Starting a value-added food business from scratch

By Ted Craig
Value-Added Program Manager in the Agribusiness Division of the Wyoming Business Council

It is a secret recipe that has been in the family for generations.  Your friends all say you should go into business because it is the best salsa, barbecue sauce or jam they’ve ever tasted.  As you develop your business plan, you need to address many questions.  Here are some of the most common questions that I receive from potential food producers:

Do I need a license to process food?  Yes, you are required to obtain a Food Handlers License from the Wyoming Department of Agriculture.

What about liability insurance?  There are many food borne illnesses that are associated with improper handling, cooking or packaging of food.  No law exists that says you are required to have product liability insurance, but not having it puts you at risk.  All it takes is one lawsuit to lose everything.

Where can I manufacture the product?  If you want to make a food product for wholesale or retail sale, you cannot make it in your home kitchen.  You will need to find either an existing certified kitchen to rent, a co-packer willing to make it for you or build your own facility.  Before you go to the expense of buying equipment and constructing a new building, we recommend that you start out using someone else’s facility.  Check out your local community center, church or local restaurant to see if you can use their space.

How do I commercialize my recipe?  Just because a recipe works in small batches does not mean that large size commercial batches will work.  This is where a food scientist or co-packer can help refine your recipe.

What is the shelf life of my product?  This is a difficult question to answer as it will depend on your products’ formulation and the degree of risk that it poses to the consumer.  Products like jams and jellies have low risks and long shelf lives in comparison to acidified foods like salsa or egg products like mayonnaise.  Shelf life testing is best done by an accredited lab or university.

What needs to be included on my label?   All products need to have an accurate product descriptor to let the consumer know what it truly is.  It also needs to have a net weight, list of ingredients in descending order and your contact information.  If you are not making any health claims and you fall within the Food and Drug Administration’s definition of small business, you can apply for an exemption from the nutritional labeling requirements.  If you must use a nutritional label, you can have a laboratory analysis of your product for $600-700 or analyze it by computer for $150-250.

Where will I sell it?  You need unique ways to market your product, such as farmers’ markets, county fairs, craft fairs, local celebrations, specialty shops and the Wyoming State Fair.

How do I get a UPC?  UPC codes are not required by government but if you want to sell your products through supermarkets, you will need one.  The bar codes are managed by the Uniform Code Council, which can be found at www.uc-council.org.

Ted Craig is the Value-Added Program Manager in the Agribusiness Division of the Wyoming Business Council. Contact him at ted.craig@wybusiness.org If you are interested similar articles, contact Terri Barr at terri.barr@wybusiness.org for a free subscription to the Wyoming Agtivities Newsletter.