How to Make a Product
Making a packaged food product is such a broad topic that we want to put some boundaries on what is discussed here. This page is specifically focused on the steps required to take your idea - and maybe a rudimentary recipe you tried at home - and scaling it so it can be sold.
How do you develop a recipe?
This first question is focused on how to take your concept and develop it into a recipe. Most new food entrepreneurs, and many mid-sized brands, will start this process at home. Maybe you have a very specific recipe already - like your grandmother’s salsa - that you want to scale and bring to market. Maybe you have a general idea, but no recipe yet. In either case, you should start by making sure your goal product is feasible. You can try making a batch of your product at home and getting feedback from friends and family. Ask them questions about their experience and try to get those who you think are most aligned to your target customer group. For consistency, every time you make a batch you should keep a detailed record of your ingredients and process. You should measure your ingredients by weight, and, if heating is involved, measure the temperature of your food with a digital kitchen thermometer. Ultimately, this home production process can be a helpful first try to test new methods and flavors without investing significant amounts of capital in a more expensive process. However, homemade food production is not scalable beyond a farmer’s market (and you must abide by highly restrictive cottage laws if you truly wish to produce your product at home).
Once you are convinced that your product is feasible, both financially and technically, there are various services you can work with to professionalize it. You don’t need to work with any of these organizations, but they can help if you are new to the space and provide a number of valuable services.
Flavor houses develop natural and artificial flavorings for food products. These can be particularly helpful if your production process involves heat (which can break down flavor molecules) or if you are developing a beverage and looking to enhance the flavor profile. If you agree to work with a flavor house, they will help develop a flavoring agent for your product. Keep in mind that if you go this route, you will have to buy flavorings from the flavor house indefinitely. If you really want, you can always try going to another flavor house (which can make a similar flavor) or reformulate your product to avoid flavor houses all together later on.
Food labs offer a wide spectrum of services to assist in the development of a food product. Their food scientists can take your initial concept and develop it into a scalable recipe that can be produced on industrial manufacturing equipment and in larger quantities. This may include changing the production process to minimize the number of steps, or the amount of time; it might also involve changes to the ingredients in order to get a specific mouth feel or flavor after the product is packaged. They can also provide suggestions to change ingredients so that you can meet a specific price point. If you are willing to pay for it, food labs can even develop your product from scratch if you have a clear idea of the product-market fit. Food labs can be affiliated with universities, independent nonprofits, or for profit entities. Regardless of their affiliation, they typically charge on a fee per service basis, based on the expected time it takes their team. This depends on your product form and complexity, but generally costs tens of thousands of dollars. You also have to provide the ingredients for food labs, which is an additional cost.
Independent food scientists can offer some of the same services as food scientists associated with a university, but at lower costs (and possibly with fewer conflicts of interest).
Herbalists can help identify herbs for your product development. They may also be familiar with medicinal properties of herbs and can help you develop a product with specific health goals in mind - for example, a calming tea blend. However, be careful about making any health claims and be sure they are backed up by scientific research.
Farms and farmers. There are many reasons to talk to a farmer or two: pursuing better flavored ingredients, buying local, identifying and promoting sustainable farming practices, and even creating markets for heirloom crops that benefit soils and honor heritage but might otherwise lack a market. Buying from specific farmers may require you to produce in certain seasons when a crop is at peak ripeness; keep this in mind when negotiating production agreements with co-packers and commercial facilities.
What else do I need?
There are a few additional tasks you should consider.
Develop a scheduled process. This technical document details the exact production process, including all ingredients, their weights and the steps involved in production. It also includes safety factors like pH levels or moisture content, if relevant for your product. These documents are provided to your production facility so that they can produce your product exactly to specification. You should work with a food scientist to develop the scheduled process.
Create nutrition facts. Your packaged food product must have clear nutrition information on its package for customer understanding and FDA compliance.* To create this panel, you have a few options. If your product is a combination of raw ingredients, the FDA and USDA have nutrition databases that you can reference, such as FoodData Central. If you use other prepared products, you can reference the nutrition facts from those products or ask the supplier for greater detail. You can apply a weighted average across your recipe and divide by serving size to determine the nutrition facts for your product. You can also use services such as Recipal.com, which maintain their own databases and format the information into standard nutrition fact panels for you. Most accurate, but also most expensive, is to complete a full nutritional profile for your product, which can range from a few hundred dollars to well over $1,000 if you want to understand the content of vitamins and minerals.
