How to Start a Food Company
The food product market is a hotbed for investment!
Consumers care more than ever about health and sustainability. Plus, large food corporations are funding + acquiring smaller companies with innovative food products. It’s a great market either way!
But the food product market is a heavily regulated one so you’ll need to follow the law closely. Here’s what you need to know…
1. Start your company
If you’re operating a business without registering as an LLC or Corporation, you’re taking a big risk. Your personal assets can be taken to pay your business debts. That means you can lose your car, house, and bank account on a product injury, a bad business deal, or a freak accident. Is it likely? Probably not. Is it worth all that risk to save a few hundred bucks on registering? Definitely not. Register your company with the state and follow certain formalities, so only your company assets are at risk.
This is so important for food brands because you never know how your product will react to people’s allergies or nutrition needs. If someone develops a reaction to your product, you can be sued for damages.
Youʼll start by completing the state paperwork to register your entity. First, you'll need to decide what kind of entity is the best fit for you. If you haven't decided yet, check out our guides to Sole Proprietorship, Partnerships, LLCs, C Corporations, and S Corporations.
Now you're ready to register. If you are registering an LLC, the form is usually called Articles of Organization. If youʼre forming a Corporation, the form is called Articles of Incorporation. You can find these on your stateʼs corporation agency website. Youʼll also need to choose a registered agent, principal place of business, and business purpose. Keep in mind that all of this information, including your address, will be public.
Tip: Call in your business attorney if you’re not sure which entity is the right fit for your company.
2. Lock down your brand
A trademark allows you to own your brand. It means you're the only company who can use your company name, logo, slogan, domain name, personal name, product name, or hashtags. Here's why it's key: without it, you can be sued, forced to rebrand, or have your customers stolen by copycats.
Trademarks give you the exclusive rights to use the name nationally. So if someone else registers your trademark, they’ll own the rights to your name nationally. You'll only be able to use it in your geographic region (typically your city). That's not ideal!
Think about how many brand pieces feature your company name: your website, social media, business cards, products, marketing materials, press links, inventory, etc. If you want to operate nationally, you'll need to change all of that + pull back all inventory with the brand on it, or possibly pay monetary damages. You'll lose customers, money, and valuable momentum.
Bottom line: if you’re building a brand, you need to own your trademark.
3. Find your products
If you’ve read our popular blog post, How to Start a Business, you have a plan for what you’ll sell. Once you decide on your product list, you’ll want to create recipes to help you outsource your products to a contract manufacturer. You’ll want to have a contract in place with your manufacturer that spells out the items produced, specifications, production + payment timelines, and inspection rights.
It’s also important that you and your manufacturer adhere to federal regulations about food production, labeling, and testing. The law is very strict about food products and there are many requirements you need to follow. Otherwise, you can be liable to your customers and face regulatory fines. The law dictates that your products need to be manufactured in a space that complies with federal regulations called GMP: Good Manufacturing Practices. The law also specifies what your labels need to say like what ingredients you need to include, in what order, and any allergens, plus what kind of quality control testing you need.
4. Promote your company
There are so many ways you can market your brand. You can use instagram, Facebook, Snapchat, Twitter, YouTube, email newsletters, and influencers to promote your brand online. Find out where your customers are online and join them!
You can also check out tradeshows and trade organizations for food products like Expo West or Fancy Foods.