Business Idea Center:
Specialty Foods

Business Overview

When people go grocery shopping, they want not just a can of soup but something special. In an age when very few have the time to stay home and bake cookies, put up preserves or pickles, or spend hours over that simmering pot of soup or spaghetti sauce, most of us scan the supermarket shelves for take-home goodness. So if you’re renowned among family and friends for your famous chili or killer brownies or champagne jelly, then the specialty foods business might be your piece of pie. Specialty foods can range from salad dressing to chocolate sauce to fragrant breads. If you can make it, you can sell it--provided you know how. The specialty foods business is more about marketing than cooking, getting your product on the shelves and then off again into customers’ shopping carts. The advantages to this business are that it’s creative and challenging, and if you believe in your product, it can be extremely rewarding. Besides the ability to whip up a mean soufflé or sorbet, you’ll need a working knowledge of safe food-handling practices, health regulations and product liability laws. A flair for food packaging is also a must--nobody’s going to buy your delightful danishes if they look dumpy.

The Market

Your customers can be specialty markets like gourmet grocers, health- and natural-foods shops (if your product fits this description), department stores, restaurants, coffee bars and gift shops. You can also sell at flea markets, arts and crafts festivals, farmers’ markets and through mail order. Because the competition for supermarket shelf space is fierce and because you’ll be expected to pay a “slotting” fee of as much as $25,000 to get your wares on the shelves, you’ll want to save marketing to major chains for the future when you know your product’s a success and you can afford the fee. The best way to start is by letting your customers sample your wares. Take your products to shopkeepers and let them savor the taste. Then ask if you can test-market a few jars or packages on their shelves. Offer to help promote your product yourself. In-store demos are terrific ways to do this. Customers sample your goodies and talk to you, which gives them a sense of connection--sort of like tasting from grandma’s spoon. Once you’ve landed a selection of retail accounts, you can attract food distributors, who will take your wares to the national and even international level. You’ll find these people--as well as sales representatives to sell your products to other venues--through industry associations and at trade shows. If you choose the mail order route, you’ll direct-mail a brochure or catalog to lists of people who buy foods by mail. You’ll also want to develop your own mailing list by having everyone who purchases your products at flea markets, festivals or other events sign a guest book with address lines. Another option is to place small magazine ads so customers can order products by mail.

Needed Equipment

In most states it’s illegal to manufacture food products in your own kitchen, but you can rent a commercial facility or have your own cozy corner converted to a Health Department-approved site. Your best bet, however, is not to do the cooking yourself but to find a co-packer, someone who’ll have your raw ingredients and all the packing materials already on-site and who will follow your recipe, leaving you free for those all-important marketing tasks. (The National Association for the Specialty Food Trade will fax you a list of co-packers if you call them at 212-482-6440.)