Do you want to start a food seasoning company? If YES, here is a 21-step guide on how to start a food seasoning production business with no money or experience.
When starting this business, it is important that you conduct detailed research in order to find out all it will take you to setup and how you can leverage on the existing market to sell your products and also how to create new market channels.
Food seasoning Production Company can be considered to be capital intensive, but it is indeed money-spinning business if you are able to create a robust distribution network.
The truth is that you can start your food seasoning production business in a small town in the United States and if you put proper structures in place, it won’t be too long before your brand becomes nationally recognized and your products sold all across cities in the United States of America and other countries of the world.
Steps to Starting a Food Seasoning Production Business
1. Understand the Industry
The Seasoning, Sauce and Condiment Production industry manufactures products like mayonnaise, salad dressings, spices, extracts and dry food mixes from a variety of ingredients. Industry products are then sold to wholesalers, food manufacturers and retail markets.
Note that ketchup and other tomato-based sauces are not part of this industry because they are part of the Canned Fruit and Vegetable Processing industry.
The fact that the Seasoning, Sauce and Condiment Production industry produces a wide range of products, some segments have performed better than others over the years. Hot sauce and ethnic spices have been on the rise while traditional condiments like mayonnaise and salad dressings, have not performed as well.
Interesting Statistics About the Industry
The industry’s future appears positive with demand for seasoning, sauce and condiments expected to remain consistent over the five years to 2023. The industry has shown impressive growth over the years because seasoning, sauce and condiment is a consumer staple and does not experience wild fluctuations in demand, even during recession.
The Seasoning, Sauce and Condiment Production industry is a thriving sector of the economy of the United States of America and they generate over $21 billion annually from more than 3,703 registered and licensed companies scattered all around the United States of America.
The industry is responsible for the employment of over 36,830 people. Experts project the industry to grow at a -0.6 percent annual rate. Kraft Heinz, Unilever Group and McCormick & Company Inc. has the lion market share of the available market in the United States.
Some of the factors that encourage aspiring entrepreneurs to venture into starting a food seasoning production company is that the market is growing rapidly in the United States and it is not seasonal. This makes it easier for entrepreneurs who are interested in the business to come into the industry at any time they desire.
Generally, the barrier to entry into the industry is low and depends on the scale of production the entrant is pursuing. The scale of production determines the level of capital, technology and labor required to begin production. If a new entrant aims to compete with mid- to large-sized producers from the start, then they need to secure enough capital to invest heavily in facilities, machinery and equipment.
Those that cannot afford these initial investments would be unable to enter the industry. One of the leading challenges new entrants experience is the well-entrenched position of the industry’s larger players, especially McCormick and Kraft Heinz, which are expected to capture 10.8 percent and 10.3 percent of the market in 2018, respectively.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who make use of food seasoning, sauce and condiment cut across households and all players in the food preparation business such as hotels, restaurants, bakers, caterers, and snacks manufacturers’ et al.
So, it will be safe to say that the demographic composition for a food seasoning Production Company is all encompassing.
3. Decide What Niche to Concentrate On
Food seasoning production is a niche area in the Seasoning, Sauce and Condiment Production industry, but we are not ruling out the fact that it is the practice for food seasoning production companies to engage in the production of other food sauce and condiments for the purpose of maximizing profits.
Which is why you find food seasoning production company also engage in producing some or all of the under listed;
- Manufacturing mayonnaise
- Manufacturing salad dressing
- Manufacturing vinegar
- Manufacturing mustard
- Manufacturing horseradish
- Manufacturing soy sauce
- Manufacturing salt and seasonings
- Manufacturing flavoring extracts (except coffee and meat) and colorings
The Level of Competition in the Industry
There is hardly any industry where there is no competition, as a matter of fact, it is competition that brings innovation in the business world.
This goes to show that if you are looking towards starting a food seasoning production company, then you should brace up for competition in the industry. You are expected to compete with other players in the industry. This is why most food seasoning production companies are leveraging on producing food seasoning, sauce and condiments with organic ingredients, packaging and marketing to continue to stay afloat in the industry.
The fact that there is competition in the Seasoning, Sauce and Condiment Production industry is not hampering the performance of new entrants; most of them know how to recreate and re – strategize to reach out or attract more customers even if it is just households, restaurants and caterers in their immediate community.
4. Know the Major Competitors in the Industry
It is the norm that in every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands have been in the industry for a long time, while others are known for the results they have achieved over the years and of course the quality of their products when compared with others.
These are some of the leading seasoning, sauce and condiment production companies in the United States of America and in the globe;
- Kraft Heinz
- McCormick & Company Inc.
- J. Heinz Company
- Unilever Group
- Crosse & Blackwell Food Production Company
- Gold Pure Food Products Co.
