Facebook. Set aside ample financial resources on advertising. Consumer eating habits are highly susceptible to packaged food advertising, according to Gordon Edlin and Eric Golanty, authors of the book, “Health and Wellness.” They add that competition is fierce: Food companies are the second-largest advertisers, 70 per cent of which is packaged foods.

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