Home Business Challenges and Rewards of Starting a New Food Business

Challenges and Rewards of Starting a New Food Business

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business_start_upI’ve lived in Portland, Oregon since 1990. Not long enough to be considered a native. But I do know how to correctly pronounce Couch Street, I’ve picked enough blueberries, cherries and strawberries each summer to tied our family over through the winter, I’ve watched microbreweries spring up in every part of town, and I’ve tasted from the free samples at dozens of farmer’s markets from Sellwood to Salem. The food scene here has experienced myriad adds, moves and changes in 20+ years. A fairly new addition to the scene is the explosion of food carts – mainly due to the low barrier of entry. 

Why in Oregon? Within a two hour drive or less, you can be on the coast digging clams, out in wine growing country, in old growth forests foraging for wild mushrooms, and much more, so fresh ingredients are a reality year-round – a real bonus when you’ve got a tiny refrigerator and you don’t have the space to carry much inventory.

Another reason is our entrepreneurial spirit.

“People come to Oregon because they hear about the food utopia. I have seen record numbers of food start-ups seeking assistance. Oregon is at the forefront of new food trends and it is considered an early adopter state. Oregonians like to try new things,” said Sarah Masoni, product and process development manager, Food Innovation Center, Oregon State University. Also high on OSU’s agenda is keeping our food supply safe and tasty because food production can be risky. Even tiny water droplets can invite microbial contamination.

Almost everyone here dabbles in some kind of a side business or serious hobby. For me personally, it’s making pickles and sauerkraut in the fall when pickling cucumbers and cabbage are plentiful. But there are very real obstacles to starting a food business whether it’s a cart or a brick and mortar.

As many of us know, food is the #1 most frequently started business and the most likely to fail. Consider food as a product:  it’s perishable, so the clock is ticking from the point of acquisition. Ingredients’ quality and availability vary depending on season, quality, yield and timing. Next, throw in heavy costs of specialized equipment, licensing and space. Finally, all food businesses face concerns and legalities associated with food safety.

“Finding the right ‘sweet spot’ of product, profitability, marketing, location, menu, pricing, location, hours, and stability is a huge challenge,” said Lizzy Caston, co-owner of Food Carts Portland, and a food industry education professional.

The Ball brothers, who own the Dog-on-it cart near Portland State University, sell flame-grilled jumbo beef or Polish dogs with their secret sauce. The pair, who are in their twenties, are looking for a larger cart to support their growing business and are searching for a good partner to run their food cart full-time.

“The key to running a successful food service business is consistency. This is true whenever dealing with repeat purchasers. Customers want to receive the same high quality product each time they purchase. To be consistent, you must have processes in place for everything you do. If you want your customers to be loyal to your product, you must be loyal to them,” said Tyler Ball.

Go for slow

Like most entrepreneurs, those who’ve experienced some success at the beginning get anxious to start immediate expansion. The experts say, “Whoa.”

“The best growth and change is slow, thoughtful, planned growth. You don’t want to invest money in too many things that might not perform and pull down everything else. You need at least one solid, steady, proven and easy to manage revenue stream before growing or diversifying. Make sure you have a great team to help you, because as you grow you’ll be more and more reliant on others to do things you have been used to doing yourself,” said Caston.

Just because you’re a wonderful cook and everyone loves your cookies doesn’t mean you’ve got the right temperament to run a successful food business.

“Patience, persistence and a bit of detachment from ‘your baby’ all need to take place. Idea people should stay creative, continue to concoct new flavors and ideas and let someone with experience and patience deal with the everyday business issues,” said Brenda Steele, Independent Natural Food Brokers.

Maximizing a mature industry niche

Distributors face slightly different challenges than retailers. They’re not out to get mass acceptance, but they do need to reach the right audience with the appropriate message.

“We are looking at a target market of around 150 people with our branded and private label baking mixes. Our growth doesn’t come from being introduced to new buyers because there aren’t any. It comes from developing relationships with the buyers we currently work with,” said Emily Ward-Dickerman, NorthWest Specialty Baking Mixes, www.nwsbm.com.

Add a safety program to your food business

There are several ways all new food businesses should deal with food safety.

  • Train your staff to know what they’re expected to do. Make sure all supplies are ready and prepped at every shift, including visual reminders about proper temperatures. Create a cleaning and inventory to-do list and stick it where all can see.
  • Management. Food safety must come from the top down. Make sure everyone knows the rules and routine and follows them, with inspections from those who work above.
  • For health department inspectors and consumers, post required safety warnings. In Oregon, homemade food offered at events to the public must be prepared in a kitchen that has been inspected by the local environmental health department. In Portland, many food cart gardens also post reserved parking signs for food truck vendors, to maintain safe distances between consumers and vehicles.

“Manufacturers must be diligent when it comes to dealing with food sensitivities and intolerances,” said Shelley Gunton, Chief-Make-It-Happen Officer at Chez Marie, Portland, Oregon, who supplies the New Seasons grocery store chain and other stores with veggie burgers. “We have strict storage, processing, and cleaning protocols to ensure there is no gluten or other materials transferred between products. Our standard protocols require the entire manufacturing area and all equipment be thoroughly cleaned after every product is completed.”

“Ignoring food safety principles screams inconsistency and low quality—not to mention that you risk harming your customers,” added Ball.

Future food safety requirements

“The Federal Government is in the midst of putting the Food Safety Modernization Act (FSMA) in to action. Farms, especially, will be affected by new requirements for more robust agricultural practices and procedures. Manufacturers will be required to maintain a higher level of manufacturing records and must track food from farm to consumer. Oregon State University and Washington State University have been traveling across both states updating farmer and processor groups about the new regulations, and helping to make them aware of the comment periods that the FDA has for the new regulations. We believe it will take 10 years to fully implement the changes,” concluded Masoni.

While The Joy of Cooking may have a permanent home on your shelf, you’ve already begun converting that vintage Airstream, and you’ve got a potion already in motion, take the time to learn from those who’ve come before you in the food scene: They’ve experienced all the adds, moves, and changes you’re likely to face and know how to make food safe for all.

 

Jack RubingerBY: Jack Rubinger, Graphic Products, has more than 20 years of experience contributing to trade and business publications including Dairy Foods, Food Manufacturing, and Industry Week. Graphic Products is a leading industrial safety and labeling system manufacturer whose customers include Tyson Foods and Kroger Foods. For more information, contact jarubinger@graphicproducts.com, call 1.800.788.5572, x3024 or visit www.GraphicProducts.com.

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