- Hirzel Canning Company & Farms
- Mama Sita’s Holding Company
- Shan Food Industries
- Three Threes Condiments
- Wei-Chuan Food Corporation
- The Bega Co-operative Society Limited
- ConAgra Foods, Inc.
- Cackalacky Classic Condiment
- Hampton Creek
Starting a food seasoning production company isn’t difficult but at the same time, it requires thorough economic, cost analysis, feasibility studies and market survey if you are looking towards making profits in the industry.
Part of what you need to focus on in this line of business is how to build a standard food seasoning production plant, a robust distribution network, branding and of course how to maintain your machinery and equipment and to take care of your overhead. Other costs that should be considered during planning and budgeting are supply of ingredients, packaging materials and maintenance costs.
Lastly, in other to play safe with your investment, it is important that you hire the services of experts to help you carry out thorough economic and cost analysis before committing your resourcing to the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
There are loads of factors that should be considered before choosing an option to follow when starting a food seasoning production company. Some of the factors to consider are the cost of starting from the scratch or buying a franchise.
If your intention of starting a food seasoning production business is to grow beyond one city, if you want to have presence in key cities in the United States, then starting your food seasoning production company from the scratch is your best option.
But if you just want to start a business with the aim of just making profits and you don’t have the required finance and experience to build a business from the scratch, then it will pay you to buy the franchise of a successful brand.
Please note that most of the successful food seasoning production companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to go into food seasoning production business today, one of the major challenges you are likely going to face is the presence of well – established brands in the industry. The only way to avoid this challenge is to create your own market by concentrating on grocery stores and households in your immediate community.
So also, unfavorable government policies can also hamper the growth of your food seasoning production company. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
If you have plans to launch a food seasoning production business, the legal entity you choose will go a long way to determine how big the business can grow.
You can either choose a general partnership, limited liability company which is commonly called an LLC, or even a sole proprietorship for your food seasoning production business. Sole proprietorship is the ideal business structure for a small – scale food seasoning production business especially if you are just starting out with a moderate capital in a small neighborhood.
But if your intention is to grow the business and have distribution networks spread across the United States of America and other countries of the world via franchising, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your food seasoning production business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to study the various legal entities to use for your food seasoning production business with the ability to export and open chains of distribution networks all across the United States of America, you will agree that Limited Liability Company is the most suitable.
You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or ‘S’ corporation especially when you have the plans of going public.
When you upgrade to a ‘C’ corporation or ‘S’ corporation, it will give you the opportunity to grow your food seasoning production business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
8. Choose a Catchy Business Name from the ideas Below
When it comes to choosing a name for your business, you should be creative because whatever name you choose will create a perception of what your business represents. If you are considering starting your own food seasoning production business, here are some catchy names that you can choose from;
- Finger Licking® Food Seasoning & Condiment Production Co
- Queens Taste® Food Seasoning Production Company, LLC
- Golden Pot® Food Seasoning Production Company, Inc.
- Knox Julia® Food Seasoning Production Company, Inc.
- McKeon Brand® Food Seasoning Production Company, Inc.
- Lara Brown™ Food Seasoning Production Company, Inc.
- Cooking Delight© Food Seasoning Production Company, Inc.
- Meg™ Seasoning & Sauce Production Company, LLC
- Janet McKesson© Food Seasoning Production Company, Inc.
- Belinda Pickford© Food Seasoning Production Company, Inc.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your food seasoning production company.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your food seasoning production company in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Building Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own food seasoning production company, you may not have any need to file for intellectual property protection because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
When it comes to food seasoning production, you do not need to have any formal training or special certification before you can be allowed to start the business. All you need is just to study courses such as food science technology or any related courses at degree or diploma level.
On the other hand, if you come across any form of certification that can aid you to conduct your food seasoning production business, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own food seasoning production business in the United States of America;
- Business and liability insurance
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Food Seasoning Production Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
It is often said that money is the blood of any business, and raising startup capital is perhaps one of the major concerns of entrepreneurs; it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from angel investors.
The first thing to put in place before sourcing for startup capital for your food seasoning production business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business.
The truth is that no bank can give you a loan if you don’t have a good and workable business plan. Besides, investors will not take you seriously if you don’t have a business plan. Here are some of the options you can explore when sourcing for startup capital for your food seasoning production company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your company, there are key questions you should answer and key factors that must be considered. You are expected to choose a location that is easily accessible especially as it relates to your distribution network. Affordability, availability of labor and safety are also some of the factors that you should consider.
Despite the fact that food seasoning, sauce and condiments are used by households and commercial users, it is important to choose a location that will give you economy of scales; a location that will allow you to favorably compete in the industry as a new entrant.
