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5 Challenges Food Startups Must Overcome

May 15, 2017

Don’t worry—PieShell and Food Starter are here to help!

by Caroline Halter, PieShell

Food startups are hard… really hard.

Luckily, there is better support for food and beverage entrepreneurs than ever before. From commercial kitchens, to incubators, to online forums, to niche crowdfunding platforms, foodpreneurs have more access to the resources needed to turn a passion project into a business.

We spoke with Dana McCauley, CEO and Founder of Food Starter, to learn more about the most common challenges food startups face as they grow, and how to move past them.

Meet Food Starter

First, here’s a little background on Food Starter, one of our fantastic community partners:

Food Starter focuses on helping early-stage food processors commercialize and scale the development of their food products. They offer shared production and packaging facilities, business consulting, and a structured training program to help entrepreneurs build and grow food processing businesses.

1. Rules, Rules, and More Rules!

Food industry regulations are tough to navigate if you’ve never done packaged food before. It can feel like trying to walk through a maze blindfolded.

From food science to packaging, commercial kitchens help startups understand how to comply with regulations.

 

If you think reading food labels is hard, try designing  

Dana said, “Entrepreneurs don’t always know what they don’t know, and it’s hard to get access to all this information in one place.” She’s helped companies comply with regulations for multiple markets, too. For example, she often works with companies who sell in both Ontario and New York State, which while in the same geographical region of North America, have two different sets of regulations due to being in Canada and the US.

If you’re taking a packaged product direct to consumer, we recommend finding a commercial kitchen/incubator that can walk you through what you need to know. Visit pieshell.com/community to see our growing list of community partners.

2. Shit Is Expensive

Pardon the expletive, but there’s really no other way to say it — the startup costs for food and beverage are steep!

Once you’re ready to commercialize a product, it costs money to do testing and research. That’s why we love commercial kitchens. They offer shared, affordable industry equipment to commercial kitchen space to test and refine food products. Pair that with industry expertise, and you’ve got a winning recipe.

Yes, you’ll still have to pay money, but companies like Food Starter have significantly lowered the barrier to entry for foodpreneurs.

Do you think you’re ready to take advantage of your local commercial kitchen? Take Food Starter’s quiz to find out where your business is on the food commercialization highway and what to do next.

3. Um… What Is Marketing, Exactly?

When you’re just starting out, it’s hard to grasp the real meaning of “marketing.” It’s a term that’s used in many different contexts, and that has distorted its meaning.

New entrepreneurs often think it’s simply what you put on social media, or an ad you place in the paper.

What is marketing? Keep reading to learn more…

Dana is an expert in food packaging, and people don’t often associate that with marketing. In reality, marketing is the analysis that informs everything from packaging to your Instagram feed and ad campaigns. It includes things like market gap analysis, brand positioning, and consumer research — all the things that set you in the direction to make a profitable business.

Wrapping your head around the difference between marketing and communications is a good place to start if you want to make your food business profitable.

4. “Your Ego Is Not Your Amigo”

It’s a tough pill to swallow, but one key to business is understanding that you are not your customer. In other words, you may love your product as is, but that doesn’t mean that there’s a large enough group of people out there who also love it and are willing to pay for it.

This is something that Dana sees a lot. Many PieShellers have experienced it as well. “When you expand your focus group beyond your family and friends, you often find that the product has to change, or that there isn’t demand for it at all,” she said. “It takes humility and empathy to accept that and move forward.”

She said that not all of the people she works with choose to move forward and that’s not failure — it just means that they’re choosing to continue as a hobbyist rather than an entrepreneur, and that’s OK.

If you decide to move forward, the best advice we can offer is to check your ego at the door and learn to detach a little bit from your product. That doesn’t mean losing passion. It means realizing that it’s not about you, it’s about the customer.

5. Lifestyle Change

While we’re at it, let’s talk about one more thing that doesn’t get talked about nearly enough: being an entrepreneur means changing your lifestyle.

Being a food or beverage entrepreneur is tough. But there’s always comfort food or a glass of wine to help! 😉 

You will be preoccupied. You will have many late nights. You will wonder why on earth you chose to do this in the first place. You will have to try and mitigate the negative effects on relationships with friends and family.

This is all normal, but the choice to take on the uncertainty and thrill of entrepreneurship is also choosing the inevitable and inherent ups and downs that come with it.

PieShell and Food Starter are complementary services, but one thing we have in common is the goal of bringing together entrepreneurs to share advice and offer support.

At PieShell, we require new projects to “PieShell it forward” by contributing to a current project before they launch. It’s not about money. Instead, it’s about helping to build a supportive network to strengthen the community-driven food movement. We’ve seen amazing friendships and mentorships develop between PieShellers who’ve never even met each other in person.

We’re All in This Together!

It sounds cheesy, but we’re here to help you overcome the challenges of starting a business in the food and beverage space. We’ve got a great network of experts, like Dana, who have helped many a foodpreneur succeed.


This post was originally written for and posted on PieShell’s blog. Thank you Caroline Halter and PieShell for featuring Food Starter in your post on food business startups! Learn more about PieShell and their crowdfunding programs at pieshell.com!