I'd Buy That: Starting small – and doing your research – can pay off for new food products“You could make a fortune if you bottled this spaghetti sauce.” Sound familiar? Many of our favorite products come from home kitchens and family recipes, and your to-die-for sauce could be the next big thing on grocery store shelves.
Vivian Gibson developed her Vib’s Caribbean Heat hot sauce to provide an extra kick to her catering business and everyday cooking. Thomas Meihaus promoted his family’s My House Salt seasoning as a way to honor his mother, who invented the product.
Like thousands of other entrepreneurs throughout Missouri and Illinois, these two individuals worked on products in their personal kitchens as a way to start their own businesses. Although getting a product from a kitchen to a store shelf is an extremely difficult task, Gibson and Meihaus took great recipes and tons of ingenuity to make their dreams come true.
Starting Out on the Long Road to Market
The key to growing a home product business is to have a big dream but to start small. You first need to discover what makes your product stand out in the marketplace. Meihaus’ mother created My House Salt as an alternative to other seasonings in the industry. According to Meihaus, the seasoning differentiates itself because it starts with a coarse salt that is combined with seven herbs and spices for extra flavor without the addition of additives and preservatives. After his mother passed away, the Meihaus family decided to take her unique product to market. Why? “Basically because people were telling us it tastes great, and because we wanted to do it in memory of our mom,” said Meihaus.
Gibson, president of The MillCreek Company, developed Vib’s Caribbean Heat as an alternative to the usual hot sauces Midwesterners have grown accustomed to. “Caribbean Heat is different from the traditional Louisiana hot sauce, which is made from cayenne peppers. Our sauce has a thicker, chunkier, peppery consistency. It’s made in the Caribbean tradition with onions, garlic and lime in comparison to salt and vinegar.” The sauce quickly became a hit with her catering clients and, eventually, among the general public.
Urged on by friends, family and other fans who gravitated toward the products, Meihaus and Gibson decided to make the move from the kitchen to the grocery store. In order to become successful, the two did something few food entrepreneurs do: their research.
According to Larry Aldag of the Illinois Department of Agriculture, which helps assist and promote Illinois-based food producers, getting feedback is the first step to determining how successful your product can be. He said, “Many, many products don’t get on shelves even though they are good products. You need to do test marketing – with the food industry, friends, consumers – before you launch your product. If the quality is there, this is the best place to start.”
Sarah Shultz, member services coordinator for the Missouri Department of Agriculture’s AgriMissouri Program, agreed. “Do a lot of market research. Have people try your product and fill out a quick survey,” she advised. “Would you like to try this product? Do you like it? What don’t you like? How much would you be willing to pay for it?”
A good way to begin test marketing is to set up displays at fairs and festivals. Gibson, for instance, used the Missouri Black Expo as a way to test her product and reach customers. “Start small,” she said. “Start with the festivals and specialty shops to get a sense if you can create a customer base.” Meihaus turned to cooking, home improvement and working women’s shows. Besides gathering information about your product, this one-on-one meeting with possible consumers is a great way to build customer loyalty and to get large stores to recognize you.
Catching the Eye of the Supermarket
Once any problems with the product are fixed, recognizing financial limitations, finding packaging and distribution partners and meeting industry regulations can all become daunting tasks in themselves. Gibson laughed, “There are a lot of hidden costs. It definitely goes beyond having a good recipe – that’s for sure.”
Learning about funding beforehand can help immensely. “My main suggestion is to do your research first, before investing money in product and packaging,” said Shultz. “Plus, you need to save money to get your product going, especially if this is going to be your full-time job. You won’t likely make your first profit until four or five years into your business.”
In addition, Aldag remarked, “If you want to reach the bigger stores, there are more difficulties and costs of doing business – marketing fees, transportation fees, processing fees. There is more to be gained but at a higher cost, too.” For instance, if you want to get into Schnucks, you need to be able to meet its requests, even if that means producing 1,000 bottles a week. Said Meihaus, “Find someone professional to do bottling, mixing, whatever the product needs. Someone that if you need 500 cases, they can go out and produce it. For shows – it’s fine to do it in-house, but with stores, you have to do it in bulk. Good producers have the experience, equipment and material to do it for you.”
Besides funding, food developers need to look at Food and Drug Administration and state regulations as well as industry standards. According to Schultz, if you want to mass produce, your kitchen, or any other commercial kitchen you use, must be inspected by a local health department or the FDA. Furthermore, labeling that meets FDA standards is also strictly enforced. Said Aldag, “Nutritional facts are a requirement, and in many cases, you have to go to a lab testing facility to determine the nutritional aspects of your product.”
In addition to health regulations, companies must also meet rules developed by the supermarket industry. To illustrate, Gibson remarked, “Besides meeting FDA guidelines, the other main step was to obtain a UPC code. A small company can go into specialty stores without it, but major supermarkets have to have it.”
Once the logistics are out of the way, the most difficult and time-consuming step occurs – attempting to get your product into the stores. Without a major distributor and a high-dollar advertising campaign behind you, promoting your product to the stores requires a good dose of pounding the pavement.
Said Gibson about her own experience, “Getting a store to believe in you is a huge hurdle. You can’t just get anyone to talk to you. They demand of you, ‘Why should we believe in you? What have you done? Who are your customers?’”
Gibson started small to help grab the big stores’ attention. Besides shows, she focused on marketing her product to airport shops, specialty stores and restaurants. Although she continually called on Schnucks, it wasn’t until she grew a strong fan base that the supermarket chain began to take notice.
Meihaus, too, discovered that a guerilla marketing approach took a lot of work but garnered great rewards. Meihaus often walked into smaller markets with a sample bottle, information and pricing. This helped him get his start at 15 local stores across the metropolitan area, such as Ladue Market and, eventually, into Straub’s, Shop ‘n Save, Dierbergs and Schnucks. My House Salt also gained favor among some media personalities. “We were lucky – we got onto some different cooking shows. The Kelly Twins fell in love with it right away. Father Dominic pushes it on his show as well.”
Overall, Meihaus said, the end consumer was key to landing the product in the larger stores. “Once the market tried it, they fell in love. It showed the big stores that people will buy it – the product is not going to sit there on the store shelves.”
Locating the Help You Need
The process of developing and marketing your product may seem overwhelming, especially in regard to funding but also in terms of meeting regulations and reaching a customer base. However, there are fantastic state resources that can help you on your way toward your goal. Whether you live in Missouri or Illinois, each state’s Department of Agriculture can be a key partner as you work toward marketability.
The Missouri Department of Agriculture’s AgriMissouri Program was developed in 1985 to offer marketing assistance to food development companies in the state. Schultz noted, “We provide regulation information, we have a list of commercial kitchens available and we help market their products through different promotions.” For instance, the program recently focused on a winery promotion and also sponsors the AgriMissouri Market retail outlet at the Missouri State Fair and at the Ozark Empire Fair. In addition, the program allows companies to market their products through the AgriMissouri’s online buyer’s guide, www.mda.state.mo.us/Market/bguide.htm. It also promotes the state’s products at a national food trade show.
The Illinois Department of Agriculture provides Illinois firms with similar programs. Companies can promote their goods through www.BuyIllinoisProducts.com, work with the Department of Agriculture to receive information on food processors and buyers or possibly be included in Illinois-oriented grocery stores promotions.
The Illinois Department of Agriculture also focuses heavily on shows, especially the Illinois Products Expo held in Springfield every March. Said Aldag, “Consumers can come and sample food products as well as purchase the products at the show. We also have a list of buyers we invite to a closed show before the show opens to the general public. We had 50 companies that did $40,000 in business at the show itself, just selling to consumers.”
If you are interested in more information from these organizations, Illinois residents can call the Illinois Department of Agriculture’s Bureau of Marketing and Promotions at 217.524.3012; Missouri residents can contact AgriMissouri at 888.MO.BRAND.
Reaping the Rewards
In the end, Gibson and Meihaus both believe the overall experience has been worth the sacrifices; their businesses continue to grow and attract new customers.
My House Salt has recently been accepted in the National Association for the Specialty Food Trade, which will help the company get in front of national buyers. In addition, the seasoning is starting to make its way in stores across the United States and is featured at restaurants in both St. Louis and Chicago. Gibson’s Vib’s Caribbean Heat is not only a hit in St. Louis, but her company has been recognized by both local and national publications. The success of Caribbean Heat has led her to create two more products – Vib’s Southern Heat and Vib’s Bar-B-Q Today, a dry seasoning rub.
By creating a great product and jumping through the necessary hoops, small food businesses can prosper. In the future, when people say, “You could make a fortune if you bottled this spaghetti sauce,” perhaps you’ll be able to tell them, “I already am.”