The location you chose to launch your food seasoning production company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location. If you make the mistake of renting or leasing a facility for your food seasoning production company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for a business such as food seasoning production company, then you should talk to a business consultant or a realtor to help you out.
Before choosing a location for your food seasoning production company, ensure that you first conduct thorough feasibility studies and market survey. The possibility of you coming across a similar business that just closed shop in the location you want to open yours can’t be ruled out.
15. Hire Employees for your Technical and Manpower Needs
If you are considering starting a food seasoning production company, then you should make plans to build a standard food seasoning production plant. A standard food seasoning production plant includes oil extractors, vessels, stirrers, tanks, conveyor belt system et al. So, you are expected to put all this equipment and machine in place and also purchase standard distribution trucks.
Although you can get fairly used of the above listed equipment and machines, but it is advisable to go for new equipment that can serve you for a long time most especially if you have the money to make the purchase. Even if you don’t have the required amount, you can enter into an agreement with the suppliers of such machines and spread the payment over a period of time.
As regards acquiring a facility, if you have the required finance, it is to your advantage to lease your food seasoning production plant; it usually gives you the freedom to design the facility the way you want to it to be. But if you are low on cash, then you don’t have any option other than to rent a facility.
When it comes to creating a workforce structure for a standard food seasoning production company, you should look towards getting qualified and competent people to fill the following roles;
Chief Executive Officer (Owner), Plant Manager, Quality Control Officer, Human Resources and Admin Manage, Merchandize Manager, Sales and Marketing Manager, Accountants/Cashiers, Production Workers/Machine Operators, Distribution Truck drivers, and Cleaners.
Over and above, you will need a minimum of 15 – 20 staff members to successfully run a small scale but standard food seasoning production company.
The Service Delivery Process of the Business
Please note that spices and seasonings are a broad category that includes dried seeds, roots, plant materials, bark or fruits that are used as a flavoring or preservative for foods.
The production process of food seasoning or sauce starts by placing the leek, chives, culantro, parsley, thyme, cilantro, oregano, onion and garlic on a baking tray. They are made to dry in the oven at 180 ºF (or lowest temperature your oven reaches) for one hour, or until all the ingredients are dry.
You then remove the mixture from the oven and get rid of the oregano and thyme twigs, leaving only the dry leaves. You are expected to mix them with peppercorns and salt and pulse in the food processor until it turns into the desired consistency. When it comes to saving the processed food seasoning, you expected to save in a tight-fitting lid jar in a dry spot.
The last stage is to pass it through the quality control unit where the food seasoning, sauce and condiments are tested and are packaged for distribution. It is important to state that a food seasoning production company may decide to improvise or adopt any business process that will guarantee them efficiency and flexibility.
16. Write a Marketing Plan Packed With ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a food seasoning production company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well-known brands that determine the market direction for food seasoning industry.
Your marketing strategy will center on quality, good packaging and pricing, and above all excellent customer service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services or products. In other words, a larger percentage of your marketing effort should be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your food seasoning production company;
- Introduce your food seasoning production company and your products by sending introductory letters alongside your brochure to households and players in the food preparation business such as hotels, restaurants, bakers, caterers, and snacks manufacturers et al.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your products.
- Engage in road shows in targeted communities from time to time to promote your food seasoning brand
- Join local food seasoning production company associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the u se of word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your food seasoning, sauce and condiments at rock bottom prices is to purchase your raw materials directly from farmers and wholesalers in pretty large quantities. The truth is the higher the quantity of items you purchase directly from wholesalers, the cheaper you tend to get them.
Another strategy that will help you retail your food seasoning at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop an Iron-clad Competitive Strategies to Help You Win
The availability of different sizes of food seasoning under your production, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust distribution network and clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your food seasoning can favorably compete with the some of the best in the industry.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps to attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your product, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality.
If you can continue to make available different sizes of food friendly and well – packaged food seasoning, and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
If your intention of starting a food seasoning production company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of distribution network and exporting your products, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is a dynamic and it requires consistent brand awareness and brand boosting to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your food seasoning production company;
- Place adverts on both print (newspapers and food magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your food seasoning production company – brand
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your food seasoning production company
- Distribute your fliers and handbills in target areas
- List your food seasoning production company in local directories / yellow pages
- Advertise your food seasoning production company in your official website and employ strategies that will help you pull traffic to the site.
- Position our Flexi Banners at strategic positions in the location where food seasoning production company is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks are well branded with your company logo et al.
21. Create a Suppliers/Distribution Network
In order to successfully run a food seasoning production company, you must establish good business relationship with farmers and wholesalers of packaging materials within the city where your food seasoning production company is located.
You would need steady supply of these raw materials to remain in business. So also, you are expected to create business networks with distributors.