How to start a food production business
Starting a business in the food manufacturing industry? Startups has the guide for you...
- What is a food production business and who is it suited to?
- Planning your food production business
- Finding premises and equipment
- The rules and regulations of the industry
- Negotiating with retailers
- Useful contacts for a food production business
- Test your business idea (opens in a new tab)
- Register a company (opens in a new tab)
- Apply for a business loan (opens in a new tab)
What is a food production business and who’s it suited to?
The food sector is the largest in the manufacturing industry as a whole and, according to Mintel, the world foods market was worth £1.7bn in 2013 and is set to hit £2.1bn by 2018 and so a food production business is an attractive area in which to start a business.
Food manufacturing businesses range for the multinational juggernauts such as Cadbury’s and Heinz to the independent factory with a handful of staff producing one or two products for local retailers.
Unless you’re planning on restricting sales to a few school fetes and church fares, this is not really a business you can effectively run on a part-time basis. Your own kitchen won’t have the scalability you need to supply the big retailers. Starting a food production business will almost certainly involve taking on dedicated premises and at least a handful of staff.
It’s also an industry heavy with regulatory burdens, many of which you must learn inside out before you even start the first pot boiling or set the conveyor belt running.
However, even with the relatively high start-up costs, it is an industry in which many entrepreneurs flourish, as the recent statistics on the sector’s growth prove. And despite the apparent complexity involved in getting a manufacturing business off the ground, you can test the waters by starting small.
Lotte Garner started dried fruit and snacks company Southern Alps with her husband in her own kitchen at home. A mechanical engineering graduate, Garner started working on the idea after a friend reacted badly to the sulphur in the apricots she was eating. “After chasing different wholesalers I realised that all the real nasties were actually in the fruit – sugar, preservatives and even colours. It was the thought that I could improve on this that triggered the business.”
Having come from a farming background, Alex Albone attributes his handmade crisps company Pipers Crisps to having ‘a bit of a midlife crisis’ and wanting to do something different. “Food processing seemed like a good idea so I started going to food trade shows while I mooched around thinking about what exactly we could do,” he recalls. “I chanced upon a man producing sea salt in Wales and then came my Eureka moment.”
Albone thought he could build a food business around the stories of regional produce – potatoes from his own county of Lincolnshire, and Anglesey Sea Salt. Zoeb Bhujwalla had been running a café after giving up his career in the financial services sector. He and co-founder of the American Muffin Co., Jose Mulji, thought there was space in the market for a donut manufacturing business.
However, after studying the logistics they decided not to pursue the idea because of the short shelf-life of the product. Instead they went with the idea of muffins, and now supply most of the major supermarkets with their gluten free products.
Ready to get started? Find out everything you need to know about how to start your own business here.