This is the first installment in a seven-part series to help you chart a course from your kitchen to the Consumer Packaged Goods (CPG) market. It is not intended to be definitive nor qualify as legal advice, but simply a roadmap to help you navigate some of the choices you will have to make along the way. You are encouraged to consult with your Board of Health or other regulatory authorities throughout your product development process.
Part 1: Introduction
Many a chef, restaurateur, or experienced home cook has thought about bringing their great recipe to the CPG market, and for good reason: The boom in growth for the specialty foods category is both formidable and enticing!
Whether you are familiar with the business of food, or a first-time entrepreneur, you will likely encounter a number of new challenges along the way. From supply chain solutions and development of packaging, to complying with a myriad of health regulations, you may have to refine your product concept several times over before you are ready to launch.
Whether your goal is to operate your own food production company; scale your product and potentially sell your business to a larger conglomerate; or simply to develop an additional revenue stream for your established restaurant, the questions you will have to answer along the way will be roughly the same.
In this seven-part series, we’ll take a look at the following topics:
- Identifying Your Initial Offering
- Who Is Your Target Customer?
- What Is Your Pricing Model?
- What Is Your Distribution Concept?
- What Is Your Pricing Model?
- Transitioning From Your Kitchen To The CPG Regulated Market
- The Wholesale Regulatory Environment
- Recipes vs. Formulas
- To Self-Produce or Co-Pack?
- Initial Product Quantity
- Identifying Suppliers and Minimum Purchase Orders
- Co-Packing: Taking Advantage Of Another’s Resources
- How To Write A GREAT Co-Packer Query Letter
- Developing Your Packaging
- How To Source Your Packaging
- Define Your Value Proposition
- How Will Your Product Stand Out On The Shelf?
- Trust The Artist!
- Creating A Nutritional Panel and Ingredient Statement
- Distributing Your Product
- To Self-Distribute Or Work With A Third Party?
- Marketing Your Products
- Should I Hire A Broker?
- Product Review Windows
- Selling On Amazon
As you learn more about the process of developing your CPG food product, you may find that a later installment in this series causes you to re-think something you learned from a prior chapter. Do not be discouraged! It is to your benefit to define exactly what your product is, how it will be made, to whom you are marketing your product, and how you will achieve a foothold in the market long before you are ready to launch.
Note that this series does not address any questions with regard to funding your new product launch. This is the one aspect that is highly unique to each startup, and there are numerous resources available to help you identify your best sources of funding. At the very least, you’ll want a fleshed-out business plan, a snappy pitch deck, and a five-year cash flow document.
With that, let’s get on with the series! Can't wait for the next installment? Download the complete printable series.