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Dishing It Out

Help yourself to success as a specialty food entrepreneur.
April 1, 1998
URL: http://www.entrepreneur.com/article/15366

When Terry Brown left upstate New York for the West Coast in 1986, he had no problem saying goodbye to his family and friends. But buffalo wings he just couldn't live without. "I grew up around the Buffalo area, which is how I became familiar with buffalo wings," says Brown. "But when I moved to California, I couldn't find any wings or wing sauces, so I said, `I'll have to do it myself,' because I live on these things!"

Over the next eight years, Brown perfected his recipe for buffalo wing sauce in hopes of making the unique flavor available nationwide. In 1994, he started Wing-Time, an all-natural buffalo wing sauce company he operates from a second bedroom in his Davis, California, home. Last year, Wing-Time sauce was sold throughout the United States, Japan, Germany and Hong Kong--generating more than $120,000 in sales.

If you have an outstanding recipe that appeals to a wide audience, owning a specialty food business can be a culinary dream come true. But the transition from kitchen to marketplace is not as simple as serving treats to friends and family.

While your kitchen may be a great place to fine-tune your favorite recipes, it's not the best place to generate consumer-targeted food products. "You can make food legitimately [at home] to sell at a church bazaar, but it's not legal when you're in commercial sales," says Shermain Hardesty, a private food marketing consultant in Davis, California. State health agencies require commercial food to be manufactured in licensed facilities that meet strict sanitary regulations.

A Winning Recipe

For homebased food entrepreneurs, Hardesty recommends using co-packers, who can manufacture and package products for you on a large scale. "My relationship with my co-packer is the most time-consuming and expensive business relationship I have," says Brown. "But it's also the most important, because without a product, you don't have a business."

Co-packers are usually listed in the Yellow Pages under "Canners," "Food Processors" or "Food Facilities." Many co-packers have minimum production requirements and maximum production capabilities; find one whose production abilities will meet your company's needs cost-effectively.

Also be sure to protect your recipe. "Reputable companies will sign a nondisclosure agreement with you," says Hardesty. "Before you show them anything, get the nondisclosure agreement upfront and only then give them your recipe."

If you can't find a nearby co-packer to manufacture your product, don't assume you have to throw in the kitchen towel. Restaurants, school cafeterias, churches and other licensed facilities often rent out their kitchens during off-peak hours.

Extra Ingredients

While state and county health departments oversee food manufacturing, labeling is governed on the federal level through the Food and Drug Administration (FDA). "The FDA has established guidelines for labels that cover not just nutrition facts, but weight declarations and ingredient statements," says Brown. You can research these requirements at the FDA Web site, under the Food Labeling and Nutrition page (http://vm.cfsan.fda.gov/label.html). Independent label consultants can also assist you with the labeling process.

You'll also want to think carefully about the artwork on your product. While many co-packers offer label designing services, you should still shop around for other vendors. "I recommend talking to several food label designers, because the package is the final spokesperson for the product," says Hardesty.

Competition is fierce in the specialty food market. According to Stephen F. Hall, author of From Kitchen to Market (Upstart Publishing, $27.95, 800-235-8866), there are more than 15,000 new food products introduced every year.

In other words, even if you have a fantastic product, there's a good chance it will face a shelf full of competition. "The market for standard items, like jams and jellies, is really saturated," says Hardesty. "In order to get consumers' attention, you have to come up with something very different."

Brown started his company with a line of four buffalo wing sauces: hot, medium, mild, and garlic with parmesan. Two years later, he added barbecue and super-hot versions of the sauce. "Selection's really important, especially when you're looking to establish a new relationship with a vendor," says Brown, who works with product distributors and brokers to get his sauces into gourmet and specialty food stores, hot-sauce shops, catalogs and grocery stores. "The more you can offer in terms of one-stop shopping--which translates to a better selection for customers--the better chance you'll have of getting your product in."

Time To Simmer

If you can't afford your own production facility, consider a specialized kitchen incubator. "We provide a state-of-the-art, health-inspected facility, and [tenants] just lease it when they need it," says David Gonzales, executive director of the Denver Enterprise Center, a 74,000-square-foot incubation facility with 7,900 square feet of kitchen space.

Leo Reiff is the first graduate of the Center's kitchen incubation program, which helps start-up companies develop food and food-related products. His business, Culinaire Inc., makes gourmet appetizers and delivers them to country clubs, hotels and other caterers.

One of the largest of its kind in the country, the Denver incubator has ovens for bakers, cooking lines for making specialty foods, and plenty of space for preparing and storing food. "It offers all the newest equipment the food service industry has to offer," says Reiff.

Looking for help with your food business? Here are some resources: