Specialty Foods Service Business Idea

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Markets Are Changing Seg3: Case Studies

SaladBowlBranding 7/9/2008

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Business Summary:

As a specialty foods provider, you’ll spend your days doing what you love: creating that special recipe or food that customers crave. You’ll be baking, cooking, roasting, and probably duplicating the same foods over and over for your clients. To differentiate yourself from caterers and professional cooks/chefs, it’s best to start with an item that you love making and most importantly: people love eating! Specialize in sauces, breads, desserts, jellies, wedding cakes, whatever your forte.

The advantages of initiating a specialty foods service, are that it’s highly rewarding, challenging, creative, and to someone who loves to cook: a dream come true. So many people shop grocery aisles and food stores for something different, something special to eat. You’ll be answering that gastronomical craving.

Start Up Cost: $2,000 – $50,000

Can Be Home Based?: Yes

Can Be Operated Part Time?: Yes

Skills Required:

To start a successful specialty food business, you’ll first and foremost, need to know health regulations, safe food-handling practices, product laws, as well as where you can set up shop (as most states will not allow a home-based specialty foods business). You’ll also need to know how to effectively market your food in packaging and store type location. Moreover, you will have to be able to whip up the same recipes over and over, without fail to meet your store food agreements.

How Much Can You Earn:

The money you can earn in the specialty foods industry depends on the product you are making, how much you can supply, and who you are marketing it to. Most all of your customers will pay more for your product than standard foods, plus your ingredients and labor. If your specialty is sauces, you can sell it for $3 wholesale, multiplied by shelf space and how many distributors you have. If your forte is wedding cakes, you can sell each for $300+ per cake. Depending on volume and work ethic, you could make anywhere from a part time $35,000 to easy six figures. Also, keep in mind that in a production business such as this, you can hire staff to churn out more and therefore make more, without much of an increased investment.

Understanding Customers:

Your customers are probably gourmet grocery stores, restaurants, wedding caterers, coffee shops, and health food stores. Creating a product that is unique to the mass-produced food in typical food stores, allows you a different customer: the specialty grocer or restaurant. They are looking for quality, distinctive packaging, and timely delivery to fulfill the supply and demand of hungry and thirsty customers. Know that-if you produce a shelf item-most stores and cafes charge a “slotting fee” up to about $25,000, which is shelf space (due to high demand for shelf placement); so it’s best to start with the smaller stores when you are beginning.

Marketing Strategy:

If you are running a specialty foods company, the very best way to market your food or drink is free sampling. Bring your foods to restaurants, shop owners, and any potential distributor and offer them a free sample. Next, ask if you can “test-market” which means stock a limited number of your product in their store for a limited time, and see how it sells. With their permission, you can promote your product yourself with in-store demonstrations and samples. Beyond this, attend food and culinary trade shows to network with wholesalers.


It is almost always required that you operate in another facility other than your home when preparing foods for sale. This means renting a commercial kitchen space or the like. It is also possible to get your home space health-code certified, but this may take more work and money than its worth.

To set up specialty foods business, you’ll need:

  • Stove, refrigerator, and any cooking appliances needed to make your creation.
  • Health Board-approved facility.
  • Packaging space and service/employee.
  • Food ingredients in bulk.
  • Samples for on-the-go marketing.

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