Define shelf life. All packaged foods must have a shelf life on the product. Generally speaking, you want this to be as long as possible in order to reduce the risk of your products expiring on store shelves. One of the most effective, and least expensive, ways to determine this is to keep a unit of your product and test it after your desired shelf life. However, this requires time you may not have. Another option is to work with a food lab to complete accelerated shelf life testing, which varies in cost and can easily exceed $1,000 per product. If you are working with food scientists or a co-packer, they might also be able to estimate your shelf life based on their experience with the product type. Keep in mind that packaging plays a huge role in shelf life, both in terms of what materials you use and how much oxygen your product is exposed to in its packaging. Which brings us to…
Define your packaging. Beyond the design and branding elements to your packaging, it must also be functional and scalable. You should consider packaging options that meet your needs in terms of size, material, and shape. Be aware, co-packers use machines to fill packages and different types of packaging require different machines. If your package is not compatible with a certain co-packer’s machines, you won’t be able to use them - unless you lease/buy a new machine for your co-packer that is!
How do you produce for commercial sale?
There are a few avenues you can pursue to produce at commercial scale. We will discuss the three most common methods in order of scale - commercial kitchens, test kitchens or pilot facilities, and co-packers. Beyond this, there is the larger option of having your own production facility; this requires large scale and product demand, and is not how most packaged food products start, so we do not go into detail here.
As you consider which facility you will produce in, it’s worth pausing to think about any certifications or claims you want to advertise on your product. USDA Organic certification is a facility-based certification, so you would need to work with a facility that is certified organic. Certain facilities will accommodate allergens and may be peanut free or have dedicated gluten free production lines. If this matters to you, you should ask these questions early on in your search for a production facility.
Commercial Kitchen
Commercial kitchens are commercial-grade cooking facilities. Every restaurant you have been to has one. For packaged food products, you can often find community commercial kitchens that rent space by the day or hour. Larger commercial kitchens may also offer labor on an hourly basis as well, which can help you prepare and package a greater quantity of goods. These facilities typically have commercial grade appliances - refrigeration, food processing, ovens, etc. - but little if any specialized food processing equipment. If you choose to produce in a commercial kitchen, you will be responsible for complying with all health and safety regulations at the facility (as opposed to if you hire a pilot kitchen or co-packer, which have kitchen managers to do this for you). This means that someone present at the commercial kitchen must have food manager certification (you can obtain this by completing a test from ServSafe or other service for a fee). This also means that you need to be aware of food safety requirements, including allergen control and sanitation throughout the facility. While commercial kitchens are financially accessible, having to do everything by hand means that it is only a slight upgrade from producing at home. This limits the amount you can produce, increases your per-unit production costs, and can make consistency across product batches more difficult to achieve.
Some shared kitchens have programs that can help you achieve desired certifications and get onto store shelves in the local area. Typically these are in bigger cities, but it never hurts to check what the organization can do to support your business.
Test/Pilot Kitchen
Between commercial kitchens and co-packers are test or pilot kitchens. Often, if you are working with a food lab, they will have a test kitchen on site that they suggest you use to test your production process. Pilot kitchens have specialized food processing and packaging equipment similar to what you will find at co-packers, but often only one or two of each type of machine. This is an effective method of trying a production process you plan to scale with a co-packer, but at a smaller quantity. Pilot kitchens are run by facility managers, so you are contracting out the production of your product to the facility. This makes life easier on you, since all you have to do is provide the scheduled process, ingredients, and packaging. Particularly since these facilities are used to pilot larger production processes, you will want to assess the final product for flavor, texture, and consistency across units.
Co-Packers
Co-packers are all over the country in obscure buildings you might have never noticed because they often lack signage. Co-packers specialize in certain types of products based on their equipment and certifications. Rodeo CPG and Sherpa have developed an extensive list of co-packers that serves as helpful reference, available for free here. These facilities produce and package products at large scale and typically have minimum production quantities of 10,000+ units. Most co-packers will be willing to work with you to complete a smaller test batch, which is a good idea to make sure that the recipe scales as expected and the final product performs and tastes the way you want. Co-packers often offer you a contract agreement to produce X units of your product in a given timeframe. Co-packers prefer to know approximately how much you plan on producing every quarter – and this is something that may be included in the contract. By signing a contract, you commit to a minimum amount. You could choose not to sign a contract and ask the co-packer to produce on-call, but they may charge higher fees and by not signing a contract you deprioritize your product from production because the co-packer will produce for their contracted clients first. Good co-packers can help you source large quantities of ingredients and packaging, since they have standing relationships with suppliers. Here’s another helpful link with suppliers and co-packers.
However you choose to produce, it’s worth remembering the economies of scale that come with greater production efficiency. Test kitchens and co-packers may cost more at first than a commercial kitchen space, but they produce significantly more units of your product and use industrial machinery that helps you maintain product consistency and food safety batch after batch.
You should also keep in mind that, regardless of your production method, you must have a way of tracking ingredients in case of recall. If you use a co-packer, they can assist with this process, but if you are using a commercial kitchen, you may need to log every lot # for every ingredient you use in each round of production. Otherwise you may have to recall more product than necessary, both a costly and brand-devastating endeavor.
Footnotes
*Unless your product fits certain categories like alcohol, which are not regulated by the FDA. Technically, the FDA also does not require nutrition labels for small companies selling under $25,000, but consumers expect to see the nutrition panel, so we recommend designing with it in mind